Financial Data and Key Metrics Changes - The company reported record results in Q3 2025, with adjusted EBITDA of $20.8 million, up approximately 15% year over year and 6% sequentially [7][19] - Total rental revenue grew 11.1% year over year and 4.9% sequentially to $41.5 million, reflecting a 27,000 horsepower increase during the quarter [18] - Net income was $5.8 million or $0.46 per diluted share, up $800,000 year over year and $600,000 sequentially [19] - The company raised its full-year 2025 adjusted EBITDA guidance to $78 million to $81 million from the previous range of $76 million to $80 million [7][22] Business Line Data and Key Metrics Changes - Rented horsepower ended the quarter at approximately 526,000, an 11% increase year over year and 5% sequentially [19] - Fleet utilization reached a record 84.1%, up 204 basis points year over year and 45 basis points sequentially [19] - Rental adjusted gross margin was $25.5 million, up $2.6 million year over year and $1.5 million sequentially, with a margin percentage of 61.5% [18] Market Data and Key Metrics Changes - The company continues to take market share in large horsepower compression, with all new sets under long-term contracts [6] - Devon Energy now represents more than 10% of year-to-date revenue, highlighting a significant customer relationship [6] Company Strategy and Development Direction - The company is focused on fleet optimization and technology leadership to enhance service excellence and competitive positioning [8][10] - There is a strong emphasis on expanding into new markets, including data centers and LNG infrastructure, which are expected to drive future growth [10][11] - The company plans to add approximately 90,000 horsepower over 2025 and early 2026, with a significant number of new large horsepower units already under contract [9][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver improved performance despite global macroeconomic uncertainty [10] - The company anticipates continued demand for compression driven by existing production and rising electricity demand [10] - Preliminary expectations for 2026 growth capital expenditures are set at $50 million to $70 million, indicating ongoing organic growth [22] Other Important Information - The company paid out its inaugural quarterly dividend of $0.10 per share and plans to increase the fourth-quarter dividend by 10% to $0.11 per share [7][21] - The leverage ratio was reported at 2.5 times, remaining the lowest among public compression peers [20] Q&A Session Summary Question: Can you talk about the outlook for 2026 and customer conversations? - Management noted that there is no hesitancy from customers regarding 2026 contracts, with a broad range of interest observed [28][29] Question: What are the opportunities for margin improvement? - Management indicated that margins are expected to remain in the low 60s in the near term, with potential for improvement through a mix shift to large horsepower [31] Question: Is the majority of demand still for gas lift in the Permian? - While gas lift in the Permian remains a significant portion, there is growing demand for data center natural gas load, creating incremental opportunities [36] Question: How is the relationship with Devon Energy developing? - The relationship has expanded significantly due to the company's technology and service capabilities, leading to increased horsepower contracts [50][51] Question: How does the company balance capital returns with growth opportunities? - Management emphasized a disciplined approach to capital allocation, ensuring that dividend increases do not hinder growth potential [48][49]