Archrock(US:AROC) Globenewswire·2025-02-24 23:06Core Insights - Archrock reported a strong performance in Q4 2024, concluding a record-setting year with significant increases in utilization and profitability [3][4] - The company achieved a 500 basis point increase in contract operations adjusted gross margin, over 60% growth in net income, and more than 30% growth in adjusted EBITDA year-over-year [3][4] - Archrock returned $124 million to shareholders through dividends and share buybacks while maintaining a leverage ratio of 3.3x [3][6] Financial Performance - Q4 2024 net income was $59.8 million, up from $33.0 million in Q4 2023, with an EPS increase from $0.21 to $0.34 [7][9] - Total revenue for Q4 2024 was $326.4 million, compared to $259.6 million in Q4 2023, while full-year revenue reached $1,157.6 million, up from $990.3 million in 2023 [9][11] - Adjusted EBITDA for Q4 2024 was $183.8 million, compared to $120.3 million in Q4 2023, and for the full year, it was $595.4 million, up from $450.4 million in 2023 [9][12] Segment Performance - 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 of $200.2 million, up 46% [13] - Aftermarket services segment revenue for Q4 2024 was $40.0 million, down from $46.6 million in Q4 2023, attributed to seasonal delays [14] - The adjusted gross margin percentage for contract operations improved to 70% in Q4 2024 from 64% in Q4 2023 [13] Balance Sheet and Capital Allocation - As of December 31, 2024, Archrock's long-term debt stood at $2.2 billion, with available liquidity of $688 million and a leverage ratio of 3.3x, down from 3.5x a year earlier [15] - The company declared a quarterly dividend of $0.19 per share for Q4 2024, reflecting a 15% increase year-over-year, with a dividend coverage ratio of 3.5x [16] - Archrock plans to invest in profitable growth, with guidance for 2025 indicating net income between $253 million and $293 million and adjusted EBITDA between $750 million and $790 million [17][18] Market Outlook - Archrock anticipates continued strong demand driven by rising energy needs, particularly for natural gas to support LNG exports and power generation [5][6] - The company has a large contracted backlog for 2025 and is already booking units for 2026 delivery, indicating sustained customer demand [5][6] - Management emphasizes the importance of high-quality assets and innovative technology in driving value for customers and shareholders [4][6]