Archrock(US:AROC)2025-10-29 01:49Financial Performance - Archrock reported third quarter 2025 revenue of $382.4 million, a 31% increase from $292.2 million in the same quarter of 2024[8]. - Net income for the third quarter 2025 was $71.2 million, with adjusted net income at $73.2 million, compared to $37.5 million and $47.3 million in the third quarter of 2024, respectively[5][8]. - Adjusted EBITDA for the third quarter 2025 was $220.9 million, up 46% from $150.9 million in the third quarter of 2024[8]. - The contract operations segment revenue increased by 33% to $326.3 million in the third quarter 2025, compared to $245.4 million in the same quarter of 2024[9]. - Total revenue for Q3 2025 was $382.43 million, a 31% increase from $292.16 million in Q3 2024[40]. - Adjusted EBITDA for Q3 2025 was $220.94 million, representing 58% of total revenue, compared to 52% in Q3 2024[42]. - Net income for Q3 2025 was $71.25 million, or $0.40 per share, compared to $37.52 million, or $0.22 per share, in Q3 2024[40]. - Adjusted EBITDA for the three months ended September 30, 2025, was $220,944 thousand, compared to $212,678 thousand in the previous quarter and $150,854 thousand in the same quarter last year[51]. - Total revenues for the three months ended September 30, 2025, were $382,430 thousand, slightly down from $383,152 thousand in the previous quarter but up from $292,161 thousand year-over-year[53]. Margins and Expenses - Archrock's adjusted gross margin for the third quarter 2025 was $239.6 million, a 45% increase from $165.6 million in the third quarter of 2024, with a gross margin percentage of 73%[11]. - Adjusted gross margin for Q3 2025 was $252.61 million, with an adjusted gross margin percentage of 66%, up from 61% in Q3 2024[42]. - Adjusted gross margin for the three months ended September 30, 2025, was $252,605 thousand, representing an adjusted gross margin percentage of 66%, compared to 62% in the previous quarter and 61% in the same quarter last year[53]. - The company reported a gross margin of $185,475 thousand with a gross margin percentage of 48% for the three months ended September 30, 2025, compared to 45% in the previous quarter and 44% in the same quarter last year[53]. - Interest expense for the three months ended September 30, 2025, was $43,661 thousand, up from $41,711 thousand in the previous quarter and $30,179 thousand year-over-year[51]. Shareholder Returns - The company declared a quarterly dividend of $0.21 per share for the third quarter 2025, representing a 20% increase year-over-year, with a dividend coverage ratio of 3.7x[8][14]. - Archrock returned $159.1 million to shareholders through dividends and share repurchases in the first three quarters of 2025, compared to $93.0 million in the same period of 2024[8]. - Cash available for dividend coverage was 3.7 times the dividends declared for the period[42]. - The company declared a dividend of $0.21 per share for the period, consistent with the previous quarter[42]. - Cash available for dividend for the three months ended September 30, 2025, was $135,737 thousand, an increase from $125,055 thousand in the previous quarter and $92,887 thousand year-over-year[57]. Debt and Liquidity - Long-term debt stood at $2.6 billion with available liquidity of $728 million as of September 30, 2025, resulting in a leverage ratio of 3.1x[13]. - Long-term debt as of September 30, 2025, was $2.56 billion, an increase from $2.24 billion in Q3 2024[45]. - Total equity increased to $1.42 billion as of September 30, 2025, compared to $1.29 billion in Q3 2024[45]. Capital Expenditures and Guidance - Capital expenditures for Q3 2025 totaled $135.07 million, an increase from $70.02 million in Q3 2024[42]. - The company raised its full-year 2025 adjusted EBITDA guidance to a range of $835 million to $850 million[8][17]. - 2025 annual guidance for net income is projected between $265.2 million and $280.2 million[62]. - Adjusted EBITDA is expected to range from $835 million to $850 million[62]. - Cash available for dividend is estimated to be between $526 million and $531 million[62]. - Long-lived and other asset impairment for 2025 is estimated at $16.5 million, with previous years being $10.7 million in 2024 and $12.0 million in 2023[62]. Management Insights - Management emphasizes that adjusted EBITDA provides a more complete understanding of performance compared to GAAP results alone[64]. - Cash available for dividend is used to compute the coverage ratio of estimated cash flows to planned dividends[65]. - Changes in assets and liabilities were $(25.8) million in 2024 and $(28.0) million in 2023, which are not estimable for future cash provided by operating activities[66]. - Estimated transaction-related costs for the TOPS and NGCS acquisitions are reflected in the financials[63].