Kodiak Gas Services, Inc.

Kodiak Gas Services reported record second-quarter 2026 results, with revenue up 21% year-over-year to $391 million and adjusted EBITDA up 22% to a company record of $217 million. Adjusted net income was $54 million, or $0.55 per diluted share. Management raised full-year guidance for adjusted EBITDA to $830 million to $860 million and discretionary cash flow to $570 million to $600 million. The company also detailed plans to expand its power infrastructure business, having signed a multiyear turbine supply deal with Baker Hughes for 1 gigawatt of capacity by 2030, with an option to grow to 1.8 gigawatts, and secured about 1.8 gigawatts of power generation overall toward its 2-gigawatt target. Kodiak ended the quarter with 4.4 million revenue-generating horsepower and fleet utilization of 98.2%, while net debt stood at about $2.6 billion.

Kodiak Gas Services raised its full-year 2026 adjusted EBITDA, compression infrastructure gross margin, and discretionary cash flow guidance after reporting record second-quarter results. Adjusted EBITDA rose 22% year-over-year to $217 million, while revenue increased 21% to $391 million, driven by the DPS acquisition and compression infrastructure growth. The company now expects adjusted EBITDA of $830 million to $860 million, compression infrastructure adjusted gross margin of 69% to 70.5%, and discretionary cash flow of $570 million to $600 million. Kodiak also announced a multiyear gas turbine supply agreement with Baker Hughes for 1 gigawatt of turbine power by 2030, with an option to increase to 1.8 gigawatts, and executed a limited notice to proceed for a West Texas data center project leased to a hyperscaler.

Kodiak Gas Services has agreed a multi-year power generation deal with Baker Hughes targeting up to 1.8 gigawatts for data centers and behind-the-meter projects. The stock last closed at $67.18 against a most-followed fair value estimate of $84.07, implying a potential undervaluation of about 20%. High fleet utilization above 97%, premium-rate contracting of new large-horsepower units, and long-term fee-based contracts support resilient recurring revenue and EBITDA stability. However, the current price-to-earnings ratio of 101.4 times sits well above the US Energy Services industry average of 26.5 times, raising valuation risk questions.

Baker Hughes has signed a multi-year strategic agreement with Kodiak Gas Services to supply power generation technologies, starting with an equipment award capable of delivering approximately 1 gigawatt of power generation capacity by 2030. The broader framework provides a pathway to expand capacity to 1.8 gigawatts over time, with the initial order including NovaLT 16 gas turbines, Frame 5 gas turbines and BRUSH generators. The partnership targets behind-the-meter projects in key U.S. markets to meet surging electricity demand from artificial intelligence, cloud computing and data centers, and also includes technical training, spare parts support and a long-term service agreement. The agreement reinforces Baker Hughes' strategy of expanding beyond traditional oilfield services into energy infrastructure and power solutions.

Kodiak Gas Services raised its full-year 2026 adjusted EBITDA guidance to a range of $820 million to $860 million after reporting record first-quarter contract services revenue of $307.0 million and adjusted EBITDA of $190.1 million. The company cited continued strength in its core natural gas compression business and the integration of its newly acquired Distributed Power Solutions segment. To meet surging demand from data center developers, Kodiak has procured over 260 megawatts of additional power generation capacity and plans to expand total capacity to over 650 megawatts, targeting consistent annual growth of 300 to 500 megawatts through 2030 and a total capacity of over two gigawatts by the end of the decade, all backed by long-term contracts. A $1 billion senior note issuance reduced the company’s weighted average borrowing rate, though it incurred a $36.5 million loss on debt extinguishment; excluding nonrecurring items, adjusted net income was $52.0 million, or $0.59 per adjusted diluted share.