Kodiak Gas Beats Q2, Raises EBITDA Guidance on Power Surge

Kodiak Gas Services beat second-quarter expectations and raised its full-year outlook, powered by a 35% jump in its Power Infrastructure segment as data center demand for natural gas-fired generation keeps climbing.

The company reported adjusted earnings of $0.72 per share for the quarter ended June 30, above the $0.66 consensus estimate. Revenue came in at $352 million, beating the $340 million analysts had expected, according to figures compiled by the Street.

CEO Mickey McKee said the quarter reflected sustained demand for both compression and power generation. “We are seeing sustained interest in our Power Infrastructure solutions, and our backlog remains strong,” he said on the earnings call Thursday.

Kodiak lifted its 2026 adjusted EBITDA guidance to $1.05 billion to $1.10 billion, up from $1.02 billion to $1.07 billion. The company cited higher utilization and pricing across its compression fleet, plus incremental revenue from new power projects starting up in the second half.

The Power Infrastructure segment posted $120 million in revenue, up 35% from a year earlier. Kodiak signed contracts for 150 megawatts of additional power capacity during the quarter, bringing its total contracted pipeline to 1.2 gigawatts, McKee said. Margins in the segment widened to 42% from 38%, helped by better pricing and operating leverage.

Cash flow from operations reached $180 million, up from $150 million in the year-ago period. Capital expenditures were $250 million, reflecting investment in new compression units and power generation assets. The company reiterated its free cash flow target of $200 million to $250 million for the full year.

Kodiak's core contract compression business held utilization at 94%. The company secured multi-year renewals with several large exploration and production customers, with pricing on renewals up 5% from prior contracts, McKee said.

Analysts from JPMorgan, Raymond James, William Blair, Barclays, Citigroup, and Goldman Sachs asked about the pace of power project development. McKee said the company is evaluating additional projects in the Permian Basin and other regions, and expects to announce new contracts in the coming months.

For the third quarter, Kodiak expects adjusted EBITDA of $260 million to $275 million, compared with $240 million in the same period last year. The sequential increase reflects higher power segment revenue and continued compression fleet growth, the company said.

Kodiak's stock, which has gained about 18% over the past year, was little changed in after-hours trading following the report. The company's Alpha Score of 64 out of 100, a moderate rating, reflects balanced fundamentals and valuation.

Net leverage stood at 2.3 times trailing twelve-month EBITDA. The company had $400 million of liquidity as of June 30, including cash and undrawn credit facility capacity.