Archrock(AROC) - 2024 Q4 - Annual Results

Financial Performance - Archrock reported a fourth quarter 2024 net income of $59.8 million, a 81% increase from $33.0 million in Q4 2023, with an EPS of $0.34 compared to $0.21[7]. - For the full year 2024, net income reached $172.2 million, up from $105.0 million in 2023, with adjusted EBITDA increasing to $595.4 million from $450.4 million[11]. - The fourth quarter 2024 revenue was $326.4 million, a 26% increase from $259.6 million in Q4 2023, while full year revenue grew to $1,157.6 million from $990.3 million[8]. - Net income for Q4 2024 was $59,758,000, up from $37,516,000 in Q3 2024, and $33,002,000 in Q4 2023, representing a significant year-over-year increase[22]. - Adjusted EBITDA for the year ended December 31, 2024, reached $595,434,000, compared to $450,387,000 for the previous year, indicating a growth of approximately 32.3%[22]. - Adjusted EBITDA for Q4 2024 was $183.8 million, representing 56% of total revenue, compared to 52% in Q3 2024 and 46% in Q4 2023[41]. - Adjusted net income for Q4 2024 reached $61,533,000, up from $47,313,000 in Q3 2024 and $33,002,000 in Q4 2023[47]. Revenue and Margins - Archrock's contract operations segment revenue for Q4 2024 was $286.5 million, a 34% increase from $213.0 million in Q4 2023, with an adjusted gross margin percentage of 70%[13]. - Contract operations revenue for Q4 2024 was $286,466,000, an increase of 16.7% from $245,420,000 in Q3 2024 and up from $213,022,000 in Q4 2023[22]. - Adjusted gross margin percentage for contract operations improved to 70% in Q4 2024, compared to 67% in Q3 2024 and 64% in Q4 2023[22]. - The adjusted gross margin percentage for total revenue improved to 64% in Q4 2024 from 61% in Q3 2024 and 57% in Q4 2023[41]. Dividends and Cash Flow - The company declared a quarterly dividend of $0.19 per share for Q4 2024, representing a 15% increase year-over-year, with a dividend coverage ratio of 3.5x[16]. - Cash available for dividend in Q4 2024 was $118,089,000, up from $92,887,000 in Q3 2024 and $71,484,000 in Q4 2023, reflecting a strong increase in cash generation[22]. - The company reported a dividend coverage ratio of 3.5x for Q4 2024, up from 3.0x in Q3 2024 and 2.8x in Q4 2023, indicating strong cash flow relative to dividends[22]. - Total dividends paid to stockholders in 2024 amounted to $110.37 million, up from $95.80 million in 2023[59]. - Cash available for dividend guidance for 2025 is projected to be between $456 million and $471 million[65]. Guidance and Future Outlook - For 2025, Archrock provided guidance for net income between $253 million and $293 million, and adjusted EBITDA between $750 million and $790 million[17]. - The company anticipates contract operations revenue for 2025 to be between $1.2 billion and $1.235 billion, with adjusted gross margin percentage expected to be between 68% and 71%[17]. - Archrock's investment in high-quality assets and innovative technology is expected to drive continued growth and shareholder returns in 2025[4]. - The company is focused on capital expenditures for growth, estimating $330 million to $370 million for growth capital expenditures in 2025[17]. - Maintenance capital expenditures for 2025 are estimated to be between $105 million and $115 million[65]. Debt and Leverage - Archrock's leverage ratio improved to 3.3x as of December 31, 2024, down from 3.5x a year earlier, with long-term debt at $2.2 billion[15]. - Long-term debt as of December 31, 2024, was $2.2 billion, a decrease from $2.2 billion in Q3 2024 and an increase from $1.6 billion in Q4 2023[44]. Operational Metrics - Total available horsepower at the end of Q4 2024 was 4,401, compared to 4,418 at the end of Q3 2024 and 3,759 at the end of Q4 2023[22]. - Capital expenditures for Q4 2024 totaled $98.0 million, significantly higher than $70.0 million in Q3 2024 and $36.7 million in Q4 2023[41]. - The company incurred transaction-related costs of $2,247,000 in Q4 2024, down from $9,220,000 in Q3 2024[51]. - Interest expense for Q4 2024 was $38,238,000, compared to $30,179,000 in Q3 2024 and $27,938,000 in Q4 2023[55]. - The company reported a gross margin of $151,170,000 for Q4 2024, which is 46% of total revenues, compared to 44% in Q3 2024[53]. Conference Call - The company plans to host a conference call on February 25, 2025, to discuss the financial results for Q4 and the full year 2024[25].