USA Compression Partners, LP Q3 FY2025 earnings call

• Delivered a solid quarter with revenues over $250M, adjusted EBITDA over $160M, and DCF approaching $104M. - Increased 2025 EBITDA and DCF guidance due to effective cost management and operational discipline. - Will deploy most 2025 new unit horsepower in Q4, with new horsepower expected to exceed 2025 levels in 2026. - Finalizing 2026 capital budget, expect to release in February. - Active horsepower in Northeast and Central regions to grow by over 40,000 horsepower by end of 2025. - Realizing majority of $5M SG&A annualized savings in 2025 ahead of timeline. - Refinanced ABL and 2027 senior notes, reducing weighted average borrowing cost and improving flexibility. - ERP implementation in early 2026 bringing control, sophistication, data integrity, and profitability, along with shared services cost synergies.

In the third quarter, revenues were over $250 million, adjusted EBITDA was over $160 million, and DCF approached $104 million. Adjusted EBITDA range for 2025 is increased to $610 million to $620 million, DCF range is increased to $370 million to $380 million. Expansion capital range is reduced to $115 million to $125 million, and maintenance capital is maintained between $38 million and $42 million. Revenue contribution isn't specified in terms of product segments but overall financials are highlighted.

• Increased 2025 adjusted EBITDA range to $610 million to $620 million. - Increased 2025 DCF range to $370 million to $380 million. - Reduced expansion capital range for 2025 to $115 million to $125 million. - Maintained maintenance capital between $38 million and $42 million. - $11 million of expansion capital tied to late December deliveries moved to 2025. - Target leverage ratio remains at or below 4x debt to EBITDA.

• Forward-looking statements are based on current beliefs and actual results may differ materially. - Please review risk factors included in the earnings release and other public filings.

Q: Congrats on the record quarter. In a sustained slowdown in oil-directed activity, can you speak to your willingness to lean further into compression and dry gas plays in this environment based on the success you just highlighted in your prepared remarks? And then also, would there be any investment in in-basin facilities required to support any significant increase in gas-directed compression?

A: Micah Green responds that they're already established in dry gas markets, with operations in Permian, Northeast, Oklahoma, Gulf Coast, and can move equipment or buy new equipment for growth in gas plays. Regarding in-basin facilities, they have active horsepower in those basins and can move equipment or install new for operation.

Q: With the strong pricing trends that you guys noted during the quarter, can you speak to recent pricing dynamics and how spot prices are comparing to your fleet average here?

A: Christopher Wauson responds that market has picked up since Q2, pricing trends on dollar per horsepower basis are consistent into back half of 2025 into 2026 and dollar per horsepower revenue is expected to be consistent.