USA Compression 2025 Q1 Earnings Revenue Increases by 7% but Net Income Falls 13%

USA Compression (USAC) reported its fiscal 2025 Q1 earnings on May 6th, 2025. The company experienced a 7% increase in total revenue, reaching $245.23 million compared to $229.28 million in 2024 Q1. However, net income declined to $20.51 million from $23.57 million, representing a 13% decrease. The guidance for 2025 remains in line with previous expectations.

USA Compression's revenue for Q1 2025 rose to $245.23 million, marking a 7% increase compared to the same quarter last year. The contract operations segment generated $224.97 million, parts and service contributed $5.09 million, and related party transactions added $15.16 million to the total revenue.

Earnings/Net Income
USA Compression's earnings per share (EPS) dropped by 26.3% to $0.14 in Q1 2025 from $0.19 in Q1 2024. Meanwhile, net income fell to $20.51 million, a 13% decrease from the $23.57 million reported in the same quarter last year. This decline indicates a challenging earnings performance.

Price Action
The stock price of USA Compression has edged down 1.32% during the latest trading day, dropped 7.36% during the most recent full trading week, and tumbled 10.37% month-to-date.

Post-Earnings Price Action Review
Investing in USA Compression shares after a quarter-over-quarter revenue increase and holding them for 30 days has yielded a 48.45% return over the past five years. This strategy compares to a benchmark return of 83.12%, with a compound annual growth rate (CAGR) of 8.32%. The approach experienced a maximum drawdown of -20.22% and a Sharpe ratio of 0.53, reflecting moderate risk and returns. While the strategy offered a positive return, it underperformed relative to the broader market benchmark, indicating room for improvement in risk-adjusted performance.

CEO Commentary
"USA Compression’s first-quarter results represented another quarter of solid financial and operational performance. The contract compression service market remains strong as evidenced by another record average revenue per-horsepower of $21.06, which drove year-over-year increases in revenues, Adjusted EBITDA, and Distributable Cash Flow," commented Clint Green, President and Chief Executive Officer. "During the first quarter of 2025, we renewed our focus on new horsepower unit additions and placed orders for approximately 40,000 horsepower that we expect to begin placing in service in the back half of 2025. We are excited to continue delivering reliable services to our customers and continuing our commitment to safety, while maintaining capital discipline and delivering returns to our unitholders."

Guidance
The Partnership expects to continue its focus on operational efficiency and customer service, with a commitment to delivering approximately 40,000 horsepower units in the latter half of 2025. This investment is anticipated to enhance future revenue generation and operational capacity. The company maintains its strategy to prioritize safety and capital discipline while ensuring returns to unitholders, reflecting a positive outlook for growth in the upcoming periods.

Additional News
USA Compression Partners announced a cash distribution of $0.525 per common unit for the first quarter of 2025, equating to an annualized distribution rate of $2.10 per common unit. This distribution will be paid on May 9, 2025, to unitholders of record as of April 28, 2025. The distribution remains consistent with the previous year's allocation, underscoring the company's commitment to providing stable returns to its investors. Looking ahead, USA Compression reaffirms its full-year 2025 guidance, projecting Adjusted EBITDA between $590 million and $610 million and Distributable Cash Flow ranging from $350 million to $370 million.