Archrock (AROC) Investor presentation summary

Company overview and market position

• Specializes in natural gas compression with a focus on large horsepower and electric motor drive units, operating across all major U.S. oil and gas basins.

• Holds a leading outsourced compression market share, with a diversified customer base and long-term, fee-based contracts.

• Maintains strong relationships with top-tier, investment-grade customers, with 81% of operating horsepower under long-term contracts or strategic agreements.

• Significant presence in the Permian and Eagle Ford basins, representing about 76% of operating horsepower.

• Aftermarket Services business expands addressable market and provides diversification.

Financial performance and outlook

• Achieved record adjusted EBITDA of $901 million in 2025, exceeding guidance midpoint, with 11 consecutive quarters above 95% fleet utilization.

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

• Returned $212 million to investors in 2025 through dividends and share repurchases, a 70% year-over-year increase.

• Maintains a leverage ratio of 2.7x and strong dividend coverage of 4.9x, supporting ongoing capital returns and growth investments.

• 2026 growth capex projected at $250–$275 million, funded by operations and potential asset sales.

Operational strengths and transformation

• Focus on midstream applications provides earnings stability and long-term contracts, with average time on-site over 6 years.

• Fleet high-grading and standardization have increased average time on location by 61% since 2021, now at 73 months.

• Contract operations adjusted gross margin improved from 57% in 2017 to 70% in 2025.

• Maintains high fleet utilization (82–96%) and a scalable, regionally diversified footprint.

• Best-in-class safety record with a TRIR of 0.22 in 2025 and no lost time incidents.