Kodiak Gas Services(KGS) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This section provides a standard disclaimer on forward-looking statements, detailing inherent uncertainties and risks that could cause actual results to differ materially - Forward-looking statements are based on current beliefs, expectations, and assumptions about the future of the business, including plans, strategies, projections, anticipated events, and economic trends[6] - Key factors that could cause actual results to differ materially include operating results, capital expenditures, credit market volatility, potential acquisitions, litigation, and risk management strategies[7][8] PART I. FINANCIAL INFORMATION This part presents Kodiak Gas Services, Inc.'s unaudited condensed consolidated financial statements for the quarter and six months ended June 30, 2025, and management's discussion and analysis Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, comprehensive income, equity, cash flows, and notes Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Total current assets | $345,525 | $383,661 | | Property, plant and equipment, net | $3,392,339 | $3,395,022 | | Goodwill | $415,213 | $415,213 | | Total assets | $4,375,927 | $4,435,123 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $313,318 | $319,369 | | Long-term debt, net | $2,545,019 | $2,581,909 | | Total liabilities | $3,027,461 | $3,061,516 | | Total stockholders' equity | $1,348,466 | $1,373,607 | | Total liabilities and stockholders' equity | $4,375,927 | $4,435,123 | Condensed Consolidated Statements of Operations This section details the company's revenues, operating expenses, and net income for the three and six months ended June 30, 2025 and 2024 | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $322,843 | $309,653 | $652,485 | $525,145 | | Total operating expenses | $223,113 | $255,486 | $463,569 | $410,820 | | Income from operations | $99,730 | $54,167 | $188,916 | $114,325 | | Net income | $39,984 | $6,713 | $71,020 | $36,945 | | Net income attributable to common shareholders | $39,496 | $6,228 | $69,907 | $36,460 | | Basic EPS | $0.44 | $0.07 | $0.78 | $0.44 | | Diluted EPS | $0.43 | $0.06 | $0.76 | $0.41 | Condensed Consolidated Statements of Comprehensive Income This section presents the company's comprehensive income, including net income and other comprehensive income items, for the three and six months ended June 30, 2025 and 2024 | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $39,984 | $6,713 | $71,020 | $36,945 | | Cash flow hedges, net of tax effects | $(2,632) | — | $(8,316) | — | | Comprehensive income | $37,352 | $6,713 | $62,704 | $36,945 | | Comprehensive income attributable to common shareholders | $36,864 | $6,228 | $61,591 | $36,460 | Condensed Consolidated Statements of Stockholders' Equity This section outlines the changes in stockholders' equity, including net income, other comprehensive loss, dividends, and share repurchases, for the six months ended June 30, 2025 - Total stockholders' equity decreased from $1,373,607 thousand as of January 1, 2025, to $1,348,466 thousand as of June 30, 2025[18][19] - Key changes in stockholders' equity for the six months ended June 30, 2025, include net income of $39,984 thousand, other comprehensive loss of $(8,316) thousand, dividends paid of $(77,603) thousand, and common share repurchases of $(19,956) thousand[18][19] Condensed Consolidated Statements of Cash Flows This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $291,500 | $172,624 | | Net cash used for investing activities | $(142,565) | $(167,352) | | Net cash used for financing activities | $(148,257) | $(6,982) | | Net increase (decrease) in cash and cash equivalents | $678 | $(1,710) | | Cash and cash equivalents - end of period | $5,428 | $3,852 | Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements 1. Organization and Description of Business This subsection describes Kodiak Gas Services, Inc.'s core operations as a contract compression infrastructure provider in the U.S - Kodiak Gas Services, Inc. operates contract compression infrastructure and related services primarily in the U.S., under fixed-revenue contracts with upstream and midstream customers[25] - The majority of the Company's assets and liabilities are operated under its subsidiary, Kodiak Gas Services, LLC, which is a variable interest entity where Kodiak is the primary beneficiary[26] 2. Basis of Presentation This subsection outlines the accounting principles and standards used in preparing the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim financial information, with certain footnotes condensed or omitted[27] - The Company is evaluating the impact of recently issued accounting pronouncements: ASU 2023-09 (Income Taxes) effective after December 15, 2024, and ASU 2024-03 (Disaggregation of Income Statement Expenses) effective after December 15, 2026[28][29] 3. Acquisitions and Divestitures This subsection details significant business combinations and asset disposals, including the CSI Compressco acquisition and a sale-leaseback agreement - On April 1, 2024, Kodiak completed the acquisition of CSI Compressco for $342.3 million, issuing 6.8 million common shares and 5.6 million preferred shares[30] | (in thousands) | Amount | | :--- | :--- | | Fair value of consideration transferred | $342,285 | | Total identifiable assets acquired less liabilities assumed | $232,396 | | Goodwill acquired | $109,889 | - Acquisition-related costs were approximately $0.6 million for the six months ended June 30, 202