Executive Summary

Q1 2025 was operationally solid with record pricing and stable utilization, but sequentially softer margins: revenue was $245.2M (+6.9% YoY), Adjusted EBITDA $149.5M (+7.3% YoY) with Adjusted EBITDA margin of 61.0% (down from 63.2% in Q4), and EPS of $0.14; DCF was $88.7M (coverage 1.44x) .
Management confirmed full-year 2025 guidance (Adj. EBITDA $590–$610M; DCF $350–$370M; expansion capex $120–$140M; maintenance capex $38–$42M), signaling confidence despite macro/tariff volatility and back-end loaded growth timing .
Pricing power remains the key driver: average revenue per HP reached a record $21.06 (+6% YoY), with average utilization at 94.4% and large horsepower “close to fully utilized” per management .
Growth catalysts in 2H: USAC ordered ~40,000 HP in Q1 (most deliveries expected in Q4, minimal P&L impact initially); leverage stood at 4.08x and the ABL refinancing is planned in the near term while remaining patient on the high-yield market .
Dividends maintained: $0.525 per unit for Q1 (annualized $2.10), consistent with prior quarters .

What Went Well and What Went Wrong

What Went Well
- Record pricing and durable demand: “record average revenue per-horsepower of $21.06… drove year-over-year increases in revenues, Adjusted EBITDA, and Distributable Cash Flow” .
- Utilization and mix: large HP “continues to be close to fully utilized,” supporting pricing discipline and contract terms .
- Guidance held with visible growth pipeline: ordered ~40,000 HP for delivery mostly before year-end; maintained full-year guidance amid back-end loaded deployments .
What Went Wrong
- Sequential margin compression vs Q4: Adjusted EBITDA margin decreased to 61.0% from 63.2% (Q4) as CO opex rose; gross margin fell sequentially to $93.2M from $99.3M .
- Net income dipped YoY and QoQ: $20.5M vs $23.6M in Q1 2024 and $25.4M in Q4 2024, with $3.6M of non-cash impairment and similar interest expense burden .
- Working capital headwind: operating cash flow declined to $54.7M (from $130.2M in Q4), primarily due to a $46.9M negative change in operating assets and liabilities .

Financial Results

Quarterly progression (oldest → newest):

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$240.0	$245.9	$245.2
Net Income ($M)	$19.3	$25.4	$20.5
Net Income per Common Unit ($)	$0.13	$0.18	$0.14
Adjusted EBITDA ($M)	$145.7	$155.5	$149.5
Adjusted EBITDA Margin (%)	60.7%	63.2%	61.0%
DCF ($M)	$86.6	$96.3	$88.7
DCF Coverage (x)	1.41x	1.56x	1.44x

YoY snapshot:

Metric	Q1 2024	Q1 2025
Revenue ($M)	$229.3	$245.2
Net Income ($M)	$23.6	$20.5
Adjusted EBITDA ($M)	$139.4	$149.5
Net Income per Common Unit ($)	$0.19	$0.14
DCF ($M)	$86.6	$88.7

Segment revenue – quarterly progression (oldest → newest):

Revenue ($M)	Q3 2024	Q4 2024	Q1 2025
Contract Operations	$220.5	$223.0	$225.0
Parts & Service	$5.8	$6.9	$5.1
Related Party	$13.7	$16.1	$15.2
Total	$240.0	$245.9	$245.2

Operating KPIs – quarterly progression (oldest → newest):

KPI	Q3 2024	Q4 2024	Q1 2025
Avg rev per rev-gen HP per month ($)	$20.60	$20.85	$21.06
Avg rev-generating HP (MM HP)	3.56	3.56	3.56
Avg Utilization (%)	94.6%	94.5%	94.4%
DCF Coverage (x)	1.41x	1.56x	1.44x

Cash flow and balance sheet (Q1 2025):

CFFO $54.7M; working capital change −$46.9M; long-term debt (net) $2.54B as of 3/31/25 .
Revolver borrowings $804.6M; availability $739.8M (after covenant restrictions); notes outstanding: $750M due 2027 and $1.0B due 2029 .

Dividend:

Q1 2025 distribution: $0.525 per unit (paid 5/9/25; record 4/28/25) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2025	$590–$610	$590–$610	Maintained
Distributable Cash Flow ($M)	FY 2025	$350–$370	$350–$370	Maintained
Expansion Capex ($M)	FY 2025	$120–$140 (incl. ~$21M other support capex)	$120–$140 (incl. ~$21M other support capex)	Maintained
Maintenance Capex ($M)	FY 2025	$38–$42	$38–$42	Maintained
Distribution ($/unit)	Quarterly run-rate	$0.525 (Q4 2024)	$0.525 (Q1 2025)	Maintained

Management emphasized growth is back-end loaded (Q4 deliveries have minimal 2025 EBITDA impact), supporting the decision to maintain the range .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
Pricing power (ARPU)	Record ARPU: $20.60 (Q3); $20.85 (Q4)	Record $21.06; pricing improvements continue	Positive
Utilization/demand	Tight market; record avg HP; utilization 94.6–94.5%	Avg utilization 94.4%; large HP “close to fully utilized”	Stable/strong
Growth capex/new HP	2025 capex guided $120–$140M; back-end loaded	~40,000 HP ordered; majority delivered before YE; 2025 growth back-end loaded (Q4 impact minimal)	Building for 2H
Macro/AI & data centers	Q4 cited LNG/export and “electrification… driven by AI and data center demand”	Data center demand reaffirmed (Amazon, Microsoft, etc.); NE power demand cited	Supportive
Tariffs/supply chain	Not highlighted	Monitoring tariffs; minimal near-term capex impact (locked-in); lead times stable (CAD ~48 wks, Waukesha ~25, Ariel ~24–26, packagers 30–40)	Watchful
Leverage/financing	Focus on deleveraging	Leverage 4.08x; ABL refi near term; patient on high-yield notes amid higher costs	Balanced

Management Commentary

“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” — Clint Green, CEO .
“In Q1, we ordered approximately 40,000 new horsepower… delivered before year-end” .
“Average operating margins… around 67%” and large horsepower “close to fully utilized” — management remarks .
CFO: First-quarter highlights — pricing at all-time high $21.06; leverage ratio 4.08x; reiteration of full-year guidance ranges and back-end loaded expansion .
Financing: “We are in no hurry to rush into notes market… expect to move forward with refinancing our ABL in the near term” .

Q&A Highlights

Guidance cadence: With Q1 annualized at mid-range, most new HP arrives in Q4 with “minimal” Q4 P&L impact; guidance held at $590–$610M Adjusted EBITDA .
2025–2026 growth outlook: ~40k HP ordered in Q1, more expected in Q2; active RFPs for 2026; consolidation has strengthened counterparties; NE basin highlighted (~900k HP footprint) .
New HP vs operating HP target: 40k ordered is below ~1.5% operating HP growth aspiration, but remainder expected through year-end (potentially as early as Q2 orders) .
Capital markets: High-yield window open but pricier (~+50 bps vs pre-April); patient on notes; proceed with ABL refi in 2H with strong bank interest .
Contracting/terms: No notable change in duration/term; preference to re-term where possible, especially if cycle softens .
Lead times: Stable (CAD ~48 wks; Waukesha ~25; Ariel ~24–26; packagers 30–40), with 2025 capex largely locked .
Portfolio optimization: Modest asset sales/swaps continue to improve fleet efficiency .

Estimates Context

We attempted to retrieve S&P Global consensus for EPS, revenue, and EBITDA for Q1 2025 and adjacent quarters, but no consensus data were available for USAC at the time of query; therefore, we do not present beats/misses vs Street for Q1 2025 (Values retrieved from S&P Global).*

Key Takeaways for Investors

Pricing remains the primary driver: record ARPU of $21.06 and sustained 94%+ utilization underpin YoY growth in revenue and Adjusted EBITDA .
Sequential margin normalization vs Q4: Adjusted EBITDA margin at 61.0% (down from 63.2% in Q4) as operating costs ticked up; watch cost discipline and mix through 1H .
Growth is back-end loaded: ~40k HP ordered with deliveries concentrated near year-end; EBITDA impact likely more visible into 2026 than late 2025 .
Balance sheet/liquidity intact: 4.08x leverage, ample revolver capacity; ABL refi planned in near term with patience on higher-cost notes .
Tariffs/supply chain risk manageable near term: 2025 costs largely locked; lead times stable; monitor potential parts/material cost creep as inventories turn .
Dividend sustained with healthy coverage (1.44x), supporting income-oriented positioning while funding disciplined growth .
With no published Street consensus, near-term sentiment likely hinges on execution versus internal plan (pricing resilience, maintaining ~67% adjusted operating margins, and on-time HP deliveries) and progress on ABL refi .

Appendix: Additional Context (Prior Quarters)

Q4 2024 set a high base: record revenue ($245.9M), Adjusted EBITDA ($155.5M), and DCF ($96.3M), with 1.56x coverage .
Q2 2025 (reported subsequently): record revenue ($250.1M), record ARPU ($21.31), DCF $89.9M; guidance reaffirmed .

Notes:

Distribution details: Q1 2025 $0.525 per unit, paid May 9, 2025 (record April 28, 2025) .
Organizational update: Chris Wauson named COO effective April 5, 2025 .

Footnote:
(*) Consensus and estimates: No consensus data available for USAC from S&P Global at the time of query; hence, beats/misses vs Street are not shown (Values retrieved from S&P Global).

USA Compression Partners, LP (USAC)·Q1 2025 Earnings Summary