Kodiak Gas Services, Inc. (NYSE: KGS)

Kodiak Gas Services, Inc. operates as a leading provider and operator of large horsepower contract compression infrastructure in the U.S. The company supports the critical movement and processing of natural gas across key production regions through its wholly-owned subsidiary, Kodiak Services, established in 2011. Kodiak Gas Services completed its initial public offering on July 3, 2023, and its common stock is currently trading on the New York Stock Exchange under the ticker symbol KGS. The company's business model is centered on long-term customer relationships, operational excellence, and disciplined capital deployment, positioning it to deliver stable performance while supporting the essential infrastructure needs of the domestic energy industry.

Kodiak Gas Services generates revenue through two primary segments: Contract Services and Other Services. Contract Services involve operating company-owned and customer-owned compression and gas treating and cooling infrastructure to enable the production, gathering, processing, and transportation of natural gas and oil. This segment is critical to the company's customers' ability to reliably produce, gather, and transport natural gas and oil. The Other Services segment consists of a broad range of services to support the needs of customers, including station construction, customer-owned compression maintenance and overhaul, freight and crane charges, parts sales, and other ancillary time and material-based offerings. These services are often cross-sold with Contract Services, bolstering cash flow generation with no associated capital expenditures.

• Contract Services: This segment focuses on operating large horsepower compression units under fixed-revenue term contracts with upstream and midstream customers. The company's fleet includes both high-quality, large and medium & small horsepower units, serving as essential infrastructure in high-volume gas gathering systems, processing facilities, multi-well gas lift applications, and natural gas transmission systems. The horsepower provided by the fleet is characterized by a focus on large horsepower compression units, which align with the evolving industry demand for such units. Large horsepower compression units enable multi-well pad development, reduce downtime, improve overall unit economics, and provide lower emissions per horsepower relative to small horsepower compression units. Fleet standardization and continued geographic concentration allow the company to lower its cost of operations and improve margins through economies of scale.

• Other Services: This segment offers a broad range of services to support the needs of customers, including station construction, customer-owned compression maintenance and overhaul, freight and crane charges, parts sales, and other ancillary time and material-based offerings. These services are often cross-sold with Contract Services, enhancing cash flow generation without requiring additional capital expenditures.

Kodiak Gas Services holds a strong position within the contract compression industry, particularly in the Permian Basin, which is the largest producing natural gas and oil basin in the U.S. The company's focus on large horsepower compression units, which serve more stable applications, receive longer initial contracts, are more likely to be renewed, and produce higher margins, ultimately generating recurring cash flow and return on invested capital. The company's customer-centric business model positions it as the preferred contract compression operator for its customers, creating long-standing relationships. Additionally, Kodiak Gas Services maintains an intense focus on being one of the most sustainable and responsible operators of contract compression infrastructure, further enhancing its competitive advantage.

The company's customer base consists of leading upstream and midstream customers in key areas of operation. Kodiak Gas Services has established long-term commercial relationships with these customers, prioritizing mechanical availability and maintaining a consistently high level of mechanical availability to support customer uptime and contribute to stable revenue generation. The company's systematic and selective customer evaluation process considers factors such as customers' creditworthiness, size, and geological asset quality. For the years ended December 31, 2025, 2024, and 2023, the four largest customers accounted for approximately 32%, 32%, and 33%, respectively, of the company's total revenues. Each of these customers is a S&P 500 constituent and investment grade-rated upstream or midstream company active in the Permian Basin.