Financial Data and Key Metrics Changes - In 2025, adjusted EPS increased by 68% and adjusted EBITDA rose by 51% compared to 2024 [8] - For Q4 2025, net income was $117 million and adjusted EBITDA was $269 million, bringing full-year net income to $322 million and adjusted EBITDA to $901 million [37][38] - The year-end leverage ratio was 2.7x, down from 3.3x in Q4 2024, indicating improved cash-generating capacity [11][45] Business Line Data and Key Metrics Changes - Contract operations revenue for Q4 2025 was $327 million, consistent with Q3 2025, with adjusted gross margin percentage expanding to approximately 78% [40][41] - Aftermarket services segment reported Q4 2025 revenue of $50 million, down from Q3 but up from $40 million a year ago, with adjusted gross margin percentage at 24% [42] - Operating horsepower declined by approximately 80,000 sequentially due to asset sales, totaling 325,000 horsepower sold in 2025 [24][25] Market Data and Key Metrics Changes - U.S. natural gas volumes are expected to increase incrementally in 2026, particularly in the Permian Basin, where gas volumes are projected to grow at mid-single-digit rates [17] - LNG exports are anticipated to grow in 2026, with an additional 2 BCF per day of export capacity coming online [18][19] - The company has a substantial backlog for 2026, with 85% contracted and units already booked for 2027 delivery [20] Company Strategy and Development Direction - The strategic focus for 2026 includes investing in natural gas infrastructure, maximizing service reliability, and maintaining disciplined capital allocation [12][13][15] - The company aims to enhance its fleet through disciplined portfolio actions and has completed two accretive acquisitions in 18 months [10] - Continued investment in technology, including digital tools and machine learning, is expected to improve service quality and operational efficiency [14][110] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the natural gas infrastructure sector, anticipating sustained demand and earnings growth opportunities [16][20] - The company expects to maintain high utilization rates above 95% due to strong demand for natural gas [21][98] - Management acknowledged challenges in the supply chain but remains optimistic about meeting customer needs for 2026 and beyond [60][61] Other Important Information - The company returned $212 million to shareholders through dividends and share repurchases in 2025, a 70% increase year-over-year [11] - The fourth quarter dividend was increased to $0.22 per share, reflecting a 5% increase from the previous quarter and a 16% increase year-over-year [31][47] - Total capital expenditures for 2026 are expected to be approximately $400 million-$445 million, with growth CapEx between $250 million and $275 million [52] Q&A Session Summary Question: Growth CapEx guidance and organic horsepower addition - Management indicated that the CapEx should translate into about 170,000 horsepower to be added in 2026, with approximately 60% expected to start up in the first half of the year [59] Question: Lead times and pricing power - Lead times for gas drive equipment have extended significantly, but the company is well-positioned to meet customer needs for 2026 [60][61] Question: M&A opportunities and capital allocation - Management remains open to M&A opportunities, particularly in the compression sector, while also focusing on returning capital to shareholders [68][74] Question: Asset sales and non-core assets - The company has a disciplined approach to asset management, selling non-core assets while maintaining a focus on fleet quality [81][84] Question: Electric motor drive compression demand - Demand for electric motor drive remains strong, though it is subject to competition for power and customer prioritization [85] Question: Growth in aftermarket services - Management expects growth in aftermarket services to be more selective and constrained by labor availability, focusing on profitability [118]