USA Compression Partners LP: Q4 2024 Earnings Call - A Deep Dive into Record Results and Future Growth Prospects

USA Compression Partners LP (NYSE: USAC) reported its financial and operating results for the fourth quarter of 2024, marking another consecutive quarter of record-setting revenues and Adjusted EBITDA, as well as record-setting Distributable Cash Flow and Distributable Cash Flow Coverage. The company's strong performance was driven by improved operational efficiencies, with record average revenue per-horsepower of $20.85 and record revenue-generating horsepower of 3.56 million, reflecting the tight contract compression service space.



Key Financial Highlights:

* Record total revenues of $245.9 million for Q4 2024, compared to $225.0 million for Q4 2023.
* Net income of $25.4 million for Q4 2024, compared to $12.8 million for Q4 2023.
* Record net cash provided by operating activities of $130.2 million for Q4 2024, compared to $91.6 million for Q4 2023.
* Adjusted EBITDA of $155.5 million for Q4 2024, compared to $138.6 million for Q4 2023.
* Distributable Cash Flow of $96.3 million for Q4 2024, compared to $79.9 million for Q4 2023.
* Distributable Cash Flow Coverage of 1.56x for Q4 2024, compared to 1.48x for Q4 2023.

Operational Highlights:

* Record average revenue-generating horsepower of 3.56 million for Q4 2024, compared to 3.41 million for Q4 2023.
* Record average revenue per revenue-generating horsepower per month of $20.85 for Q4 2024, compared to $19.52 for Q4 2023.
* Average horsepower utilization of 94.5% for Q4 2024, compared to 94.1% for Q4 2023.



The company's strong performance was driven by favorable market conditions, including the expectation that the price of oil will remain constructive and continue to drive growth in associated gas volumes, particularly in the Permian region. USA Compression Partners LP anticipates an expansion capital range of $120 million to $140 million for 2025, with a refocus on contracted new horsepower unit additions that will be largely back-end loaded for the year. Additionally, the company expects the Energy Transfer shared services model to begin taking effect at the outset of 2025, which is anticipated to reduce back-office costs and enhance management of the business from an operations perspective throughout 2025 and 2026.

In conclusion, USA Compression Partners LP's Q4 2024 earnings call demonstrated the company's strong financial performance and operational efficiency, driven by favorable market conditions and strategic investments. With a record-setting quarter and a positive outlook for future growth, the company is well-positioned to capitalize on opportunities in the natural gas compression services market.