USA Compression Revenue Jumps 20%, Raises Capex on Permian Demand

USA Compression Partners posted $322.6 million in second-quarter revenue, up 20% from a year earlier, the company said Tuesday.

Adjusted EBITDA rose to $195.9 million from $162.1 million. Distributable cash flow of $79.8 million covered the $0.525 quarterly distribution 1.4 times.

The results reflect the integration of 335,000 horsepower acquired in the past four months. The combined fleet hit 4.1 million total horsepower, up 9% from March. The company added 124,000 horsepower in the quarter. Utilization held at 92%.

"We are running the combined fleet harder than either side did separately," Micah Green, president and CEO, said on the call. "The operational integration is ahead of our internal schedule."

Growth capex reached $95 million in the quarter, mostly on new-build units and facility expansions tied to Permian Basin and Haynesville contracts. Management raised the 2026 growth capex range to $300 million to $340 million, from the prior $250 million to $300 million. Green cited customer demand for electric-drive compression in the Permian and the need to pre-build units ahead of expected first-quarter 2027 deliveries.

"The Permian call on compression is structural, not cyclical, as gas gathering and processing expands alongside oil production," Green said.

Raymond James analyst James Rollyson asked whether the company would consider a distribution increase given the payout ratio trend. Chris Paulsen, CFO, said the board prefers to keep the ratio near 1.3 times for now and revisit at year-end.

"We like the coverage where it is while we digest the recent deal and the capex ramp," Paulsen said.

USA Compression ended the quarter with $2.1 billion in total debt. The leverage ratio fell to 3.9 times from 4.3 times at the end of 2025. The company has no material debt maturities until 2028.

COO Chris Wauson noted that utilization stayed at 92% despite a 10% drop in the U.S. gas rig count from the first quarter. "That tells you the compression market is undersupplied for the work that needs doing," he said.

JPMorgan analyst Elias Jossen asked about the impact of a potential slowdown in LNG export terminal approvals on long-term demand. Green said the company's Permian book is weighted toward gas lift and gathering, not long-haul transport, so exposure is limited.

"Even if one or two LNG projects slip, the gas still needs to move from wellhead to processing," Green said. "We are in the first mile, not the last mile."

Texas Capital analyst Nathaniel Pendleton asked about the pace of the private operator integration. Green said the company expects to close the remaining operational migration by October. Cost synergies are running 10% above the initial estimate of $15 million annually.

"The combined enterprise is winning contracts neither standalone entity could have bid on," Green said.

The next quarterly distribution of $0.525 per unit is payable Nov. 14 to holders of record Oct. 31.