Steel Dynamics(STLD) - 2025 Q2 - Quarterly Results

Executive Summary & Performance Highlights Steel Dynamics achieved strong sequential improvement in Q2 2025 with increased net sales and net income, driven by expanded steel margins and strategic aluminum product shipments Q2 2025 Financial Highlights Steel Dynamics reported strong sequential improvement in Q2 2025, with net sales of $4.6 billion and net income of $299 million, or $2.01 per diluted share, driven by stabilized steel pricing and expanded margins Q2 2025 Key Financial Results | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------- | :-------- | :-------- | :-------- | | Net Sales | $4.6 billion | - | $4.63 billion | | Net Income | $299 million | $217 million | $428 million | | Diluted EPS | $2.01 | $1.44 | $2.72 | Q2 2025 Key Operating Metrics | Metric | Q2 2025 | | :----------------------- | :-------- | | Operating Income | $383 million | | Adjusted EBITDA | $533 million | | Cash Flow from Operations | $302 million | - The company shipped its first aluminum flat rolled product coils on June 16, 2025[7] - Maintained liquidity of $1.9 billion as of June 30, 2025, after repaying $400 million of senior notes and repurchasing $200 million of common stock[7] CEO Commentary & Market Overview The CEO highlighted significant sequential improvement in consolidated operating income (39%) and adjusted EBITDA (19%) due to expanded steel margins and stronger long product shipments - Consolidated operating income improved 39 percent sequentially, and adjusted EBITDA improved 19 percent[4] - Uncertainty regarding trade policy continues to cause hesitancy in customer order patterns, despite healthy underlying demand factors such as manufacturing onshoring, infrastructure program funding, and increased regionalization of supply chains in the U.S.[5] - The company is firmly positioned for continued growth and long-term value creation, coupled with its expansion in value-added steel and now aluminum flat rolled products[5] Segment Performance - Second Quarter 2025 This section details the Q2 2025 operational and financial performance of Steel, Metals Recycling, and Steel Fabrication segments, highlighting key drivers and sequential changes Steel Operations Steel operations' operating income surged 66% sequentially to $382 million in Q2 2025, primarily due to expanded metal spread as average realized selling prices increased significantly more than scrap costs Steel Operations Operating Income (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------- | :-------- | :-------- | :---------------- | | Operating Income | $382 million | $229.96 million | +66% | Steel Operations Pricing & Cost (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :-------------------------- | :-------- | :-------- | :---------------- | | Average External Selling Price | $1,134/ton | $998/ton | +$136/ton | | Average Ferrous Scrap Cost | $408/ton | $386/ton | +$22/ton | - The Sinton, Texas Flat Roll Division's access to oxygen was limited for over 65 days, negatively impacting volume by an estimated 55,000 tons in Q2 2025[6] Metals Recycling Operations Metals recycling operations generated $21 million in operating income in Q2 2025, a $4 million sequential decrease, primarily due to lower realized ferrous scrap pricing, which more than offset record quarterly shipments Metals Recycling Operating Income (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------- | :-------- | :-------- | :---------------- | | Operating Income | $21 million | $25.71 million | -$4 million | - Lower realized ferrous scrap pricing more than offset record quarterly shipments[8] Steel Fabrication Operations Steel fabrication operations reported $93 million in operating income for Q2 2025, a sequential decline due to metal spread compression, with order backlog increasing 15% year-to-date and extending into 2026 Steel Fabrication Operating Income (Sequential Change) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------- | :-------- | :-------- | :---------------- | | Operating Income | $93 million | $117 million | -$24 million | - Order backlog increased 15 percent since the beginning of the year and now extends into 2026[9] - Profitability from steel fabrication operations is expected to improve in the sequential third quarter[9] Financial Position & Cash Flow Steel Dynamics generated significant cash flow from operations in Q2 2025, strategically allocating capital to investments, debt repayment, dividends, and share repurchases while maintaining strong liquidity Cash Flow from Operations & Capital Allocation (Q2 2025) In Q2 2025, Steel Dynamics generated $302 million in cash flow from operations, strategically allocating capital by investing $288 million, repaying $400 million in senior notes, distributing $75 million in dividends, and repurchasing $200 million of common stock Q2 2025 Cash Flow and Capital Allocation | Activity | Amount | | :-------------------------- | :----------- | | Cash Flow from Operations | $302 million | | Capital Investments | $288 million | | Senior Notes Repaid | $400 million | | Cash Dividends Paid | $75 million | | Common Stock Repurchases | $200 million | | Liquidity (as of June 30, 2025) | $1.9 billion | Year-to-Date June 30, 2025 Comparison This section compares Steel Dynamics' financial performance and capital allocation for the first half of 2025 against the prior year, noting changes in net income, sales, and operational metrics Year-to-Date Financial Performance For the first half of 2025, net income was $516 million on $8.9 billion in net sales, a significant decrease compared to $1.0 billion net income and $9.3 billion net sales in H1 2024, primarily due to lower realized pricing H1 2025 vs H1 2024 Key Financials | Metric | H1 2025 | H1 2024 | YoY Change | | :----------------- | :-------- | :-------- | :--------- | | Net Income | $516 million | $1.0 billion | -48.4% | | Net Sales | $8.9 billion | $9.3 billion | -4.3% | | Operating Income | $658 million | $1.31 billion | -49.8% | H1 2025 vs H1 2024 Steel Operations Pricing & Cost | Metric | H1 2025 | H1 2024 | YoY Change | | :-------------------------- | :-------- | :-------- | :--------- | | Average External Selling Price | $1,064/ton | $1,169/ton | -$105/ton | | Average Ferrous Scrap Cost | $397/ton | $403/ton | -$6/ton | Year-to-Date Cash Flow & Capital Allocation For the first half of 2025, cash flow from operations totaled $454 million, with capital allocated to investments, senior note repayments, dividends, and share repurchases, maintaining $1.9 billion in liquidity H1 2025 Cash Flow and Capital Allocation | Activity | Amount | | :-------------------------- | :----------- | | Cash Flow from Operations | $454 million | | Capital Investments | $594 million | | Senior Notes Repaid | $400 million | | Cash Dividends Paid | $144 million | | Common Stock Repurchases | $450 million | | Liquidity (as of June 30, 2025) | $1.9 billion | Outlook & Strategic Initiatives The company anticipates robust domestic steel and aluminum consumption, supported by favorable trade policies and strategic expansion into value-added aluminum flat rolled products Market Outlook Steel Dynamics anticipates strong domestic steel and aluminum consumption in the coming years, driven by the mitigation of trade and tax policy uncertainties and an improved interest rate environment - The company remains confident that market factors are in place to support strong domestic steel and aluminum product consumption in the coming years, as trade and tax policy uncertainty is mitigated and the interest rate environment improves[14] - The U.S. International Trade Commission's preliminary determinations on coated flat rolled steel are viewed as a significant positive development, with final determinations expected before the end of the third quarter 2025[15] Aluminum Expansion & Diversification The company successfully shipped its first aluminum flat rolled product coils in June 2025 and projects a utilization rate of 40-50% by the end of 2025 and 75% by the end of 2026, diversifying into counter-cyclical markets - Successfully produced and sold the first aluminum coils last month (June 2025)[16] Aluminum Mill Utilization Rate Projections | Period | Projected Utilization Rate | | :----- | :------------------------- | | End of 2025 | 40-50% | | End of 2026 | 75% | - Expanding and diversifying end markets by supplying aluminum flat rolled products with high recycled content to the counter-cyclical, sustainability-driven beverage can and packaging industry, as well as the automotive, industrial, and construction sectors[17] Company Information & Disclosures This section provides an overview of Steel Dynamics' business model, defines key financial metrics, and includes standard forward-looking statements and risk factor disclosures About Steel Dynamics, Inc. Steel Dynamics is a leading industrial metals solutions company, utilizing a circular manufacturing model to produce lower-carbon-emission products from recycled scrap, and is diversifying into aluminum operations - Operates using a circular manufacturing model, producing lower-carbon-emission, quality products with recycled scrap as the primary input[20] - One of the largest domestic steel producers and metal recyclers in North America, combined with a meaningful downstream steel fabrication platform[20] - Currently investing in aluminum operations to further diversify its product offerings, with plans to supply aluminum flat rolled products with high recycled content to the countercyclical sustainable beverage can industry, in addition to the automotive and industrial sectors[20] Financial Metric Notes & Forward-Looking Statements This section defines After-tax Return-on-Invested Capital (ROIC) and clarifies the use of non-GAAP financial measures like EBITDA and Adjusted EBITDA, emphasizing they supplement, not replace, GAAP results - After-tax ROIC is calculated as Net Income Attributable to Steel Dynamics, Inc. divided by (Quarterly Average Current Maturities of Long-term Debt + Long-term Debt + Total Equity)[21] - Non-GAAP financial measures (EBITDA and Adjusted EBITDA) provide additional meaningful information but should be viewed in addition to and not as an alternative for GAAP results[22] - The press release contains predictive statements about future events, subject to many risks and uncertainties, as detailed in the company's SEC filings[23] Consolidated Financial Statements This section presents Steel Dynamics' complete consolidated statements of income, balance sheets, and cash flows for the specified periods, offering a comprehensive financial overview Consolidated Statements of Income The consolidated statements of income provide a detailed overview of Steel Dynamics' financial performance for the three and six months ended June 30, 2025, and comparative periods, showing key figures such as net sales, gross profit, operating income, net income, and diluted earnings per share Consolidated Statements of Income (Selected Data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | Q1 2025 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Net sales | $4,565,123 | $4,632,634 | $8,934,318 | $9,326,637 | $4,369,195 | | Gross profit | $618,468 | $774,837 | $1,105,012 | $1,755,635 | $486,544 | | Operating income | $382,855 | $559,123 | $657,999 | $1,310,098 | $275,144 | | Net income attributable to Steel Dynamics, Inc. | $298,726 | $427,998 | $515,877 | $1,012,039 | $217,151 | | Diluted earnings per share | $2.01 | $2.72 | $3.44 | $6.39 | $1.44 | | Dividends declared per share | $0.50 | $0.46 | $1.00 | $0.92 | $0.50 | Consolidated Balance Sheets The consolidated balance sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets (cash, receivables, inventories, property), liabilities (accounts payable, debt), and equity, reflecting changes over the period Consolidated Balance Sheets (Selected Data) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total current assets | $5,690,599 | $5,431,338 | | Total assets | $15,548,638 | $14,935,233 | | Total current liabilities | $1,819,081 | $2,150,583 | | Long-term debt | $3,779,559 | $2,804,017 | | Total liabilities | $6,704,588 | $5,989,987 | | Total equity | $8,702,824 | $8,774,034 | Consolidated Statements of Cash Flows The consolidated statements of cash flows illustrate the movement of cash for the three and six months ended June 30, 2025, and comparative periods, categorizing cash flows from operating, investing, and financing activities, and showing the overall change in cash and equivalents Consolidated Statements of Cash Flows (Selected Data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------------------------- | :-------- | :-------- | :-------- | :-------- | | Net cash provided by operating activities | $301,611 | $382,561 | $454,214 | $737,778 | | Net cash used in investing activities | $(305,696) | $(209,586) | $(484,455) | $(502,520) | | Net cash used in financing activities | $(724,783) | $(382,350) | $(101,488) | $(806,196) | | Decrease in cash, cash equivalents, and restricted cash | $(728,868) | $(209,375) | $(131,729) | $(570,938) | | Cash, cash equivalents, and restricted cash at end of period | $463,281 | $835,526 | $463,281 | $835,526 | Supplemental Segment Information This section provides detailed financial and operational data for Steel Dynamics' various segments, including net sales, operating income, and key production and shipment metrics Segment Net Sales This section provides a detailed breakdown of external net sales across Steel, Steel Fabrication, Metals Recycling, and Aluminum segments for Q2 2025 and year-to-date, illustrating the revenue contribution from each business unit External Net Sales by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Steel | $3,275,551 | $3,132,232 | $6,342,567 | $6,498,469 | $3,067,016 | | Steel Fabrication | $340,648 | $472,832 | $692,955 | $920,011 | $352,307 | | Metals Recycling | $522,721 | $517,167 | $1,057,616 | $1,024,437 | $534,895 | | Aluminum | $65,632 | $69,265 | $132,208 | $131,468 | $66,576 | | Other | $360,571 | $441,138 | $708,972 | $752,252 | $348,401 | | Consolidated Net Sales | $4,565,123 | $4,632,634 | $8,934,318 | $9,326,637 | $4,369,195 | Segment Operating Income (Loss) This section details the operating income or loss for each segment, including Steel, Steel Fabrication, Metals Recycling, and Aluminum, along with non-cash adjustments and non-segment operations, contributing to the consolidated operating income Operating Income (Loss) by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :---------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Steel | $382,196 | $442,317 | $612,159 | $1,116,965 | $229,963 | | Steel Fabrication | $93,115 | $180,780 | $209,860 | $359,161 | $116,745 | | Metals Recycling | $21,290 | $26,746 | $47,000 | $43,405 | $25,710 | | Aluminum | $(40,627) | $(13,862) | $(69,362) | $(21,417) | $(28,735) | | Non-cash amortization of intangible assets | $(6,897) | $(7,645) | $(13,794) | $(15,309) | $(6,897) | | Profit sharing expense | $(30,706) | $(48,053) | $(53,401) | $(110,705) | $(22,695) | | Non-segment operations | $(35,516) | $(21,160) | $(74,463) | $(62,002) | $(38,947) | | Consolidated Operating Income | $382,855 | $559,123 | $657,999 | $1,310,098 | $275,144 | Adjusted EBITDA Reconciliation This section reconciles net income to EBITDA and Adjusted EBITDA for Q2 2025 and year-to-date, detailing adjustments for income taxes, interest, depreciation, amortization, and non-cash items to offer a comprehensive view of the company's operational performance Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :------------------------------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Net income | $301,191 | $431,690 | $518,870 | $1,019,190 | $217,679 | | Income taxes | $86,675 | $133,422 | $149,650 | $311,703 | $62,975 | | Net interest expense (income) | $7,025 | $(7,867) | $9,341 | $(22,194) | $2,316 | | Depreciation | $124,003 | $107,849 | $249,125 | $213,879 | $125,122 | | Amortization of intangible assets | $6,897 | $7,645 | $13,794 | $15,309 | $6,897 | | EBITDA | $525,791 | $672,739 | $940,780 | $1,537,887 | $414,989 | | Unrealized (gains) losses on derivatives and currency remeasurement | $(6,197) | $818 | $12,956 | $(529) | $19,153 | | Equity-based compensation | $13,819 | $12,855 | $28,000 | $27,680 | $14,181 | | Adjusted EBITDA | $533,413 | $686,412 | $981,736 | $1,565,038 | $448,323 | Other Operating Information This section offers detailed operational metrics for the Steel, Metals Recycling, and Steel Fabrication segments, including average sales prices, average ferrous costs, and various shipment and production volumes, providing granular insights into operational performance Steel Segment Operating Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Average external sales price (Per ton) | $1,134 | $1,138 | $1,064 | $1,169 | $998 | | Average ferrous cost (Per ton melted) | $408 | $388 | $397 | $403 | $386 | | Flat Roll shipments | 1,952,228 | 1,943,583 | 4,071,415 | 3,936,888 | 2,119,187 | | Long Product shipments | 918,468 | 830,338 | 1,788,103 | 1,674,079 | 869,725 | | Total Shipments (Tons) | 3,349,798 | 3,203,200 | 6,831,337 | 6,458,794 | 3,481,539 | | External Shipments (Tons) | 2,888,916 | 2,753,117 | 5,960,651 | 5,556,686 | 3,071,735 | | Steel Mill Production (Tons) | 2,949,936 | 2,802,086 | 5,971,529 | 5,794,104 | 3,021,593 | Metals Recycling Segment Operating Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Nonferrous shipments (000's of pounds) | 245,577 | 253,815 | 478,657 | 497,765 | 233,080 | | Ferrous shipments (Gross tons) | 1,596,583 | 1,509,924 | 3,049,015 | 2,967,713 | 1,452,432 | | External ferrous shipments (Gross tons) | 545,022 | 591,120 | 1,102,640 | 1,128,093 | 557,618 | Steel Fabrication Segment Operating Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | 1Q 2025 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Average sales price (Per ton) | $2,517 | $2,978 | $2,558 | $3,055 | $2,599 | | Shipments (Tons) | 135,347 | 159,069 | 270,928 | 302,911 | 135,581 |