Archrock (AROC) Q4 2024 earnings summary

Executive summary

• Delivered record operational and financial results in 2024, including record Adjusted EPS up 69%, Adjusted EBITDA up over 30%, and full-year revenue rising to $1.16B from $990.3M year-over-year.

• Completed the transformative TOPS acquisition, establishing leadership in electric compression and expanding the contract compression fleet by 716,000 horsepower.

• Achieved all-time high equipment utilization at 96% and maintained industry-leading safety performance.

• Returned $124 million to shareholders via dividends and buybacks, with a 3.1x dividend coverage for 2024.

• Entering 2025 with strong momentum, focusing on capturing robust market opportunities, maximizing service reliability, and advancing emissions reduction initiatives.

Financial highlights

• Q4 2024 net income was $59.8M (EPS $0.34); adjusted net income was $61.5M (adjusted EPS $0.35); full-year net income was $172.2M (EPS $1.05).

• Q4 Adjusted EBITDA reached $184M; full-year Adjusted EBITDA was $595M.

• Contract Operations Q4 revenue was $286.5M, up 34% year-over-year, with a record 70% Adjusted Gross Margin.

• Aftermarket Services Q4 revenue was $40M, with a 23% Adjusted Gross Margin.

• Year-end total debt was $2.2B, with available liquidity of nearly $700M and leverage ratio improved to 3.3x.

Outlook and guidance

• 2025 Adjusted EBITDA guidance is $750–$790M, a nearly 30% increase at the midpoint.

• 2025 net income guidance: $253M–$293M; cash available for dividend: $456M–$471M.

• Contract Operations revenue expected to rise 24% in 2025 to $1.2B–$1.24B, with Adjusted Gross Margin between 68% and 71%.

• Aftermarket Services revenue forecasted at $190M–$210M, with margins of 22%–24%.

• 2025 capital expenditures projected at $470M–$535M, with $330M–$370M for growth CapEx and $105M–$115M for maintenance.