USA Compression Partners, LP

Second-quarter total revenue was $342.1 million, up from $250.1 million a year ago, an increase of 37%. Contract operations revenue was $304.9 million, up 34% year over year; parts and service revenue was $22.1 million. Net income was $45.7 million, operating income was $100.4 million, net cash from operating activities was $145.7 million, cash interest expense net was $47.4 million, and adjusted gross margin was 63.5%. Average revenue per revenue-generating horsepower per month was $22.84, up 0.5% sequentially and 7% year over year, and utilization was 92%. Full-year guidance was maintained for adjusted EBITDA of $770 million to $800 million, distributable cash flow of $480 million to $510 million, maintenance capital of $60 million to $70 million, and expansion capital of $230 million to $250 million. Leverage ended the quarter at 3.72x, just below the near-term target of 3.75x debt to EBITDA.

The CEO framed the quarter as evidence that the company is becoming a stronger combined platform after the J-W acquisition and SAP go-live. He emphasized deliberate investment in horsepower, manufacturing optionality, and telemetry/AI to prepare for what he described as sustained natural gas demand growth through the rest of the decade. His tone was optimistic but disciplined, repeatedly stressing flexibility to scale capital up or down depending on market conditions.

The CFO highlighted the financial impact of the J-W transaction, noting materially higher year-over-year cash flow and improved leverage while still funding growth. He said leverage ended at 3.72x, cash from operations was $145.7 million, and the company remains on track with full-year adjusted EBITDA, DCF, maintenance capex, and expansion capex targets. He also said the company is patient on refinancing, with ABL borrowing costs still sub-6% and a possible longer-term bond issuance only if market conditions improve.

Analysts focused on distribution policy, lube oil cost inflation, margin progression, and the ability to refinance or term out revolver borrowings. Management said any distribution change would require board approval, but current excess cash is being prioritized toward growth, while also describing the current yield as competitive and a potential attractive entry point. On lube oil, management said there is no direct pass-through, so the company is trying to renegotiate renewals and offset inflation with CPIU escalators; on margins, they expect some sequential pressure from the J-W mix but see telemetry and operational efficiencies helping later this year and into 2027. They also said customers are planning farther ahead because lead times remain as high as 200 weeks, and that contracting into 2027 and 2028 is already well underway.