Q3 2024 USA Compression Partners LP Earnings Call Transcript
Key Points
- USA Compression Partners LP (USAC) reported record results in revenue, adjusted gross margin, adjusted EBITDA, distributable cash flow, and average revenue-generating horsepower for the third quarter of 2024.
- The company experienced a supportive environment in the compression service space, allowing for increased pricing and strong demand for compression services.
- USAC's revenue increased by 11% compared to the same period last year, driven by pricing improvements and high utilization rates.
- The company successfully reduced its leverage ratio to 4.2 times, continuing a downward trend.
- USAC reaffirmed its financial guidance for the full year 2024, indicating confidence in its financial performance and strategic direction.
- Cash interest expenses increased by approximately $0.5 million sequentially due to higher average outstanding borrowings.
- The company faced increased costs associated with the conversion of idle units to active status, impacting capital expenditures.
- Expansion capital expenditures for the full year 2024 were increased due to higher costs related to preparing active compression units for redeployment.
- The company is nearing the end of available large horsepower units, indicating potential limitations in meeting future demand without additional investments.
- There is uncertainty regarding the impact of the Energy Transfer Shared Services Model on future operations and costs, with more details expected in future quarters.
Good morning. Welcome to USA Compression Partners' third quarter 2024 earnings conference call. During today's call, all parties will be in listen-only mode. At the conclusion of management prepared remarks, the call will be open for Q&A. (Operator Instructions). This conference is being recorded today, November 5, 2024.
I now would like to turn the call over to Chris Porter, Vice President, General Counsel, and Secretary.
Good morning, everyone, and thank you for joining us. This morning, we released our operational and financial results for the quarter ending September 30, 2024. You can find a copy of our earnings release as well as a recording of this call in the investor relations section of our website at usacompression.com.
During this call, our management will reference certain non-GAAP measures. You will find definitions and reconciliations of these non-GAAP measures to the most comparable US GAAP measures in our earnings release.
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