Kodiak Gas Services (KGS) Q4 2025 earnings summary

Executive summary

• Achieved record financial performance in 2025, including all-time highs in revenue, adjusted EBITDA, discretionary cash flow, and free cash flow, driven by demand for large horsepower contract compression and fleet optimization.

• Completed strategic fleet high-grading, exited non-core and international operations, and focused on large horsepower compression in the U.S.

• Successfully implemented a new ERP system and invested in AI and machine learning to drive operational efficiency.

• Announced acquisition of Distributed Power Solutions (DPS) for approximately $675 million, expanding into distributed power generation, expected to close in early April 2026.

• Exited the year with industry-leading fleet utilization and average horsepower per unit.

Financial highlights

• Total revenue grew 13% year-over-year to $1.31 billion; Q4 revenue was $332.9 million, up from $309.5 million in Q4 2024.

• Adjusted EBITDA increased 17% to $715 million; Q4 adjusted EBITDA was $184.5 million, up 9.1% year-over-year.

• Adjusted net income for Q4 was $35.3 million ($0.40 per adjusted diluted share); full-year adjusted net income was $139 million.

• Free cash flow for the year was $230 million; discretionary cash flow reached $462 million.

• Returned over $263 million to shareholders via dividends and share repurchases.

Outlook and guidance

• 2026 revenue guidance: $1.37–$1.43 billion; adjusted EBITDA: $750–$780 million; discretionary cash flow expected at $480–$510 million.

• Contract Services revenue guidance for 2026 is $1.24–1.28 billion, with adjusted gross margin percentage of 67.5–69.5%.

• Maintenance CapEx projected at $75–$85 million; growth CapEx at $235–$265 million, targeting 150,000 new unit horsepower.

• Guidance excludes DPS acquisition, which is expected to accelerate growth post-close.