| | | | | | | | |
| | Investor Contact
Graham Sones, VP – Investor Relations
ir@kodiakgas.com (936) 755-3529 |
Kodiak Gas Services Reports Third Quarter 2025 Financial Results, Increases Full Year 2025 Discretionary Cash Flow Guidance and Reiterates Other Guidance Metrics
THE WOODLANDS, Texas — November 4, 2025 — Kodiak Gas Services, Inc. (NYSE: KGS) (“Kodiak” or the “Company”), a leading provider of critical energy infrastructure and contract compression services, today reported financial and operating results for the quarter ended September 30, 2025. The Company also announced increased full-year 2025 guidance for discretionary cash flow.
Third Quarter 2025 and Recent Highlights
•Generated record Contract Services segment revenues of $297.0 million
•Reported net loss of $14.0 million, or $(0.17) per diluted share and adjusted net income(1) of $31.5 million, or $0.36 per adjusted diluted share(1)
•Quarterly adjusted EBITDA(1) of $174.7 million, including approximately $5 million of extraordinary professional fees related to recently-divested Mexico operations
•Quarterly net cash provided by operating activities of $113.4 million and discretionary cash flow(1) of $116.7 million, a 13.2% increase compared to third quarter 2024
•Declared a quarterly dividend of $0.49 per share, a 9% increase over the second quarter of 2025
•Returned over $90 million to stockholders through dividends and share repurchases
•Deployed 59,550 horsepower of new, large horsepower compression units
•Fleet utilization increased to 97.6%, a 120 basis point increase compared to third quarter 2024
•Increased full-year 2025 discretionary cash flow(1) guidance to a range of $450 to $470 million
“Kodiak’s third quarter results demonstrate the continued strength and resilience of our business model, even as we navigate a dynamic energy landscape,” said Mickey McKee, Kodiak's President and Chief Executive Officer. “We achieved another quarter of increased fleet utilization, matched our record adjusted gross margin percentage in Contract Services, and delivered strong discretionary cash flow, underscoring the effectiveness of our strategic focus on large horsepower compression and fleet optimization. Our investments in technology and our people are driving operational excellence and enabling us to meet the evolving needs of our customers with reliability and efficiency.
“We are encouraged by the robust natural gas demand outlook, particularly in the Permian Basin, and the growing power requirements from data centers and domestic LNG projects. These trends reinforce our confidence in the long-term growth prospects for contract compression. The strategic initiatives we completed in the third quarter, including the successful implementation of a new ERP platform, divestment of our Mexico operations and two bond offerings to significantly enhance our liquidity, position us well to execute on these opportunities.
“Our commitment to returning capital to shareholders remains a priority, as evidenced by our active share repurchase program and the 20% increase in our quarterly dividend in 2025. As we look ahead, Kodiak is well-positioned to capitalize on industry tailwinds,
(1) Adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, and discretionary cash flow are non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measure are included herein.
continue driving profitable growth, and deliver enhanced value for our shareholders. I want to thank our employees for their dedication and our customers and investors for their ongoing support.”
Segment Information
Contract Services segment revenue was $297.0 million in the third quarter of 2025, a 4.5% increase compared to $284.3 million in the third quarter of 2024. Contract Services segment gross margin was $136.4 million in the third quarter of 2025, a 19.4% increase compared to $114.2 million in the third quarter of 2024 and adjusted gross margin was $202.7 million in the third quarter of 2025, an 8.0% increase compared to $187.7 million in the third quarter of 2024.
Other Services segment revenue was $25.8 million in the third quarter of 2025, a 36.1% decrease compared to $40.3 million in the third quarter of 2024. Other Services segment gross margin and adjusted gross margin were each $3.8 million in the third quarter of 2025, a 50.6% decrease compared to $7.7 million for each measure in the third quarter of 2024.
Financial Results
Kodiak reported a net loss attributable to common shareholders of $14.0 million or $0.17 per share, in the third quarter of 2025. The net loss for the quarter included a $33.3 million loss on the disposal of the Company’s Mexico operations as well as a $28.0 million other expense to increase the reserve for sales and use tax to an amount the Company estimates will be sufficient to settle all outstanding Texas sales and use tax matters. Adjusting for these items and non-recurring transaction expenses, adjusted net income was $31.5 million or $0.36 per diluted share.
Adjusted EBITDA of $174.7 million in the third quarter of 2025 was negatively impacted by approximately $5 million of extraordinary professional fees associated with the divested Mexico operations.
Discretionary cash flow for the quarter was $116.7 million, which funded all of the Company’s growth capital expenditures. When combined with asset sale proceeds, the Company generated $33.5 million of free cash flow in the third quarter of 2025.
Long-Term Debt and Liquidity
Total debt outstanding was $2.7 billion as of September 30, 2025, and the Company had $1.5 billion available on its ABL Facility. Kodiak’s credit agreement leverage ratio was 3.8x for the third quarter of 2025.
Summary Financial Data
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands, excluding percentages) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Total revenues | | $ | 322,744 | | | $ | 322,843 | | | $ | 324,647 | |
| Net income (loss) attributable to common shareholders | | $ | (14,011) | | | $ | 39,496 | | | $ | (5,648) | |
Adjusted net income (1) | | $ | 31,539 | | | $ | 39,984 | | | $ | 18,751 | |
Adjusted EBITDA (1) | | $ | 174,702 | | | $ | 178,216 | | | $ | 168,374 | |
Adjusted EBITDA percentage (1) | | 54.1 | % | | 55.2 | % | | 51.9 | % |
| | | | | | |
| Contract Services revenue | | $ | 296,970 | | | $ | 293,534 | | | $ | 284,313 | |
Contract Services adjusted gross margin (1) | | $ | 202,748 | | | $ | 200,397 | | | $ | 187,696 | |
Contract Services adjusted gross margin percentage (1) | | 68.3 | % | | 68.3 | % | | 66.0 | % |
| | | | | | |
| Other Services revenue | | $ | 25,774 | | | $ | 29,309 | | | $ | 40,334 | |
Other Services adjusted gross margin (1) | | $ | 3,782 | | | $ | 7,195 | | | $ | 7,660 | |
Other Services adjusted gross margin percentage (1) | | 14.7 | % | | 24.5 | % | | 19.0 | % |
| | | | | | |
| | | | | | |
| Maintenance capital expenditures | | $ | 19,765 | | | $ | 17,565 | | | $ | 21,553 | |
| | | | | | |
| | | | | | |
Growth capital expenditures (2) | | $ | 80,330 | | | $ | 37,966 | | | $ | 53,022 | |
| | | | | | |
Other capital expenditures (3) | | 12,202 | | | 16,398 | | | 12,093 | |
| Total Growth and Other capital expenditures | | $ | 92,532 | | | $ | 54,364 | | | $ | 65,115 | |
| | | | | | |
Discretionary cash flow (1) | | $ | 116,652 | | | $ | 116,424 | | | $ | 103,049 | |
Free cash flow (1) | | $ | 33,463 | | | $ | 70,290 | | | $ | 52,500 | |
(1)Adjusted net income, adjusted EBITDA, adjusted EBITDA percentage, adjusted gross margin, adjusted gross margin percentage, discretionary cash flow and free cash flow are non-GAAP financial measures. For definitions and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures” below.
(2)Growth capital expenditures made to (1) expand the operating capacity or operating income capacity of assets including, but not limited to, the acquisition of additional compression units, upgrades to existing equipment, expansion of supporting infrastructure, and implementation of new technologies, (2) maintain the operating capacity or operating income capacity of assets by acquisition of replacement compression units and their supporting infrastructure, and (3) expand the operating capacity or operating income capacity of existing assets.
(3)Other capital expenditures made on assets required to support our operations—such as rolling stock, leasehold improvements, technology hardware and software and related implementation expenditures, safety enhancements to equipment, and other general items that are typically capitalized and that have a useful life beyond one year. Other capital expenditures were previously included in growth capital expenditures, but are now shown separately for both current and historical periods.
Summary Operating Data
(as of the dates indicated)
| | | | | | | | | | | | | | | | | | | | |
| | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
Fleet horsepower (1) | | 4,456,492 | | 4,419,884 | | 4,417,687 |
Revenue-generating horsepower (2) | | 4,350,576 | | 4,296,978 | | 4,259,843 |
| Fleet compression units | | 4,767 | | 4,881 | | 5,297 |
| Revenue-generating compression units | | 4,510 | | 4,514 | | 4,757 |
Revenue-generating horsepower per revenue-generating compression unit (3) | | 965 | | 952 | | 895 |
Fleet utilization (4) | | 97.6 | % | | 97.2 | % | | 96.4 | % |
(1)Fleet horsepower includes (x) revenue-generating horsepower and (y) idle horsepower, which is comprised of compression units that do not have a signed contract or are not subject to a firm commitment from our customer and therefore are not currently generating revenue.
(2)Revenue-generating horsepower includes compression units that are operating under contract and generating revenue and compression units which are available to be deployed and for which we have a signed contract or are subject to a firm commitment from our customer.
(3)Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end.
(4)Fleet utilization is calculated as (i) revenue-generating horsepower divided by (ii) fleet horsepower.
Full-Year 2025 Guidance
Kodiak is providing revised guidance for the full year 2025.
| | | | | | | | | | | | | | |
| | Full-Year 2025 Guidance |
| (in thousands, excluding percentages) | | Low | | High |
Adjusted EBITDA (1) | | $ | 700,000 | | | $ | 725,000 | |
Discretionary cash flow (1)(2) | | $ | 450,000 | | | $ | 470,000 | |
| | | | |
| Segment Information | | | | |
| Contract Services revenues | | $ | 1,160,000 | | | $ | 1,200,000 | |
Contract Services adjusted gross margin percentage (1) | | 67.0 | % | | 69.0 | % |
| Other Services revenues | | $ | 120,000 | | | $ | 140,000 | |
Other Services adjusted gross margin percentage (1) | | 14.0 | % | | 17.0 | % |
| | | | |
| Capital Expenditures | | | | |
| Maintenance capital expenditures | | $ | 75,000 | | | $ | 85,000 | |
| | | | |
Growth capital expenditures | | $ | 180,000 | | | $ | 205,000 | |
| Other capital expenditures | | 60,000 | | | 65,000 | |
Total Growth and Other capital expenditures | | $ | 240,000 | | | $ | 270,000 | |
(1)The Company is unable to reconcile projected adjusted EBITDA to projected net income (loss) and discretionary cash flow to projected net cash provided by operating activities and projected adjusted gross margin percentage to projected gross margin percentage, the most comparable financial measures calculated in accordance with GAAP, respectively, without unreasonable efforts because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, unknown future events, and estimating certain future GAAP measures. The inability to project certain components of the calculation would significantly affect the accuracy of the reconciliations.
(2)Discretionary cash flow guidance assumes no change to Secured Overnight Financing Rate futures.
Conference Call
Kodiak will conduct a conference call on Wednesday, November 5, 2025, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss financial and operating results for the quarter ended September 30, 2025. To listen to the call by phone, dial 877-407-4012 and ask for the Kodiak Gas Services call at least 10 minutes prior to the start time. To listen to the call via webcast, please visit the Investors tab of Kodiak’s website at www.kodiakgas.com.
About Kodiak
Kodiak is a leading contract compression services provider in the United States, serving as a critical link in the infrastructure that enables the safe and reliable production and transportation of natural gas and oil. Headquartered in The Woodlands, Texas, Kodiak provides contract compression and related services to oil and gas producers and midstream customers in high–volume gas gathering systems, processing facilities, multi-well gas lift applications and natural gas transmission systems. More information is available at www.kodiakgas.com.
Non-GAAP Financial Measures
Adjusted net income is defined as net income (loss) excluding (i) severance expenses; (ii) transaction expenses; (iii) sales tax reserve; (iv) loss (gain) on disposal of business; (v) loss (gain) on derivatives; (vi) impairment of compression equipment; and (vii) the tax effects of the adjustments.
Adjusted diluted earnings per share (adjusted diluted EPS), is calculated by dividing adjusted net income above by the weighted average diluted shares outstanding.
Adjusted EBITDA is defined as net income (loss) before interest expense; income tax expense; and depreciation and amortization; plus (i) loss on extinguishment of debt; (ii) loss (gain) on derivatives; (iii) equity compensation expense; (iv) severance expenses; (v) transaction expenses; (vi) loss (gain) on sale of assets; and (vii) loss (gain) on disposal of business; (viii) sales tax reserve; and (ix) impairment of compression equipment. Adjusted EBITDA percentage is defined as adjusted EBITDA divided by total revenues.
Adjusted net income, adjusted diluted EPS, adjusted EBITDA and adjusted EBITDA percentage are used as supplemental financial measures by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess: (i) the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; (ii) the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; (iii) the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and (iv) our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure. We believe adjusted net income, adjusted diluted EPS, adjusted EBITDA and adjusted EBITDA percentage provide useful information because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business. Reconciliations of adjusted net income and adjusted EBITDA to net income (loss) and adjusted diluted EPS to GAAP diluted earnings (loss) per share, the most directly comparable GAAP financial measures are presented below.
Adjusted gross margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense. Adjusted gross margin percentage is defined as adjusted gross margin divided by total revenues. We believe adjusted gross margin and adjusted gross margin percentage are useful as supplemental measures to investors of our operating profitability. Reconciliations of adjusted gross margin to gross margin are presented below.
Discretionary cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; and (iii) certain other expenses; plus (w) cash loss on extinguishment of debt; (x) severance expenses; and (y) transaction expenses. We believe discretionary cash flow is a useful liquidity and performance measure and supplemental financial measure for us in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. A reconciliation of discretionary cash flow to net cash provided by operating activities is presented below.
Free cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; (iii) certain other expenses; and (iv) growth and other capital expenditures; plus (w) cash loss on extinguishment of debt; (x) severance expenses; (y) transaction expenses; and (z) proceeds from sale of assets. We believe free cash flow is a liquidity measure and useful supplemental financial measure for us in assessing our ability to pursue business opportunities and investments to grow our business and to service our debt. A reconciliation of free cash flow to net cash provided by operating activities is presented below.
Cautionary Note Regarding Forward-Looking Statements
This news release contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding: (i) expected operating results, such as revenue growth and earnings, including upon the continued integration of CSI Compressco LP (“CSI Compressco”) into our operations, and our ability to service our indebtedness; (ii) anticipated levels of capital expenditures and uses of capital; (iii) current or future volatility in the credit markets and future market conditions; (iv) potential or pending acquisition transactions or other strategic transactions, the timing thereof, the receipt of necessary approvals to close such acquisitions, our ability to finance such acquisitions, and our ability to achieve the intended operational, financial, and strategic benefits from any such transactions; (v) expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities and governmental and regulatory investigations and proceedings; (vi) production and capacity forecasts for the natural gas and oil industry; (vii) strategy for customer retention, growth, fleet maintenance, market position and financial results; (viii) our interest rate hedges; and (ix) strategy for risk management.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) a reduction in the demand for natural gas and oil and/or a decrease in natural gas and oil prices; (ii) the loss of, or the deterioration of the financial condition of, any of our key customers; (iii) nonpayment and nonperformance by our customers, suppliers or vendors; (iv) competitive pressures that may cause us to lose market share; (v) the structure of our Contract Services contracts and the failure of our customers to continue to contract for services after expiration of the primary term; (vi) our ability to successfully integrate any acquired businesses, including CSI Compressco, and realize the expected benefits thereof in the expected timeframe or at all; (vii) our ability to fund purchases of additional compression equipment; (viii) our ability to successfully implement our share repurchase program; (ix) a deterioration in general economic, business, geopolitical or industry conditions, including as a result of the conflict between Russia and Ukraine, the Israel-Hamas war, and the hostilities in the Middle East, inflation, and slow economic growth in the United States; (x) a downturn in the economic environment, as well as continued inflationary pressures; (xi) international operations and related mobilization and demobilization of compression units, operational interruptions, delays, upgrades, refurbishment and repair of compression assets and any related delays and costs overruns or reduced payment of contracted rates; (xii) our ability to successfully manage our international operations and comply with any applicable laws and regulations, including risks associated with doing business in foreign countries, and our ability to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) or other anti-corruption laws; (xiii) the outcome of any pending internal review or any future related government enforcement actions; (xiv) tax legislation and the impact of changes to applicable tax laws, including the passage of the One Big Beautiful Bill Act, and administrative initiatives or challenges to our tax positions; (xv) the loss of key management, operational personnel or qualified technical personnel; (xvi) our dependence on a limited number of suppliers; (xvii) the cost of compliance with existing and new governmental regulations, as well as the associated uncertainty given the current U.S. federal government administration; (xviii) changes in trade policies and regulations, including increases or changes in duties, current and potentially new tariffs and other actions; (xix) the cost of compliance with regulatory initiatives and stakeholders’ pressures, including sustainability and corporate responsibility; (xx) the inherent risks associated with our operations, such as equipment defects and malfunctions; (xxi) our reliance on third-party components for use in our IT systems; (xxii) legal and reputational risks and expenses relating to the privacy, use and security of employee and client information; (xxiii) threats of cyber-attacks or terrorism; (xxiv) agreements that govern our debt contain features that may limit our ability to operate our business and fund future growth and also increase our exposure to risk during adverse economic conditions; (xxv) volatile and/or elevated interest rates and associated central bank policy actions; (xxvi) our ability to access the capital and credit markets or borrow on affordable terms (or at all) to obtain additional capital that we may require; (xxvii) major natural disasters, severe weather events or other similar events that could disrupt operations; (xxiii) unionization of our labor force, labor interruptions and new or amended labor regulations; (xxix) renewal of insurance; (xxx) the effectiveness of our disclosure controls and procedures; and (xxxi) such other factors as discussed throughout the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission.(“SEC”) on March 7, 2025, as may be updated by subsequent filings under the Securities Exchange Act of 1934, as amended, including Forms 10-Q and 8-K, each of which can be obtained free of charge on the SEC’s website at http://www.sec.gov.
Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by applicable law, we undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future developments or otherwise.
KODIAK GAS SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands, except per share data) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Revenues: | | | | | | |
| Contract Services | | $ | 296,970 | | $ | 293,534 | | $ | 284,313 |
| Other Services | | 25,774 | | 29,309 | | 40,334 |
| Total revenues | | 322,744 | | 322,843 | | 324,647 |
| Operating expenses: | | | | | | |
| Cost of operations (exclusive of depreciation and amortization shown below): | | | | | | |
| Contract Services | | 94,222 | | 93,137 | | 96,617 |
| Other Services | | 21,992 | | 22,114 | | 32,674 |
| Depreciation and amortization | | 66,329 | | 66,135 | | 73,452 |
| Long-lived asset impairment | | — | | — | | 9,921 |
| Selling, general and administrative | | 37,771 | | 35,121 | | 35,528 |
| Loss on sale of assets | | 38,230 | | 6,606 | | 10,376 |
| Total operating expenses | | 258,544 | | 223,113 | | 258,568 |
| Income from operations | | 64,200 | | 99,730 | | 66,079 |
| Other income (expenses): | | | | | | |
| Interest expense | | (56,406) | | (45,755) | | (53,991) |
Loss on derivatives | | — | | — | | (20,327) |
| Other expense, net | | (28,292) | | (546) | | (156) |
| Total other expenses, net | | (84,698) | | (46,301) | | (74,474) |
| Income (loss) before income taxes | | (20,498) | | 53,429 | | (8,395) |
| Income tax expense (benefit) | | (6,301) | | 13,445 | | (2,184) |
| Net income (loss) | | (14,197) | | | 39,984 | | | (6,211) | |
| Less: Net income (loss) attributable to noncontrolling interests | | (186) | | | 488 | | | (563) | |
| Net income (loss) attributable to common shareholders | | $ | (14,011) | | | $ | 39,496 | | | $ | (5,648) | |
| | | | | | |
| Earnings (loss) per share attributable to common shareholders: | | | | | | |
| Basic | | $ | (0.17) | | | $ | 0.44 | | | $ | (0.07) | |
| Diluted | | $ | (0.17) | | | $ | 0.43 | | | $ | (0.07) | |
| | | | | | |
| Weighted average shares outstanding: | | | | | | |
| Basic | | 87,055 | | 87,699 | | 84,292 |
| Diluted | | 87,055 | | 90,040 | | 84,292 |
KODIAK GAS SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| | | | | | | | | | | | | | |
| (in thousands) | | September 30, 2025 | | December 31, 2024 |
| Assets | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 724 | | | $ | 4,750 | |
| Accounts receivable, net | | 215,878 | | | 253,637 | |
| Inventories, net | | 101,241 | | | 103,341 | |
| Fair value of derivative instruments | | — | | | 3,672 | |
| Contract assets | | 4,882 | | | 7,575 | |
| Prepaid expenses and other current assets | | 18,737 | | | 10,686 | |
| Total current assets | | 341,462 | | | 383,661 | |
| Property, plant and equipment, net | | 3,408,447 | | | 3,395,022 | |
| Operating lease right-of-use assets, net | | 44,680 | | | 53,754 | |
| Finance lease right-of-use assets, net | | 7,224 | | | 5,696 | |
| Goodwill | | 408,681 | | | 415,213 | |
| Identifiable intangible assets, net | | 156,440 | | | 162,747 | |
| Fair value of derivative instruments | | 4,156 | | | 17,544 | |
| Other assets | | 789 | | | 1,486 | |
| Total assets | | $ | 4,371,879 | | | $ | 4,435,123 | |
| Liabilities and Stockholders’ Equity | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 75,968 | | | $ | 57,562 | |
| Accrued liabilities | | 203,572 | | | 188,732 | |
| Contract liabilities | | 69,472 | | | 73,075 | |
| Total current liabilities | | 349,012 | | | 319,369 | |
| Long-term debt, net of unamortized debt issuance cost | | 2,609,162 | | | 2,581,909 | |
| Operating lease liabilities | | 41,492 | | | 49,748 | |
| Finance lease liabilities | | 4,985 | | | 3,514 | |
| Deferred tax liabilities | | 110,305 | | | 103,826 | |
| Other liabilities | | 2,344 | | | 3,150 | |
| Total liabilities | | $ | 3,117,300 | | | $ | 3,061,516 | |
| Stockholders’ equity: | | | | |
| Preferred stock | | 4 | | | 9 | |
| Common stock | | 902 | | | 892 | |
| Additional paid-in capital | | 1,329,794 | | | 1,305,375 | |
| Treasury stock, at cost | | (110,320) | | | (40,000) | |
| Noncontrolling interest | | 5,003 | | | 13,694 | |
| Accumulated other comprehensive loss | | (2,379) | | | — | |
| Retained earnings | | 31,575 | | | 93,637 | |
| Total stockholders’ equity | | 1,254,579 | | | 1,373,607 | |
| Total liabilities and stockholders’ equity | | $ | 4,371,879 | | | $ | 4,435,123 | |
KODIAK GAS SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | | | | | | | | | | |
| Nine Months Ended September 30, |
| (in thousands) | 2025 | | 2024 |
| Cash flows from operating activities: | | | |
| Net income | $ | 56,823 | | $ | 30,734 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 202,993 | | | 189,859 | |
| Long-lived asset impairment | — | | | 9,921 | |
| Equity compensation expense | 18,013 | | | 12,064 | |
| Amortization of debt issuance costs | 9,734 | | | 8,079 | |
| Non-cash lease expense | 6,042 | | | 3,164 | |
| Provision for credit losses | 1,032 | | | 4,625 | |
| Inventory reserve | 124 | | | 476 | |
| Loss on sale of assets | 54,047 | | | 9,203 | |
| Change in fair value of derivatives | — | | | 13,219 | |
| Loss on discontinuation of hedge | 9,398 | | | — | |
| Amortization of interest rate swap | 5,152 | | | — | |
| Deferred tax provision | 15,084 | | | 4,821 | |
| Changes in operating assets and liabilities, exclusive of effects of business acquisition: | | | |
| Accounts receivable | 25,479 | | | (126,941) | |
| Inventories | 1,359 | | | (7,895) | |
| Contract assets | 2,693 | | | 3,934 | |
| Prepaid expenses and other current assets | (11,625) | | | (747) | |
| Accounts payable | 6,681 | | | 40,204 | |
| Accrued and other liabilities | 3,567 | | | 9,593 | |
| Contract liabilities | (2,479) | | | 5,068 | |
| Other assets | 761 | | | 121 | |
| Net cash provided by operating activities | 404,878 | | | 209,502 | |
| Cash flows from investing activities: | | | |
| Net cash acquired in acquisition of CSI Compressco LP | — | | | 9,458 | |
| Purchase of property, plant and equipment | (262,641) | | | (263,719) | |
| Proceeds from sale of assets | 26,949 | | | 14,977 | |
| Other | — | | | (35) | |
| Net cash used for investing activities | (235,692) | | | (239,319) | |
| Cash flows from financing activities: | | | |
| Borrowings on debt instruments | 2,506,305 | | | 2,297,435 | |
| Payments on debt instruments | (2,455,996) | | | (2,114,013) | |
| Principal payments on other borrowings | (4,645) | | | (3,721) | |
| Payment of debt issuance cost | (26,457) | | | (16,346) | |
| Principal payments on finance leases | (2,393) | | | (870) | |
| | | |
| Offering costs | — | | | (1,162) | |
| Dividends paid to stockholders | (116,571) | | | (97,506) | |
| Repurchase of common shares | (70,320) | | | (25,000) | |
| Cash paid for shares withheld to cover taxes | (6,013) | | | (2,665) | |
| Net effect on deferred taxes and taxes payable related to the vesting of restricted stock | 3,906 | | | 418 | |
| Distributions to noncontrolling interest | (1,028) | | | (4,881) | |
| | | |
| Net cash provided by (used for) financing activities | (173,212) | | | 31,689 | |
| Net increase (decrease) in cash and cash equivalents | (4,026) | | | 1,872 | |
| Cash and cash equivalents - beginning of period | 4,750 | | | 5,562 | |
| Cash and cash equivalents - end of period | $ | 724 | | | $ | 7,434 | |
KODIAK GAS SERVICES, INC.
RECONCILIATION OF NET INCOME AND
DILUTED EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Net income (loss) | | $ | (14,197) | | | $ | 39,984 | | | $ | (6,211) | |
| Severance expense | | — | | | — | | | 2,243 | |
| Transaction expenses | | 1,523 | | | — | | | 2,554 | |
| Sales tax reserve | | 27,968 | | | — | | | — | |
| Loss on disposal of business | | 33,349 | | | — | | | 7,024 | |
Loss on derivatives | | — | | | — | | | 20,327 | |
| Tax effect of adjustments | | (17,104) | | | — | | | (7,186) | |
| Adjusted net income | | $ | 31,539 | | | $ | 39,984 | | | $ | 18,751 | |
| | | | | | |
| Weighted-average common shares outstanding: | | | | | | |
| Basic | | 87,055 | | | 87,699 | | | 84,292 | |
| Diluted | | 87,055 | | | 90,040 | | | 84,292 | |
| | | | | | |
Diluted earnings (loss) per common share | | $ | (0.17) | | | $ | 0.43 | | | $ | (0.07) | |
| Severance expense | | — | | | — | | | 0.03 | |
| Transaction expenses | | 0.02 | | | — | | | 0.03 | |
| Sales tax reserve | | 0.32 | | | — | | | — | |
| Loss on disposal of business | | 0.38 | | | — | | | 0.08 | |
Loss on derivatives | | — | | | — | | | 0.24 |
| Tax effect of adjustments | | (0.19) | | | — | | | (0.09) | |
| Adjusted diluted earnings per common share | | $ | 0.36 | | | $ | 0.43 | | | $ | 0.22 | |
KODIAK GAS SERVICES, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands, excluding percentages) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Net income (loss) | | $ | (14,197) | | | $ | 39,984 | | | $ | (6,211) | |
| Interest expense | | 56,406 | | | 45,755 | | | 53,991 | |
| Income tax expense (benefit) | | (6,301) | | | 13,445 | | | (2,184) | |
| Depreciation and amortization | | 66,329 | | | 66,135 | | | 73,452 | |
| Long-lived asset impairment | | — | | | — | | | 9,921 | |
Loss on derivatives | | — | | | — | | | 20,327 | |
| Equity compensation expense | | 4,744 | | | 6,291 | | | 3,905 | |
Severance expense (1) | | — | | | — | | | 2,243 | |
Transaction expenses (2) | | 1,523 | | | — | | | 2,554 | |
Sales tax reserve (3) | | 27,968 | | | — | | | — | |
| Loss on disposal of business | | 33,349 | | | — | | | 7,024 | |
| Loss on sale of assets | | 4,881 | | | 6,606 | | | 3,352 | |
| Adjusted EBITDA | | $ | 174,702 | | | $ | 178,216 | | | $ | 168,374 | |
| | | | | | |
| Net income percentage | | (4.4)% | | 12.4% | | (1.9)% |
| Adjusted EBITDA percentage | | 54.1% | | 55.2% | | 51.9% |
(1)Represents severance expense related to the CSI Acquisition.
(2)Represents certain costs associated with non-recurring professional services and other costs, primarily related to the CSI Acquisition and secondary offerings.
(3)During the quarter, the Company received a settlement offer with the Texas Comptroller’s office to resolve the outstanding Texas sales and use tax matters. Under this settlement arrangement, the Company would be subject to interest and penalties for all open periods totaling $28.0 million.
KODIAK GAS SERVICES, INC.
RECONCILIATION OF ADJUSTED GROSS MARGIN TO GROSS MARGIN
(UNAUDITED)
Contract Services
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands, excluding percentages) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Total revenues | | $ | 296,970 | | | $ | 293,534 | | | $ | 284,313 | |
Cost of operations (excluding depreciation and amortization) | | (94,222) | | | (93,137) | | | (96,617) | |
| Depreciation and amortization | | (66,329) | | | (66,135) | | | (73,452) | |
| Gross margin | | $ | 136,419 | | | $ | 134,262 | | | $ | 114,244 | |
| Gross margin percentage | | 45.9% | | 45.7% | | 40.2% |
| Depreciation and amortization | | 66,329 | | | 66,135 | | | 73,452 | |
| Adjusted gross margin | | $ | 202,748 | | | $ | 200,397 | | | $ | 187,696 | |
| Adjusted gross margin percentage | | 68.3% | | 68.3% | | 66.0% |
Other Services
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands, excluding percentages) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Total revenues | | $ | 25,774 | | | $ | 29,309 | | | $ | 40,334 | |
Cost of operations (excluding depreciation and amortization) | | (21,992) | | | (22,114) | | | (32,674) | |
| Depreciation and amortization | | — | | | — | | | — | |
| Gross margin | | $ | 3,782 | | | $ | 7,195 | | | $ | 7,660 | |
| Gross margin percentage | | 14.7% | | 24.5% | | 19.0% |
| Depreciation and amortization | | — | | | — | | | — | |
| Adjusted gross margin | | $ | 3,782 | | | $ | 7,195 | | | $ | 7,660 | |
| Adjusted gross margin percentage | | 14.7% | | 24.5% | | 19.0% |
KODIAK GAS SERVICES, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO DISCRETIONARY CASH FLOW AND FREE CASH FLOW
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (in thousands) | | September 30, 2025 | | June 30, 2025 | | September 30, 2024 |
| Net cash provided by operating activities | | $ | 113,378 | | | $ | 177,172 | | | $ | 36,878 | |
| Maintenance capital expenditures | | (19,765) | | | (17,565) | | | (21,553) | |
| | | | | | |
Severance expense (1) | | — | | | — | | | 2,243 | |
Transaction expenses (2) | | 1,523 | | | — | | | 2,554 | |
Sales tax reserve (3) | | 27,968 | | | — | | | — | |
| Change in operating assets and liabilities | | (6,637) | | | (38,478) | | | 84,479 | |
Other (4) | | 185 | | | (4,705) | | | (1,552) | |
| Discretionary cash flow | | $ | 116,652 | | | $ | 116,424 | | | $ | 103,049 | |
Growth capital expenditures (5)(6) | | (80,330) | | | (37,966) | | | (53,022) | |
Other capital expenditures (5) | | (12,202) | | | (16,398) | | | (12,093) | |
| Proceeds from sale of assets | | 9,343 | | | 8,230 | | | 14,566 | |
| Free cash flow | | $ | 33,463 | | | $ | 70,290 | | | $ | 52,500 | |
(1)Represents severance expense related to the CSI Acquisition.
(2)Represents certain costs associated with non-recurring professional services and other costs, primarily related to the CSI Acquisition and secondary offerings.
(3)During the quarter, the Company received a settlement offer with the Texas Comptroller’s office to resolve the outstanding Texas sales and use tax matters. Under this settlement arrangement, the Company would be subject to interest and penalties for all open periods totaling $28.0 million.
(4)Includes non-cash lease expense, provision for credit losses and inventory reserve.
(5)For the three months ended September 30, 2025, June 30, 2025, and September 30, 2024, growth and other capital expenditures includes a $9.6 million increase, a $10.7 million decrease and a $0.3 million decrease in accrued capital expenditures, respectively.
(6)For the three months ended September 30, 2025, June 30, 2025, and September 30, 2024, growth capital expenditures includes a $1.9 million increase, a $0.3 million decrease and a $1.7 million increase, in a non-cash sales tax accrual on compression equipment purchases, respectively.
