Kodiak Gas Services(KGS) - 2024 Q4 - Annual Results

Financial Performance - Net income attributable to common shareholders for Q4 2024 was $19.1 million, compared to a net loss of $6.9 million in Q4 2023[2] - Net income for the year ended December 31, 2024, increased to $50,334,000, up 150.0% from $20,066,000 in 2023[36] - Total revenues for the year ended December 31, 2024, reached $1,034,173,000, a 40.7% increase compared to $735,605,000 in 2023[40] - Total revenues for the three months ended December 31, 2024, were $309,519,000, an increase from $225,980,000 for the same period in 2023, representing a growth of 37%[31] - Net income attributable to common shareholders for the year ended December 31, 2024, was $49,895,000, compared to $20,066,000 for 2023, indicating a growth of 148%[31] - Basic net earnings per share for the three months ended December 31, 2024, was $0.21, compared to a loss of $0.07 for the previous quarter[31] Adjusted Metrics - Adjusted EBITDA for 2024 was $609.6 million, a 39.1% increase from $438.1 million in 2023[5] - Adjusted EBITDA for the year ended December 31, 2024, was $609,550,000, representing a 39.0% increase from $438,148,000 in 2023[37] - Adjusted gross margin percentage for the year ended December 31, 2024, was 65.7%, compared to 65.1% in 2023[40] - Adjusted gross margin percentage for the Contract Services segment increased to 66.7% in Q4 2024, up from 65.1% in Q4 2023[5] Revenue Segments - Contract Services segment revenues reached $1.0 billion in 2024, a 40.6% increase from $735.6 million in 2023[9] - Contract Services revenue was $280,211,000 for the three months ended December 31, 2024, compared to $189,616,000 for the same period in 2023, reflecting a 48% increase[31] - Contract Services adjusted gross margin was $679.2 million in 2024, a 41.9% increase from $478.5 million in 2023[9] Cash Flow and Expenditures - Net cash provided by operating activities for the year ended December 31, 2024, was $327,987,000, an increase of 23.2% from $266,326,000 in 2023[38] - Free cash flow for the year ended December 31, 2024, reached $122.319 million, compared to $65.111 million for the year ended December 31, 2023, reflecting a growth of 87.6%[47] - Growth capital expenditures for the year ended December 31, 2024, totaled $285.992 million, compared to $184.487 million in 2023, representing a 55% increase[47] - Maintenance capital expenditures for the year ended December 31, 2024, were $66.200 million, compared to $36.990 million in 2023, reflecting an increase of 78.9%[44] Debt and Leverage - Total debt outstanding as of December 31, 2024, was $2.6 billion, with a credit agreement leverage ratio of 3.9x[11] - Long-term debt as of December 31, 2024, was $2,581,909,000, up from $1,791,460,000 in 2023, reflecting an increase of 44%[33] - The company reported a significant increase in borrowings on debt instruments, totaling $2,642,370,000 for the year ended December 31, 2024, compared to $1,020,102,000 in 2023[36] Shareholder Returns - The company returned a total of $179 million to shareholders in 2024 through dividends and share repurchases[7] - Dividends paid to stockholders increased to $133,886,000 for the year ended December 31, 2024, up from $29,793,000 in 2023[36] Operational Insights - Fleet utilization increased to 97% in Q4 2024, reflecting strong demand for compression services[5] - The company anticipates continued integration of CSI Compressco LP into operations, which is expected to enhance revenue growth and operational efficiencies[27] - The company plans to focus on customer retention and market position to drive future growth and financial results[27] Risks and Challenges - The company has identified potential risks including a reduction in demand for natural gas and oil, which could impact future performance[28] Other Financial Metrics - The company reported a total operating expense of $240,473,000 for the three months ended December 31, 2024, compared to $165,243,000 for the same period in 2023, which is a 45% increase[31] - Cash flows from investing activities showed a net cash outflow of $292,468,000 for the year ended December 31, 2024, compared to an outflow of $218,421,000 in 2023[36] - The company recorded a loss on extinguishment of debt of $6.757 million for the year ended December 31, 2023, with no such losses reported for 2024[47] - Proceeds from the sale of assets for the year ended December 31, 2024, amounted to $35.030 million, significantly higher than $1.449 million in 2023[44] - The change in operating assets and liabilities for the three months ended December 31, 2024, was $1.732 million, a decrease from $19.058 million in the previous year[44] - The company incurred transaction expenses of $32.552 million for the year ended December 31, 2024, compared to $6.001 million in 2023, indicating a substantial increase due to acquisition-related costs[48]