Archrock (AROC) Investor presentation summary

Business overview and strategy

• Leading U.S. provider of outsourced natural gas compression, specializing in large horsepower and electric motor drive units, with a market cap of $6.8 billion and enterprise value of $9.2 billion as of April 2026.

• Operations are focused on midstream applications, providing stability through long-term, fee-based contracts and diversified customer relationships.

• Maintains a strong presence in all major U.S. shale plays, with 76% of operating horsepower in the Permian and Eagle Ford basins.

• Aftermarket Services business expands addressable market and diversifies revenue streams.

• Multi-year transformation has improved fleet quality, customer base, and technology, increasing average time on location and gross margins.

Financial performance and outlook

• Achieved record performance with 12 consecutive quarters at 95%+ utilization and expects $250–$275 million in growth capex for 2026.

• 2026 adjusted EBITDA guidance is $865–$915 million, reflecting pricing and profitability improvements.

• EBITDA margins have steadily improved, reaching 46%–47% in recent years, with financial performance tied to production rather than commodity prices.

• Free cash flow inflection in 2026 provides flexibility for growth and capital returns, with a leverage ratio of 2.6x and $113.2 million remaining under share repurchase authorization.

• Returned $44.3 million to investors in Q1 2026 through dividends and buybacks, up 28% year-over-year.

Dividend and balance sheet

• 50 consecutive quarters of dividends, with Q1 2026 dividend per share up 16% year-over-year and strong coverage of 3.5x.

• No near-term debt maturities, ample liquidity, and a Fitch outlook revised to Positive.

• Long-term leverage target of 3.0x–3.5x, with current leverage at 2.6x, supporting both organic and inorganic growth.