Kodiak Gas Services reports solid fourth-quarter and full-year 2025 performance, highlighting operational growth and providing financial guidance for 2026.
Kodiak Gas Services, Inc., a leading provider of critical energy infrastructure and contract compression services in the United States, delivered record-setting financial and operating results for the fourth quarter and full year ended December 31, 2025. The company also introduced its initial full-year 2026 guidance, underscoring confidence in continued growth across its core contract compression business.
Record Fourth-Quarter Performance Caps Strong Year
Kodiak reported net income of $24.6 million for the fourth quarter of 2025, or $0.28 per diluted share, compared with $19.1 million in the fourth quarter of 2024. Adjusted net income reached $35.3 million, or $0.40 per adjusted diluted share, reflecting improved operating performance and disciplined cost management.
Total revenues for the fourth quarter rose to $332.9 million, up from $309.5 million in the prior-year period and $322.7 million in the third quarter of 2025. The company generated record quarterly adjusted EBITDA of $184.5 million, marking a 9.1% increase year over year. Adjusted EBITDA margin remained strong at 55.4%.
Contract Services, Kodiak’s core business segment, continued to drive performance. Segment revenue increased 7.7% year over year to $301.8 million, while adjusted gross margin climbed 11.7% to $208.9 million. The adjusted gross margin percentage reached a record 69.2%, reflecting operational efficiency and the strategic emphasis on large-horsepower compression units.
The Other Services segment generated $31.1 million in revenue, up 6.0% year over year. While adjusted gross margin for this segment declined modestly to $4.0 million, overall results remained stable.
Fleet utilization rose to 97.7%, representing a 120-basis-point improvement compared to the fourth quarter of 2024. Revenue-generating horsepower increased to 4.35 million, highlighting strong demand for Kodiak’s large-horsepower contract compression services.
Full-Year 2025: Growth, Cash Flow, and Shareholder Returns
For the full year 2025, Kodiak delivered total revenues of $1.31 billion, up from $1.16 billion in 2024. Net income attributable to common shareholders reached $80.5 million, compared to $49.9 million in the prior year. Adjusted net income rose significantly to $139.4 million from $92.1 million in 2024.
Adjusted EBITDA for the year totaled $715.0 million, up from $609.6 million in 2024, representing a 17% increase. The adjusted EBITDA margin improved to 54.7%, compared to 52.6% the previous year.
The company generated $599.7 million in net cash provided by operating activities and $461.7 million in discretionary cash flow, reflecting a 23.7% increase over 2024. Free cash flow reached $229.6 million for the year.
Kodiak returned more than $263 million to shareholders in 2025 through dividends and share repurchases, demonstrating its commitment to disciplined capital allocation and shareholder value creation. At year-end, the company achieved its total leverage target of 3.5x, reflecting balance sheet strength.
Strategically, Kodiak completed the sale of its Mexico operations during the year, finalizing the divestment of all international operations and sharpening its focus on the U.S. market.
Capital Investment and Operational Metrics
Capital expenditures remained disciplined throughout 2025. Maintenance capital expenditures totaled $76.0 million for the year, while growth capital expenditures amounted to $199.5 million. Other capital expenditures were $62.8 million, bringing total growth and other capital expenditures to $262.3 million.
Fleet horsepower stood at 4.46 million at year-end 2025, with 4.35 million revenue-generating horsepower. The company operated 4,736 fleet compression units, of which 4,490 were revenue-generating. Revenue-generating horsepower per unit improved to 970 horsepower, reflecting Kodiak’s continued emphasis on larger, higher-margin units.
Acquisition of Distributed Power Solutions
On February 5, 2026, Kodiak announced a definitive agreement to acquire Distributed Power Solutions, LLC in a transaction valued at approximately $675 million. The purchase price consists of $575 million in cash and the issuance of 2,401,278 shares of Kodiak common stock, subject to customary adjustments.
The acquisition, expected to close in early April 2026 pending regulatory approvals and standard closing conditions, will expand Kodiak’s service offerings into turnkey, scalable distributed power solutions. Management expects to update full-year 2026 guidance following the transaction’s completion to incorporate the acquisition’s financial contribution.
2026 Guidance Signals Continued Momentum
Kodiak provided initial 2026 guidance, excluding any impact from the pending acquisition.
The company expects adjusted EBITDA in the range of $750 million to $780 million. Discretionary cash flow is projected between $480 million and $510 million, assuming no change to Secured Overnight Financing Rate futures.
Segment-level guidance includes:
- Contract Services revenue between $1.24 billion and $1.28 billion
- Contract Services adjusted gross margin percentage between 67.5% and 69.5%
- Other Services revenue between $125 million and $150 million
- Other Services adjusted gross margin percentage between 13.0% and 16.0%
Capital expenditure guidance for 2026 includes:
- Maintenance capital expenditures of $75 million to $85 million
- Growth capital expenditures of $235 million to $265 million
- Other capital expenditures of $40 million to $50 million
- Total growth and other capital expenditures of $275 million to $315 million
Growth capital spending is expected to deliver approximately 150,000 new unit horsepower, supporting further expansion in large-horsepower compression capacity.
Leadership Perspective
President and Chief Executive Officer Mickey McKee highlighted the company’s achievements and strategic direction, emphasizing record operational performance and strong free cash flow generation. He credited the company’s focus on large-horsepower compression, fleet optimization, and disciplined capital management for driving results.
Management reiterated its commitment to operational excellence, prudent balance sheet management, and consistent shareholder returns. The integration of distributed power capabilities is expected to further diversify the company’s service offerings and enhance long-term growth prospects.
Strong Foundation for Sustainable Growth
Headquartered in The Woodlands, Texas, Kodiak continues to serve as a critical infrastructure partner to oil and gas producers and midstream operators across the United States. Its contract compression services play a vital role in enabling safe and reliable natural gas production, gas lift applications, gathering systems, processing facilities, and transmission systems.
With record financial performance in 2025, a strengthened balance sheet, high fleet utilization, disciplined capital spending, and a strategic acquisition poised to expand capabilities, Kodiak enters 2026 positioned for sustained growth and operational momentum.
The company will host a conference call to discuss results and outlook, reinforcing transparency and engagement with investors as it builds on a year of significant achievement.
