USA Compression Partners (USAC) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenues of $240.0 million, up 10.5% year-over-year, and record Adjusted EBITDA of $145.7 million, reflecting robust compression market demand and strong operational execution.

• Net income for Q3 2024 was $19.3 million, down from $20.9 million in Q3 2023, primarily due to higher interest expense and a loss on derivative instruments.

• Distributable Cash Flow increased to $86.6 million, with a DCF coverage ratio of 1.41x, supported by reduced preferred distributions after unit conversions.

• Leadership transition with Clint Green as CEO and Chris Paulson as CFO, and implementation of the Energy Transfer Shared Services Model.

• Maintained 47 consecutive quarters of distributions, returning ~$1.9 billion to unitholders since IPO.

Financial highlights

• Q3 2024 revenues were $240.0 million, up from $217.1 million in Q3 2023, with operating income of $75.7 million and net cash provided by operating activities of $48.5 million.

• Adjusted EBITDA margin was 60.7% for Q3 2024, and adjusted gross margin was $158.2 million, up 11.3% year-over-year.

• Expansion capital expenditures for Q3 2024 were $34.1 million; maintenance capital expenditures were $9.1 million.

• Leverage ratio declined to 4.20x in Q3 2024, continuing a downward trend.

• Minimal bad debt write-offs, totaling only 0.06% of billings over 19 years.

Outlook and guidance

• Reaffirmed full-year 2024 guidance: net income $105–$125 million, Adjusted EBITDA $565–$585 million, Distributable Cash Flow $345–$365 million.

• Expansion capital expenditures for 2024 increased to $240–$250 million, mainly for redeploying returned units and converting idle fleet.

• DCF coverage ratio expected between 1.40x and 1.48x for 2024.

• Annualized distribution rate of $2.10 per common unit for 2024.

• Anticipates deploying up to 10,000 horsepower of existing uncontracted fleet at lower capital costs than new builds for the remainder of 2024.