Breaking Down USD Partners LP (USDP) Financial Health: Key Insights for Investors

You're looking at USD Partners LP (USDP) and wondering if the current risk is priced in, or if there's any hidden value in this midstream infrastructure play-and honestly, the numbers tell a stark story. To be fair, the company generated $71.79 million in revenue over the last twelve months ending October 2025, a solid top line from their fee-based, take-or-pay contracts. But here's the quick math: that revenue translated into a tiny $594,000 in net profit, which is a razor-thin margin, and their debt load is the real headwind, sitting at a staggering $196.96 million against only $11.22 million in cash. That's a net cash position of negative $185.74 million, and it's defintely why the stock is trading around $0.0072 per share as of November 2025, prompting a technical 'Sell' signal from analysts. Still, they did produce $6.54 million in free cash flow, so the core operations aren't dead, but the capital structure (how the company funds its assets) is clearly stressed.

Revenue Analysis

You need to know where the money is coming from, but for USD Partners LP (USDP) in 2025, the story is more about where the revenue went. The firm's revenue profile has been fundamentally reshaped by a rapid series of asset divestitures, culminating in the sale of its last major operating asset in April 2025.

The core of USD Partners LP's business model was historically fee-based, generating cash flow from multi-year, take-or-pay contracts (a form of minimum volume commitment) with primarily investment-grade customers, like major oil companies and refiners. This revenue was disaggregated into two primary segments: Terminalling services and Fleet services.

• Terminalling services: Revenue from crude oil and other energy-related product terminal operations, including railcar loading and storage.
• Fleet services: Revenue from providing customers with leased railcars and related logistics services.

The year-over-year revenue trend shows a dramatic contraction as the company sold off its physical infrastructure. Annual revenue for the 2024 fiscal year was approximately $35.83 million, which represented a massive year-over-year revenue decrease of about 42.99% from the 2023 annual revenue of $62.86 million. That's a drop of over $27 million in a single year. The trend is clear: the company is shrinking its operational footprint.

Here's the quick math on the near-term risk: the significant changes in 2024 and 2025 mean the 2025 full-year operational revenue will be a fraction of the 2024 figure. The sale of the Stroud Terminal in April 2024 was the first major step. The definitive move, however, was the sale of the Hardisty Rail Terminal on April 10, 2025. This was the Partnership's 'last remaining operating asset'.

What this estimate hides is the shift to near-zero operational revenue for the remainder of 2025, post-Q2. The remaining revenue for the second half of 2025 will primarily come from the residual Fleet services segment and the recognition of any deferred revenue (money already collected but recognized over time). You are defintely looking at a business model in wind-down mode, not a growth story. For more on the strategic context of these divestitures, you can review the Mission Statement, Vision, & Core Values of USD Partners LP (USDP).

Profitability Metrics

You need to know if USD Partners LP (USDP) is actually making money, and the latest figures tell a story of high gross efficiency but razor-thin final profitability due to significant operating costs. Based on the Trailing Twelve Months (TTM) data ending in October 2025, the partnership's net profit margin is a meager 0.83%, which is a serious red flag for investors.

Here's the quick math on the TTM profitability, which we use as the most current proxy for 2025 fiscal year performance. The company generated $71.79 million in revenue, but only kept a fraction of that as net income.

Operational Efficiency and Cost Management

The gross margin for USD Partners LP is actually quite strong at 57.07%, which is better than the midstream industry average of 52.36%. This shows the core terminalling and logistics services (see Mission Statement, Vision, & Core Values of USD Partners LP (USDP) for their business model) are priced well above the direct cost of services (Cost of Goods Sold). That's a good start.

But here is where the operational efficiency breaks down: the operating margin plummets to 11.45%. This is a massive drop from the gross margin and falls significantly short of the industry's typical operating margin of 34.73%. This gap points directly to excessive Selling, General, and Administrative (SG&A) expenses and depreciation. The company is having trouble controlling its overhead costs relative to its revenue.

Profitability Trends and Industry Comparison

The trend in profitability is clearly negative, even before factoring in the announced sale of their final asset in April 2025. Over the last five years, the partnership had a 5-Year Average (5YA) gross margin of 66.11% and an operating margin of 16.78%. The current TTM margins of 57.07% and 11.45% show a distinct erosion of profitability on both fronts. The net profit margin is the most concerning metric.

• Gross Margin: Dropped from a 5YA of 66.11% to TTM 57.07%.
• Operating Margin: Fell from a 5YA of 16.78% to TTM 11.45%.
• Net Margin: Improved from a 5YA average loss of -6.48% to a TTM profit of 0.83%, but this is still nearly negligible and far below the industry average of 23.83%.

The high gross margin suggests the business model is sound on a per-unit basis, but the low operating and net margins indicate a structural issue with fixed costs and overhead. Given the sale of their final asset in 2025, these TTM numbers represent a business in transition, and future profitability will defintely depend on the effective management of remaining operations and cash proceeds.

Debt vs. Equity Structure

You need to know how USD Partners LP (USDP) finances its operations, and honestly, the picture is stark. The company's financial structure is overwhelmingly debt-reliant, which is a major red flag, especially for a Master Limited Partnership (MLP) in a distressed phase.

As of the trailing twelve months (TTM) ending October 2025, USD Partners LP carried a total debt load of approximately $196.96 million. This substantial debt is set against a very troubling equity position. The company's book value of equity is negative, sitting at roughly -$108.88 million. That's a massive hole.

Here's the quick math on the leverage: when you divide the total debt by the negative equity, you get a Debt-to-Equity (D/E) ratio of approximately -1.81. This figure is not just high; it signals a technically insolvent balance sheet, meaning liabilities exceed assets. A healthy midstream energy company typically has an average D/E ratio closer to 0.97. USD Partners LP is nowhere near that industry standard.

The company's approach to financing-or rather, its current situation-is a classic example of debt overpowering equity. The recent history shows a clear struggle to manage this leverage, forcing a significant restructuring of the business. This isn't a balanced growth strategy; it's a fight for survival.

• Total Debt: $196.96 million (TTM Oct 2025)
• Equity (Book Value): -$108.88 million (TTM Oct 2025)
• D/E Ratio: -1.81 (Extreme leverage)

The company has been actively managing its debt through asset sales, not new issuances. In April 2025, USD Partners LP completed the sale of its final operating asset, the Hardisty Rail Terminal. This sale was a necessary step to generate cash and address liabilities. Plus, going back to June 2024, the Partnership had to enter a Forbearance Agreement under its Credit Agreement, which is a formal acknowledgment of a default or near-default situation. This kind of activity is defintely not a sign of a company balancing debt and equity; it's a liquidation of assets to pay down debt and stay afloat. For a deeper dive into the company's overall health, you should read the full post at Breaking Down USD Partners LP (USDP) Financial Health: Key Insights for Investors.

What this estimate hides is the true cost of this debt. The forbearance agreement and asset sales imply that the remaining debt is likely secured and carries significant risk premiums or restrictive covenants, making it expensive and inflexible. Your action item here is to assume a high cost of capital and a continued focus on debt reduction over any new equity-funded growth.

Liquidity and Solvency

You need to know how easily USD Partners LP (USDP) can cover its short-term bills, and honestly, the picture is tough. The firm's liquidity ratios are extremely low, but they are still generating positive cash from core operations, which is the one bright spot in a challenging solvency situation.

Looking at the most recent quarter, the Current Ratio sits at a mere 0.20, meaning for every dollar of current liabilities (bills due within a year), the company only has 20 cents in current assets to cover it. The Quick Ratio, which strips out inventory-a less liquid asset-is even lower at a concerning 0.06. This is a flashing red light for near-term financial flexibility. A ratio below 1.0 is worrisome; a ratio this low suggests an immediate struggle to meet obligations without selling long-term assets or taking on new debt.

• Current Ratio: 0.20 (MRQ)
• Quick Ratio: 0.06 (MRQ)
• Working Capital: -$167.26 million (TTM)

The working capital trend confirms this severe liquidity crunch. The trailing twelve months (TTM) shows a negative working capital position of approximately -$167.26 million. This huge deficit means the company's current liabilities significantly outweigh its current assets. To be fair, this is common for Master Limited Partnerships (MLPs) that rely on long-term, fee-based contracts and debt financing, but this level of negative working capital is a major structural risk, especially when you consider the total current liabilities were around $209.07 million in the most recent quarter.

Here's the quick math on cash flow: Over the last twelve months, USD Partners LP has generated a positive operating cash flow of $7.25 million. This is a strength-the core business of railcar loading and logistics is still bringing in cash. Investing activities, primarily capital expenditures (CapEx), were a modest outflow of -$712,000, resulting in a healthy Free Cash Flow (FCF) of $6.54 million. Still, the latest quarterly net change in cash was a negative -$1.58 million, which shows the pressure is still on.

The biggest near-term risk is an explicit solvency concern. The company's own financial statements have noted a 'substantial doubt' about its ability to continue as a going concern due to its Credit Agreement maturing within 12 months of the March 2024 report. This is the most critical factor for an investor right now. Plus, the recent announcement in April 2025 about the sale of its final asset signals a significant, if not final, shift away from its historical operations. You need to treat this as a wind-down scenario, not a growth story.

For a deeper dive into the strategic implications of these numbers, check out the full post at Breaking Down USD Partners LP (USDP) Financial Health: Key Insights for Investors.

Next step: Check the latest filings for updates on the Credit Agreement maturity and the final asset sale proceeds. Finance: Determine the exact use of the sale proceeds.

Valuation Analysis

You are looking at USD Partners LP (USDP) and wondering if the market has overreacted or if the valuation reflects a deeper problem. The quick takeaway is that the market views this stock as highly distressed, pricing it for a potential wind-down or restructuring, not growth. The extreme drop in price and non-standard valuation metrics make a traditional overvalued/undervalued call impossible; the price is a reflection of risk.

As of late 2025, the stock trades around $0.01 per unit, a staggering decline of approximately 89.14% over the last 12 months alone. That kind of price action is a clear signal of market panic and a fundamental shift in the business model or solvency. The 52-week range, which stretched from a low of $0.0039 to a high of $0.0999, shows massive volatility at the bottom of the market. This isn't a dip, it's a collapse.

Here's the quick math on the key valuation ratios for USD Partners LP (USDP) based on the latest available data for the 2025 fiscal year (TTM):

• Price-to-Earnings (P/E) Ratio: At a stock price of $0.01 and a Trailing Twelve Months (TTM) Earnings Per Share (EPS) of $0.02, the P/E ratio is an extremely low 0.5. A P/E this low usually screams 'undervalued,' but in this context, it signals that the market does not believe the current earnings of $594,000 are sustainable.
• Price-to-Book (P/B) Ratio: The P/B ratio is effectively meaningless because the company's Book Value Per Share is a negative -$3.22. A negative book value means liabilities exceed assets, which is a major red flag for solvency.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: With an Enterprise Value of approximately $174.88 million and TTM EBITDA of $15.44 million, the EV/EBITDA ratio calculates to about 11.33. This is a more moderate, but still high, multiple for a midstream energy company facing such severe stock price pressure, suggesting the debt load is a huge factor in the total valuation.

The high EV/EBITDA relative to the tiny market capitalization (around $243 thousand) tells you the story: the unit holders (equity) bear almost all the risk, while the debt holders claim the lion's share of the enterprise value. That's a classic sign of financial distress.

When you look at the income stream, the dividend yield is a stark 0.00%, reflecting that the company has not paid a dividend in the past year. This is critical for a Master Limited Partnership (MLP) like USD Partners LP, where the distribution is the primary reason for ownership. The distribution is gone. To be fair, a few older reports show a Payout Ratio of 1,085.19% based on earnings, which just confirms the unsustainability of past payments. The unit has become a speculation play, not an income investment.

Finally, the analyst consensus is telling in its absence. There are currently no Wall St. Ratings or price targets for USD Partners LP for the next 12 months. When the street drops coverage, it's often because the situation is too volatile or the equity value is too small to warrant the research effort. No one is pounding the table for a 'buy' here. For a deeper dive into the company's operational stability, check out the full post: Breaking Down USD Partners LP (USDP) Financial Health: Key Insights for Investors.

Your next step should be to look at the balance sheet-specifically the debt maturity schedule-to see if a near-term restructuring is defintely on the cards.

Risk Factors

You need to understand that USD Partners LP (USDP) is facing not just cyclical headwinds, but fundamental, existential risks in 2025. The most significant takeaway is that the partnership has been in a strategic wind-down, evidenced by the sale of its core operating assets, which translates directly into a high-risk profile for remaining unit-holders. This isn't a growth story right now; it's a liquidation story.

The internal and external risks are now largely conflated with the strategic decision to divest. The company's focus has shifted from midstream operations to managing an orderly exit and satisfying creditors. This is the single most important factor for any investor to consider. Honestly, the business model is in the rearview mirror.

Existential and Operational Risk: Asset Liquidation

The most profound operational risk is the near-complete dissolution of the asset base. The company announced the expected sale of its final asset, the Hardisty Rail Terminal, on January 21, 2025, and then the actual sale of its final asset on April 10, 2025. This terminal, which facilitates the transportation of heavy crude oil from Western Canada, was essentially the last remaining piece of the operating puzzle. With the sale of the Stroud rail terminal completed in April 2024, and now Hardisty gone in 2025, the partnership holds minimal, if any, cash-generating midstream infrastructure.

The primary risk is a lack of future operating cash flow (OCF) from core assets. The business was built on multi-year, take-or-pay contracts, but those contracts are now tied to assets that have been sold off. This means the partnership's revenue stream is defintely drying up, making the TTM (Trailing Twelve Months) Earnings Per Share (EPS) of just $0.02 as of late 2025 a very poor indicator of future performance.

• Final Asset Sale: Eliminates core operating cash flow.
• Contract Risk: Revenue tied to assets that are no longer owned.
• Liquidation Focus: Management is focused on wind-down, not growth.

Financial Distress and Debt Burden

The financial risks are stark and center on the debt load and the partnership's relationship with its lenders. The most critical event was the Forbearance Agreement entered into on June 21, 2024, with the lenders under its Credit Agreement. A forbearance agreement is a clear signal of financial distress, where the lender temporarily agrees not to exercise its legal rights (like demanding immediate repayment) because the borrower is in default or near default. That's a massive red flag.

The debt burden is also visible in how the company is managing interest payments. For the year ended December 31, 2024, the amount of interest paid in kind (PIK) was $24.5 million, a huge jump from $2.0 million in 2023. PIK interest means the company is paying its interest not with cash, but by increasing the principal amount of the loan. Here's the quick math: you're effectively borrowing money just to pay the interest on your existing debt. This compounds the debt and is unsustainable.

Market and Regulatory Risks: OTC Trading and MLP Structure

The company's market position has also deteriorated significantly. Following its delisting from the NYSE on December 1, 2023, because its average global market capitalization fell below $15 million, the units now trade on the OTC Pink Market. Trading on the OTC market is more restricted and less liquid, which is a major risk for investors seeking to exit their position quickly. What this estimate hides is the difficulty in pricing and trading a security with no major exchange oversight.

Also, the Master Limited Partnership (MLP) structure, which typically offers tax benefits, becomes complex and potentially less valuable in a liquidation scenario. The general partner, indirectly owned by US Development Group, LLC, holds significant control. As of August 1, 2024, the general partner and its affiliates owned 51.2% of the limited partnership interests entitled to vote on removing the general partner, making it incredibly difficult for unit-holders to influence the wind-down process. You are essentially a passive participant in a process controlled by the general partner and the secured lenders.

Mitigation Strategies: Debt Resolution

The partnership's primary mitigation strategy is the sale of assets to pay down debt, as dictated by the Forbearance Agreement. The sale of the Hardisty Rail Terminal, its last remaining operating asset, was the final step in this process. The action is not about mitigating operational risk-it's about mitigating financial default risk. The goal is to maximize the value of the remaining assets to satisfy the secured debt holders, leaving the unit-holders' recovery as the residual outcome. Your action here is to monitor the debt resolution process closely, as it will determine the final value, if any, returned to unit-holders. For more context on the entire picture, check out the full post: Breaking Down USD Partners LP (USDP) Financial Health: Key Insights for Investors

Growth Opportunities

You're looking for a clear path forward for USD Partners LP (USDP), but the simple truth is that its future growth prospects are now defined by a managed corporate wind-down, not midstream expansion. The company is no longer a growth-oriented Master Limited Partnership (MLP); it's an entity in the process of a strategic exit forced by its lenders.

The core of the matter is the sale of its operating assets. Following the sale of the Stroud Terminal in 2024, USD Partners LP completed the sale of its final operating asset, the Hardisty Rail Terminal, on April 10, 2025. This was a mandatory condition under a forbearance agreement with its lenders. The entire strategy has shifted from generating fee-based cash flow to maximizing the return from liquidation for creditors and unit-holders.

Here's the quick math: the Hardisty Rail Terminal sale to Strathcona Resources Ltd. was valued at CAD 45 million. Using a conservative 2025 exchange rate of 0.71, that cash injection translates to approximately $31.9 million USD. This cash is earmarked to repay borrowings, not to fund new growth projects. The next step is a wind-down.

Near-Term Revenue and Dissolution Outlook

Future revenue growth projections are essentially non-existent; the focus is on a sharp decline in operating revenue as the business dissolves. The partnership intends to wind down or dissolve following the sale and the expected termination and write-off of the remaining debt balance by its lenders. This is a liquidation play, not a growth investment.

For the 2025 fiscal year, the only substantial operating revenue will come from the first three months of the Hardisty Terminal's operation (Q1 2025) and a small portion of Q2 2025, plus any residual Fleet Services revenue. The real opportunity is in the final distribution of capital to common unit holders (if any remains after debt repayment and wind-down costs), a high-risk, high-reward scenario that depends heavily on the final debt write-off terms.

• Revenue: Expect a massive revenue drop post-Q2 2025.
• Earnings: Estimates are now tied to asset sale gains and debt write-offs.
• Action: Monitor the wind-down plan disclosure for a final capital distribution estimate.

What this estimate hides is the potential for significant non-cash gains from the debt write-off, which could temporarily inflate net income figures but won't represent sustainable business operations. The partnership's competitive advantage-its network of strategically located terminals with multi-year, take-or-pay contracts-is gone.

Strategic Pivot: From MLP to Wind-Down Vehicle

The 'strategic initiatives' for USD Partners LP are now administrative, not operational. The key growth driver is the efficient execution of the wind-down process to maximize residual value. This is a complete pivot from its original mission to acquire, develop, and operate midstream infrastructure.

The only remaining 'asset' for investors to analyze is the balance sheet's residual value, which must be measured against the 33,774,427 common units outstanding as of March 8, 2025. The opportunity is in the timing of the dissolution and the final net asset value per unit.

The table below summarizes the shift in the investment thesis for the 2025 fiscal year:

You can learn more about the unit holder base in Exploring USD Partners LP (USDP) Investor Profile: Who's Buying and Why?. The bottom line is that for a company with no operating assets, the only growth is in the potential for a final, one-time distribution to unit holders. That's a defintely different kind of growth.