Archrock Reports Third Quarter 2026 Results
Archrock, Inc. (AROC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Archrock Reports Third Quarter 2026 Results HOUSTON, November 2, 2026 - Archrock, Inc. (NYSE: AROC) (“Archrock” or the “Company”) today reported results for the third quarter 2026. Third Quarter 2026 Highlights ● Revenue for the third quarter of 2026 was $370
How this was made
The 30-second read
Why it matters
The earnings beat and reaffirmed guidance suggest continued cash flow generation, supporting dividend sustainability and potential share buyback capacity.
Market read
The earnings release provides fresh data for traders to assess Archrock's valuation and sector positioning.
What to watch
Aftermarket services revenue fell sharply, indicating potential weakness in maintenance demand.
Archrock reported third-quarter 2026 revenue of $370.8 million, net income of $84.5 million and Adjusted EBITDA of $228.4 million, while reaffirming full-year 2026 Adjusted EBITDA guidance of $865 million to $885 million.
Net income, adjusted EBITDA and contract operations revenue increased from the prior-year quarter, but total revenue declined as aftermarket services revenue fell and adjusted free cash flow declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue (three months ended September 30, 2026)GAAP | $370.8M | – | – |
| Total cost of sales, exclusive of depreciation and amortization (three months ended September 30, 2026)GAAP | $123.0M | – | – |
| Gross margin and gross margin percentage (three months ended September 30, 2026)GAAP | 175,850 47% | – | – |
| Total adjusted gross margin and adjusted gross margin percentage (three months ended September 30, 2026)non-GAAP | $ 247,798 67% | – | – |
| Selling, general and administrative (three months ended September 30, 2026)GAAP | $26.05M | – | – |
| Selling, general and administrative as a percentage of revenue (three months ended September 30, 2026)GAAP | 7 % | – | – |
| Depreciation and amortization (three months ended September 30, 2026)GAAP | $71.95M | – | – |
| Long-lived and other asset impairment (three months ended September 30, 2026)GAAP | $3.22M | – | – |
| Interest expense (three months ended September 30, 2026)GAAP | $37.02M | – | – |
| Income before income taxes (three months ended September 30, 2026)GAAP | 111,546 | – | – |
| Provision for income taxes (three months ended September 30, 2026)GAAP | 26,660 | – | – |
| Net income (three months ended September 30, 2026)GAAP | $84.47M | – | – |
| Basic and diluted earnings per common share (three months ended September 30, 2026)GAAP | $ 0.48 | – | – |
| Adjusted net income (three months ended September 30, 2026)non-GAAP | $84.68M | – | – |
| Adjusted basic and diluted earnings per common share (three months ended September 30, 2026)non-GAAP | $ 0.49 | – | – |
| Adjusted EBITDA (three months ended September 30, 2026)non-GAAP | $228.4M | – | – |
| Adjusted EBITDA as a percentage of revenue (three months ended September 30, 2026)non-GAAP | 62 % | – | – |
| Net cash provided by operating activities (three months ended September 30, 2026)GAAP | $158.8M | – | – |
| Cash available for dividend (three months ended September 30, 2026)non-GAAP | $153.0M | – | – |
| Cash available for dividend coverage (three months ended September 30, 2026)non-GAAP | 3.8 x | – | – |
| Capital expenditures (three months ended September 30, 2026)other | $117.9M | – | – |
| Net capital expenditures (three months ended September 30, 2026)other | $106.8M | – | – |
| Adjusted free cash flow (three months ended September 30, 2026)non-GAAP | $49.61M | – | – |
| Adjusted free cash flow after dividend (three months ended September 30, 2026)non-GAAP | $9.04M | – | – |
| Total available horsepower (at period end)other | 4,811 | – | – |
| Total operating horsepower (at period end)other | 4,537 | – | – |
| Average operating horsepower (three months ended September 30, 2026)other | 4,528 | – | – |
| Horsepower utilization spot (at period end)other | 94.3 % | – | – |
| Horsepower utilization average (three months ended September 30, 2026)other | 94.3 % | – | – |
| Long-term debt (September 30, 2026)GAAP | $2.34B | – | – |
| Total equity (September 30, 2026)GAAP | 1,597,867 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Contract operationsThe Company cited consistent customer demand, a structurally tight compression market, strong bookings including in the Permian Basin, rising gas-to-oil ratios and additional takeaway capacity in the basin. | $331.2M | – | 1.5% |
| Aftermarket servicesPrimarily reflecting reduced customer demand for major maintenance service activity and lower parts sales. | $39.66M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
full-year 2026 outlook
- NoteNet income: $ 290,750 to $ 310,750
- NoteInterest expense: 150,000
- NoteProvision for income taxes: 103,000
- NoteDepreciation and amortization: 283,000
- NoteRestructuring charges: 250
- NoteStock-based compensation expense: 22,000
- NoteLong-lived and other asset impairment: 10,100
- NoteAmortization of capitalized implementation costs: 4,000
- NoteDebt extinguishment gain: (700)
- NoteTransaction-related costs: 1,400
- NoteEquity in net loss of unconsolidated affiliate: 1,000
- NoteIndemnification expense, net: 200
- NoteAdjusted EBITDA: 865,000 to 885,000
Capital returns
- Declared a quarterly dividend of $0.23 per share of common stock, or $0.92 per share on an annualized basis, approximately 10% higher compared to the third quarter of 2025.
- Dividend declared for the period per share: $ 0.230, compared to $ 0.210 in the third quarter of 2025.
- Dividend declared for the period to all stockholders: $ 40,473, compared to $ 37,007 in the third quarter of 2025.
- The third quarter 2026 dividend will be paid on November 10, 2026 to stockholders of record at the close of business on November 3, 2026.
- No shares were repurchased during the third quarter of 2026.
- As of September 30, 2026, $113.2 million remained available under the share repurchase program.
- Since inception of the share repurchase program in April 2023 through September 30, 2026, the Company repurchased 4,632,263 shares of common stock for an aggregate purchase price of $96.9 million, or an average price of $20.91 per share.
What drove it
- The Company achieved its strongest bookings quarter since the second quarter of 2023, including strong bookings in the Permian Basin.
- Contract operations revenue increased 1.5% compared with the third quarter of 2025.
- Rising gas-to-oil ratios and additional takeaway capacity in the Permian Basin were cited as supporting sustained compression requirements.
- Adjusted EBITDA included $2.1 million in net gains primarily related to the sale of compression and other assets.
- Selling, general and administrative expense was $ 26,049, compared with $ 37,676 in the third quarter of 2025.
Concerns
- Total revenue was $370.8 million compared to $382.4 million in the third quarter of 2025.
- Aftermarket services revenue was $39.7 million compared to $56.2 million in the third quarter of 2025, primarily reflecting reduced customer demand for major maintenance service activity and lower parts sales.
- Customer maintenance deferrals affected aftermarket activity.
- Higher lube oil prices created near-term cost pressure.
- Contract operations adjusted gross margin percentage was 72%, compared to 73% in the third quarter of 2025.
- Adjusted free cash flow was $ 49,607, compared to $ 113,843 in the third quarter of 2025.
- Horsepower utilization spot was 94.3 %, compared to 96.0 % in the third quarter of 2025.
What to watch
- Aftermarket services demand for major maintenance service activity and parts sales.
- The effect of customer maintenance deferrals and lube oil prices on aftermarket activity and costs.
- Execution of the disciplined growth program and deployment of horsepower to meet customer demand.
- Whether contract operations utilization and operating horsepower stabilize or improve from their prior-year levels.
- Delivery against reaffirmed full-year 2026 Adjusted EBITDA guidance of $865 million to $885 million.
Balance sheet and cash flow
- Long-term debt was $2.3 billion at September 30, 2026.
- Available liquidity totaled $637 million at September 30, 2026.
- Leverage ratio was 2.5x as of September 30, 2026, down from 3.1x as of September 30, 2025.
- Net cash provided by operating activities was $ 158,824.
- Net cash used in investing activities was (109,217).
- Dividends paid to stockholders were (40,563).
Analysis
Archrock’s third-quarter results showed a split between resilient contract operations and a sharp decline in aftermarket services. Total revenue was $ 370,811, compared with $ 382,430 in the third quarter of 2025 and $ 371,238 in the second quarter of 2026. Contract operations revenue increased 1.5% to $ 331,155 from $ 326,269 in the prior-year period, while aftermarket services revenue was $ 39,656 versus $ 56,161. Management attributed the aftermarket decline to reduced customer demand for major maintenance service activity and lower parts sales, and cited maintenance deferrals as a headwind.
Profitability improved despite the lower total revenue base. Net income was $ 84,466, compared with $ 71,248 in the prior-year quarter, and adjusted net income was $ 84,680, compared with $ 73,187. Adjusted EBITDA increased to $ 228,425 from $ 220,944, while adjusted EBITDA as a percentage of revenue was 62 % versus 58 %. GAAP gross margin and gross margin percentage were 175,850 and 47%, compared with 185,475 and 48%, while total adjusted gross margin was $ 247,798 compared with $ 252,605 and adjusted gross margin percentage was 67% compared with 66%.
Contract operations remained highly utilized, but its fleet indicators were below the prior-year period. Spot utilization was 94.3 %, compared with 96.0 %, and total operating horsepower was 4,537 compared with 4,651. Management noted the sale of approximately 112,000 non-strategic operating horsepower since the prior-year period. Contract operations adjusted gross margin was $ 238,722 versus $ 239,559 and its adjusted gross margin percentage was 72 % versus 73 %. Higher lube oil prices were identified as a near-term cost pressure, though management said it is mitigating these pressures through cost discipline and operating efficiencies.
Cash generation was positive but lower than the prior-year quarter as investment activity remained elevated. Net cash provided by operating activities was $ 158,824 compared with $ 164,530, while adjusted free cash flow was $ 49,607 compared with $ 113,843. Adjusted free cash flow after dividend was $ 9,044 compared with $ 76,922. The Company declared a $ 0.230 per-share dividend, compared with $ 0.210 in the prior-year period, and cash available for dividend coverage was 3.8 x versus 3.7 x. No shares were repurchased during the quarter.
The balance sheet measures reported in the release improved from the prior-year period. Long-term debt was $ 2,343,100 compared with $ 2,559,944, total equity was 1,597,867 compared with 1,422,279, and leverage was 2.5x compared with 3.1x. Archrock reaffirmed full-year 2026 Adjusted EBITDA guidance of 865,000 to 885,000. The central reported variables for the remainder of the year are the durability of contract operations demand and utilization, recovery in aftermarket maintenance and parts activity, lube oil cost pressure, capital expenditures and conversion of operating cash flow to adjusted free cash flow after dividends.
Management, verbatim
The continued strength and profitability of our business reflect consistent customer demand and a structurally tight compression market. We achieved our strongest bookings quarter since the second quarter of 2023, including strong bookings in the Permian Basin. Rising gas-to-oil ratios and additional takeaway capacity in the basin are supporting sustained compression requirements. While customer maintenance deferrals affected aftermarket activity and higher lube oil prices created near-term cost pressure, we are actively mitigating these headwinds through cost discipline and operating efficiencies. The underlying demand fundamentals remain strong, supporting our confidence in the long-term outlook.
Brad Childers, President and Chief Executive Officer
We remain focused on executing our disciplined growth program, deploying horsepower to meet customer demand and delivering the operational reliability our customers expect. With durable natural gas demand supported by long-term growth in LNG exports and power generation, a strong balance sheet and a disciplined, returns-based approach to capital deployment, Archrock is well positioned to invest alongside our customers at attractive returns, generate durable free cash flow and deliver consistent shareholder returns.
Brad Childers, President and Chief Executive Officer
Not in the filing
stated, not guessed- Cash and cash equivalents balance was not reported.
- GAAP operating income was not reported.
- Effective income tax rate was not reported.
- Revenue guidance was not reported.
- Gross margin guidance was not reported.
- Operating expense guidance was not reported.
- Tax rate guidance was not reported.
- Previous-period outlook was not provided, so comparison of actual results with prior guidance was not available.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Archrock, a provider of compression services for the natural gas industry, filed its Q3 2026 earnings on Form 8‑K.
Ticker impact
Archrock reported Q3 2026 results with revenue of $370.8M, net income $84.5M and reaffirmed full-year Adjusted EBITDA guidance of $865M-$885M.
likely modest upside as investors price in strong earnings and stable guidance
Quarterly earnings exceeded prior year, leverage improved, and dividend increased, all indicating financial strength.
Market effects
Strong results may boost sentiment in the energy services and compression equipment sector.
Positive for U.S. energy infrastructure investors.
Reinforces demand outlook for natural gas compression amid LNG export growth.
Counterpoint
Higher dividend and lower leverage could already be priced in; any slowdown in gas demand may pressure the stock.
Key entities
- ExecutiveBrad Childers
President and CEO of Archrock who commented on the results.
