Kodiak Gas Services Q2 Earnings Call Highlights

Revenue rose 21% year over year to $391 million, while adjusted EBITDA increased 22% to $217 million. Compression margins reached 70% as pricing, utilization and operational efficiency improved. Kodiak secured approximately 1.8 GW of generation capacity and is targeting 2 GW by 2030, supported by a Baker Hughes turbine agreement and a growing data-center project pipeline. The company raised 2026 adjusted EBITDA guidance to $830 million-$860 million and discretionary cash flow guidance to $570 million-$600 million, while lowering power infrastructure capital expenditure guidance to $400 million-$450 million.

Kodiak Gas Services NYSE: KGS reported record second-quarter adjusted EBITDA and raised portions of its 2026 outlook, as its contract compression business delivered higher pricing and margins and the company advanced plans to build a larger behind-the-meter power generation platform. The company reported second-quarter revenue of $391 million, up 21% from a year earlier, and adjusted EBITDA of $217 million, up 22% year over year. Adjusted net income was $54 million, or $0.55 per diluted share, according to Executive Vice President and Chief Financial Officer John Griggs.

Management attributed revenue growth primarily to the addition of DPS, alongside continued expansion in its Compression Infrastructure business. Kodiak acquired DPS four months ago and has since focused its Power Infrastructure commercial efforts on larger projects with longer-term contracts, the company said.

In Compression Infrastructure, Kodiak ended the quarter with 4.4 million revenue-generating horsepower. Revenue-generating horsepower increased by about 24,000 sequentially, while fleet utilization reached 98.2%. Revenue in the segment increased 7% year over year and 3% from the prior quarter. Ending revenue per horsepower was $23.80, representing a 4.5% increase from a year earlier. Compression Infrastructure adjusted gross margin was 70%, up 170 basis points year over year and marking the second straight quarter at or above that level. Griggs said the margin performance occurred despite increased lubricant oil expenses. He said the company mitigated those costs through vendor relationships, supply-chain management, and operational improvements tied to training, artificial intelligence and machine-learning tools. “What we see is we truthfully break things less,” Griggs said, describing the effects of expanded fleet monitoring and maintenance practices. “We fix things when they need to be fixed, not just based on hours and time, and we have higher labor productivity.” Chief Executive Officer Mickey McKee said Kodiak added approximately 80,000 horsepower during the first half of 2026 and expects to add about 170,000 horsepower for the full year. The company has secured large-horsepower compressor packages for delivery in 2027, 2028 and 2029, and is already about 50% contracted for its 2027 deliveries, he said. Kodiak continues to target annual fleet growth of roughly 150,000 horsepower and a compression fleet of at least 5.2 million horsepower by the end of 2030.

The company’s new Power Infrastructure segment generated $33 million of revenue and a 65% adjusted gross margin in the second quarter. Kodiak exited the quarter with a 405-megawatt power fleet, about 90% of which was utilized, McKee said. Kodiak recently entered a multiyear gas-turbine supply agreement with Baker Hughes that provides 1 gigawatt of ...