Core Viewpoint - Archrock Inc. reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, and showing an increase from $0.25 per share a year ago, indicating a positive earnings surprise of +5.41% [1] Financial Performance - The company achieved revenues of $383.15 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.36% and up from $270.53 million year-over-year [2] - Over the last four quarters, Archrock has exceeded consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance and Outlook - Archrock shares have declined approximately 9.7% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Earnings Estimate Revisions - The trend for earnings estimate revisions for Archrock was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $377.37 million, and for the current fiscal year, it is $1.54 on revenues of $1.47 billion [7] Industry Context - The Oil and Gas - Field Services industry, to which Archrock belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Archrock delivered strong Q2 2025 performance, completing the NGCS acquisition, growing operating horsepower, and maintaining a record 96% utilization rate, while raising EBITDA guidance and increasing shareholder returns - Archrock delivered strong Q2 2025 performance, completing the NGCS acquisition, achieving **368,000 operating horsepower growth**, and maintaining a record **96% utilization rate**[3](index=3&type=chunk) - Despite commodity price volatility, customer demand remains robust, with strong contract compression backlog extending into **2026**, primarily driven by the Permian region[4](index=4&type=chunk) - The company raised its **2025 Adjusted EBITDA guidance**, increased the quarterly cash dividend, and repurchased approximately **$29 million** in stock to return value to shareholders and maintain a healthy balance sheet[5](index=5&type=chunk) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Archrock achieved significant financial growth in Q2 2025, with substantial increases in revenue, net income, and Adjusted EBITDA, alongside the NGCS acquisition and enhanced shareholder returns Q2 2025 Key Financial Metrics Comparison (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------- | :--------------- | :--------------- | :--- | | Revenue | $383.2 million | $270.5 million | +41.7% | | Net Income | $63.4 million | $34.4 million | +84.3% | | EPS | $0.36 | $0.22 | +63.6% | | Adjusted Net Income | $68.4 million | $35.8 million | +91.1% | | Adjusted EPS | $0.39 | $0.23 | +69.6% | | Adjusted EBITDA | $212.7 million | $129.7 million | +64.0% | - The company completed the acquisition of Natural Gas Compression Systems, Inc. (NGCS) on May 1, 2025[8](index=8&type=chunk) - A quarterly dividend of **$0.21 per share** was declared, representing approximately **27% growth** from Q2 2024, with a **3.4x dividend coverage ratio**[8](index=8&type=chunk) - Shareholder returns through dividends and share repurchases totaled **$96.9 million** in H1 2025, compared to **$53.0 million** in H1 2024[8](index=8&type=chunk) - Full-year 2025 Adjusted EBITDA guidance was raised to a range of **$810 million to $850 million**[8](index=8&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Contract Operations](index=2&type=section&id=Contract%20Operations) Contract Operations showed robust Q2 2025 performance with significant revenue and Adjusted Gross Margin growth, increased operating horsepower, high utilization, and a strategic asset divestiture Contract Operations Key Metrics Comparison (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------- | :--------------- | :--------------- | :--- | | Revenue | $318.3 million | $225.5 million | +41% | | Adjusted Gross Margin | $222.2 million | $146.2 million | +52% | | Adjusted Gross Margin % | 70% | 65% | +5% | | Total Operating Horsepower (End of Period) | 4.7 million | 3.6 million | +30.6% | | Utilization Rate (End of Period) | 96% | 95% | +1% | - The company completed the sale of 155 compression units (approximately **47,000 horsepower**) and other related assets on August 1, 2025, generating **$71.0 million** in cash proceeds[10](index=10&type=chunk) - A **$10.8 million** impairment of long-lived and other assets was recognized in Q2 2025 due to assets classified as held for sale, with **$8.7 million** impacting Adjusted Net Income, a **$6.9 million** after-tax impact, and approximately **$0.04 per share**[6](index=6&type=chunk)[11](index=11&type=chunk) [Aftermarket Services](index=2&type=section&id=Aftermarket%20Services) Aftermarket Services experienced notable revenue and Adjusted Gross Margin growth in Q2 2025, accompanied by a slight improvement in gross margin percentage Aftermarket Services Key Metrics Comparison (YoY) | Metric | Q2 2025 | Q2 2024 | Change | | :----------------------- | :--------------- | :--------------- | :--- | | Revenue | $64.8 million | $45.1 million | +43.7% | | Adjusted Gross Margin | $14.9 million | $9.9 million | +50.5% | | Adjusted Gross Margin % | 23% | 22% | +1% | [Financial Position & Shareholder Returns](index=2&type=section&id=Financial%20Position%20%26%20Shareholder%20Returns) [Balance Sheet](index=2&type=section&id=Balance%20Sheet) As of June 30, 2025, Archrock reported $2.6 billion in long-term debt and $675 million in available liquidity, with leverage slightly increasing due to the NGCS acquisition Balance Sheet Key Metrics | Metric | June 30, 2025 | June 30, 2024 | Change | | :----------------------- | :--------------- | :--------------- | :--- | | Long-Term Debt | $2.6 billion | $1.6 billion | +62.5% | | Available Liquidity | $675 million | N/A | N/A | | Leverage Ratio | 3.3x | 3.2x | +0.1x | - The increase in leverage was primarily driven by the NGCS acquisition[13](index=13&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) Archrock consistently returns value to shareholders through increased quarterly dividends and an active share repurchase program, demonstrating healthy dividend coverage and ample repurchase capacity [Quarterly Dividend](index=2&type=section&id=Quarterly%20Dividend) The Board declared a Q2 2025 quarterly dividend of $0.21 per share, annualized to $0.84 per share, with a 3.4x dividend coverage ratio Quarterly Dividend Information | Metric | Amount | | :----------------------- | :--------------- | | Q2 2025 Dividend/Share | $0.21 | | Annualized Dividend/Share | $0.84 | | Q2 2025 Dividend Coverage | 3.4x | [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) In Q2 2025, Archrock repurchased 1,226,954 common shares for approximately $28.8 million, with $58.9 million remaining under the program as of June 30, 2025 Share Repurchase Activity | Metric | Q2 2025 | April 2023 to Date | | :----------------------- | :--------------- | :--------------- | | Shares Repurchased | 1,226,954 shares | 2,719,315 shares | | Average Repurchase Price | $23.49/share | $18.84/share | | Total Repurchase Amount | $28.8 million | $51.2 million | | Available Authorization as of June 30, 2025 | $58.9 million | N/A | [Updated 2025 Annual Guidance](index=3&type=section&id=Updated%202025%20Annual%20Guidance) Archrock updated its 2025 full-year guidance, incorporating the NGCS acquisition and a compression asset divestiture, projecting strong net income and Adjusted EBITDA, stable gross margins, and significant capital expenditures 2025 Full-Year Guidance | Metric | Low (USD Thousands) | High (USD Thousands) | | :----------------------------------- | :-------------- | :-------------- | | Net Income | 249,600 | 289,600 | | Adjusted EBITDA | 810,000 | 850,000 | | Cash Available for Dividend | 502,000 | 527,000 | | Contract Operations Revenue | 1,260,000 | 1,280,000 | | Contract Operations Adjusted Gross Margin % | 69% | 71% | | Aftermarket Services Revenue | 205,000 | 215,000 | | Aftermarket Services Adjusted Gross Margin % | 23% | 24% | | Selling, General & Administrative Expenses | 151,000 | 147,000 | | Growth Capital Expenditures | 340,000 | 360,000 | | Maintenance Capital Expenditures | 110,000 | 120,000 | | Other Capital Expenditures | 35,000 | 40,000 | - The full-year 2025 guidance incorporates the NGCS acquisition (8 months of financial impact) and the divestiture of certain compression assets to Flowco Holdings Inc. (August to December impact)[16](index=16&type=chunk) [Summary Metrics](index=4&type=section&id=Summary%20Metrics) This section provides detailed financial and operational metrics for Q2 2025, Q1 2025, and Q2 2024, including net income, Adjusted EBITDA, segment revenues, gross margins, cash flow, and operating horsepower utilization, illustrating quarterly performance and efficiency changes Key Financial Metrics Summary (USD Thousands, Percentages, Per Share Amounts, and Ratios) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net Income | $63,420 | $70,850 | $34,425 | | Adjusted Net Income | $68,374 | $74,484 | $35,793 | | Adjusted EBITDA | $212,678 | $197,845 | $129,712 | | Contract Operations Revenue | $318,327 | $300,397 | $225,468 | | Contract Operations Adjusted Gross Margin | $222,175 | $210,598 | $146,190 | | Contract Operations Adjusted Gross Margin % | 70% | 70% | 65% | | Aftermarket Services Revenue | $64,825 | $46,766 | $45,058 | | Aftermarket Services Adjusted Gross Margin | $14,939 | $11,509 | $9,900 | | Aftermarket Services Adjusted Gross Margin % | 23% | 25% | 22% | | Selling, General & Administrative Expenses | $36,244 | $37,207 | $31,163 | | Net Cash Provided by Operating Activities | $127,471 | $115,628 | $70,651 | | Cash Available for Dividend | $125,055 | $132,247 | $71,593 | | Cash Available for Dividend Coverage | 3.4x | 3.9x | 2.6x | | Adjusted Free Cash Flow | $(250,195) | $(48,403) | $(16,914) | | Adjusted Free Cash Flow After Dividends | $(283,815) | $(82,588) | $(42,733) | | Total Available Horsepower (End of Period) | 4,843 | 4,461 | 3,806 | | Total Operating Horsepower (End of Period) | 4,651 | 4,283 | 3,601 | | Horsepower Utilization (End of Period) | 96% | 96% | 95% | | Average Operating Horsepower | 4,467 | 4,254 | 3,605 | | Horsepower Utilization (Average) | 96% | 96% | 95% | | Dividend Declared Per Share for Period | $0.210 | $0.190 | $0.165 | | Total Dividend Declared for Period | $37,155 | $33,758 | $27,977 | [Non-GAAP Financial Measures Definitions](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions) This section defines Archrock's non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDA, Adjusted Gross Margin, Cash Available for Dividend, Adjusted Free Cash Flow, and Adjusted Free Cash Flow After Dividends, explaining their relationship to GAAP metrics and management's rationale for their use - Adjusted Net Income is defined as net income (loss) excluding restructuring charges and transaction-related costs, adjusted for income taxes[27](index=27&type=chunk) - Adjusted EBITDA is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, impairment of long-lived and other assets, unrealized changes in fair value of investments in unconsolidated affiliates, restructuring charges, transaction-related costs, non-cash equity-based compensation expense, amortization of capitalized implementation costs, and other items[28](index=28&type=chunk) - Adjusted Gross Margin is defined as total revenue less cost of sales, excluding depreciation and amortization; Adjusted Gross Margin Percentage is defined as Adjusted Gross Margin divided by revenue[29](index=29&type=chunk) - Cash Available for Dividend is defined as Adjusted EBITDA less maintenance capital expenditures, other capital expenditures, cash taxes, and cash interest expense[30](index=30&type=chunk) - Adjusted Free Cash Flow is defined as net cash provided by operating activities plus net cash provided by (used in) investing activities[31](index=31&type=chunk) - Adjusted Free Cash Flow After Dividends is defined as net cash provided by operating activities plus net cash provided by (used in) investing activities less dividends paid to shareholders[32](index=32&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) [About Archrock](index=5&type=section&id=About%20Archrock) Archrock is an energy infrastructure company focused on midstream natural gas compression, providing safe and environmentally responsible services for natural gas production, compression, and transportation, and is a leading provider of compression equipment aftermarket services in the U.S - Archrock is an energy infrastructure company focused on midstream natural gas compression[33](index=33&type=chunk) - The company is committed to helping customers produce, compress, and transport natural gas in a safe and environmentally responsible manner[33](index=33&type=chunk) - Archrock is a leading provider of natural gas compression services and aftermarket services in the U.S. energy industry[33](index=33&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) All non-historical statements in this report are forward-looking, based on assumptions about future events, and subject to uncertainties and factors that could cause actual results to differ materially, including integration challenges, macroeconomic conditions, competition, debt risks, and regulatory changes - Forward-looking statements rely on assumptions about future events and are subject to various uncertainties and factors that could cause actual results to differ materially from those stated[34](index=34&type=chunk) - Risk factors include difficulties in integrating the NGCS acquisition, macroeconomic conditions (inflation, trade tensions), pandemics, international conflicts, operational risks, competitive pressures, debt and debt agreement risks, access to capital markets, deterioration of customer financial conditions, loss of key customers, information technology and cybersecurity risks, and legal and regulatory risks (including climate-related and ESG risks)[35](index=35&type=chunk) [Conference Call Details](index=5&type=section&id=Conference%20Call%20Details) Archrock will host a conference call on August 5, 2025, at 11:30 AM ET to discuss Q2 2025 financial results, accessible via webcast or phone, with a 90-day replay available online - The conference call will be held on **August 5, 2025, at 11:30 AM ET**[25](index=25&type=chunk) - It can be accessed via webcast on Archrock's website (www.archrock.com) or by dialing a specified phone number[25](index=25&type=chunk) - A webcast replay will be available on the company's website for **90 days**[26](index=26&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Statements of Operations](index=7&type=section&id=Statements%20of%20Operations) This section presents Archrock's unaudited condensed consolidated statements of operations, detailing key financial data including revenue, costs, expenses, net income, and earnings per share for Q2 2025, Q1 2025, and Q2 2024 Unaudited Condensed Consolidated Statements of Operations (USD Thousands, Per Share Amounts) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | **Revenue:** | | | | | Contract Operations | $318,327 | $300,397 | $225,468 | | Aftermarket Services | $64,825 | $46,766 | $45,058 | | **Total Revenue** | **$383,152** | **$347,163** | **$270,526** | | **Cost of Sales (Excluding D&A):** | | | | | Contract Operations | $96,152 | $89,799 | $79,278 | | Aftermarket Services | $49,886 | $35,257 | $35,158 | | **Total Cost of Sales (Excluding D&A)** | **$146,038** | **$125,056** | **$114,436** | | Selling, General & Administrative Expenses | $36,244 | $37,207 | $31,163 | | Depreciation and Amortization | $63,139 | $57,620 | $43,853 | | Impairment of Long-Lived and Other Assets | $10,847 | $972 | $4,401 | | Restructuring Charges | $144 | $665 | — | | Interest Expense | $41,711 | $37,741 | $27,859 | | Transaction-Related Costs | $6,127 | $3,935 | $1,782 | | Net Gain on Sale of Assets | $(4,297) | $(7,335) | $(576) | | Other (Income) Expense, Net | $(2,841) | $(684) | $128 | | Income Before Income Taxes | $86,040 | $91,986 | $47,480 | | Income Tax Expense | $22,433 | $21,136 | $13,055 | | Income Before Equity in Net Loss of Unconsolidated Affiliates | $63,607 | $70,850 | $34,425 | | Equity in Net Loss of Unconsolidated Affiliates (After Tax) | $187 | — | — | | **Net Income** | **$63,420** | **$70,850** | **$34,425** | | Net Income Per Share - Basic and Diluted | $0.36 | $0.40 | $0.22 | | Weighted Average Common Shares Outstanding - Basic | 175,007 | 174,014 | 154,496 | | Weighted Average Common Shares Outstanding - Diluted | 175,264 | 174,371 | 154,785 | [Supplemental Information (General)](index=8&type=section&id=Supplemental%20Information%20(General)) This section provides additional supplemental financial and operational data, including segment Adjusted Gross Margins, capital expenditures, total available and operating horsepower, utilization rates, dividend information, and key balance sheet metrics like long-term debt and total equity Unaudited Supplemental Information (USD Thousands, Percentages, Per Share Amounts, and Ratios) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | **Revenue:** | | | | | Contract Operations | $318,327 | $300,397 | $225,468 | | Aftermarket Services | $64,825 | $46,766 | $45,058 | | **Total Revenue** | **$383,152** | **$347,163** | **$270,526** | | **Adjusted Gross Margin:** | | | | | Contract Operations | $222,175 | $210,598 | $146,190 | | Aftermarket Services | $14,939 | $11,509 | $9,900 | | **Total Adjusted Gross Margin** | **$237,114** | **$222,107** | **$156,090** | | **Adjusted Gross Margin %:** | | | | | Contract Operations | 70% | 70% | 65% | | Aftermarket Services | 23% | 25% | 22% | | **Total Adjusted Gross Margin %** | **62%** | **64%** | **58%** | | Selling, General & Administrative Expenses | $36,244 | $37,207 | $31,163 | | % of Revenue | 9% | 11% | 12% | | Adjusted EBITDA | $212,678 | $197,845 | $129,712 | | % of Revenue | 56% | 57% | 48% | | Capital Expenditures | $111,462 | $168,140 | $91,271 | | Proceeds from Sale of Property, Plant & Equipment and Other Assets | $(28,589) | $(2,904) | $(3,706) | | Net Capital Expenditures | $82,873 | $165,236 | $87,565 | | Total Available Horsepower (End of Period) | 4,843 | 4,461 | 3,806 | | Total Operating Horsepower (End of Period) | 4,651 | 4,283 | 3,601 | | Average Operating Horsepower | 4,467 | 4,254 | 3,605 | | Horsepower Utilization (End of Period) | 96% | 96% | 95% | | Horsepower Utilization (Average) | 96% | 96% | 95% | | Dividend Declared Per Share for Period | $0.210 | $0.190 | $0.165 | | Total Dividend Declared for Period | $37,155 | $33,758 | $27,977 | | Cash Available for Dividend Coverage | 3.4x | 3.9x | 2.6x | | Adjusted Free Cash Flow | $(250,195) | $(48,403) | $(16,914) | | Adjusted Free Cash Flow After Dividends | $(283,815) | $(82,588) | $(42,733) | Balance Sheet Key Metrics (USD Thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Long-Term Debt | $2,613,082 | $2,297,767 | $1,608,956 | | Total Equity | $1,408,440 | $1,349,983 | $894,496 | [Reconciliation of Net Income to Adjusted Net Income and Earnings Per Share to Adjusted Earnings Per Share](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20Earnings%20Per%20Share%20to%20Adjusted%20Earnings%20Per%20Share) This section presents the reconciliation of net income to Adjusted Net Income and earnings per share to Adjusted Earnings Per Share, detailing restructuring and transaction-related costs and their tax impacts to illustrate non-GAAP metric calculations Reconciliation of Net Income to Adjusted Net Income and EPS to Adjusted EPS (USD Thousands, Per Share Amounts) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net Income | $63,420 | $70,850 | $34,425 | | Restructuring Charges | $144 | $665 | — | | Transaction-Related Costs | $6,127 | $3,935 | $1,732 | | Adjusted Tax Impact | $(1,317) | $(966) | $(364) | | **Adjusted Net Income** | **$68,374** | **$74,484** | **$35,793** | | Weighted Average Common Shares Outstanding - Basic | 175,007 | 174,014 | 154,496 | | Weighted Average Common Shares Outstanding - Diluted | 175,264 | 174,371 | 154,785 | | Net Income Per Share - Basic and Diluted | $0.36 | $0.40 | $0.22 | | Restructuring Charges Per Share | $0.00 | $0.00 | — | | Transaction-Related Costs Per Share | $0.04 | $0.03 | $0.01 | | Adjusted Tax Impact Per Share | $(0.01) | $(0.01) | — | | **Adjusted Basic and Diluted EPS** | **$0.39** | **$0.42** | **$0.23** | [Reconciliation of Net Income to Adjusted EBITDA and Adjusted Gross Margin](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Adjusted%20Gross%20Margin) This section provides the reconciliation of net income to Adjusted EBITDA and Adjusted Gross Margin, detailing adjustments such as depreciation, amortization, interest, taxes, and equity-based compensation to show non-GAAP metric calculations Reconciliation of Net Income to Adjusted EBITDA and Adjusted Gross Margin (USD Thousands) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net Income | $63,420 | $70,850 | $34,425 | | Depreciation and Amortization | $63,139 | $57,620 | $43,853 | | Impairment of Long-Lived and Other Assets | $10,847 | $972 | $4,401 | | Restructuring Charges | $144 | $665 | — | | Interest Expense | $41,711 | $37,741 | $27,859 | | Transaction-Related Costs | $6,127 | $3,935 | $1,782 | | Equity-Based Compensation Expense | $4,085 | $4,027 | $3,513 | | Amortization of Capitalized Implementation Costs | $818 | $762 | $824 | | Indemnification (Income) Expense, Net | $(233) | $137 | — | | Income Tax Expense | $22,433 | $21,136 | $13,055 | | Equity in Net Loss of Unconsolidated Affiliates (After Tax) | $187 | — | — | | **Adjusted EBITDA** | **$212,678** | **$197,845** | **$129,712** | | Less: Selling, General & Administrative Expenses | $36,244 | $37,207 | $31,163 | | Add: Equity-Based Compensation Expense | $(4,085) | $(4,027) | $(3,513) | | Add: Amortization of Capitalized Implementation Costs | $(818) | $(762) | $(824) | | Less: Net Gain on Sale of Assets | $(4,297) | $(7,335) | $(576) | | Less: Other (Income) Expense, Net | $(2,841) | $(684) | $128 | | **Adjusted Gross Margin** | **$237,114** | **$222,107** | **$156,090** | [Reconciliation of Gross Margin to Adjusted Gross Margin and Adjusted Gross Margin Percentage](index=11&type=section&id=Reconciliation%20of%20Gross%20Margin%20to%20Adjusted%20Gross%20Margin%20and%20Adjusted%20Gross%20Margin%20Percentage) This section presents the reconciliation of gross margin to Adjusted Gross Margin and Adjusted Gross Margin Percentage, illustrating the calculation of Adjusted Gross Margin by adding back depreciation and amortization Reconciliation of Gross Margin to Adjusted Gross Margin and Adjusted Gross Margin Percentage (USD Thousands) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Total Revenue | $383,152 | $347,163 | $270,526 | | Cost of Sales (Excluding D&A) | $(146,038) | $(125,056) | $(114,436) | | Depreciation and Amortization | $(63,139) | $(57,620) | $(43,853) | | **Gross Margin** | **$173,975** | **$164,487** | **$112,237** | | **Gross Margin %** | **45%** | **47%** | **41%** | | Add: Depreciation and Amortization | $63,139 | $57,620 | $43,853 | | **Adjusted Gross Margin** | **$237,114** | **$222,107** | **$156,090** | | **Adjusted Gross Margin %** | **62%** | **64%** | **58%** | [Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Cash%20Available%20for%20Dividend) This section provides the reconciliation of net income to Adjusted EBITDA and Cash Available for Dividend, detailing adjustments from net income to Adjusted EBITDA, and further deducting maintenance and other capital expenditures, cash taxes, and cash interest to derive Cash Available for Dividend Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend (USD Thousands) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net Income | $63,420 | $70,850 | $34,425 | | Depreciation and Amortization | $63,139 | $57,620 | $43,853 | | Impairment of Long-Lived and Other Assets | $10,847 | $972 | $4,401 | | Restructuring Charges | $144 | $665 | — | | Interest Expense | $41,711 | $37,741 | $27,859 | | Transaction-Related Costs | $6,127 | $3,935 | $1,782 | | Equity-Based Compensation Expense | $4,085 | $4,027 | $3,513 | | Amortization of Capitalized Implementation Costs | $818 | $762 | $824 | | Indemnification (Income) Expense, Net | $(233) | $137 | — | | Income Tax Expense | $22,433 | $21,136 | $13,055 | | Equity in Net Loss of Unconsolidated Affiliates (After Tax) | $187 | — | — | | **Adjusted EBITDA** | **$212,678** | **$197,845** | **$129,712** | | Less: Maintenance Capital Expenditures | $(32,413) | $(22,753) | $(25,415) | | Less: Other Capital Expenditures | $(11,707) | $(6,019) | $(3,445) | | Less: Cash Taxes Paid | $(2,853) | $(92) | $(2,028) | | Less: Cash Interest Expense | $(40,650) | $(36,734) | $(27,231) | | **Cash Available for Dividend** | **$125,055** | **$132,247** | **$71,593** | [Reconciliation of Net Cash Provided by Operating Activities to Cash Available for Dividend](index=13&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Cash%20Available%20for%20Dividend) This section reconciles net cash provided by operating activities to Cash Available for Dividend, detailing adjustments for inventory impairment, credit loss provisions, asset sale gains, taxes, amortization, deferred revenue, cash restructuring, cash transaction costs, and balance sheet changes Reconciliation of Net Cash Provided by Operating Activities to Cash Available for Dividend (USD Thousands) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net Cash Provided by Operating Activities | $127,471 | $115,628 | $70,651 | | Inventory Impairment | $(280) | $(188) | $(318) | | Provision for Credit Losses | $(71) | $(156) | $(80) | | Net Gain on Sale of Assets | $4,297 | $7,335 | $576 | | Current Income Tax Expense | $2,155 | $1,182 | $615 | | Cash Taxes Paid | $(2,853) | $(92) | $(2,028) | | Amortization of Operating Lease Right-of-Use Assets | $(1,080) | $(1,204) | $(880) | | Amortization of Contract Costs | $(5,615) | $(5,889) | $(5,957) | | Recognition of Deferred Revenue | $4,039 | $3,746 | $2,747 | | Indemnification (Income) Expense, Net | $(233) | $137 | — | | Cash Restructuring Charges | $144 | $665 | — | | Cash Transaction-Related Costs | $6,127 | $3,935 | $1,782 | | Equity Settlement of Time-Vested Cash or Equity-Settled Units | — | $(1,756) | — | | Changes in Assets and Liabilities | $35,074 | $37,676 | $33,345 | | Maintenance Capital Expenditures | $(32,413) | $(22,753) | $(25,415) | | Other Capital Expenditures | $(11,707) | $(6,019) | $(3,445) | | **Cash Available for Dividend** | **$125,055** | **$132,247** | **$71,593** | [Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow and Adjusted Free Cash Flow After Dividends](index=14&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Adjusted%20Free%20Cash%20Flow%20and%20Adjusted%20Free%20Cash%20Flow%20After%20Dividends) This section reconciles net cash provided by operating activities to Adjusted Free Cash Flow and Adjusted Free Cash Flow After Dividends, by adding back net cash used in investing activities and deducting dividends paid to shareholders, illustrating the calculation of these non-GAAP cash flow metrics Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow and Adjusted Free Cash Flow After Dividends (USD Thousands) | Metric | June 30, 2025 (Q2) | March 31, 2025 (Q1) | June 30, 2024 (Q2) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net Cash Provided by Operating Activities | $127,471 | $115,628 | $70,651 | | Net Cash Used in Investing Activities | $(377,666) | $(164,031) | $(87,565) | | **Adjusted Free Cash Flow** | **$(250,195)** | **$(48,403)** | **$(16,914)** | | Dividends Paid to Shareholders | $(33,620) | $(34,185) | $(25,819) | | **Adjusted Free Cash Flow After Dividends** | **$(283,815)** | **$(82,588)** | **$(42,733)** | - The cash flow metrics reflect **$296.6 million** in cash paid for the NGCS acquisition (net of cash acquired)[57](index=57&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend Guidance](index=15&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Cash%20Available%20for%20Dividend%20Guidance) This section provides the reconciliation of 2025 full-year net income to Adjusted EBITDA and Cash Available for Dividend guidance, detailing all projected adjustments to illustrate the calculation of these non-GAAP guidance metrics Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend Guidance (USD Thousands) | Metric | 2025 Guidance Low | 2025 Guidance High | | :----------------------------------- | :--------------- | :--------------- | | Net Income | $249,600 | $289,600 | | Interest Expense | $164,000 | $164,000 | | Income Tax Expense | $94,000 | $94,000 | | Depreciation and Amortization | $249,000 | $249,000 | | Equity-Based Compensation Expense | $20,000 | $20,000 | | Impairment of Long-Lived and Other Assets | $11,800 | $11,800 | | Amortization of Capitalized Implementation Costs | $3,700 | $3,700 | | Transaction-Related Costs | $17,000 | $17,000 | | Restructuring Charges | $800 | $800 | | Equity in Net Loss of Unconsolidated Affiliates (After Tax) | $200 | $200 | | Net Indemnification Income | $(100) | $(100) | | **Adjusted EBITDA** | **$810,000** | **$850,000** | | Less: Maintenance Capital Expenditures | $(110,000) | $(120,000) | | Less: Other Capital Expenditures | $(35,000) | $(40,000) | | Less: Cash Tax Expense | $(4,000) | $(4,000) | | Less: Cash Interest Expense | $(159,000) | $(159,000) | | **Cash Available for Dividend** | **$502,000** | **$527,000** | - The 2025 annual net income guidance includes **$11.8 million** in impairment of long-lived and other assets as of June 30, 2025, but excludes any potential future costs of this nature[60](index=60&type=chunk) - Transaction-related costs reflect estimated expenses associated with the TOPS and NGCS acquisitions[61](index=61&type=chunk)

Core Insights - Archrock reported outstanding performance in Q2 2025, completing the acquisition of NGCS and achieving a record utilization rate of 96% across its fleet [3][4][5] - The company raised its 2025 adjusted EBITDA guidance and increased its quarterly cash dividend per share, reflecting confidence in future growth [5][16] Financial Performance - Q2 2025 net income was $63.4 million, up from $34.4 million in Q2 2024, with adjusted net income reaching $68.4 million compared to $35.8 million in the prior year [6][8] - Total revenue for Q2 2025 was $383.2 million, a 42% increase from $270.5 million in Q2 2024 [8][39] - Adjusted EBITDA for Q2 2025 was $212.7 million, compared to $129.7 million in Q2 2024, indicating strong operational performance [8][22] Segment Performance - Contract operations segment revenue increased by 41% to $318.3 million in Q2 2025, with an adjusted gross margin percentage of 70% [8][12] - Aftermarket services segment revenue rose to $64.8 million, with an adjusted gross margin percentage of 23% [12][22] Shareholder Returns - The company declared a quarterly dividend of $0.21 per share, approximately 27% higher than the previous year, with a dividend coverage ratio of 3.4x [14][22] - Archrock returned $96.9 million to shareholders through dividends and share repurchases in the first half of 2025, compared to $53.0 million in the same period of 2024 [5][8] Balance Sheet and Guidance - Long-term debt stood at $2.6 billion with available liquidity of $675 million as of June 30, 2025, resulting in a leverage ratio of 3.3x [13][47] - The revised full-year 2025 guidance includes net income between $249.6 million and $289.6 million and adjusted EBITDA between $810 million and $850 million [16][17]

Check price target & stock forecast for Archrock Inc. here>>> When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? 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 advan ...

Archrock is an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping its customers produce, compress and transport natural gas in a safe and environmentally responsible way. Headquartered in Houston, Texas, Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment. For more information on how ...

Company Overview - Archrock Inc. (AROC) is expected to report a year-over-year increase in earnings, with a projected EPS of $0.37, reflecting a +48% change, and revenues anticipated at $360.26 million, up 33.2% from the previous year [3]. Earnings Expectations - The consensus EPS estimate has been revised 2.44% lower over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Archrock is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +10.81% [12]. Earnings Surprise History - In the last reported quarter, Archrock exceeded expectations by delivering an EPS of $0.42 against an expected $0.39, resulting in a surprise of +7.69% [13]. - Over the last four quarters, Archrock has beaten consensus EPS estimates three times [14]. Market Sentiment - Despite the positive Earnings ESP, Archrock currently holds a Zacks Rank of 4 (Sell), complicating predictions of an earnings beat [12][20]. - The stock's movement may be influenced by how actual results compare to estimates, with potential for upward movement if results exceed expectations [2].

Company Performance - Archrock Inc. (AROC) closed at $23.44, reflecting a -2.46% change from the previous day, underperforming compared to the S&P 500's 0.61% gain [1] - Prior to the latest trading session, AROC shares had decreased by 3.1%, lagging behind the Oils-Energy sector's gain of 5.17% and the S&P 500's gain of 3.85% [1] Earnings Projections - The upcoming earnings disclosure for Archrock is projected to show earnings per share (EPS) of $0.37, which is a 48% increase from the same quarter last year [2] - Revenue is estimated to be $360.26 million, indicating a 33.17% growth compared to the corresponding quarter of the prior year [2] - Full-year Zacks Consensus Estimates forecast earnings of $1.55 per share and revenue of $1.47 billion, representing year-over-year changes of +47.62% and +27.02%, respectively [3] Analyst Estimates and Valuation - Recent adjustments to analyst estimates for Archrock reflect near-term business trends, with upward revisions indicating analysts' positivity towards the company's operations [4] - The Zacks Rank system, which evaluates estimate changes, currently ranks Archrock at 4 (Sell), following a 4.83% fall in the Zacks Consensus EPS estimate over the past month [6] - Archrock is currently traded at a Forward P/E ratio of 15.55, which is a premium compared to the industry average Forward P/E of 14.94 [7] - The company has a PEG ratio of 1.3, while the Oil and Gas - Field Services industry holds an average PEG ratio of 3.71 [7] Industry Context - The Oil and Gas - Field Services industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 218, placing it in the bottom 12% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Overview - Archrock is the largest outsourced compression provider in the U S [10] - The company has a market capitalization of $2 25 billion and an enterprise value of $4 1 billion [10] - Archrock's dividend is $0 165 per quarter, resulting in a yield of 4% [10] - 85% of Archrock's fleet is focused on large horsepower units, primarily serving midstream gathering systems [12] Financial Performance and Outlook - Archrock anticipates an adjusted EBITDA between $500 million and $530 million for 2024 [14] - The company's dividend coverage is strong at 2 8x [12] - Archrock is targeting a leverage ratio of 3 0-3 5x in 2024 [12] Market and Strategy - Approximately 2/3 of Archrock's operating horsepower is concentrated in the Permian and Eagle Ford basins [24] - The company's utilization rate reached 96% exceeding prior cycle peak [27] - Archrock is increasing return of capital to shareholders YoY and long-term, with dividend growth complimented by strong expected dividend coverage of well above 2 0x [42]

Company Performance - Archrock Inc. (AROC) closed at $24.36, reflecting a -2.33% change from the previous day's closing price, underperforming the S&P 500 which gained 0.96% [1] - Over the past month, shares of Archrock have appreciated by 0.65%, underperforming the Oils-Energy sector's gain of 6.67% but outperforming the S&P 500's gain of 0.5% [2] - Analysts expect Archrock to report earnings of $0.38 per share, indicating a year-over-year growth of 52%, with a revenue estimate of $360.26 million, representing a 33.17% increase from the same quarter last year [3] - For the entire fiscal year, earnings are projected at $1.62 per share and revenue at $1.47 billion, reflecting changes of +54.29% and +27.02% respectively from the prior year [4] Analyst Estimates - Recent changes to analyst estimates for Archrock indicate a positive outlook on the company's business operations and profit generation capabilities [5] - The Zacks Rank system, which evaluates estimate changes, currently ranks Archrock at 4 (Sell), with the consensus EPS estimate remaining unchanged over the last 30 days [7] Valuation Metrics - Archrock is trading at a Forward P/E ratio of 15.36, which aligns with the industry average [8] - The company has a PEG ratio of 1.28, compared to the Oil and Gas - Field Services industry's average PEG ratio of 3.65 [9] Industry Context - The Oil and Gas - Field Services industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 141, placing it in the bottom 43% of over 250 industries [10]

Core Insights - Archrock, Inc. (NYSE: AROC) has experienced a significant share price increase of 30.97% year-over-year [1] - The company's Q1 2025 revenue rose by 29.32% year-over-year, reaching $347.2 million compared to $268.5 million in Q1 2024 [1] Company Performance - Archrock's revenue growth indicates strong operational performance and demand for its natural gas compression services [1] - The increase in revenue from $268.5 million to $347.2 million reflects a robust market position and potential for continued growth in the energy infrastructure sector [1]