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• Total Revenue: $1.2 billion, a 36% increase over 2023.

• Adjusted EBITDA: $610 million, up 39% from the prior year.

• Net Income: Nearly $50 million attributable to common shareholders, up 149% from the prior year.

• Free Cash Flow: $122 million generated in 2024.

• Dividends and Distributions: $139 million paid in 2024, about 37% of discretionary cash flow.

• Share Buybacks: Over 1.4 million shares repurchased at a weighted average price below $28.

• Leverage: Ended the year at 3.9x, targeting 3.5x by the end of 2025.

• Revenue-Generating Horsepower: 4.25 million, with a fleet utilization of 97%.

• Contract Services Adjusted Gross Margin: Approximately 67% in Q4.

• Growth Capital Expenditures: $286 million for the year, including $71 million in Q4.

• Maintenance Capital Expenditures: Slightly more than $66 million for the full year.

• 2025 Revenue Guidance: Expected to range between $1.31 billion and $1.38 billion.

• 2025 Adjusted EBITDA Guidance: $685 million to $725 million.

• 2025 Growth Capital Expenditures Guidance: $240 million to $280 million.

• Warning! GuruFocus has detected 5 Warning Signs with KGS.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kodiak Gas Services Inc (NYSE:KGS) achieved a 36% increase in total revenue, reaching $1.2 billion, and a 39% increase in adjusted EBITDA to $610 million for 2024.

• The company successfully integrated the CSI acquisition, realizing over 50% more cost savings than initially expected, which contributed to increased margins and free cash flow.

• Kodiak Gas Services Inc (NYSE:KGS) returned significant capital to shareholders, paying $139 million in dividends and buying back over 1.4 million shares, contributing to a 115% total shareholder return in 2024.

• The company made strategic divestitures of noncore assets, totaling approximately 129,000 horsepower, which improved margins and cash flow stability.

• Kodiak Gas Services Inc (NYSE:KGS) invested in new large horsepower units, adding approximately 23,000 new horsepower to their fleet, primarily in the Permian Basin, and maintained a high fleet utilization rate of 97%.

Negative Points

• The company experienced a 5% sequential decline in total revenues for the fourth quarter due to divestitures of low-margin noncore horsepower and seasonal slowdowns.

• Kodiak Gas Services Inc (NYSE:KGS) faces challenges with supply chain constraints, particularly in securing shop space for building compressors and managing delivery times for equipment.

• The company is dealing with macroeconomic volatility, including potential inflationary pressures from tariffs and OPEC announcements, which could impact capital costs.

• Kodiak Gas Services Inc (NYSE:KGS) is navigating labor tightness in the Permian Basin, which poses challenges for growth and requires significant investment in training and development.

• The company's Other Services segment reported lower margins, with a seasonal slowdown and challenges in optimizing synergies between station construction and AMS businesses.