Q2 2026 USA Compression Partners LP Earnings Call Transcript
Key Points
- USA Compression Partners LP (USAC) reported a 37% year-over-year increase in total revenues to $342.1 million, driven by the J-W acquisition and higher average revenue per horsepower.
- The company has secured approximately 50% of new units scheduled for delivery in 2027 and mid-teens percentage for 2028, reflecting strong customer demand and long-term planning.
- USA Compression Partners LP (USAC) maintains a strong leverage ratio of 3.72 times, just below its target, with ample liquidity under its ABL at a low interest rate.
- The company's in-house manufacturing capabilities through J-W provide flexibility in managing capital exposure and reducing lead times, differentiating it from peers.
- USA Compression Partners LP (USAC) is investing in telemetry and AI to improve operational efficiency, with expectations of meaningful benefits starting in 2027.
- The company has a clear growth plan to add over 500,000 horsepower by 2030, with 2.5% average annual growth, supported by strong customer conviction in natural gas demand.
- USA Compression Partners LP (USAC) expects incremental lube oil costs of approximately $1 million per month in the second half of 2026, with no direct pass-through in contracts.
- The company's adjusted gross margin percentage declined to 63.5% in Q2, impacted by the J-W acquisition's mix and integration costs.
- Elevated stops in Q2 and a blended utilization rate of 92% reflect the ongoing integration of J-W's fleet, which may pressure near-term operational performance.
- New engine lead times remain extended at up to 200 weeks, creating uncertainty in planning and potential delays in meeting customer demand.
- The company's distribution growth is not a current priority, as excess cash flow is directed toward fleet expansion, potentially limiting near-term unitholder returns.
- Debt markets have pulled back, and the company is being patient on refinancing, which could limit financial flexibility if market conditions worsen.
Good morning. Welcome to USA Compression Partners' second-quarter 2026 earnings conference call. (Operator Instructions) This conference is being recorded today, August 4, 2026.
I now would like to turn the call over to Clint Green, President and Chief Executive Officer
Good morning, everyone. Thank you for joining us. With me today is Chris Paulsen, Senior Vice President and CFO; Chris Wauson, Senior Vice President and COO; and other members of our leadership team. This morning, we released our operational and financial results for quarter ending June 30, 2026.
Today's call will contain forward-looking statements based on our current beliefs and certain non-GAAP measures. Please refer to our earnings release and SEC filings for reconciliations and definitions of non-GAAP measures and related risk factors.
I am excited about the progress we continue to make as a leading contract compression provider across the US. In the second quarter, we strengthened
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