Archrock (AROC) Q1 2026 earnings summary

Executive summary

• Revenue increased to $373.8 million for Q1 2026, up 8% year-over-year, driven by strong contract operations, high customer demand, and the NGCS Acquisition.

• Net income rose to $73.8 million, with EPS at $0.41, reflecting higher adjusted gross margin and gains on asset sales, partially offset by increased SG&A and depreciation.

• Adjusted EBITDA reached $221 million, up 12% year-over-year.

• Returned $44.3 million to shareholders through dividends and share repurchases, a 29% increase year-over-year.

• Major transactions included the redemption of $800 million in 2028 Notes and issuance of $800 million in 2034 Notes, with proceeds used to repay credit facility borrowings.

Financial highlights

• Adjusted net income was $74.4 million or $0.42 per share, nearly flat year-over-year.

• Adjusted gross margin improved to $247.4 million (66% margin), up from $222.1 million (64%) in Q1 2025.

• Operating cash flow was $185.9 million, up from $115.6 million, aided by tax refunds and higher contract operations activity.

• Adjusted free cash flow was $92 million; adjusted free cash flow after dividends was $52 million.

• SG&A expenses rose to $45.2 million, mainly due to higher incentive compensation and a one-time executive retention expense.

Outlook and guidance

• Reaffirmed full-year 2026 adjusted EBITDA guidance of $865 million–$915 million.

• Growth capital plan for 2026 remains at $250 million–$275 million for fleet investment.

• Total 2026 capital expenditures expected at $400 million–$445 million, with maintenance CapEx of $125 million–$135 million.

• Management expects operating cash flows and credit facility access to be sufficient for liquidity needs over the next twelve months and beyond.

• Expect continued strong demand for compression, especially in the Permian and other basins, with LNG and AI data center growth as key drivers.