Kodiak Gas Services Reports 53% Revenue Growth to $329.6 Million in Latest Quarter

Kodiak Gas Services, Inc. reported significant financial growth in its latest quarterly results, with total revenues reaching $329.6 million for the three months ended March 31, 2025, a 53% increase from $215.5 million in the same period last year. The company's Contract Services segment contributed $289.0 million, up 49.4% year-over-year, primarily driven by the acquisition of CSI Compressco LP, which added substantial revenue-generating horsepower. Other Services also saw a notable increase, with revenues rising 84.2% to $40.7 million, attributed to higher parts sales and increased service charges.

Operating expenses for the quarter increased to $240.5 million, a 54.8% rise compared to $155.3 million in the prior year. This increase was largely due to higher costs associated with direct labor, parts, and depreciation, reflecting the expanded operations following the CSI acquisition. Despite the rise in expenses, the company reported an operating income of $89.2 million, up 48.3% from $60.2 million a year earlier. Net income attributable to common shareholders was $30.4 million, a slight increase of 0.6% from $30.2 million in the previous year, resulting in diluted earnings per share of $0.33.

In terms of operational metrics, Kodiak's fleet horsepower increased by 34.4% to 4.4 million, with revenue-generating horsepower also rising by 30.4%. The company reported a fleet utilization rate of 96.9%, slightly down from 99.8% in the prior year, indicating a minor decrease in operational efficiency. The total number of compression units increased significantly to 4,941, up from 3,091, reflecting the integration of new assets from the CSI acquisition.

Strategically, Kodiak completed the acquisition of CSI Compressco on April 1, 2024, for a total consideration of $342.3 million, which included the issuance of common and preferred shares. This acquisition is expected to enhance Kodiak's market position, particularly in the Permian Basin, the largest oil and gas producing region in the U.S. The company also engaged in a sale-leaseback transaction involving two properties, which resulted in a net loss of $2.6 million recorded in the quarter.

Looking ahead, Kodiak anticipates continued growth driven by the integration of CSI Compressco and ongoing demand for its services. The company has approximately $321.2 million in liquidity, including $2.0 million in cash and $319.3 million available under its ABL Facility, which positions it well to fund future capital expenditures and operational needs. The board has declared a cash dividend of $0.45 per share for the quarter, reflecting confidence in the company's financial health and commitment to returning value to shareholders.