Kodiak Gas Services, Inc. · NYSE:KGS
Kodiak Gas Services — Investor Presentation (March 2025)
29 slides from Kodiak Gas Services's investor presentation, March 2025
Slide 1: Investor Presentation March 2025
Investor Presentation March 2025
Slide 2: Disclaimer
Disclaimer Cautionary Note Regarding Forward-Looking Statements. This presentation contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Fo
Slide 3: Kodiak Gas Services Overview
Kodiak Gas Services Overview POWERING Our Critical Energy Future $3.2 billion $5.8 billion 4.5% Market Enterprise Dividend Capitalization1 Value1 Yield1 4.4 million ~7 years ~97% Fleet Average Age of Fleet Horsepower2 Large Horsepower2 Utilization Rate2 1 Market capitalization and enterprise value c
Slide 4: Kodiak Contract Compression Fleet
Kodiak Contract Compression Fleet Leading contract compression provider in oil-directed basins 4.4 million fleet horsepower1 3.5 million Combined horsepower in the 8% 2% Permian and Eagle Ford Northeast Northern Rockies 4% Fleet Horsepower Profile1 Mid-Continent 69% Permian % of revenue-generating 1
Slide 5: Kodiak Investment Thesis
Kodiak Investment Thesis Constructive Industry ► Highly visible, multi-year domestic natural gas demand growth Fundamentals ► Tight equipment market with industry-wide capital discipline Compression Market ► 4.4 million HP compression fleet1 Leader ► Market leader in the Permian Robust Organic ► 202
Slide 6: Fourth Quarter & Full Year 2024 Highlights
Fourth Quarter & Full Year 2024 Highlights Adjusted EBITDA1 Fourth Quarter Highlights ► Improved Contract Services Adjusted Gross Margin ~97% $610 to 66.7% Fleet $438 ► Increased fleet utilization to ~97% utilization2 $168 $169 ► Divested ~33,000 HP of small horsepower compression units and exited o
Slide 7: Continued Execution of Core Strategy
Continued Execution of Core Strategy Since closing the CSI Acquisition, Kodiak continues to streamline operations while emphasizing the core strategy—domestic large horsepower compression in oil-directed basins At Closing1 Current2 Comment Optimizing growth and risk adjusted Countries 6 2 returns Di
Slide 8: Investing In Our Future
Investing In Our Future Building Experience And Real Skills BEARS IGNITE Telemetry-enabled fleet Academy Development Program ► ► Predictive analytics & machine ► >9,000 square foot, hands-on ► Four-month internship program for learning training facility entry level field technicians ► Customized AI
Slide 9: Industry Compression Capacity
Industry Compression Capacity Top 3 U.S. Contract Compression Providers = ~75% of the outsourced market1 U.S. Compression Market2 HP (in millions) % Outsourced (contract compression) 15 24% 4.7 4.4 Insourced (end user-owned) 48 76% Total 63 100% 4.0 HP in millions 0.9 0.6 0.5 0.6 0.4 0.3 0.3 0.3 0.3
Slide 10: Compression Industry Tightness
Compression Industry Tightness Compression CapEx is Below Historical Levels...1 ...While Costs Have Risen2 $1,111 ~$1,200 $884 (per year) $ Millions ~$800 $ per HP $495 Average Average Average 2017 2025E 2017-2019 2020-2021 2022-2024E Increase in Industry Utilization Rate3 Increase in Industry Prici
Slide 11: LNG is Primary Driver of Gas Growth
LNG is Primary Driver of Gas Growth U.S. LNG Capacity1 30 28 Bcf/d U.S. LNG capacity is 25 expected to double by 2030 20 Capacity Additions Through 2030 Bcf/d (14 Bcf/d from 8 FID Projects) 15 10 Existing U.S. LNG Capacity 14 Bcf/d 5 - 2024 2025 2026 2027 2028 2029 2030 1 Company reports and Goldman
Slide 12: Power is Secondary Driver of Gas Growth
Power is Secondary Driver of Gas Growth >200% ~15% >40% YoY increase in new CAGR through 2030 in of U.S. electricity is natural gas fired electric demand from natural gas-sourced3 power plants in 20251 new datacenters2 Rapidly Increasing Data Center Demand Presents Upside to Forecast 3-10 Bcf/d Rang
Slide 13: Compression Growth Driven by Gas Growth
Compression Growth Driven by Gas Growth U.S. Gas Demand Growth U.S. Compression Intensity1 Mexico / 2 140 Bcf/d million HP 70 Other 63 million HP / 103 Bcf/d = ~600K HP per Bcf/d 63 Power 120 3-10 60 Demand 100 104 103 100 50 23 Bcf/d 46 93 92 95 midpoint 80 84 U.S. LNG 74 73 75 40 Demand 14 60 30 4
Slide 14: Permian Gas Positioned for Long-Term Growth
Permian Gas Positioned for Long-Term Growth Permian Basin ~50% of domestic Increased ~10% CAGR drilling activity located in drilling activity gross gas production the Permian Basin1 in higher GOR areas since 20202 >20% Takeaway Projects4 Capacity Start Pipeline4 (Bcf/d) Date More gas per Gulf Coast
Slide 15: Permian Compression Intensity
Permian Compression Intensity Permian Compression Requirements Long 01 02 03 04 Haul Pipeline Centralized Gathering Gas Residue Gas lift Systems Processing Compression Dry Long Gas Basins Haul Pipeline >3x 01 Compression required by Permian Basin vs Dry Gas Basins 1 Gathering Compression 15
Slide 16: Premier Customer Base
Premier Customer Base >50% >60% Long-Term Revenue from top 10 Revenue from Relationships with top customers1 investment grade rated customers customers1 High Quality Customer Base2 1 Based on total revenues for 2024 2 As of December 31, 2024 16
Slide 17: Contract Structure Supports Cash Flow
Contract Structure Supports Cash Flow 01 02 03 04 05 Fixed monthly Annual inflation Advance billing 98% mechanical Customer bears revenue index adjustments improves working availability mobilization and with multi-year capital cycle guarantee demobilization terms costs Percent of Contracts on Term1
Slide 18: Capital Allocation Framework
Capital Allocation Framework Adjusted EBITDA Targeting upper single digit % growth annually Cash Interest Cash Taxes Maintenance Capex 75% of total debt either fixed rate or NOLs provide significant tax shield Based on predictive analytics & hours swapped to fixed Discretionary Cash Flow Shareholder
Slide 19: 2025 Capital Plan
2025 Capital Plan Full Year Capital Spending Growth CapEx Other CapEx ► New compression ► Safety-related unit units $315 - $365 upgrades ► Methane mitigation Million ► Operational unit systems 2025E CapEx upgrades ► Technology systems ► Rolling stock/facilities Maintenance CapEx 2025E New Units >90%
Slide 20: Strengthening Credit Profile
Strengthening Credit Profile Leverage Covenant Debt – EBITDA Ratio1 Kodiak’s Credit Ratings2 Corporate Rating 3.9x Ba3 BB- 3.5x YE 2024 YE 2025 BB Kodiak’s Debt Maturity Profile1 $2,000 ABL Facility Senior Unsecured Notes $1,875 ~75% $1,600 Debt either fixed rate or swapped to fixed1 $1,200 3 years
Slide 21: Contracted Cash Flow with Strong Margins
Contracted Cash Flow with Strong Margins Multi-Year Investment Flexibility to Q4 2024 Adjusted Revenue Contracts Grade Customers Move Assets Gross Margin2 Cost plus model Yes Mixed No 44% Utilities1 Take-or-pay contracts Yes Yes No 53% / throughput charge Pipelines1 Minimum volume commitments / Yes
Slide 22: Steady Business in Any Price Environment
Steady Business in Any Price Environment Divested 128K of Quarterly Contract Services Adjusted Gross Margin non-core horsepower ($M) 200 ~97% $177 $188 $187 % of AGM provided by Contract 180 Services segment1 160 140 $126 $128 $121 $115 $117 120 $112 $105 $108 $104 $104 $94 $95 $97 $108.87 $89 100 $
Slide 23: Attractive Valuation
Attractive Valuation Creating Value for Adjusted EBITDA Growth Annual CAGR 2023 – 20261,2 Shareholders ► Valuation provides the potential for 20% further upside 14% 13% ► Shareholder return program provides attractive cash return 5% Kodiak Compression G&Ps Pipelines ~145% EV/2026 Adj. EBITDA2 13.7x
Slide 24: Increasing Liquidity & Buying Back Stock
Increasing Liquidity & Buying Back Stock Top 5 Shareholders Top 5 Shareholders (% of fully diluted shares outstanding)1 (% of fully diluted shares outstanding)1 84% 57% 76% 65% January February 61% 2024 2025 49% 39% Top 5 Shareholders Remaining Shareholders Q1 2024 Q2 2024 Q3 2024 Q4 2024 Feb. 2025
Slide 25: Full-Year 2025 Guidance
Full-Year 2025 Guidance (All amounts below are in thousands except per share amounts and percentages) Low High Adjusted EBITDA (1) $ 685,000 $ 725,000 Discretionary Cash Flow (1)(2) $ 425,000 $ 450,000 Segment Information Contract Services Revenues $ 1,150,000 $ 1,200,000 Contract Services Adjusted
Slide 26: Supplemental Slides
Supplemental KODIAK» 26 |
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Gross Margin to Adjusted Gross Margin Net Cash Provided by Operating Activities to DCF and FCF (in thousands) Q4 2023 Q3 2024 Q4 2024 (in thousands) Q4 2023 Q3 2024 Q4 2024 Total revenues $225,980 $324,647 $309,519 Net cash provided by operating activiti
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Gross Margin to Adjusted Gross Margin for Contract Services (in 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q thousands) 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 2024 Total Revenues $131
Slide 29: Contact Us
Contact Us IR@KODIAKGAS.COM
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