Archrock (AROC) Q4 2025 Earnings Call Transcript

The Motley Fool

by newsfeedback@fool.com (Motley Fool Transcribing)

February 25, 2026

AI-Generated Deep Dive Summary

Archrock (AROC) delivered a strong fiscal year 2025, marked by significant financial growth and operational efficiency. The company reported an adjusted EPS increase of 68% year over year, alongside a robust rise in adjusted EBITDA to $901 million for the full year. This figure excludes one-time items such as tax settlements and asset-related gains, with core EBITDA reaching $846 million, above the midpoint of guidance. Net income totaled $322 million for the year, including a solid $117 million in the fourth quarter. These results reflect effective pricing strategies and cost management. Key operational highlights include a 78% contract operations adjusted gross margin in Q4, driven by improved underlying operating margins of 71.5%, up from 70% in Q3. Archrock also achieved record-high utilization rates of over 95% for 11 consecutive quarters, underscoring strong fleet performance and high demand for their services. The company strategically sold 325,000 horsepower worth of assets, generating $47 million in net gains but reducing estimated 2026 adjusted EBITDA by $18 million. Despite this, Archrock maintained a solid financial position with $579 million in liquidity and a leveraged ratio of 2.7x, down from 3.3x the prior year. Looking ahead, Archrock provided guidance for 2026, forecasting adjusted EBITDA between $865 million and $915 million, with $890 million as the midpoint. Growth capital expenditures are expected to range from $250 million to $275 million, supporting the addition of approximately 170,000 horsepower, with 60% of new units expected online in the first half of the year. The company also highlighted strong demand, with 85% of new units already committed for 2026 and bookings extending into 2027. Despite these positives, Archrock faces challenges such as extended supply chain lead times—cited at 110 to 120 weeks for large horsepower units—and increased planned overhaul activity driving up maintenance capital expenditures. Additionally, labor availability constraints are limiting aftermarket services growth, though the company remains optimistic about meeting customer demand and continuing its strategic expansion

Verticals

financeinvesting

Originally published on The Motley Fool on 2/25/2026