Kodiak Gas Services, Inc. (NYSE:KGS) reported its third-quarter 2025 financial results, announcing record Contract Services segment revenues and an increase in its full-year discretionary cash flow guidance, while also posting a net loss for the period.
For the quarter ended September 30, 2025, Kodiak generated $297.0 million in Contract Services segment revenues, a 4.5% increase from $284.3 million in the third quarter of 2024. The company reported a net loss of $14.0 million, or $(0.17) per diluted share. This included a $33.3 million loss on the disposal of its Mexico operations and a $28.0 million expense to increase its reserve for Texas sales and use tax matters. Adjusting for these items, adjusted net income was $31.5 million, or $0.36 per adjusted diluted share.
Adjusted EBITDA for the third quarter was $174.7 million, which included approximately $5 million of extraordinary professional fees related to the divested Mexico operations. Discretionary cash flow for the quarter was $116.7 million, a 13.2% increase compared to $103.0 million in the third quarter of 2024, and funded all growth capital expenditures. Net cash provided by operating activities was $113.4 million. Fleet utilization rose to 97.6%, up 120 basis points from the prior year's third quarter.
Kodiak also announced an increase in its full-year 2025 discretionary cash flow guidance to a range of $450 million to $470 million. The company declared a quarterly dividend of $0.49 per share, a 9% increase over the second quarter of 2025, and returned over $90 million to stockholders through dividends and share repurchases in the quarter. Total debt outstanding was $2.7 billion as of September 30, 2025, with $1.5 billion available on its ABL Facility, and its credit agreement leverage ratio stood at 3.8x.
President and Chief Executive Officer Mickey McKee commented, "Kodiak's third quarter results demonstrate the continued strength and resilience of our business model... Our investments in technology and our people are driving operational excellence." He added that the company is encouraged by the robust natural gas demand outlook, particularly in the Permian Basin, and the growing power requirements from data centers and LNG projects. McKee highlighted strategic initiatives completed in the third quarter, including a new ERP platform, divestment of Mexico operations, and bond offerings to enhance liquidity, positioning the company for future opportunities.
