USA Compression Partners (USAC) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenues of $235.3 million, up 14% year-over-year and 3% sequentially, with record Adjusted EBITDA of $143.7 million and net income of $31.2 million; utilization reached an all-time high of 95–96% and large horsepower at 99%.

• Maintained 46 consecutive quarters of distributions without a cut, returning over $1.8 billion to unitholders since IPO.

• Completed conversion of 320,000 Preferred Units into 15,990,804 common units, increasing public float and reducing preferred distributions.

• Issued $1.0 billion in Senior Notes due 2029 and redeemed $725 million in Senior Notes due 2026, optimizing capital structure.

• Strong demand outlook driven by oil and natural gas growth, LNG exports, power generation, and electrification, especially in the Permian Basin and data center sectors.

Financial highlights

• Q2 2024 net income: $31.2 million; operating income: $77.4 million; net cash from operations: $96.7 million.

• Revenue per revenue-generating horsepower was $20.29, up 9% year-over-year and 2% sequentially.

• Adjusted EBITDA margin for Q2 2024 was 61.1%; adjusted gross margin was $157.2 million (66.8% of revenue).

• DCF for Q2 2024 was $85.9 million, with coverage ratio at 1.40x.

• Cash interest expense: $46.6 million, offset by $2.5 million from interest rate swap; weighted-average interest rate on credit facility borrowings was 7.98%.

Outlook and guidance

• 2024 guidance raised: net income $105–$125 million, adjusted EBITDA $565–$585 million, distributable cash flow $345–$365 million.

• DCF Coverage Ratio expected between 1.40x and 1.48x for 2024.

• Expansion capital expenditures for 2024 increased to $195–$205 million due to delayed unit deliveries and acquisitions.

• Expect continued high utilization and pricing, with further deployment of 30,000–50,000 horsepower from idle fleet at lower capital costs.

• Management expects operating cash flow and credit facility borrowings to be sufficient for debt service, working capital, and distributions over the next 12 months.