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• Adjusted EPS: Increased by over 60% compared to Q1 2024.

• Adjusted EBITDA: Increased by more than 50% compared to Q1 2024, totaling $198 million.

• Fleet Utilization: Remained fully utilized at 96%.

• Contract Compression Operating Fleet: Increased by more than 70,000 horsepower, excluding sales of non-strategic assets.

• Leverage Ratio: Record-low quarter-end leverage ratio of 3.2 times.

• Quarterly Dividend: Increased by 15% compared to a year ago, with a coverage of 3.9 times.

• Share Repurchase: Approximately $23 million or 977,000 shares repurchased at an average price of $23.22 per share.

• Contract Operations Revenue: $300 million, up 5% sequentially and 35% year-over-year.

• Monthly Revenue per Horsepower: Reached a company record of $23.54.

• Adjusted Gross Margin Percentage: Achieved 70% for the second consecutive quarter.

• Aftermarket Services Revenue: $47 million, up from $40 million in Q4 2024.

• Net Income: $71 million for Q1 2025.

• Adjusted Net Income: $74 million or $0.42 per share.

• Total Debt: $2.3 billion with available liquidity of $590 million.

• 2025 Adjusted EBITDA Guidance: Raised to $790 million to $830 million.

• Growth CapEx: Expected between $330 million and $370 million.

• Maintenance CapEx: Forecasted to be approximately $110 million to $120 million.

• Warning! GuruFocus has detected 4 Warning Signs with AROC.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Archrock Inc (NYSE:AROC) delivered record-setting performance in the first quarter of 2025, with a significant increase in adjusted EPS by over 60% and adjusted EBITDA by more than 50% compared to the first quarter of 2024.

• The company maintained a high fleet utilization rate of 96% and increased its contract compression operating fleet by more than 70,000 horsepower, reflecting high return organic investments.

• Archrock Inc (NYSE:AROC) achieved a record-low quarter-end leverage ratio of 3.2 times, demonstrating strong financial discipline.

• The company increased its quarterly dividend per share by 15% compared to the previous year, with a robust dividend coverage of 3.9 times.

• Archrock Inc (NYSE:AROC) has been actively repurchasing shares, with approximately $23 million worth of shares repurchased year-to-date, and the Board approved a $50 million increase to the share repurchase program.

Negative Points

• Macroeconomic factors, including OPEC's actions and tariff announcements, have introduced uncertainty and volatility in WTI prices, which could impact future market conditions.

• Despite strong current performance, there is a potential risk of deceleration in growth if there is a sustained oil price deterioration, particularly affecting the oil side of the business.

• The company is closely monitoring market developments as any significant changes in customer development plans or capital programs could impact future operations.

• Tariffs could potentially increase costs for parts and materials, although the impact is currently estimated to be in the low single-digit range.

• The compression intensity in the Permian is higher compared to other basins, and a major migration away from the Permian could affect compression demand and market dynamics.