Archrock, Inc. (NYSE:AROC) Q2 2022 Results Conference Call August 3, 2022 9:00 AM ET

Company Participants

Megan Repine - VP, IR

Brad Childers - President & CEO

Doug Aron - CFO

Conference Call Participants

TJ Schultz - RBC Capital Markets

Tim O’Toole - Stifel

Operator

Good morning, welcome to the Archrock Second Quarter 2022 Conference Call. Your host for today is Megan Repine, Vice President of Investor Relations at Archrock.

I will now turn the call over to Ms. Repine. You may begin.

Megan Repine

Thank you, Brent. Hello, everyone, and thanks for joining us on today’s call. With me today are Brad Childers, President and Chief Executive Officer of Archrock; and Doug Aron, Chief Financial Officer of Archrock.

Yesterday, Archrock released its financial and operating results for the second quarter 2022. If you have not received a copy, you can find the information on the company’s website at www.archrock.com. During the call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 based on our current lease and expectations as well as assumptions made by and information currently available to Archrock’s management team.

Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

In addition, our discussion today will reference certain non-GAAP financial measures, including adjusted EBITDA, gross margin, gross margin percentage, free cash flow, free cash flow after dividend, and cash available for dividend. For reconciliations of these non-GAAP financial measures to our GAAP financial results, please see yesterday’s press release and our Form 8-K furnished to the SEC.

I’ll now turn the call over to Brad to discuss Archrock’s second quarter results and to provide an update of our business.

Brad Childers

Thank you, Megan, and good morning, everyone. During the second quarter, we continued to see a significant acceleration of customer activity and a strengthening of supply-demand dynamics for large midstream compression. Our focus in the quarter was converting this growing customer demand into high-return bookings, delivering profitable growth and maintaining capital discipline.

Second quarter highlights include that we generated adjusted EBITDA of $99 million, reflecting solid underlying business performance that was generally in line with our internal expectations. In addition, quarterly results benefited from a net gain on the sale of assets as we continue to advance our fleet high-grading strategy.