Archrock Inc. (AROC) closed at $19.27 in the latest trading session, marking a +0.21% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.85%. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq appreciated by 1.53%.Heading into today, shares of the natural gas compression services business had lost 3.99% over the past month, outpacing the Oils-Energy sector's loss of 4.55% and lagging the S&P 500's gain of 3.11% in that time.The investment communit ...

Archrock Inc. (AROC) closed the most recent trading day at $18.87, moving -1.46% from the previous trading session. This change lagged the S&P 500's 0.02% loss on the day. Meanwhile, the Dow experienced a rise of 0.2%, and the technology-dominated Nasdaq saw a decrease of 0.09%.The the stock of natural gas compression services business has fallen by 5.01% in the past month, lagging the Oils-Energy sector's loss of 2.35% and the S&P 500's gain of 4.59%.Market participants will be closely following the financ ...

Archrock Inc. (AROC) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this natural gas compression services business have returned -7.1%, compared to the Zacks S&P 500 composite's +3.4% change. During this period, the Zacks Oil and Gas - Field Services industry, which Archrock Inc. falls in, has lost 6%. The key question now is: What c ...

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?Let's take a look at what these Wall Street heavyweights have to say about Archrock Inc. (AROC) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.Archrock Inc. currently has an averag ...

esemelweThesis The US natural gas industry has been in growth mode for over a decade. Accommodating this growth requires extensive infrastructure and capital investment. The most discussed infrastructure topics for natural gas are pipelines or export terminals. What does not get discussed, is the compression equipment market that supplies the equipment necessary to send the molecules down the pipe. This is a niche market with only three significant suppliers, all of which are nearly maxed out in terms o ...

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?Let's take a look at what these Wall Street heavyweights have to say about Archrock Inc. (AROC) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.Archrock Inc. currently has ...

Archrock Inc. (AROC) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this natural gas compression services business have returned -4.1% over the past month versus the Zacks S&P 500 composite's -1.6% change. The Zacks Oil and Gas - Field Services industry, to which Archrock Inc. belongs, has lost 9.3% over this period. Now the key question is: Where could ...

Financial Data and Key Metrics Changes - Net income for Q1 2024 was $41 million, up from $16 million in Q1 2023 [5] - Adjusted EBITDA increased to $131 million, a 35% increase year-over-year [5][16] - The leverage ratio improved to an all-time low of 3.2x, down from 3.5x at year-end 2023 [5][19] - Quarterly dividend per share increased by 10% compared to the previous year, with a robust dividend coverage of 3.2x [5][20] Business Segment Data and Key Metrics Changes - Contract operations revenue reached $223 million, up 5% from the previous quarter, driven by higher pricing [16] - Aftermarket services segment revenue was $45 million, an 8% increase year-over-year, with a gross margin of 23% [18][53] - Gross margin percentage for contract operations increased to 65%, up 700 basis points year-over-year [12][18] Market Data and Key Metrics Changes - The U.S. natural gas production forecast indicates flat production for 2024, but growth in associated gas production in key markets like the Permian is expected [9] - Demand for compression services is strong, particularly in the Permian, with near-record utilization of 95% [11][12] - The market for gas lift is growing, directly tied to oil production, with expectations for continued strength in the Permian [34][35] Company Strategy and Development Direction - The company is focused on enhancing its operational efficiency through digitization and emissions reduction efforts [10][15] - Archrock aims to maintain high levels of profitability and is committed to returning capital to shareholders through dividends and share repurchases [14][20] - The company is optimistic about the future of natural gas as a cleaner energy source and is investing in electric motor drive compression [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong compression market fundamentals and the company's ability to sustain high utilization and pricing [10][21] - The outlook for 2024 has been raised, with adjusted EBITDA guidance increased to a range of $510 million to $540 million [21] - Management highlighted the importance of capital discipline across the energy sector and the need for higher returns on investment [10][27] Other Important Information - The company celebrated its 70th anniversary, reflecting on its legacy and future potential [7][8] - Share repurchase program has been reauthorized with an additional capacity of $50 million [20] - The company reported a noncash long-lived asset impairment of $3 million in Q1 2024 [16] Q&A Session Summary Question: Insights on pricing dynamics and future expectations - Management noted that spot pricing is up 23% to 24% year-over-year, with continued pricing momentum expected [25][26] - Future pricing guidance was not provided, but management acknowledged the need for higher returns in the industry [27][28] Question: Capital allocation strategy regarding dividends and buybacks - The company intends to revisit dividend rates quarterly and is focused on generating returns for investors [29][30] - Management emphasized a systematic approach to share repurchases, balancing between equity and debt [30][31] Question: Opportunities in the gas lift market - Management highlighted strong growth in the gas lift market, particularly in the Permian, and noted the economic similarities to gathering applications [34][37] Question: Growth expectations outside the Permian - Management identified growth opportunities in the Rockies, South Texas, and the Northeast, but emphasized that 60% of growth CapEx is still directed towards the Permian [50][51] Question: Continued strength in aftermarket services - The aftermarket segment's growth is attributed to a higher mix of service work and a tight labor market, which is expected to continue [52][55]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-33666 Archrock, Inc. (Exact name of registrant as specified in its charter) Delaware 74-3204509 (State or other j ...

[Q1 2024 Performance Overview](index=1&type=section&id=Q1%202024%20Performance%20Overview) [First Quarter 2024 Highlights](index=1&type=section&id=First%20Quarter%202024%20Highlights) Archrock reported significant year-over-year growth in key metrics, raised its full-year guidance, and increased its dividend Q1 2024 vs Q1 2023 Key Metrics | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $268.5M | $229.8M | +16.8% | | Net Income | $40.5M | $16.5M | +145.5% | | Adjusted EBITDA | $131.0M | $97.2M | +34.8% | | Leverage Ratio | 3.2x | 4.1x | -0.9x | | Quarterly Dividend | $0.165/share | $0.150/share | +10.0% | - The company raised its 2024 Adjusted EBITDA guidance to a range of **$510 million to $540 million**, up from the previous range of $500 million to $530 million[2](index=2&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management credits strong performance to operational execution and sees sustained high utilization driven by positive long-term natural gas demand - The company's earnings momentum is driven by excellent operating execution, a high-quality asset base, and innovative processes and technology[3](index=3&type=chunk) - Archrock expects to maintain **historically high levels of utilization, pricing, and profitability** throughout 2024[3](index=3&type=chunk) - Long-term demand for natural gas is supported by growing energy needs for **LNG exports and domestic power generation**, positioning Archrock as a crucial part of the value chain[4](index=4&type=chunk) [Consolidated Financial Results](index=1&type=section&id=Consolidated%20Financial%20Results) Net income more than doubled year-over-year to $40.5 million, and Adjusted EBITDA grew substantially by 34.8% to $131.0 million Q1 Financial Performance Comparison | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $40.5M | $16.5M | | Adjusted EBITDA | $131.0M | $97.2M | - Q1 2024 net income included a non-cash long-lived and other asset impairment of **$2.6 million**, the same amount as in Q1 2023[5](index=5&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) [Contract Operations](index=1&type=section&id=Contract%20Operations) The segment saw a 19% revenue increase and a significant gross margin expansion to 65%, maintaining high utilization at 95% Contract Operations Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $223.1M | $187.7M | | Gross Margin | $145.3M | $108.3M | | Gross Margin % | 65% | 58% | | Utilization (End of Qtr) | 95% | 94% | - Total operating horsepower increased to **3.6 million** at the end of Q1 2024 from 3.5 million at the end of Q1 2023[6](index=6&type=chunk) - Exit utilization was slightly down sequentially because **19,500 horsepower** of new units were delivered in March but did not begin generating revenue until April[7](index=7&type=chunk) [Aftermarket Services](index=3&type=section&id=Aftermarket%20Services) This segment reported increased revenue and a 27% growth in gross margin, with the margin percentage improving from 19% to 23% Aftermarket Services Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $45.4M | $42.1M | | Gross Margin | $10.4M | $8.2M | | Gross Margin % | 23% | 19% | [Financial Position and Shareholder Returns](index=3&type=section&id=Financial%20Position%20and%20Shareholder%20Returns) [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) The company maintained a strong balance sheet with $1.6 billion in debt, ample liquidity, and a significantly improved leverage ratio of 3.2x - Long-term debt stood at **$1.6 billion** as of March 31, 2024[9](index=9&type=chunk) - Total available liquidity was **$477.7 million** at the end of the first quarter[9](index=9&type=chunk) - The company's leverage ratio improved to **3.2x** at the end of Q1 2024, compared to 4.1x at the end of Q1 2023[2](index=2&type=chunk)[9](index=9&type=chunk) [Shareholder Returns](index=3&type=section&id=Shareholder%20Returns) Commitment to shareholders was shown through a 10% dividend increase and the extension of its $50 million share repurchase program [Quarterly Dividend](index=3&type=section&id=Quarterly%20Dividend) The company declared a 10% year-over-year dividend increase to $0.165 per share, supported by a strong 3.2x coverage ratio - Declared a quarterly dividend of **$0.165 per share**, which is 10% higher than Q1 2023[2](index=2&type=chunk)[10](index=10&type=chunk) - Dividend coverage for the first quarter of 2024 was strong at **3.2x**[10](index=10&type=chunk) [Share Repurchase Program](index=3&type=section&id=Share%20Repurchase%20Program) Archrock repurchased $1.2 million in shares during the quarter and extended its $50 million repurchase authorization for 24 months - In Q1 2024, the company repurchased **82,972 common shares** for approximately **$1.2 million**[11](index=11&type=chunk) - The Board of Directors extended the share repurchase program for another 24 months and replenished the available capacity to **$50 million**[11](index=11&type=chunk) [2024 Annual Guidance](index=4&type=section&id=2024%20Annual%20Guidance) [Updated 2024 Guidance](index=4&type=section&id=Updated%202024%20Guidance) The company raised its full-year 2024 guidance for Adjusted EBITDA and Net Income, reflecting confidence in continued strong performance Updated Full Year 2024 Guidance | Metric | Low | High | | :--- | :--- | :--- | | Net Income | $144.0M | $174.0M | | Adjusted EBITDA | $510.0M | $540.0M | | Cash available for dividend | $300.0M | $320.0M | | Contract operations revenue | $890.0M | $915.0M | | Aftermarket services revenue | $175.0M | $185.0M | | Growth capital expenditures | $190.0M | $190.0M | [Financial Statements and Supplemental Information](index=5&type=section&id=Financial%20Statements%20and%20Supplemental%20Information) [Summary Metrics](index=5&type=section&id=Summary%20Metrics) This section presents a comparative overview of key financial and operational metrics for Q1 2024 versus prior periods Key Metrics Comparison | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income | $40.5M | $33.0M | $16.5M | | Adjusted EBITDA | $131.0M | $120.3M | $97.2M | | Cash available for dividend | $82.0M | $71.5M | $46.2M | | Cash available for dividend coverage | 3.2x | 2.8x | 2.0x | | Horsepower utilization (spot) | 95.0% | 96.0% | 94.0% | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The income statement shows a significant year-over-year increase in total revenue to $268.5 million and net income to $40.5 million Q1 2024 Income Statement Highlights | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $268.5M | $229.8M | | Income before income taxes | $53.6M | $22.6M | | Net Income | $40.5M | $16.5M | | Diluted EPS | $0.26 | $0.10 | [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP measures like Adjusted EBITDA and Free Cash Flow to their GAAP equivalents - Adjusted EBITDA is reconciled from Net Income by adding back items such as interest expense, taxes, depreciation & amortization, and stock-based compensation[16](index=16&type=chunk)[30](index=30&type=chunk) - Cash Available for Dividend is derived from Adjusted EBITDA by subtracting maintenance and other capital expenditures, cash taxes, and cash interest expense[18](index=18&type=chunk)[32](index=32&type=chunk) - Free Cash Flow is calculated as Net Cash Provided by Operating Activities plus Net Cash Used in Investing Activities[19](index=19&type=chunk)[36](index=36&type=chunk)