Archrock Reports 29.3% Revenue Growth to $347.2 Million in Latest Quarter

Archrock, Inc. reported significant financial growth in its latest quarterly results, with total revenue reaching $347.2 million for the three months ended March 31, 2025, compared to $268.5 million for the same period in 2024. This 29.3% increase was primarily driven by a substantial rise in revenue from the company's contract operations segment, which generated $300.4 million, up from $223.1 million a year earlier. The company's net income also saw a notable increase, rising to $70.9 million from $40.5 million, reflecting a 75% year-over-year growth.

The financial performance was bolstered by the integration of new assets from the recent TOPS Acquisition, which added approximately 580,000 horsepower to Archrock's operational capacity. The company reported an adjusted gross margin of $222.1 million, a 42.5% increase from $155.7 million in the prior year, indicating improved operational efficiency. However, the company also faced increased costs, including a rise in selling, general, and administrative expenses, which totaled $37.2 million, up from $31.7 million in the previous year.

In terms of operational metrics, Archrock's total available horsepower increased to 4.46 million as of March 31, 2025, compared to 3.78 million a year prior. The average operating horsepower also improved, reflecting higher utilization rates. The company reported a 96% utilization rate for its horsepower, consistent with the previous year, indicating stable operational performance despite the expansion.

Strategically, Archrock has been active in expanding its market presence through acquisitions. The company completed the TOPS Acquisition in August 2024 and announced the NGCS Acquisition, which is set to enhance its service offerings and operational capacity further. The NGCS Acquisition, finalized on May 1, 2025, involved acquiring a fleet of approximately 327,000 operating horsepower for a total consideration of $352.3 million. These acquisitions are expected to strengthen Archrock's position in the midstream natural gas compression market.

Looking ahead, Archrock anticipates continued growth driven by increased demand for its services and the successful integration of its recent acquisitions. The company plans to invest between $475 million and $540 million in capital expenditures throughout 2025, focusing on both growth and maintenance capital expenditures. Archrock's management remains optimistic about its ability to generate sufficient cash flows to support operations and meet its financial obligations, including dividend payments and debt servicing.