THE WOODLANDS, Texas--(BUSINESS WIRE)--May 11, 2026--
Kodiak Gas Services, Inc. $(KGS)$ ("Kodiak" or the "Company") today reported financial and operating results for the quarter ended March 31, 2026. The Company announced increased full-year 2026 guidance to incorporate the contribution from the recently-closed acquisition of Distributed Power Solutions, LLC (DPS). Kodiak also announced that it has procured over 260 megawatts (MWs) of additional power generation capacity and expects annual growth of 300 to 500 MWs per year through 2030.
First Quarter 2026 and Recent Highlights
-- Record Contract Services segment revenues of $307.0 million
-- Contract Services gross margin percentage of 48.2% and adjusted gross
margin percentage(1) of 70.6%
-- Net income of $17.8 million, or $0.20 per diluted share and adjusted
net income(1) of $52.0 million, or $0.59 per adjusted diluted share(1)
-- Record adjusted EBITDA(1) of $190.1 million, a 7.0% increase compared
to first quarter 2025
-- Quarterly net cash provided by operating activities of $71.2 million
and record discretionary cash flow(1) of $126.5 million, a 9.0% increase
compared to first quarter 2025
-- Completed 20,700 horsepower purchase-leaseback transaction with a
leading oil and gas producer in the Permian Basin
-- Issued $1 billion of senior unsecured notes, reducing the Company's
weighted average borrowing rate and bolstering liquidity
-- Closed the acquisition of DPS on April 1, 2026 and procured over 260
MWs of additional power generation capacity; expect to take delivery of
61 MWs in 2026 with the balance to be delivered in 2027 through 2029
2026 Guidance Highlights
-- Provided revised full year 2026 guidance to reflect continued strength
in natural gas compression and to incorporate new power segment
-- Increased 2026 Adjusted EBITDA guidance to a range of $820 million to
$860 million
CEO Commentary
"Kodiak is off to a fantastic start in 2026, with record contract services revenue and adjusted gross margin percentage driving record quarterly adjusted EBITDA. Our contract compression business continues to outperform expectations, and our new power business has tremendous growth potential," said Mickey McKee, Kodiak's President and Chief Executive Officer. "Since closing the DPS acquisition, we have been actively engaged with numerous data center developers discussing the scope and scale of their distributed power needs. Given the overwhelming demand, we are actively working to scale our power offerings, including today's announcement of equipment orders that will significantly increase our power generation capacity to over 650 megawatts, and clear line of sight to over two gigawatts by the end of the decade. We are currently in advanced discussions with customers to deploy this capacity under long-term contracts.
"We remain constructive on the outlook for U.S. natural gas, with rising demand driving the need for incremental compression infrastructure. The market remains tight with historically long lead times for new large horsepower compression, but Kodiak is well positioned to deliver on our growth targets in the coming years. We're also encouraged by the increasing adoption of distributed power as the preferred solution for data center and other large industrial power consumers' long-term power needs. We have a robust pipeline of commercial opportunities, and have made meaningful progress to secure the equipment to allow us to capture those opportunities and realize our long-term growth objectives."
(1) Adjusted gross margin percentage, 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.
Segment Information
Contract Services segment revenue was $307.0 million in the first quarter of 2026, a 6.2% increase compared to $289.0 million in the first quarter of 2025. Contract Services segment gross margin was $148.0 million in the first quarter of 2026, an 18.3% increase compared to $125.2 million in the first quarter of 2025 and adjusted gross margin was $216.7 million in the first quarter of 2026, a 10.7% increase compared to $195.7 million in the first quarter of 2025.
Other Services segment revenue was $38.8 million in the first quarter of 2026, a 4.7% decrease compared to $40.7 million in the first quarter of 2025. Other Services segment gross margin and adjusted gross margin were each $6.2 million in the first quarter of 2026, a 12.7% increase compared to $5.5 million for each measure in the first quarter of 2025.
Financial Results
Net income attributable to common shareholders of $17.8 million or $0.20 per share, in the first quarter of 2026 included a $36.5 million loss on extinguishment of debt related to the refinancing of the Company's senior notes due 2029, as well as $8.3 million of nonrecurring transaction expenses related primarily to the acquisition of DPS. Adjusting for these items and the associated tax effects, adjusted net income was $52.0 million or $0.59 per diluted share.
Long-Term Debt and Liquidity
Total debt outstanding was $2.8 billion as of March 31, 2026, and the Company had $1.5 billion available on its ABL Facility. Kodiak's credit agreement leverage ratio was 3.6x for the first quarter of 2026.
Summary Financial Data
Three Months Ended
-----------------------------------------------------
(in thousands,
excluding December 31,
percentages) March 31, 2026 2025 March 31, 2025
---------------- ---------------- -----------------
Total revenues $ 345,759 $ 332,871 $ 329,642
Net income
attributable to
common
shareholders $ 17,805 $ 24,625 $ 30,411
Adjusted net
income (1) $ 52,001 $ 35,261 $ 32,637
Adjusted EBITDA
(1) $ 190,092 $ 184,451 $ 177,664
Adjusted EBITDA
percentage (1) 55.0% 55.4% 53.9%
Contract Services
revenue $ 306,985 $ 301,810 $ 288,956
Contract Services
adjusted gross
margin (1) $ 216,726 $ 208,911 $ 195,721
Contract Services
adjusted gross
margin
percentage (1) 70.6% 69.2% 67.7%
Other Services
revenue $ 38,774 $ 31,061 $ 40,686
Other Services
adjusted gross
margin (1) $ 6,155 $ 3,961 $ 5,460
Other Services
adjusted gross
margin
percentage (1) 15.9% 12.8% 13.4%
Maintenance
capital
expenditures $ 17,758 $ 22,265 $ 16,407
Growth capital
expenditures (2)
(3) $ 85,552 $ 25,253 $ 55,983
Other capital
expenditures
(4) 7,458 11,895 22,258
-------- -------- ---------
Total Growth
and Other
capital
expenditures $ 93,010 $ 37,148 $ 78,241
Discretionary
cash flow (1) $ 126,505 $ 112,524 $ 116,084
Free cash flow
(1) $ 36,962 $ 78,609 $ 47,219
(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 for the three months ended March 31, 2026
include $18.0 million for additional power generation capacity.
(3) 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..
(4) 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.
Summary Operating Data
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