AROC

Archrock is the leading provider of natural-gas contract compression services in the US, and FY2025 marks a clear inflection in profitability and scale. Revenue grew 28.7% to $1.49B, net income surged 87.1% to $322M, and diluted EPS jumped 74.3% to $1.83 — extending a powerful multi-year ramp from just $28.2M net income in FY2021. The margin story is striking for an asset-heavy services business: gross margin reached 48.6% and net margin 21.6%, with a 21.6% ROE, reflecting tight compression-fleet utilization and pricing power amid strong demand for gas infrastructure tied to LNG exports, data-center power, and Permian/associated-gas production growth.

Cash generation is robust: operating cash flow rose 44.8% to $622M. The company is reinvesting aggressively — capex of $502M (up 39.9%) to expand the compression fleet — which is the right move given the demand backdrop, though it consumes most of operating cash flow and explains the minimal cash balance ($1.55M) and a 9.7% rise in long-term debt to $2.41B. Liabilities/equity of 1.92x is elevated but typical for this capital-intensive, contracted-cash-flow model. Management still returned capital, raising the dividend 28.3% to $142M and stepping up buybacks more than fivefold to $70.2M.