Kodiak Gas Services, Inc. · NYSE:KGS
Kodiak Gas Services — Q2 2024 Earnings Presentation
17 slides from Kodiak Gas Services's earnings presentation, August 2024
Slide 1: Q2 2024 Earnings Presentation
Q2 2024 EARNINGS PRESENTATION August 2024
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: Overview
Overview A leading provider of domestic energy infrastructure, enabling the reliable and secure flow of natural gas and oil to feed growing global demand AT-A-GLANCE 1, 2, 3 We Move Energy. Reliably. Market Cap $2.6 billion Safely. Enterprise Value 8% Northern Rockies Responsibly. 2% $5.1 billion No
Slide 4: Investment Thesis
Investment Thesis Leading Market Position ► Purpose-built fleet of 4.5 million HP1 ► Market leader with 2.8 million of large HP compression in the Permian1 Industry Leader in Both Growth & Utilization ► 0 to 4.5 million horsepower in 12 years ► ~98% utilization rate on >1,000 HP units Attractive Ind
Slide 5: Industry Leading Shareholder Returns at an Attractive Valuation
Industry Leading Shareholder Returns at an Attractive Valuation Creating Value for Shareholders EV/2025 Adj. EBITDA1 ► Valuation provides the potential for further upside 12.9x ► Shareholder return program provides attractive 10.0x 9.3x cash return 7.5x 8.1x 91% KGS AROC USAC Midstream Peers S&P 500
Slide 6: Capital Allocation – Exceeding Expectations
Capital Allocation – Exceeding Expectations Improving Returning Capital to Growth Balance Sheet Shareholders Increasing Target payout of Reduce leverage and ~35% fleet capacity that Target strengthen the of discretionary exceeds internal balance sheet cash flow hurdle rate ► 1.1 Million – Horsepower
Slide 7: Kodiak Standalone Q2 2024 Financial & Operational Highlights
Kodiak Standalone Q2 2024 Financial & Operational Highlights Total Contract Services Discretionary Revenues Revenue Cash Flow1 $310 million $276 million $91 million +44% vs Q1 2024 +43% vs Q1 2024 +26% vs Q1 2024 Quarterly Adjusted EBITDA1 ($M) $154 Operational Statistics $118 $114 $108 $110 41,500
Slide 8: Synergy Estimate Raised to $30M+
Synergy Estimate Raised to $30M+ Operations / Supply Chain Run-Rate Cost Synergies ► Optimized labor force and real estate Exceed Expectations footprint ► Consolidated supply contracts (lube $35 >$30 oil, spare parts, telemetry) million $30 ► In-sourced certain repair & maintenance costs $25 >$20 $2
Slide 9: New Segment Revenue Breakout
New Segment Revenue Breakout ► Contract compression – provide turnkey Contract Services compression services with Kodiak-owned HP contracted, fixed-fee ► Contract operations – operate customer- 64% recurring revenues owned HP for a fee Q2 2024 Adjusted Gross Margin1 ► Gas Treating – fee-based amine
Slide 10: 2024 Capital Plan
2024 Capital Plan Full Year Capital Spending1 2024 New Units Other New Unit CapEx >95% $270 - $300 Permian focused Million 2024e CapEx >2,000 HP Maintenance Average horsepower per unit CapEx New Unit Horsepower (in thousands) 48 50 - 55 90K 42 Organic increase horsepower in 1H24 18 - 20 Q1 2024 Q2 2
Slide 11: Full-year 2024 Guidance
Full-year 2024 Guidance (All amounts below are in thousands except per share amounts and percentages) Low High Adjusted EBITDA (1) $ 590,000 $ 610,000 Discretionary Cash Flow (1)(2) $ 365,000 $ 385,000 Segment Information Contract Services revenues $ 1,000,000 $ 1,040,000 Contract Services Adjusted
Slide 12: No Near-Term Maturities
No Near-Term Maturities Reduced High Yield Borrowing Costs2 <3.5x 12% 6.5% 10% 9.9% Leverage ratio by Weighted average 8% year-end 2025 borrowing cost1 6.2% 6% 4% 2% 0% Kodiak’s Debt Maturity Profile3 2,000 1,800 1,600 ABL Facility Senior Unsecured Notes $1,786 1,400 1,200 ($M) 1,000 800 ~4 years 60
Slide 13: Kodiak's Value Proposition
Kodiak’s Value Proposition Leading Market Position Industry Leader in Both Growth & Utilization Attractive Industry Fundamentals We Move Energy. Reliably. Safely. Strong and Stable Cash Returns Responsibly. AUGUST 2024 / 1 3
Slide 14: Supplemental Slides
Danlgioa | = SUPPLEMENTAL SLIDES
Slide 15: 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) 2Q 2023 2Q 2024 (in thousands) 2Q 2023 2Q 2024 Total revenues $203,306 $309,653 Net cash provided by operating activities $94,678 $121,082 Maint
Slide 16: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d) Gross Margin to Adjusted Gross Margin for Contract Services 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q (in thousands) 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 Total Revenues $131,616 $1
Slide 17: Thank You
KODIAK.> | | GAS SERVICES’, \ 2 < mm), ge THANK YOU! CONTACT: GRAHAM SONES | VP,IR IR@KODIAKGAS.cOM NYSE.