What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-25 · 114 added, 92 removed, 249 unchanged (45% of the section changed)

6 unchanged sentences

For a discussion of changes from 2023 to 2024 and other financial information related to 2024, refer to Part II, Item 7.

“Manag Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10–K for the year ended December 31, 2024 filed with the SEC on February 25, 2025.

We are an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping our customers produce, compress and transport natural gas in a safe and environmentally responsible way.

We are a premier provider of natural gas compression services to customers in the energy industry throughout the U.S., and a leading supplier of aftermarket services to customers that own compression equipment in the U.S.

We are a premier provider of natural gas compression services, in terms of total compression fleet horsepower, to customers in the energy industry throughout the U.S., and a leading supplier of aftermarket services to customers that own compression equipment in the U.S.

We operate in two business segments:

contract operations and aftermarket services.

Our contract operations services primarily include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining our owned fleet of natural gas compression equipment to provide natural gas compression services to our customers.

In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment.

Our contract operations business primarily includes designing, sourcing, owning, installing, operating, servicing, repairing and maintaining our owned fleet of natural gas compression equipment to provide natural gas compression services to our customers.

Our aftermarket services business provides a full range of services to support the compression needs of our customers that own compression equipment, including operations, maintenance, overhaul and reconfiguration services and sales of parts and components.

Significant 2025 Transactions

TOPS Acquisition

On August 30, 2024, we completed the TOPS Acquisition whereby we acquired all of the issued and outstanding equity interests in TOPS, including a fleet of approximately 580,000 horsepower for aggregate consideration consisting of $868.7 million in cash and approximately 6.9 million shares of common stock with an acquisition date fair value of $139.1 million.

The cash portion of the purchase price was funded with proceeds from the July 2024 Equity Offering, the 2032 Notes offering and borrowings under the Credit Facility.

See Note 4 (“Business Transactions”) for further details.

On August 26, 2024, we completed a private offering of $700.0 million aggregate principal amount of 6.625% senior notes due September 2032 and received net proceeds of $690.0 million after deducting issuance costs.

The $10.0 million of issuance costs were recorded as deferred financing costs within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statement of operations over the term of the notes.

A portion of the net proceeds was used to fund a portion of the cash consideration for the TOPS Acquisition, the 2027 Notes Tender Offer and to repay borrowings outstanding under our Credit Facility.

See Note 16 (“Long-Term Debt”) for further details.

2027 Notes Tender Offer

In connection with the TOPS Acquisition and offering of the 2032 Notes, we completed a concurrent cash tender offer of $202.0 million, which reflects approximately 101% of the aggregate principal amount of the tendered 2027 Notes and $0.2 million of agent and legal fees.

On the date of tender, the net carrying value of the tendered 2027 Notes was $198.8 million and we recorded a debt extinguishment loss of $3.2 million in our consolidated statements of operations.

Third Amendment to the Amended and Restated Credit Agreement

On December 12, 2025, we amended our Amended and Restated Credit.

We did not incur any transaction costs related to the Third Amendment to the Amended and Restated Credit Agreement.

See Note 15 (“Long-Term Debt”) for further details.

July 2024 Equity Offering

On July 24, 2024, Archrock sold, pursuant to a public underwriting offering, approximately 12.7 million shares of common stock, including approximately 1.7 million shares of common stock pursuant to an over-allotment option.

Archrock received net proceeds of $255.7 million, after deducting underwriting discounts, commissions and offering expenses.

Proceeds from this equity offering were used to fund a portion of the TOPS Acquisition.

See Note 18 (“Stockholders’ Equity”) for further details.

2027 Notes Redemption

On November 17, 2025, we repurchased our 2027 Notes.

The 2027 Notes were redeemed at 100% of their $300.0 million aggregate principal amount plus accrued and unpaid interest of approximately $2.6 million with borrowings under the Credit Facility.

We recorded a debt extinguishment loss of $0.9 million related to unamortized debt issuance costs during the fourth quarter of 2025.

Flowco Disposition

On August 1, 2025, we completed the sale of certain contract operations customer agreements and approximately 155 compressors, comprising approximately 47,000 horsepower, used to provide compression services under those agreements along with other supporting assets.

Goodwill, customer-related intangible assets and deferred revenue were allocated based on a ratio of the horsepower sold relative to the total horsepower of the asset group.

See Note 4 (“Business Transactions”) for further details.

NGCS Acquisition

On May 1, 2025, we completed the NGCS Acquisition, whereby we acquired all of the issued and outstanding equity interests in NGCS, including a fleet of approximately 326,000 operating horsepower and an 18,000 horsepower backlog of contracted new equipment, for aggregate total consideration of $349.4 million.

Total consideration consisted of $296.5 million in cash, of which we paid $265.1 million to NGCSI sellers and $31.4 million to NGCSE sellers, and approximately 2.3 million shares of common stock issued to NGCSE sellers with an NGCS acquisition date fair value of $53.0 million.

The cash portion of the purchase price was funded with borrowings under the Credit Facility.

See Note 4 (“Business Transactions”) for further details.

Trends and Outlook

14 unchanged sentences

natural gas and oil production grew to record levels, resulting in strong demand for our compression services.

In response, we increased our investment in new large horsepower fleet units and expanded our fleet through the TOPS Acquisition.

Our contract operations revenue and total operating horsepower increased 21% and 17%, respectively in 2024.

In response, we increased our investment in new large horsepower fleet units and expanded our fleet through the NGCS Acquisition.

Our contract operations revenue and period-end total operating horsepower increased 30% and 8%, respectively, in 2025.

The EIA Outlook forecasts the following year–over–year changes:

5 unchanged sentences

The EIA Outlook expects natural gas production to continue to increase to all-time highs in 2026 and 2027.

Natural gas consumption is expected to be largely consistent with 2024, reflecting consistent usage of natural gas in the electric power generation and residential sectors, as well as increased LNG exports and exports of natural gas via pipeline to Mexico.

Natural gas consumption is expected to be largely consistent with 2025, reflecting consistent usage of natural gas in the electric power sector, as well as increased LNG exports and exports of natural gas via pipeline to Mexico, offset by lower industrial, residential, and commercial demand.

We believe the outlook for the energy industry in the U.S.

While we anticipate that the combination of commodity prices and demand may likely have a positive impact on activity levels in both the upstream and midstream sectors, we cannot predict the ultimate magnitude of that impact on our business and expect it to be varied across our operations, depending on the region, customer, nature of our services, contract term and other factors.

While we anticipate that the combination of natural gas prices and demand may likely have a positive impact on activity levels in both the upstream and midstream sectors, we cannot predict the ultimate magnitude of that impact on our business and expect it to be varied across our operations, depending on the region, customer, nature of our services, contract term and other factors.

However, we continue to believe that overall the long–term demand for our compression services will continue given the necessity of compression in facilitating the transportation and processing of natural gas.

8 unchanged sentences

Cost Management .

In order to improve our operations and further reduce operating expenses, we invested and continue to invest significant resources into a process and technology transformation project that has, among other things, replaced our former ERP, supply chain and inventory management systems and expanded the remote monitoring capabilities of our compression fleet.

In order to improve our operations and further reduce operating expenses, we continue to invest significant resources into process and technology transformation that has, among other things, enhanced certain technology, supply chain and inventory management systems, replaced network infrastructure and expanded the remote monitoring capabilities of our compression fleet.

Cost management continues to be challenging, however, and there is no guarantee that our efforts will result in a reduction in our operating expenses.

1 unchanged sentence

Further, we depend on suppliers for the materials, parts, equipment and lube oil necessary to our operations, which exposes us to volatility in prices.

Significant price increases for these inputs could adversely affect our operating profits.

Significant price increases for these inputs, as a result of inflation, tariffs, or otherwise, could adversely affect our operating profits.

Supply chain disruptions could also adversely affect our ability to obtain, or increase the cost of, such items.

While we generally attempt to mitigate the impact of increased prices through strategic purchasing decisions, diversification of our supplier base, where possible, and the passing along of increased costs to customers, there may be a time delay between the increased commodity prices and the ability to increase the price of our services.

Capital Requirements and the Availability of External Sources of Capital.

We funded a significant portion of our capital expenditures and the TOPS Acquisition with proceeds from the July 2024 Equity Offering and the 2032 Notes offering and borrowings under the Credit Facility.

Current conditions could limit our ability to access the debt and equity markets to raise capital on affordable terms in 2025 and beyond.

Capital Requirements, Availability of Capital Equipment and the Availability of External Sources of Capital.

We funded a significant portion of our capital expenditures, the NGCS Acquisition and the 2027 Notes Redemption with borrowings under the Credit Facility.

While we have successfully raised capital historically, and most recently in January 2026 with the issuance of the 2034 Notes, there is no guarantee in our ability to access the debt and equity markets to raise capital on affordable terms in 2026 and beyond.

Additionally, extended lead times for newly fabricated equipment can increase near-term capital needs and create timing inconsistency between funding availability and capital expenditures.

If we are not successful in raising capital within the time period required or at all, we may not be able to fund these capital expenditures or acquisitions, which could impair our ability to grow or maintain our business.

2 unchanged sentences

Although the EIA currently forecasts natural gas demand will grow through 2050, technological advances and accelerated adoption of renewable sources of energy could reduce demand for natural gas in our markets and have an adverse effect on our business.

In addition, increased focus of our customers on reducing emissions from, or the use of, combustion engines in compression could increase demand for electric motor-driven compressors or require us to make modifications to our existing natural gas-powered units.

In addition, increased focus of our customers on reducing emissions from, or the use of, combustion engines in compression could increase demand for electric compressors or require us to make modifications to our existing natural gas-powered units.

Operating Highlights

9 unchanged sentences

(2) Defined as horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue.

(3) Defined as average of period end horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue, including operating horsepower as of September 30, 2024 through December 31, 2024 for compressors acquired in the TOPS Acquisition.

(3) Defined as average of period end horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue, including operating horsepower for the compressors acquired in the NGCS Acquisition beginning May 1, 2025 through December 31, 2025 and for the compressors acquired in the TOPS Acquisition beginning September 30, 2024 through December 31, 2025.

Non–GAAP Financial Measures

5 unchanged sentences

In addition, depreciation and amortization may not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs of current operating activity.

As an indicator of our operating performance, adjusted gross margin should not be considered an alternative to, or more meaningful than, gross margin, net income (loss) or any other measure presented in accordance with GAAP.

As an indicator of our operating performance, adjusted gross margin should not be considered an alternative to, or more meaningful than, gross margin, net income or any other measure presented in accordance with GAAP.

Our adjusted gross margin may not be comparable to a similarly titled measure of other entities because other entities may not calculate adjusted gross margin in the same manner.

Adjusted gross margin has certain material limitations associated with its use as compared to net income.

These limitations are primarily due to the exclusion of SG&A, depreciation and amortization, long-lived and other asset impairments, restructuring charges, debt extinguishment loss, interest expense, transaction-related costs, gain on sale of assets, net, other expense (income), net and provision for income taxes.

These limitations are primarily due to the exclusion of SG&A, depreciation and amortization, long-lived and other asset impairment, restructuring charges, debt extinguishment loss, interest expense, transaction-related costs, gain on sale of assets, net, other expense, net, provision for income taxes and equity in net loss of unconsolidated affiliate.

Because we intend to finance a portion of our operations through borrowings, interest expense is a necessary element of our costs and our ability to generate revenue.

12 unchanged sentences

Gain on sale of assets, net

Other expenses, net

Other expense, net

Provision for income taxes

Equity in net loss of unconsolidated affiliate

Adjusted gross margin

The following table reconciles adjusted gross margin to gross margin, its most directly comparable to GAAP measure:

The following table reconciles gross margin to adjusted gross margin, its most directly comparable to GAAP measure:

Year Ended December 31,

8 unchanged sentences

Revenue was $1,489.8 million and $1,157.6 million during the years ended December 31, 2025 and 2024, respectively.

The increase in revenue was primarily due to increased revenue from our contract operations business.

See “Contract Operations” below for further details.

The increase in revenue was due to increased revenue from our contract operations business and aftermarket services business.

See “Contract Operations” and “Aftermarket Services” below for further details.

Net income was $322.3 million and $172.2 million during the years ended December 31, 2025 and 2024, respectively.

The increase was primarily driven by higher adjusted gross margin from our contract operations business and higher gain on sale of assets, net.

These increases were partially offset by increases in depreciation and amortization, provision for income taxes, SG&A, transaction-related costs, interest expense and debt extinguishment loss.

The increase was primarily driven by higher adjusted gross margin from both our contract operations business and aftermarket services business, as well as an increase in gain on sale of assets and a reduction in debt extinguishment loss.

These increases were partially offset by increases in depreciation and amortization, interest expense, provision for income taxes, SG&A and long-lived and other asset impairment.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

6 unchanged sentences

(1) Defined as adjusted gross margin divided by revenue.

Revenue in our contract operations business increased approximately $105.6 million due to higher rates and an increase in average operating horsepower, as well as an increase of $65.5 million due to the compression units acquired in the TOPS Acquisition.

The increase in cost of sales, exclusive of depreciation and amortization, was primarily due to a $17.9 million increase in employee compensation, including the addition of headcount from the TOPS Acquisition, a $4.1 million increase in parts expense, a $1.4 million increase in auto expense and a $1.3 million increase in local and miscellaneous taxes.

This increase was partially offset by a decrease of $6.6 million in startup expenses resulting from average horsepower utilization for the fleet at record levels as well as fewer unit stops and a decrease of $2.9 million in lube oil expenses mainly due to lower prices.

Revenue in our contract operations business increased approximately $291.7 million, due primarily to the compression units acquired in the TOPS Acquisition and in the NGCS Acquisition, higher rates and an increase in average operating horsepower.

The increase in cost of sales, exclusive of depreciation and amortization, was primarily due to a $37.3 million increase in employee compensation, including the addition of headcount from the TOPS Acquisition and the NGCS Acquisition, and a $17.1 million increase in parts expense due to compression units acquired in the TOPS Acquisition and the NGCS Acquisition, as well as an increase in operating horsepower.

These increases were partially offset by a net benefit of $35.0 million as a result of certain sales and use tax audit settlements and credits and a decrease of $3.1 million in lube oil expenses mainly due to lower prices.

The increases in adjusted gross margin and adjusted gross margin percentage were mainly driven by revenue growth that outpaced the increase in cost of sales, exclusive of depreciation and amortization.

6 unchanged sentences

(1) Defined as adjusted gross margin divided by revenue.

Revenue in our aftermarket services business decreased primarily due to lower parts sales, which was partially offset by increased service activity driven by higher customer demand, and an increase in maintenance service contracts.

The increases in adjusted gross margin and adjusted gross margin percentage were mainly due to a reduction in cost of sales, exclusive of depreciation and amortization, due to a difference in the scope, timing and type of services performed, including additional work associated with maintenance service contracts, which outpaced the decline in overall revenue.

Revenue in our aftermarket services business increased primarily due to increased service activity driven by higher customer demand, an increase in maintenance service contracts and higher parts sales, including the non-recurring sale of overhauled engines.

The increase in cost of sales, exclusive of depreciation and amortization, was driven by increased activity, including differences in the scope, timing and type of services performed.

Costs and Expenses

11 unchanged sentences

Selling, general and administrative.

The increase in SG&A was primarily driven by a $17.2 million increase in employee incentive and other compensation expense, a $2.4 million increase in professional and consulting fees, a $0.8 million increase in network and computer-related costs and a $0.7 million increase in insurance expense.

The increase in SG&A was primarily driven by a $8.0 million increase in employee compensation and benefits expense, a $2.0 million increase in professional fees, a $1.7 million increase in information technology expense and a $1.4 million increase in insurance expense.

These increases were partially offset by a $4.9 million decrease in long-term performance-based incentive compensation expense.

Depreciation and amortization.

The increase in depreciation and amortization was primarily due to fixed assets additions, including $15.8 million depreciation and amortization associated with the compression units and intangible assets acquired in the TOPS Acquisition, and accelerated depreciation associated with certain assets.

The increase was partially offset by a decrease in depreciation associated with assets reaching the end of their depreciable lives, the impact of compression and other asset sales, and long-lived asset impairments.

The increase in depreciation and amortization was primarily due to fixed assets additions, including depreciation and amortization associated with the compression units and intangible assets acquired in the TOPS Acquisition and the NGCS Acquisition.

The increase was partially offset by a decrease in depreciation associated with assets reaching the end of their depreciable lives as well as compression and other asset sales.

Long–lived and other asset impairment.

The increase in long-lived and other asset impairment was primarily due to remeasurement of assets in connection with the Flowco Disposition of $9.6 million.

See Note 4 (“Business Transactions”) for further details.

This increase was partially offset by a decrease of $2.0 million in compression fleet impairment.

We periodically review the future deployment of our idle compressors for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate.

We also evaluate for impairment our idle units that have been culled from our compression fleet in prior years and are available for sale.

During the years ended December 31, 2024 and 2023, we recognized $10.7 million and $12.0 million, respectively, of impairment charges to write down these compressors to their fair value.

The decrease in impairment charges on compressors is due to an increase in customer demand and as a result, higher utilization of our equipment.

See Note 22 (“Long-Lived Asset and Other Impairments”) for further details on these impairment charges.

See Note 21 (“Long-Lived Asset and Other Impairment”) for further details.

The following table presents the results of our compression fleet impairment review, as recorded in our contract operations segment:

5 unchanged sentences

Restructuring charges .

Restructuring charges of $1.8 million during the year ended December 31, 2023 consisted of severance and consulting costs related to our restructuring activities.

See Note 23 (“Restructuring Charges”) for further details on these restructuring charges.

Restructuring charges of $1.6 million during the year ended December 31, 2025 consisted of s everance and property disposal as well as consolidation and closure costs .

See Note 22 (“Restructuring Charges”) for further details.

Debt extinguishment loss.

We incurred $3.2 million of debt extinguishment loss during the year ended December 31, 2024 as a result of the 2027 Notes Tender Offer.

We incurred $0.9 million of debt extinguishment loss during the year ended December 31, 2025 as a result of the 2027 Notes Redemption compared to $3.2 million during the year ended December 31, 2024 as a result of the 2027 Notes Tender Offer.

Interest expense.

The increase in interest expense was primarily due to a higher average outstanding balance of long-term debt due to the 2032 Notes offering, an increase in the outstanding balance on the Credit Facility and higher interest rates.

These increases were partially offset by the 2027 Notes Tender Offer and the write-off of $1.0 million of unamortized deferred financing costs as a result of the Amended and Restated Credit Agreement during the year ended December 31, 2023.

The increase in interest expense was primarily due to a higher average outstanding balance of long-term debt primarily due to the 2032 Notes and borrowings under our Credit Facility to fund cash consideration of the TOPS Acquisition and the NGCS Acquisition.

These increases were partially offset by the 2027 Notes Redemption, the 2027 Notes Tender Offer and a decrease in the weighted average effective interest rate.

Transaction-related costs.

We incurred $13.2 million of professional fees, compensation-related and other costs during the year ended December 31, 2024 related to the TOPS Acquisition.

See Note 4 (“Business Transactions”) for further details on these transaction-related costs.

We incurred $9.1 million of professional fees, compensation and other costs related to the NGCS Acquisition during the year ended December 31, 2025, and we incurred $3.6 million and $13.2 million of professional fees, compensation and other costs related to the TOPS Acquisition during the years ended December 31, 2025 and 2024, respectively.

See Note 4 (“Business Transactions”) for further details .

Gain on sale of assets, net.

1 unchanged sentence

Other expense, net.

The increase in other expense, net was primarily due to a $0.5 million increase in unrealized change in the fair value of our investment in an unconsolidated affiliate recognized during the year ended December 31, 2024, compared to the year ended December 31, 2023.

The decrease in other expense, net was primarily due to an increase in proceeds from insurance and other settlements and a decrease in unrealized change in the fair value of our investment in an unconsolidated affiliate recognized during the year ended December 31, 2025, compared to the year ended December 31, 2024.

These changes were partially offset by a limited liability agreement amendment fee of $3.6 million paid to FGC Holdco, see Note 27 (“Related Party Transactions”) for further details.

Provision for Income Taxes

The increase in provision for income taxes was primarily due to the tax effect of the increase in book income and the limitation on executive compensation offset by the benefit from equity-settled long-term incentive compensation during the year ended December 31, 2024, compared to the year ended December 31, 2023.

The increase in provision for income taxes was primarily due to the tax effect of the increase in book income during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Year Ended December 31,

3 unchanged sentences

LIQUIDITY AND CAPITAL RESOURCES

Our ability to fund operations, finance capital expenditures and pay dividends depends on the levels of our operating cash flows and access to the capital and credit markets.

Our ability to fund operations, finance capital expenditures, fund share repurchases and pay dividends depends on the levels of our operating cash flows and access to the capital and credit markets.

Our primary sources of liquidity are cash flows generated from our operations and our borrowing availability under our Credit Facility.

Our cash flow is affected by numerous factors, including prices and demand for our services, oil and natural gas exploration and production spending, conditions in the financial markets and other factors.

We have no near-term maturities and believe that our operating cash flows and borrowings under the Credit Facility will be sufficient to meet our future liquidity needs.

We have no near-term maturities and believe that our operating cash flows and borrowings under the Credit Facility will be sufficient to meet our liquidity needs in the next twelve months and beyond.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt securities in open market purchases, privately negotiated transactions or otherwise.

15 unchanged sentences

These expenditures substantially modify the operating parameters of the compression package such that it can be used in applications for which it previously was not suited.

Growth capital expenditures for the year ended December 31, 2024 were $250.9 million, including TOPS’ specific growth capital expenditures of $69.4 million.

Growth capital expenditures for the year ended December 31, 2023 were $190.3 million.

Growth capital expenditures were $347.7 million and $250.9 million for the years ended December 31, 2025 and 2024, respectively.

Maintenance Capital Expenditures.

1 unchanged sentence

Maintenance capital expenditures were $110.7 million and $87.8 million during the years ended December 31, 2025 and 2024, respectively.

The decrease in maintenance capital expenditures from 2023 to 2024 was primarily due to lower make–ready investment, as our fleet’s average horsepower utilization reached record levels, and we experienced fewer stops in 2024 compared to 2023.

This decrease was partially offset by an increase in scheduled and unscheduled maintenance activities due to maintenance cycle requirements.

The increase in maintenance capital expenditures was primarily due to an increase in scheduled and unscheduled maintenance activities due to maintenance cycle requirements and the addition of the compression units acquired in the NGCS Acquisition and the TOPS Acquisition, partially offset by lower make–ready investment.

Projected Capital Expenditures.

We currently plan to spend approximately $400 million to $445 million on capital expenditures during 2026, primarily consisting of approximately $250 million to $275 million for growth capital expenditures and approximately $125 million to $135 million for maintenance capital expenditures.

On January 30, 2025, our Board of Directors declared a quarterly dividend of $0.19 per share of common stock, or approximately $33.5 million, which was paid on February 19, 2025 to stockholders of record at the close of business on February 12, 2025.

Returning Capital to Stockholders

We continue to return capital to stockholders through quarterly dividends and share repurchases.

On January 29, 2026, our Board of Directors declared a quarterly dividend of $0.22 per share of common stock, which was paid on February 18, 2026 to stockholders of record at the close of business on February 10, 2026.

Any future determinations to pay cash dividends to our stockholders will be at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, and credit and loan agreements in effect at that time and other factors deemed relevant by our Board of Directors.

In October 2025, our Board of Directors approved an additional increase to our Share Repurchase Program of $100.0 million through December 31, 2026, and as of December 31, 2025, available capacity under the Share Repurchase Program was $117.7 million.

The actual number of shares repurchased will depend on prevailing market conditions, alternative uses of capital and other factors, and will be determined at management’s discretion.

2027 Notes Redemption

On November 17, 2025, we repurchased our 2027 Notes.

The 2027 Notes were redeemed at 100% of their $300.0 million aggregate principal amount plus accrued and unpaid interest of approximately $2.6 million with borrowings under the Credit Facility.

We recorded a debt extinguishment loss related to unamortized debt issuance costs of $0.9 million during the fourth quarter of 2025.

Contractual Obligations

1 unchanged sentence

• Long–term debt of $2.4 billion, all of which is due in 2028 and 2032;

• Estimated interest on our long–term debt of $666.1 million, consisting of annual payments of approximately $147.1 million in 2025 and 2026, approximately $131.7 million in 2027, approximately $70.1 million in 2028, approximately $46.4 million in 2029, and approximately $123.7 million thereafter;

• Purchase commitments of $341.1 million, of which $337.5 million is due in 2025, that primarily consist of commitments to purchase fleet assets;

• Operating lease payments of $18.9 million, consisting of annual payments of approximately $4.6 million in 2025, approximately $4.0 million in 2026, approximately $3.0 million in 2027, approximately $2.5 million in 2028 and 2029, and approximately $2.3 million thereafter.

• Estimated interest on our long–term debt of $551.8 million, consisting of annual payments of approximately $151.2 million in 2026 and 2027, approximately $79.3 million in 2028, annual payments of approximately $46.4 million in 2029 and 2030, and approximately $77.3 million thereafter;

• Purchase commitments of $251.4 million, of which $244.6 million is due in 2026, and primarily consists of commitments to purchase fleet assets;

• Operating lease payments of $16.4 million, consisting of annual payments of approximately $4.7 million in 2026, approximately $3.7 million in 2027, approximately $2.9 million in 2028, approximately $2.8 million in 2029, approximately $1.9 million in 2030, and approximately $0.4 million thereafter.

In addition, we had $31.3 million of unrecognized tax benefits (including discontinued operations) recorded as liabilities related to uncertain tax positions at December 31, 2025, which are uncertain as to if or when such amounts may be settled.

1 unchanged sentence

Sources of Cash

Revolving Credit Facility

Credit Facility

On December 12, 2025, we amended our Amended and Restated Credit Agreement to, among other things, remove the 0.10% per annum credit spread adjustment that was previously included in the calculation of the interest rate applicable to the loans made under the Credit Facility, decrease the applicable margin for all borrowings by 0.25% per annum such that the applicable margin for borrowings varies and decrease the commitment fee payable on the daily unused amount of the Credit Facility from 0.375% per annum to 0.25% per annum when less than 50% of the Credit Facility is utilized.

On May 16, 2025, we amended our Amended and Restated Credit Agreement to, among other things, increase the borrowing capacity of the Credit Facility from $1.1 billion to $1.5 billion and provide for the ability for the borrowers to request additional increases in the aggregate commitments under the Credit Facility to a total amount not to exceed $2.3 billion (with any increase being at the discretion of the lenders and subject to the satisfaction of certain conditions set forth in the Amended and Restated Credit Agreement).

During the years ended December 31, 2025 and 2024, our Credit Facility had an average daily balance of $713.8 million and $315.0 million, respectively.

1 unchanged sentence

As of December 31, 2025, there were $3.0 million of letters of credit outstanding under the Credit Facility and the applicable margin on borrowings outstanding was 2.0%.

We amended and restated our Credit Facility on May 16, 2023;

see Note 16 (“Long-Term Debt”) to our Financial Statements for details on the Amended and Restated Credit Agreement.

Credit Facility Terms.

Our Credit Facility matures on May 16, 2028 (or December 2, 2026 or December 3, 2027, as applicable, if any portion of our 2027 Senior Notes and 2028 Senior Notes, respectively, remain outstanding at such date) and has an aggregate revolving commitment of $1.1 billion.

Our Credit Facility matures on May 16, 2028 (or December 3, 2027 if any portion of our 2028 Notes remain outstanding at such date) and has an aggregate revolving commitment of $1.5 billion.

Portions of the Credit Facility, up to $110.0 million, are available for the issuance of swing line loans and $50.0 million is available for the issuance of letters of credit.

1 unchanged sentence

The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors.

Our Amended and Restated Credit Agreement requires that we meet certain financial ratios (see Note 16 (“Long-Term Debt”)) and contains various additional covenants including, but not limited to, mandatory prepayments from the net cash proceeds of certain asset transfers, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens, repurchase equity and pay distributions.

Our Amended and Restated Credit Agreement requires that we meet certain financial ratios and contains various additional covenants including, but not limited to, mandatory prepayments from the net cash proceeds of certain asset transfers, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens, repurchase equity and pay distributions.

As of December 31, 2025, we were in compliance with all covenants under our Amended and Restated Credit Agreement.

2032 Notes and 2027 Notes Tender Offer

In connection with the offering of the 2032 Notes, we completed a concurrent cash tender offer of $202.0 million for our 2027 Notes.

See Note 15 (“Long-Term Debt”) for further details.

July 2024 Equity Offering

Archrock received net proceeds of $255.7 million, after deducting underwriting discounts, commissions and offering expenses.

See Note 18 (“Stockholders’ Equity”) for further details.

On January 21, 2026, we completed a private offering of $800.0 million aggregate principal amount of 6.0% senior notes due 2034 and received net proceeds of $789.4 million after deducting issuance costs.

In January 2026, the approximately $10.6 million of issuance costs were recorded as deferred financing costs within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statement of operations over the term of the notes.

The net proceeds were used to repay borrowings outstanding under our Credit Facility.

2027 Notes Redemption

On November 17, 2025, we repurchased our 2027 Notes.

The 2027 Notes were redeemed at 100% of their $300.0 million aggregate principal amount plus accrued and unpaid interest of approximately $2.6 million with borrowings under the Credit Facility.

We recorded a debt extinguishment loss related to unamortized debt issuance costs of $0.9 million during the fourth quarter of 2025.

Other Sources of Cash

We received proceeds of $67.6 million and $72.2 million from asset sales during the years ended December 31, 2024 and 2023, respectively.

We received proceeds of $191.8 million and $67.6 million from asset sales and business dispositions during the years ended December 31, 2025 and 2024, respectively.

We typically use the proceeds from these sales to repay borrowings outstanding under our Credit Facility;

7 unchanged sentences

Financing activities

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Operating Activities.

The increase in net cash provided by operating activities was primarily due to increased cash inflows of $161.4 million from adjusted gross margin, excluding deferred revenue recognized in earnings and amortization of freight and mobilization charges, changes of $9.6 million in accounts receivable due to increased cash receipts from customers and of $2.7 million in deferred revenue.

These increases were partially offset by changes of $6.1 million in inventory and of $3.7 million in accounts payable and accrued liabilities.

The increase in net cash provided by operating activities was primarily due to higher adjusted gross margin from both our contract operations business and aftermarket services business, as well as an overall increase in levels of activity, including the impact from the NGCS Acquisition and the TOPS Acquisition.

These increases were partially offset by the tax refund receivable of $41.5 million recorded as a result of certain sales and use tax audit settlements and credits, as well as an increase in inventory.

Investing Activities.

The increase in net cash used in investing activities was primarily due to $868.7 million of cash paid in the TOPS Acquisition and a $60.4 million increase in capital expenditures, partially offset by a decrease of $4.8 million in investment in non-consolidated affiliates and a $4.6 million decrease in proceeds from the sale of property, plant and equipment.

The decrease in net cash used in investing activities was primarily due to cash paid in the TOPS Acquisition of $868.7 million in 2024 compared to cash paid in the NGCS Acquisition of $296.5 million in 2025, an increase of $71.0 million in proceeds from the sale of a business and an increase of $53.2 million in proceeds from the sale of property, equipment and other assets.

These changes were partially offset by an increase of $143.4 million in capital expenditures.

Financing Activities.

The change from net cash used in financing activities in 2023 to net cash provided by financing activities in 2024 was primarily due to $700.0 million of proceeds from the issuance of the 2032 Notes, $255.7 million of proceeds from the July 2024 Equity Offering and a $85.5 million increase in net borrowings of long-term debt, partially offset by $202.0 million for the 2027 Notes Tender Offer, a $14.6 million increase in dividends to Archrock shareholders, a $6.3 million increase in debt issuance costs paid, a $4.5 million increase in shares repurchased under the Share Repurchase Program and a $2.7 million increase in taxes paid related to net share settlement of equity awards.

The change to net cash used in financing activities from net cash provided by financing activities was primarily due to a decrease of $409.2 million in net borrowings of long-term debt, a decrease of $255.7 million in net proceeds for the issuance of common stock, an increase of $56.9 million of common stock purchased under the Share Repurchase Program and an increase of $31.2 million for dividends paid to stockholders.

Critical Accounting Estimates

4 unchanged sentences

Actual results may differ from these estimates under different assumptions or conditions and these differences can be material to our financial condition, results of operations and cash flows.

Business Combinations

We account for acquisitions using the acquisition method of accounting, which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the date of acquisition.

We estimate the fair values of the assets acquired and liabilities assumed using accepted valuation methods, and, in many cases, such estimates are based on our judgments as to the future operating cash flows expected to be generated from the acquired assets throughout their estimated useful lives.

The excess of the consideration transferred over those fair values is recorded as goodwill.

The assumptions and inputs incorporated within the fair value estimates are subject to considerable management judgement and are based on industry, market, and economic conditions prevalent at the time of the acquisition.

Actual results may differ from the projected results used to determine fair value.

Property, plant and equipment, net, at December 31, 2025 was $3.7 billion and depreciation expense was $242.3 million for the year ended December 31, 2025.

8 unchanged sentences

During the year ended December 31, 2025, we recorded long–lived and other asset impairments of $18.3 million.

Impairment Assessments of Property, Plant and Equipment and Identifiable Intangible Assets

We review long–lived assets, which include property, plant and equipment and intangibles assets that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

Impairment Assessments of Property, Plant and Equipment, Goodwill and Identifiable Intangible Assets

We review long–lived assets, which include property, plant and equipment, goodwill and intangible assets that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

An impairment loss may exist when the estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount.

5 unchanged sentences

The fair value of a compressor is estimated on the expected net sale proceeds compared to fleet units we recently sold, a review of other units recently offered for sale by third parties or the estimated component value of the equipment we plan to use.

See Note 22 (“Long-Lived and Other Asset Impairment”) and Note 27 (“Fair Value Measurements”) to our Financial Statements for further details of our fleet asset impairments.

See Note 21 (“Long-Lived and Other Asset Impairment”) and Note 25 (“Fair Value Measurements”) for further details.

Goodwill and Identifiable Intangible Assets.

We review the carrying amount of our goodwill and intangible assets on a quarterly basis, or whenever indicators of potential impairment exist, to determine if the carrying amount of a reporting unit exceeds its fair value, including the applicable goodwill and intangible assets.

In addition, we perform an annual qualitative assessment, during the fourth quarter, to determine whether it is more-likely-than-not that the fair value of a reporting unit is impaired.

If the fair value is more-likely-than-not impaired, we perform a quantitative impairment test to identify impairment and measure the amount of impairment loss to be recognized, if any.

See Note 2 (“Basis of Presentation and Significant Accounting Policies”) and Note 9 (“Goodwill and Intangibles Assets, net”) for further details.

Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.

10 unchanged sentences

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future.

Aside from the budget reconciliation process currently occurring in Congress, management is not aware of any such changes that would have a material effect on our financial position, results of operations or cash flows.

Management is not aware of any such changes that would have a material effect on our financial position, results of operations or cash flows.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various state and local jurisdictions.

4 unchanged sentences

Recent Accounting Developments

See Note 3 (“Recent Accounting Developments”) to our Financial Statements.

See Note 3 (“Recent Accounting Developments”) for further details.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis