THE WOODLANDS, Texas--(BUSINESS WIRE)-- Kodiak Gas Services, Inc. (NYSE: KGS) (“Kodiak” or the “Company”) today reported financial and operating results for the quarter ended March 31, 2026. The Company announced increased full-year 2026 guidance to incorporate the contribution from the recently-closed acquisition of Distributed Power Solutions, LLC (DPS). Kodiak also announced that it has procured over 260 megawatts (MWs) of additional power generation capacity and expects annual growth of 300 to 500 MWs per year through 2030.

First Quarter 2026 and Recent Highlights

• Record Contract Services segment revenues of $307.0 million
• Contract Services gross margin percentage of 48.2% and adjusted gross margin percentage(1) of 70.6%
• Net income of $17.8 million, or $0.20 per diluted share and adjusted net income(1) of $52.0 million, or $0.59 per adjusted diluted share(1)
• Record adjusted EBITDA(1) of $190.1 million, a 7.0% increase compared to first quarter 2025
• Quarterly net cash provided by operating activities of $71.2 million and record discretionary cash flow(1) of $126.5 million, a 9.0% increase compared to first quarter 2025
• Completed 20,700 horsepower purchase-leaseback transaction with a leading oil and gas producer in the Permian Basin
• Issued $1 billion of senior unsecured notes, reducing the Company's weighted average borrowing rate and bolstering liquidity
• Closed the acquisition of DPS on April 1, 2026 and procured over 260 MWs of additional power generation capacity; expect to take delivery of 61 MWs in 2026 with the balance to be delivered in 2027 through 2029

2026 Guidance Highlights

• Provided revised full year 2026 guidance to reflect continued strength in natural gas compression and to incorporate new power segment
• Increased 2026 Adjusted EBITDA guidance to a range of $820 million to $860 million

CEO Commentary

“Kodiak is off to a fantastic start in 2026, with record contract services revenue and adjusted gross margin percentage driving record quarterly adjusted EBITDA. Our contract compression business continues to outperform expectations, and our new power business has tremendous growth potential," said Mickey McKee, Kodiak's President and Chief Executive Officer. “Since closing the DPS acquisition, we have been actively engaged with numerous data center developers discussing the scope and scale of their distributed power needs. Given the overwhelming demand, we are actively working to scale our power offerings, including today's announcement of equipment orders that will significantly increase our power generation capacity to over 650 megawatts, and clear line of sight to over two gigawatts by the end of the decade. We are currently in advanced discussions with customers to deploy this capacity under long-term contracts.

“We remain constructive on the outlook for U.S. natural gas, with rising demand driving the need for incremental compression infrastructure. The market remains tight with historically long lead times for new large horsepower compression, but Kodiak is well positioned to deliver on our growth targets in the coming years. We're also encouraged by the increasing adoption of distributed power as the preferred solution for data center and other large industrial power consumers' long-term power needs. We have a robust pipeline of commercial opportunities, and have made meaningful progress to secure the equipment to allow us to capture those opportunities and realize our long-term growth objectives."

Segment Information

Contract Services segment revenue was $307.0 million in the first quarter of 2026, a 6.2% increase compared to $289.0 million in the first quarter of 2025. Contract Services segment gross margin was $148.0 million in the first quarter of 2026, an 18.3% increase compared to $125.2 million in the first quarter of 2025 and adjusted gross margin was $216.7 million in the first quarter of 2026, a 10.7% increase compared to $195.7 million in the first quarter of 2025.

Other Services segment revenue was $38.8 million in the first quarter of 2026, a 4.7% decrease compared to $40.7 million in the first quarter of 2025. Other Services segment gross margin and adjusted gross margin were each $6.2 million in the first quarter of 2026, a 12.7% increase compared to $5.5 million for each measure in the first quarter of 2025.

Financial Results

Net income attributable to common shareholders of $17.8 million or $0.20 per share, in the first quarter of 2026 included a $36.5 million loss on extinguishment of debt related to the refinancing of the Company's senior notes due 2029, as well as $8.3 million of nonrecurring transaction expenses related primarily to the acquisition of DPS. Adjusting for these items and the associated tax effects, adjusted net income was $52.0 million or $0.59 per diluted share.

Long-Term Debt and Liquidity

Total debt outstanding was $2.8 billion as of March 31, 2026, and the Company had $1.5 billion available on its ABL Facility. Kodiak’s credit agreement leverage ratio was 3.6x for the first quarter of 2026.

Summary Financial Data

Summary Operating Data

(as of the dates indicated)

Full-Year 2026 Guidance

Kodiak is providing revised guidance for the full year 2026. The full year 2026 guidance below incorporates three quarters of the financial impact of the DPS acquisition given the April 1, 2026 closing date.

Conference Call

Kodiak will conduct a conference call on Monday, May 11, 2026, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss financial and operating results for the quarter ended March 31, 2026. To listen to the call by phone, dial 877-407-4012 and ask for the Kodiak Gas Services call at least 10 minutes prior to the start time. To listen to the call via webcast, please visit the Investors tab of Kodiak’s website at www.kodiakgas.com.

About Kodiak

Kodiak is a leading contract compression, distributed power and energy infrastructure services provider in the United States. The Company serves as a critical link in the infrastructure chain that enables the safe, reliable and efficient production of energy. Headquartered in The Woodlands, Texas, Kodiak provides contract compression, distributed power and related services to oil and gas producers, midstream customers and digital infrastructure operators. Additional information is available on the Company's website at www.kodiakgas.com.

Non-GAAP Financial Measures

Adjusted net income and adjusted earnings per share are considered non-GAAP measures. Adjusted net income is defined as net income adjusted to exclude certain items, as applicable, such as (i) impairment of long-lived assets; (ii) severance expenses; (iii) transaction expenses; (iv) sales tax reserve; (v) loss on disposal of business; (vi) loss (gain) on derivatives; (vii) loss on extinguishment of debt; and (viii) the tax effects of the adjustments. Adjusted earnings per share is calculated by dividing adjusted net income by the weighted average diluted shares outstanding.

Adjusted EBITDA and adjusted EBITDA percentage are considered non-GAAP measures. Adjusted EBITDA is defined net income before interest expense; income tax expense; and depreciation and amortization; plus certain items, as applicable, such as (i) impairment of long-lived assets; (ii) loss (gain) on derivatives; (iii) equity compensation expense; (iv) severance expenses; (v) transaction expenses; (vi) sales tax reserve; (vii) loss (gain) on disposal of business; (viii) loss (gain) on sale of assets; and (ix) loss on extinguishment of debt. We define adjusted EBITDA percentage as adjusted EBITDA divided by total revenues.

Adjusted net income, adjusted diluted EPS, adjusted EBITDA and adjusted EBITDA percentage are used as supplemental financial measures by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess: (i) the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; (ii) the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; (iii) the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and (iv) our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure. We believe adjusted net income, adjusted diluted EPS, adjusted EBITDA and adjusted EBITDA percentage provide useful information because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business. Reconciliations of adjusted net income and adjusted EBITDA to net income and adjusted diluted EPS to GAAP diluted earnings per share, the most directly comparable GAAP financial measures are presented below.

Adjusted gross margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense. Adjusted gross margin percentage is defined as adjusted gross margin divided by total revenues. We believe adjusted gross margin and adjusted gross margin percentage are useful as supplemental measures to investors of our operating profitability. Reconciliations of adjusted gross margin to gross margin are presented below.

Discretionary cash flow is considered a non-GAAP measure. Discretionary cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; and (iii) certain other expenses; plus certain items, as applicable, such as (w) severance expenses; (x) transaction expenses; and (y) sales tax reserve. We believe discretionary cash flow is a useful liquidity and performance measure and supplemental financial measure in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. A reconciliation of discretionary cash flow to net cash provided by operating activities is presented below.

Free cash flow is considered a non-GAAP measure. Free cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; (iii) certain other expenses; (iv) growth capital expenditures; and (v) other capital expenditures; plus certain items, as applicable, such as (w) severance expenses; (x) transaction expenses; (y) sales tax reserve; and (z) proceeds from sale of assets. We believe free cash flow is a liquidity measure and useful supplemental financial measure in assessing our ability to pursue business opportunities and investments to grow our business and to service our debt. A reconciliation of free cash flow to net cash provided by operating activities is presented below.

Cautionary Note Regarding Forward-Looking Statements

This news release contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding: (i) expected operating results, such as revenue growth and earnings, including the integration of acquired businesses and assets into our operations, and our ability to service our indebtedness; (ii) anticipated levels of capital expenditures and uses of capital; (iii) current or future volatility in the credit markets and future market conditions; (iv) potential or pending acquisition transactions or other strategic transactions, the timing thereof, the receipt of necessary approvals to close such acquisitions, our ability to finance such acquisitions, and our ability to achieve the intended operational, financial, and strategic benefits from any such transactions; (v) expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities and governmental and regulatory investigations and proceedings; (vi) production and capacity forecasts for the natural gas and oil industry; (vii) strategy for customer retention, growth, fleet maintenance, market position and financial results; (viii) interest rate hedges; and (ix) strategy for risk management.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Please refer to the factors discussed throughout the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission, which can be found at the SEC’s website www.sec.gov. The discussion of these factors is specifically incorporated by reference into this news release.

Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by applicable law, we undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future developments or otherwise.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER SHARE

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RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO DISCRETIONARY CASH FLOW AND FREE CASH FLOW

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Investor Contact

Graham Sones, VP – Investor Relations

[email protected]

(936) 755-3529

Source: Kodiak Gas Services, Inc.