Archrock, Inc. (NYSE: AROC)

Archrock, Inc. is an energy infrastructure company primarily focused on midstream natural gas compression. The company owns and operates a fleet of 5,319 compression units with a total rated horsepower of 4,788,000 as of December 31, 2025. This fleet provides essential compression services that enable the production, processing, transportation and storage of natural gas across the United States. Archrock serves customers by delivering both contract operations and aftermarket support to maintain reliable gas flow. The company emphasizes safety and environmental responsibility in all of its operations.

Revenue is generated through two main streams. The contract operations business supplies personnel, equipment and services to customers who outsource their compression needs and accounted for approximately 85% of total revenue in 2025. Under these agreements Archrock receives a fixed monthly fee based on the horsepower of the equipment placed at a customer site and provides turnkey service including installation, operation, maintenance and repair. The aftermarket services business sells parts and components and provides maintenance, overhaul and reconfiguration for customer owned equipment contributing approximately 15% of total revenue in 2025. The company serves a broad base of oil and natural gas producers, processors, gatherers and transporters located in major producing regions. These fee based arrangements help reduce volatility in earnings by providing predictable monthly cash inflows.

The company operates through the following segments: Contract Operations and Aftermarket Services.

• Contract Operations: This segment designs, sources, owns, installs, operates, services, repairs and maintains the company owned fleet of natural gas compression equipment to provide compression services to customers.

• Aftermarket Services: This segment provides operations, maintenance, overhaul, reconfiguration and sales of parts and components to support the compression needs of customers that own compression equipment.

Archrock holds a leading position in the U. S. natural gas compression market as measured by total compression fleet horsepower. The company reports that 74% of its operating horsepower comes from units exceeding 1,000 horsepower per unit, giving it a scale advantage over peers. Competitive strengths include a strong safety record with a 2025 total recordable incident rate of 0.22, a large and stable customer base, fee based cash flows, a diversified geographic footprint across 41 states and a long operating history that supports technical expertise and reliable service. The firm competes with other national and regional compression service providers but differentiates itself through its specialized focus on large horsepower equipment and its ability to provide integrated contract and aftermarket services.

The company's customer base consists of companies engaged in all aspects of the oil and natural gas industry including large integrated and independent oil and natural gas processors, gatherers and transporters. Archrock states that its five largest customers together accounted for approximately 35% of total revenue in 2025 and no single customer represented more than 10% of consolidated revenue. The firm maintains relationships with roughly 300 customers spread across all major U. S. natural gas and crude oil producing regions. Contract operations agreements typically have initial terms ranging from 12 to 36 months with many extending on a month to month basis thereafter, contributing to stable and predictable cash flows.