Core Insights - USA Compression Partners (USAC) reported a second-quarter adjusted net profit of 22 cents per common unit, exceeding the Zacks Consensus Estimate of 21 cents, and improved from the previous year's adjusted net profit of 21 cents per common unit due to increased average revenue per horsepower [1][2] Financial Performance - The company generated revenues of $250 million, a 6% increase from the previous year's quarter, surpassing the Zacks Consensus Estimate of $245 million, driven by a 1% rise in Contract operations, a 28% increase in Parts and service revenues, and an 8% rise in Related party revenues [2] - Adjusted EBITDA rose 4% to $149.5 million, exceeding the estimate of $143.7 million [2] - Distributable cash flow increased to $89.9 million from $85.9 million in the prior-year quarter, with net income reported at $28.6 million compared to $31.2 million a year ago [3] - Net operating cash flow was $54.7 million, down from $65.9 million in the previous year [3] - Adjusted gross operating margin decreased to 65.4% from 66.8% in the year-ago period [3] Operational Metrics - Revenue-generating capacity slightly declined year over year to 3.5 million horsepower, but was 1% higher than estimates [4] - Average monthly revenue per horsepower increased to $21.31 from $20.29 in the second quarter of 2024, although it was below the estimate of $21.86 [4] - Average quarterly horsepower utilization rate was 94.4%, slightly down from 94.7% a year ago [4] Cash Flow and Capital Expenditures - Distributable cash flow available to limited partners totaled $89.9 million, providing 1.4X distribution coverage, up 4.7% from the year-ago level [5] - The company declared a cash distribution of 52.5 cents per unit for the second quarter, to be paid on August 8, 2025 [5] - Total costs and expenses were reported at $173.5 million, a 9.9% increase from the previous year's $157.9 million, with growth capex at $18.1 million and maintenance capex at $11.7 million [6] Guidance - For the full year 2025, USAC expects adjusted EBITDA to be between $590 million and $610 million, with distributable cash flow projected to range from $350 million to $370 million [7] - Expansion capital expenditures are anticipated to be between $120 million and $140 million, while maintenance capital expenditures are expected to total between $38 million and $42 million [7]

PART I. FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q2 2025, including balance sheets, statements of operations, cash flows, and detailed notes [Note 1 – Organization and Description of Business](index=11&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Description%20of%20Business) The Partnership provides natural gas compression and treating services under fixed-term contracts to customers in the U.S. natural gas and crude oil industries, operating in major unconventional resource plays - The company's core business is providing **natural gas compression services** under **fixed-term contracts** across key U.S. resource plays[25](index=25&type=chunk) [Note 5 – Property and Equipment and Identifiable Intangible Assets](index=14&type=section&id=Note%205%20%E2%80%93%20Property%20and%20Equipment%20and%20Identifiable%20Intangible%20Assets) This note details the composition of property and equipment, totaling **$2.2 billion net** as of June 30, 2025, and discloses asset impairment charges - The company recorded **impairment charges** on compression equipment of **$3.0 million** for Q2 2025 and **$6.8 million** for the first six months of 2025, due to retiring units that were unmarketable or had excessive maintenance costs[59](index=59&type=chunk) Property and Equipment, Net (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Compression and treating equipment | $4,168,616 | $4,134,544 | | Less: accumulated depreciation | ($2,079,810) | ($1,967,865) | | **Total property and equipment, net** | **$2,200,423** | **$2,273,376** | [Note 8 – Debt Obligations](index=17&type=section&id=Note%208%20%E2%80%93%20Debt%20Obligations) As of June 30, 2025, the Partnership had total long-term debt of approximately **$2.5 billion**, comprising a revolving credit facility and senior notes Long-Term Debt Composition (in thousands) | Debt Instrument | June 30, 2025 (in thousands) | | :--- | :--- | | Senior Notes 2027, aggregate principal | $750,000 | | Senior Notes 2029, aggregate principal | $1,000,000 | | Revolving credit facility | $770,596 | | **Total long-term debt, net** | **$2,503,566** | - Under the revolving credit facility, the company had **$770.6 million** in outstanding borrowings and **$735.1 million** of available borrowing capacity as of June 30, 2025[69](index=69&type=chunk) [Note 9 – Preferred Units](index=18&type=section&id=Note%209%20%E2%80%93%20Preferred%20Units) This note describes Series A Preferred Units terms and reports the conversion of **100,000 units** into common units in June 2025 - On June 3, 2025, holders of Preferred Units converted **100,000 units** into **4,997,126 common units**[85](index=85&type=chunk) Change in Preferred Units Outstanding (Units) | Description | Units | | :--- | :--- | | Outstanding, December 31, 2024 | 180,000 | | Exercise and conversion | (100,000) | | **Outstanding, June 30, 2025** | **80,000** | [Note 10 – Partners' Deficit](index=20&type=section&id=Note%2010%20%E2%80%93%20Partners%27%20Deficit) This note details changes in common units and cash distributions, with **122.6 million common units** outstanding and quarterly distributions of **$0.525 per unit** - The number of common units outstanding increased to **122.6 million**, partly due to the conversion of Preferred Units[88](index=88&type=chunk) Cash Distributions per Unit | Period | Distribution per Common Unit ($) | Distribution per Preferred Unit ($) | | :--- | :--- | :--- | | Q1 2025 (Paid May 9) | $0.525 | $24.375 | | Q4 2024 (Paid Feb 7) | $0.525 | $24.375 | [Note 11 – Revenue Recognition](index=22&type=section&id=Note%2011%20%E2%80%93%20Revenue%20Recognition) Revenue is disaggregated by service type, with contract operations as the majority, and **$1.2 billion** in remaining performance obligations as of June 30, 2025 Disaggregation of Revenue (in thousands) | Revenue Type | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Contract operations revenue | $481,822 | $452,871 | | Retail parts and services revenue | $13,537 | $11,718 | | **Total revenues** | **$495,359** | **$464,589** | - As of June 30, 2025, the company had approximately **$1.2 billion** in aggregate transaction price allocated to unsatisfied performance obligations, expected to be recognized as revenue in future periods[99](index=99&type=chunk) [Note 13 – Commitments and Contingencies](index=23&type=section&id=Note%2013%20%E2%80%93%20Commitments%20and%20Contingencies) This note covers major customers, litigation, and tax contingencies, including an IRS examination for 2019-2020 with a potential **$29.2 million** imputed underpayment - The IRS is examining the Partnership's 2019 and 2020 tax returns and has issued preliminary changes resulting in an imputed underpayment computation of approximately **$29.2 million**. The company has recognized a **$1.0 million** charge as a reasonable estimate of the potential loss[107](index=107&type=chunk)[109](index=109&type=chunk) - One customer accounted for approximately **11% of total revenues** for the first six months of 2025[105](index=105&type=chunk) - As of June 30, 2025, the company had binding commitments to purchase **$44.9 million** in new compression units[110](index=110&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total current assets** | $245,045 | $234,996 | | **Total assets** | $2,671,317 | $2,745,601 | | **Total current liabilities** | $192,922 | $190,678 | | **Long-term debt, net** | $2,503,566 | $2,502,557 | | **Total liabilities** | $2,719,331 | $2,717,843 | | **Partners' deficit** | ($121,415) | ($141,051) | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :--- | :--- | :--- | | **Total revenues** | $250,125 | $495,359 | | **Operating income** | $76,608 | $145,999 | | **Net income** | $28,559 | $49,071 | | **Net income attributable to common unitholders** | $26,609 | $42,733 | | **Basic and diluted net income per common unit** | $0.22 | $0.36 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $178,895 | $162,658 | | **Net cash used in investing activities** | ($40,395) | ($146,715) | | **Net cash used in financing activities** | ($138,512) | ($15,945) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses operating highlights, financial results, liquidity, and capital resources, focusing on revenue growth, rising costs, and non-GAAP measures for Q2 and H1 2025 [Operating Highlights](index=27&type=section&id=Operating%20Highlights) This section highlights key operational metrics, showing modest growth in fleet and revenue-generating horsepower, driven by a **5.0% increase** in average revenue per horsepower Key Operating Metrics Comparison | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Average revenue-generating horsepower (HP) | 3,551,446 | 3,515,483 | 1.0% | | Average revenue per revenue-generating HP/month ($/HP/month) | $21.31 | $20.29 | 5.0% | | Horsepower utilization (at period end) (%) | 94.2% | 95.0% | (0.8)% | - The increase in average revenue per revenue-generating horsepower was primarily due to **higher market-based rates** on new and redeployed units, as well as **contractual price increases**[127](index=127&type=chunk) [Financial Results of Operations](index=28&type=section&id=Financial%20Results%20of%20Operations) This section compares Q2 and H1 2025 financial results to 2024, showing increased total revenues but decreased net income due to higher operating costs and depreciation Q2 2025 vs Q2 2024 Results of Operations (in thousands) | Line Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $250,125 | $235,313 | 6.3% | | Cost of operations | $86,499 | $78,162 | 10.7% | | Depreciation and amortization | $70,841 | $65,313 | 8.5% | | **Operating income** | $76,608 | $77,372 | (1.0)% | | **Net income** | $28,559 | $31,238 | (8.6)% | H1 2025 vs H1 2024 Results of Operations (in thousands) | Line Item | H1 2025 (in thousands) | H1 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $495,359 | $464,589 | 6.6% | | Cost of operations | $168,117 | $153,234 | 9.7% | | Depreciation and amortization | $141,234 | $128,564 | 9.9% | | **Operating income** | $145,999 | $144,244 | 1.2% | | **Net income** | $49,071 | $54,811 | (10.5)% | - The increase in cost of operations for Q2 2025 was driven by **higher direct expenses for parts**, **increased direct labor costs** due to higher headcount and wages, and a rise in retail parts and service expenses[135](index=135&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The Partnership's liquidity relies on cash from operations and its credit facility, with planned 2025 capital expenditures of **$120-$140 million** for expansion - The company believes cash from operations and its credit facility will be **sufficient** to service debt, fund working capital, and pay distributions for the next 12 months[169](index=169&type=chunk) 2025 Capital Expenditure Guidance (in millions) | Capex Type | Planned Spending (2025) (in millions) | | :--- | :--- | | Expansion Capital | $120.0 million - $140.0 million | | Maintenance Capital | $38.0 million - $42.0 million | - Net cash from operating activities increased by **$16.2 million** in H1 2025 compared to H1 2024, primarily due to a decrease in inventory purchases[176](index=176&type=chunk) - Net cash used in investing activities decreased by **$106.3 million** in H1 2025 compared to H1 2024, mainly due to a **$105.6 million reduction** in capital expenditures for new compression units and equipment[177](index=177&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP measures, reporting Q2 2025 **Adjusted EBITDA increased 4.0% to $149.5 million** and **DCF increased 4.7% to $89.9 million** Key Non-GAAP Financial Measures (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Adjusted gross margin | $163,626 | $157,151 | 4.1% | | Adjusted EBITDA | $149,482 | $143,673 | 4.0% | | Distributable Cash Flow (DCF) | $89,926 | $85,863 | 4.7% | | DCF Coverage Ratio | 1.40x | 1.40x | 0.0% | - The increase in Adjusted EBITDA for Q2 2025 was primarily driven by a **$6.5 million increase** in Adjusted gross margin[162](index=162&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Partnership faces indirect commodity price risk, interest rate risk from variable-rate debt, and customer credit risk - A **1% increase or decrease** in the effective interest rate on the company's variable-rate debt would result in an annual change to interest expense of approximately **$7.7 million**[210](index=210&type=chunk) - A **1% decrease** in average revenue-generating horsepower would result in an annual decrease of approximately **$9.0 million in revenue** and **$6.0 million in Adjusted gross margin**[209](index=209&type=chunk) [Controls and Procedures](index=42&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[213](index=213&type=chunk) - There were **no material changes** in internal control over financial reporting during the last fiscal quarter[214](index=214&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in ordinary course litigation, which is not expected to have a **material adverse effect** on its financial position - The company states that the resolution of ordinary course legal matters is not expected to have a **material adverse effect** on its financial position or results[216](index=216&type=chunk) [Risk Factors](index=43&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers to previously disclosed risk factors in the 2024 Annual Report and Q1 2025 Quarterly Report, with **no new material changes** - There have been **no material changes** to the risk factors previously disclosed in the 2024 Annual Report and the Q1 2025 Quarterly Report[217](index=217&type=chunk) [Exhibits](index=43&type=section&id=ITEM%206.%20Exhibits) This section lists documents filed as exhibits, including officer certifications and Inline XBRL data files - The exhibits filed with this report include **officer certifications** pursuant to the Sarbanes-Oxley Act and financial statements formatted in **Inline XBRL**[218](index=218&type=chunk)

Financial Data and Key Metrics Changes - The company reported a record-setting quarter for revenues and average revenue per horsepower, with average revenue reaching $21.31 per horsepower, a 1% increase sequentially and a 5% increase year-over-year [14][6] - Net income for the second quarter was $28.6 million, operating income was $76.6 million, and net cash provided by operating activities was $124.2 million [14][15] - Adjusted gross margins for the second quarter were 65.4%, with average utilization at 94.4%, consistent with the prior quarter [14][15] Business Line Data and Key Metrics Changes - The total fleet horsepower at the end of the quarter was approximately 3.9 million horsepower, unchanged from the previous quarter [15] - Average active horsepower remained flat at 3.55 million, with a slight decrease in total active horsepower sequentially [11][15] - The company acquired approximately 48,000 new horsepower in 2025, with 10,000 expected to be online by January 2026 [10] Market Data and Key Metrics Changes - The company anticipates a 5% increase in contracted horsepower in the Northeast by Q4 compared to current levels [6] - The July EIA short-term energy outlook projected a 6% annualized gas growth in the Permian, with natural gas production expected to grow in the Northeast and Haynesville [9] Company Strategy and Development Direction - The company is optimistic about future growth due to a significant number of RFQs in the pipeline, with top customers expected to increase production [7] - The shared services model with Energy Transfer is expected to yield benefits, including licensing savings and enhanced IT functionality [10] - The company continues to focus on cost management, particularly in parts, labor, and lube oil, with expectations of reduced costs through internal hiring and new vendor agreements [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged bearish macroeconomic factors but expressed confidence in the company's execution and demand for natural gas driven by AI and cloud services [6][8] - The company sees a shift from a supply-based to a demand-based natural gas market, indicating a positive long-term outlook for natural gas [64] Other Important Information - The company maintained its 2025 guidance for adjusted EBITDA in the range of $590 million to $610 million and distributable cash flow between $350 million and $370 million [16] - The leverage ratio is currently at 4.08 times, with expectations of a marginal increase later in the year as new growth projects are funded [16][17] Q&A Session Summary Question: Gross margin trends and new horsepower - Management indicated that gross margins have fluctuated between 65% to 67% over the past four years and expect them to align with historical averages as staffing improves [22][23] Question: Contracted horsepower in the Northeast - Approximately 25% to 30% of business in the Northeast is on month-to-month contracts, with expectations for better dollar per horsepower revenue in the coming months [25][26] Question: Sold or retired equipment - There were no material sales of equipment during the quarter, and utilization was flat, with expectations for increased active horsepower in Q4 [32][33] Question: G&A costs and shared services - G&A costs were lower due to shared services, but management cautioned against over-optimism regarding future savings as the integration process continues [34][36] Question: Demand for compression services - Demand is increasing across oil and gas producing basins, particularly in dry gas basins, with expectations for more contracting in the coming months [40] Question: Electric motor drive market - There has been a shift back to natural gas engine-driven compressors, with electric drive opportunities subsiding [42] Question: Capital allocation and distribution - The company aims to maintain distribution while reducing leverage, with plans to refinance existing notes to improve cash flow [44][46] Question: CapEx and equipment costs - The cost to acquire new horsepower has increased over the past two years, but the company is still able to achieve necessary margins [49][50] Question: Buying contract opportunities - There are opportunities for buying contracts, but the volume is flat compared to last year, with a focus on advantageous deals [57][58] Question: CapEx outlook and timing - The CapEx outlook spilling into 2026 is driven by delivery timing of ordered units rather than customer production schedules [59]

Financial Data and Key Metrics Changes - The company reported a record-setting quarter for revenues and average revenue per horsepower, with average pricing reaching $21.31 per horsepower, a 1% increase sequentially and a 5% increase year-over-year [13][5] - Second quarter net income was $28.6 million, operating income was $76.6 million, and net cash provided by operating activities was $124.2 million [13][12] - Adjusted gross margins for the second quarter were 65.4%, with average utilization remaining consistent at 94.4% [13][14] Business Line Data and Key Metrics Changes - The total fleet horsepower at the end of the quarter was approximately 3.9 million horsepower, unchanged from the prior quarter [14] - Average active horsepower remained flat at 3.55 million, while the company anticipates Q4 active horsepower to exceed 3.6 million, setting a new record [10][14] Market Data and Key Metrics Changes - The company noted significant growth in natural gas demand driven by AI and cloud services, with major tech firms expected to spend over $265 billion on infrastructure this year [6][7] - The July EIA short-term energy outlook projected a 6% annualized gas growth in the Permian, with natural gas production from the Northeast and Haynesville also expected to grow [8] Company Strategy and Development Direction - The company is optimistic about the future, citing a strong pipeline of RFQs and expected growth from top customers, who comprise over 45% of revenues [6][5] - The shared services model with Energy Transfer is expected to yield benefits, including licensing savings and enhanced IT functionality [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged bearish macroeconomic factors but expressed confidence in the company's execution and customer resolve to maintain production levels [5] - The company anticipates a meaningful increase in contracted horsepower in the Northeast and sees strong demand across various basins [38][5] Other Important Information - The company maintained its 2025 guidance for adjusted EBITDA in the range of $590 million to $610 million and distributable cash flow between $350 million and $370 million [15] - The company is exploring refinancing options for its September 2027 notes and expects to extend its ABL facility [16][41] Q&A Session Summary Question: Gross margin trends - Management indicated that gross margins have fluctuated between 65% to 67% over the past four years and expect them to align with historical averages as staffing improves [21][22] Question: Contracted horsepower in the Northeast - Approximately 25% to 30% of business in the Northeast is on month-to-month contracts, with expectations for better dollar per horsepower revenue in the future [24] Question: Update on sold or retired equipment - There were no material sales of equipment during the quarter, and utilization was flat, with expectations for increased active horsepower in Q4 [31][32] Question: G&A costs and shared services - G&A costs were lower due to shared services, but management cautioned against making long-term forecasts as they are still early in the process [33][34] Question: Demand for compression services - Demand is increasing across oil and gas producing basins, particularly in dry gas basins, with expectations for more contracting in the coming months [38] Question: Electric motor drive market - There has been a shift back to natural gas engine-driven compressors, with less focus on electric drive opportunities [40] Question: Capital allocation and distribution - The company aims to maintain its distribution while reducing leverage, with plans to refinance its ABL and potentially increase cash for business growth [41][42] Question: CapEx and new horsepower costs - The cost to acquire new horsepower has increased, but the company is still able to achieve necessary margins for new equipment [46][47]

Financial Performance Highlights - Record revenues of $250.1 million, a 7% year-over-year increase[5] - Adjusted EBITDA of $149.5 million, a 4% year-over-year increase[5] - Average revenue generating horsepower at 3.55 million, a 1% year-over-year increase[5] - Average revenue generating HP at $21.31, a 5% year-over-year increase[5] Operational Highlights - High utilization rates with total utilization at 94% and large horsepower at 98%[7] - Ample distribution coverage of 1.40x[7] Strategic Positioning - USAC is well-positioned to benefit from projected increases in U S natural gas demand, driven by LNG exports and electrification of everything (EoE)[8, 10] - Approximately 3.3 million additional contract compression HP capacity is projected to be required to meet incremental U S natural gas demand[11] - Over 60% of USAC's active fleet is located within the Permian and along the Gulf Coast, regions expected to benefit most from increased exports[11] Capital Structure and Preferred Unit Conversion - 420,000 of the 500,000 Series A Preferred Units have been converted to Common Units as of August 1, 2025[2] - Illustrative example shows minimal impact on USAC's financial position from potential 100% conversion of Preferred Units[28]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) USA Compression achieved record Q2 2025 revenues, driven by strong demand and a 5% increase in average revenue per horsepower, while maintaining its quarterly distribution Financial Highlights | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues (Millions) | $250.1 | $235.3 | +6.3% | | Net Income (Millions) | $28.6 | $31.2 | -8.3% | | Adjusted EBITDA (Millions) | $149.5 | $143.7 | +4.0% | | Distributable Cash Flow (Millions) | $89.9 | $85.9 | +4.7% | | DCF Coverage (x) | 1.40 | 1.40 | Unchanged | - Achieved record average revenue per revenue-generating horsepower per month of **$21.31**, a **5% increase** from $20.29 in Q2 2024, reflecting strong demand for services[3](index=3&type=chunk)[6](index=6&type=chunk) - Announced a second-quarter cash distribution of **$0.525** per common unit, corresponding to an annualized rate of **$2.10** per unit, consistent with the prior-year quarter[4](index=4&type=chunk)[6](index=6&type=chunk) - In June 2025, holders of Series A Preferred Units converted **100,000 units** into **4,997,126 common units**[5](index=5&type=chunk) [Detailed Financial & Operational Data](index=2&type=section&id=Detailed%20Financial%20%26%20Operational%20Data) Q2 2025 saw an increase in average revenue-generating horsepower and total revenues, despite a slight dip in utilization and Adjusted EBITDA margin Detailed Financial and Operational Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Operational Data (Units)** | | | | | Fleet horsepower (at period end) | 3,858,508 | 3,859,920 | 3,851,970 | | Average revenue-generating horsepower | 3,551,446 | 3,557,164 | 3,515,483 | | Average horsepower utilization (%) | 94.4 | 94.4 | 94.7 | | **Financial Data (Thousands)** | | | | | Total revenues ($) | 250,125 | 245,234 | 235,313 | | Net income ($) | 28,559 | 20,512 | 31,238 | | Adjusted EBITDA ($) | 149,482 | 149,514 | 143,673 | | Distributable Cash Flow ($) | 89,926 | 88,695 | 85,863 | [Liquidity and Long-Term Debt](index=3&type=section&id=Liquidity%20and%20Long-Term%20Debt) The Partnership maintained compliance with debt covenants, possessing $735.1 million in available borrowing capacity and $1.75 billion in outstanding senior notes - Under its **$1.6 billion** revolving credit facility, the Partnership had **$770.6 million** in outstanding borrowings and **$735.1 million** of available borrowing capacity as of June 30, 2025[14](index=14&type=chunk) - The aggregate principal amount of outstanding senior notes totaled **$1.75 billion**, split between notes due in 2027 and 2029[14](index=14&type=chunk) [Full-Year 2025 Outlook](index=3&type=section&id=Full-Year%202025%20Outlook) The company reaffirmed its full-year 2025 guidance, projecting Adjusted EBITDA between $590 million and $610 million and Distributable Cash Flow between $350 million and $370 million Full-Year 2025 Financial Outlook | Full-Year 2025 Outlook | Low ($) | High ($) | | :--- | :--- | :--- | | Adjusted EBITDA | 590,000,000 | 610,000,000 | | Distributable Cash Flow | 350,000,000 | 370,000,000 | | Expansion capital expenditures | 120,000,000 | 140,000,000 | | Maintenance capital expenditures | 38,000,000 | 42,000,000 | [Financial Statements](index=8&type=section&id=Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for Q2 2025, detailing the company's operations, balance sheet, and cash flows [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues increased to $250.1 million, but operating income slightly decreased to $76.6 million, resulting in $0.22 net income per common unit Condensed Consolidated Statements of Operations | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | | Total revenues | 250,125 | 235,313 | | Operating income | 76,608 | 77,372 | | Net income | 28,559 | 31,238 | | Net income attributable to common unitholders | 26,609 | 26,851 | | Basic and diluted net income per common unit ($) | 0.22 | 0.23 | [Selected Balance Sheet Data](index=9&type=section&id=Selected%20Balance%20Sheet%20Data) As of June 30, 2025, total assets were $2.67 billion, with net long-term debt at $2.50 billion, leading to a total partners' deficit of $121.4 million Selected Balance Sheet Data | Selected Balance Sheet Data (as of June 30, 2025) | Amount ($ thousands) | | :--- | :--- | | Total assets | 2,671,317 | | Long-term debt, net | 2,503,566 | | Total partners' deficit | (121,415) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q2 2025 net cash from operating activities rose to $124.2 million, while investing and financing activities used $22.4 million and $101.9 million, respectively Condensed Consolidated Statements of Cash Flows | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | 124,244 | 96,741 | | Net cash used in investing activities | (22,354) | (48,142) | | Net cash used in financing activities | (101,890) | (48,598) | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines and reconciles non-GAAP measures like Adjusted Gross Margin, Adjusted EBITDA, and Distributable Cash Flow to their GAAP equivalents, providing insight into operational performance [Definitions of Non-GAAP Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines Adjusted Gross Margin, Adjusted EBITDA, Distributable Cash Flow, and DCF Coverage Ratio, explaining their use as supplemental performance metrics - **Adjusted Gross Margin** is defined as revenue less cost of operations, excluding depreciation and amortization, and is used to measure operating profitability[19](index=19&type=chunk) - **Adjusted EBITDA** is used to assess financial performance, viability of capital projects, and the ability to service debt and pay distributions, without regard to financing methods or capital structure[22](index=22&type=chunk)[29](index=29&type=chunk) - **Distributable Cash Flow (DCF)** is considered an important measure of operating performance to compare cash generation to the cash distributions the Partnership expects to pay its common unitholders[27](index=27&type=chunk) [Reconciliation of Adjusted Gross Margin](index=11&type=section&id=Reconciliation%20of%20Adjusted%20Gross%20Margin) Q2 2025 Adjusted Gross Margin was $163.6 million, reconciled from GAAP Gross Margin by adding back depreciation and amortization, showing an increase from Q2 2024 Reconciliation of Adjusted Gross Margin | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | :--- | | Gross margin (GAAP) | 92,785 | 93,223 | 91,838 | | Add: Depreciation and amortization | 70,841 | 70,393 | 65,313 | | **Adjusted gross margin (Non-GAAP)** | **163,626** | **163,616** | **157,151** | [Reconciliation of Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA increased to $149.5 million, reconciled from Net Income by adding back interest, taxes, D&A, and other non-cash adjustments Reconciliation of Adjusted EBITDA | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | :--- | | Net income (GAAP) | 28,559 | 20,512 | 31,238 | | Interest expense, net | 47,674 | 47,369 | 48,828 | | Depreciation and amortization | 70,841 | 70,393 | 65,313 | | Income tax expense | 391 | 1,535 | 463 | | Other adjustments | 2,017 | 9,705 | (2,219) | | **Adjusted EBITDA (Non-GAAP)** | **149,482** | **149,514** | **143,673** | [Reconciliation of Distributable Cash Flow](index=13&type=section&id=Reconciliation%20of%20Distributable%20Cash%20Flow) Q2 2025 Distributable Cash Flow increased to $89.9 million, resulting in a 1.40x coverage ratio, consistent with the prior-year period Reconciliation of Distributable Cash Flow | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | | :--- | :--- | :--- | :--- | | Net income (GAAP) | 28,559 | 20,512 | 31,238 | | Adjustments (D&A, non-cash items, etc.) | 74,843 | 83,221 | 63,504 | | Less: Distributions on Preferred Units | (1,950) | (4,388) | (4,387) | | Less: Maintenance capital expenditures | (11,733) | (10,853) | (8,892) | | **Distributable Cash Flow (Non-GAAP)** | **89,926** | **88,695** | **85,863** | | **Distributable Cash Flow Coverage Ratio (x)** | **1.40** | **1.44** | **1.40** | [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This report includes forward-looking statements and the 2025 financial outlook, which are subject to various risks and uncertainties that could materially affect actual results - Key risk factors that could impact future results include[34](index=34&type=chunk) - Changes in economic conditions of the crude oil and natural gas industries - General economic conditions, including inflation and supply chain disruptions - Changes in the availability and cost of capital, including interest rates - Competitive conditions and information technology risks like cyberattacks

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Group 1 - The article discusses the author's professional background in the Nuclear Power industry and how it aids in evaluating potential equities for long-term investment [1] - The focus is on investing in income-producing equities and rental real estate properties for cash flow and long-term appreciation [1] - The articles aim to present the underlying fundamentals and long-term potential of each equity or business [1]

Company Overview - USAC's fleet horsepower is approximately 385 million[16] - Approximately 76% of USAC's fleet horsepower is greater than 1,000 HP[16] - USAC's fleet utilization is approximately 95%[16] Financial Performance and Guidance - USAC's Adjusted EBITDA for 2024 is guided to be between $565 million and $585 million[16] - USAC's Distributable Cash Flow (DCF) for 2024 is guided to be between $345 million and $365 million[16] - USAC's Q2 2024 revenue was $235 million[66] - USAC's Q2 2024 Adjusted EBITDA was $144 million[66] - USAC's Q2 2024 DCF was $86 million, resulting in a DCF Coverage Ratio of 140x[66] Capital Structure and Debt - USAC opportunistically completed its $1 billion issuance of 7125% 5-year Unsecured Senior Notes on March 18, 2024[23] - $320 million of $500 million Series A Preferred Units have been converted into common units[23] - USAC monetized $700 million notional principal fixed interest rate 39725% swap on August 29, 2024 for $435K[23]

Core Insights - USA Compression Partners (USAC) reported a first-quarter adjusted net profit of 18 cents per common unit, missing the Zacks Consensus Estimate of 22 cents due to higher costs and expenses, but improved from 16 cents in the same quarter last year [1] - The company generated revenues of $245.2 million, a 7% increase year-over-year, surpassing the Zacks Consensus Estimate of $244 million, driven by a 3.2% rise in Contract operations and a significant 165.5% increase in Related party revenues [1] - Adjusted EBITDA rose by 7.2% to $149.5 million, exceeding the estimate of $146.2 million, while net income decreased to $20.5 million from $23.6 million year-over-year [2] Financial Performance - Adjusted gross operating margin decreased to 66.7% from 67.3% in the previous year [3] - Revenue-generating capacity increased by 2.4% year-over-year to 3.6 million horsepower, although below the estimate of 1.9% [3] - Average monthly revenue per horsepower rose to $21.06 from $19.96, but was below the estimate of $21.62 [3] Utilization and Cash Flow - Average quarterly horsepower utilization rate was 94.4%, slightly down from 94.8% a year ago [4] - Distributable cash flow (DCF) available to limited partners totaled $88.7 million, providing 1.4X distribution coverage, up 2.7% from the previous year [5] - The company declared a cash distribution of 52.5 cents per unit for the first quarter, to be paid on May 9, 2025 [5] Costs and Capital Expenditures - Total costs and expenses were reported at $175.8 million, an 8.3% increase from $162.4 million in the prior-year quarter [6] - Growth capital expenditures amounted to $22.2 million, while maintenance capital expenditures were $10.9 million [6] - As of March 31, 2025, USAC had a net long-term debt of $2.5 billion [6] Guidance - For the full year 2025, USAC expects adjusted EBITDA to be between $590 million and $610 million, with distributable cash flow projected to range from $350 million to $370 million [7] - Expansion capital expenditures are anticipated to be between $120 million and $140 million, while maintenance capital expenditures are expected to total between $38 million and $42 million [7]