AROC · Archrock, Inc.

Archrock's first quarter 2026 results demonstrated robust performance, with total revenue reaching $373.8 million, primarily propelled by a 10% increase in contract operations revenue to $330.9 million. This segment achieved full fleet utilization at 95%, supported by total operating horsepower of 4.5 million, up from 4.3 million a year ago, and adjusted gross margin expansion to 72% from 70%, reflecting strong execution and deployment of large and electric motor drive horsepower for midstream infrastructure. Aftermarket services revenue declined to $42.9 million amid lower activity and seasonal factors, with margins contracting to 23%. Net income of $73.8 million included a $5.3 million non-cash asset impairment and $0.6 million transaction costs, while adjusted metrics remained stable year-over-year. Adjusted EBITDA surged 12% to $221.0 million, bolstered by $10.1 million in net gains from asset sales, including non-strategic compressor units totaling 40,000 horsepower. SG&A expenses rose to $45.2 million, driven by higher incentive compensation tied to stock price appreciation and a one-time $3.7 million acceleration from an executive retention agreement. Management highlighted a strong start with meaningful free cash flow and shareholder returns, reaffirming full-year Adjusted EBITDA guidance of $865-915 million. Balance sheet strength improved with leverage at 2.6x and $1.4 billion liquidity, aided by a $800 million notes issuance in January to repay revolver borrowings and April repurchase of 2028 Notes. Shareholder returns included a 16% higher quarterly dividend of $0.22 per share (3.5x coverage) and $4.4 million in repurchases, totaling $44.3 million returned.