What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-26 compared with 2025-02-25 · 542 added, 337 removed, 1158 unchanged (43% of the section changed)

9 unchanged sentences

Based on the results of management’s evaluation described above, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

On August 30, 2024, we completed the TOPS Acquisition which was the acquisition of a privately-held company that was not subject to Section 404 of the Sarbanes-Oxley Act.

As the TOPS Acquisition occurred during the third quarter of 2024, and TOPS was not previously subject to Section 404 of the Sarbanes-Oxley Act, management concluded there was insufficient time for management to complete its assessment of the internal controls over financial reporting related to TOPS, and, therefore, TOPS’s internal controls over financial reporting were excluded from this report on internal control over financial reporting.

Our management with the participation of the Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting excluding TOPS’ internal controls as of December 31, 2024 (covering approximately 94.3% of the revenue on the Consolidated Statements of Operations for the year ended December 31, 2024 and 70.2% of the total assets on the Consolidated Balance Sheets as of December 31, 2024) based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Our management with the participation of the Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on its evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.

The effectiveness of internal control over financial reporting as of December 31, 2025 was audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its report found within this Form 10–K.

Deloitte & Touche LLP has issued an attestation report on the Company’s internal control over financial reporting, which is included in this Annual Report.

Changes in Internal Control over Financial Reporting

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 26, 2026, expressed an unqualified opinion on those financial statements.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, appearing in Item 9A, management excluded from its assessment the internal control over financial reporting at TOPS which was acquired on August 30, 2024, and whose financial statements constitute 29.8% and 5.7% of total assets and revenue, respectively of the consolidated financial statement amounts as of and for the year ended December 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting at TOPS.

Basis for Opinion

19 unchanged sentences

Insider Trading Arrangements

During the three months ended December 31, 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “ non-Rule 10b5-1 trading arrangement ,” as each term is defined in Item 408(a) of Regulation S-K.

During the three months ended December 31, 2025, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “ non-Rule 10b5-1 trading arrangement ,” as each term is defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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The information required by Part III Item 10 of this Form 10-K is incorporated by reference to the sections entitled “Election of Directors,” “Governance” and “Stock Ownership” in the definitive proxy statement related to our 2026 Annual Meeting of Stockholders, which is to be filed with the SEC within 120 days following the end of our 2025 fiscal year.

We have adopted an Insider Trading Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Form 10-K.

We have adopted a Securities Trading Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations, New York Stock Exchange listing standards and NYSE Texas listing standards.

A copy of our Securities Trading Policy is included as Exhibit 19.1 to this Form 10-K.

Executive Compensation

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Future Issuance Under

Plan Category

Warrants and Rights

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(4) Comprised of our DSDP.

See Note 20 (“Stock-Based Compensation”) to our Financial Statements for further details of our DSDP.

See Note 19 (“Stock-Based Compensation”) for further details.

Certain Relationships and Related Transactions, and Director Independence

9 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

Consolidated Statements of Equity

12 unchanged sentences

Purchase and Sale Agreement, dated as of July 22, 2024, by and among Archrock ELT LLC, Archrock, Inc., TOPS Pledge1, LLC and TOPS Pledge2, LLC and, solely with respect to Section 6.25 of the Purchase and Sale Agreement, TOPS Holdings, LLC , incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8–K filed on July 22, 2024

Agreement and Plan of Merger, dated as of March 10, 2025, by and among Archrock, Inc., Archrock Services, L.P., Archrock NGCSI Merger Sub, Inc., Natural Gas Compression Systems, Inc.

and Wolverine Securityholders’ Representative, LLC , incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8–K filed on March 11, 2025

Agreement and Plan of Merger, dated as of March 10, 2025, by and among Archrock, Inc., AROC NGCSE Merger Sub LLC, Archrock NGCSE Merger Sub, Inc., NGCSE, Inc.

and Wolverine Securityholders’ Representative, LLC, incorporated by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8–K filed on March 11, 2025

Composite Restated Certificate of Incorporation of Archrock, Inc., incorporated by reference to Exhibit 3.3 to the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2015

7 unchanged sentences

Description of Common Stock, incorporated by reference to Exhibit 4.3 of the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2019

Indenture, dated as of January 21, 2026, by and among Archrock Services, L.P., Archrock Partners Finance Corp., the guarantors party thereto and Regions Bank, as trustee , incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8–K filed on January 21, 2026

Exterran (now Archrock, Inc.) Employees’ Supplemental Savings Plan, incorporated by reference to Exhibit 10.30 of the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2007

47 unchanged sentences

Amendment to the Archrock, Inc.

2020 Stock Incentive Plan

2020 Stock Incentive Plan, incorporated by reference to Exhibit 10.30 of the Registrant’s Annual Report on Form 10-K filed on February 25, 2025

Form of Letter Agreement, incorporated by reference to Exhibit 10.99 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022

15 unchanged sentences

Sixth Amended and Restated Omnibus Agreement, effective August 30, 2024, by and among Archrock, Inc., AROC Corp., AROC Services GP LLC, AROC Services LP LLC, Archrock Services, L.P., Archrock Services Leasing LLC, Archrock ELT LLC, Total Operations and Production Services, LLC, Archrock Ecotec LLC, Archrock Ionada LLC, Archrock FGC LLC, Archrock GP LLC, Archrock GP LP LLC, Archrock MLP LP LLC, Archrock General Partner, L.P., Archrock Partners Corp., Archrock Partners, L.P., Archrock Partners Operating LLC, Archrock Partners Leasing LLC and Archrock Partners Finance Corp.

, incorporated by reference to Exhibit 10.41 of the Registrant’s Annual Report on Form 10-K filed on February 25, 2025

Tax Matters Agreement, dated as of November 3, 2015, by and between Exterran Holdings, Inc.

1 unchanged sentence

Purchase Agreement, dated as of August 12, 2024, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and Wells Fargo Securities, LLC, as representative of the initial purchasers named therein, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on August 13, 2024

Registration Rights and Lock-Up Agreement, dated as of August 30, 2024, by and between Archrock, Inc., TOPS Pledge1, LLC, TOPS Pledge2, LLC and TOPS NewCo, LLC , incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on August 30, 2024

Insider Trading Policy

Registration Rights and Lock-Up Agreement, dated as of May 1, 2025, by and between Archrock, Inc.

and NGCSE Holdings, LLC, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on May 1, 2025

Second Amendment to Amended and Restated Credit Agreement, dated as of May 16, 2025, by and among Archrock, Inc., Archrock Partners Operating LLC, Archrock Services, L.P., the other Loan Parties thereto, the Lenders thereto, and JPMorgan Chase Bank, N.A., as the Administrative Agent , incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on May 16, 2025

Third Amendment to Amended and Restated Credit Agreement, dated as of December 12, 2025, by and among Archrock, Inc., Archrock Partners Operating LLC, Archrock Services, L.P., the other Loan Parties thereto, the Lenders thereto, the Issuing Banks thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on December 15, 2025

Purchase Agreement, dated as of January 6, 2026, by and among Archrock Services, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and J.P.

Morgan Securities LLC, as representative of the initial purchasers named therein, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on January 7, 2026

Securities Trading Policy , incorporated by reference to Exhibit 19.1 of the Registrant’s Annual Report on Form 10-K filed on February 25, 2025

List of Subsidiaries of Archrock, Inc.

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We have audited the accompanying consolidated balance sheets of Archrock, Inc.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

TOPS ACQUISITION - Refer to Note 4 and 18 to the financial statements.

NGCS ACQUISITION - Refer to Notes 4 and 9 to the financial statements.

Critical Audit Matter Description

The Company completed the acquisition of Total Operations and Production Services, LLC (TOPS) for cash consideration of $868.7 million and 6,873,650 shares of common stock with an acquisition date fair value of $139.1 million.

Accordingly, the purchase price paid for assets acquired and liabilities assumed was allocated, based on respective fair value, to property, plant and equipment (including compressors) and other intangible assets.

The method for determining respective fair value varied depending on the type of asset or liability and involved management making significant estimates related to assumptions such as future cash flows, discount rates, market data, projected revenue, and current market interest rates.

Given the respective fair value determination of assets acquired and liabilities assumed requires management to make significant estimates related to assumptions such as future cash flows, discount rates, market data, projected revenue, and current market interest rates, performing audit procedures to evaluate the reasonableness of these assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

The Company completed the acquisition of NGCS (Natural Gas Compression Systems, Inc.

(“NGCSI”), and NGCSE, Inc.

(“NGCSE”)), whereby the Company acquired all of the issued and outstanding equity interests in NGCS including a fleet of approximately 326,000 horsepower and a 18,000 horsepower backlog of contracted new equipment, for aggregate total consideration of $349.4 million, which included a cash consideration of $296.5 million and issuance of approximately 2.3 million shares of common stock issued to NGCSE sellers with a NGCS acquisition date fair value of $53.0 million.

The NGCS acquisition was accounted for 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 NGCS acquisition date.

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

The method for determining relative fair value varied depending on the type of asset or liability and involved management making significant estimates related to assumptions such as future cash flows, discount rates, market data, projected revenue, and current market interest rates.

Given the relative fair value determination of assets acquired and liabilities assumed requires management to make significant estimates related to assumptions such as future cash flows, discount rates, market data, projected revenue, and current market interest rates, performing audit procedures to evaluate the reasonableness of these assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management's selection of a weighted average cost of capital, and the fair value of acquired property, plant and equipment and intangible assets for TOPS included the following, among others:

• We tested the effectiveness of controls over the purchase price allocation, including management's controls over the assumptions used in the valuation of the property, plant and equipment and intangible assets, including estimating the fair value of the acquired property, plant and equipment and intangible assets, determination of the weighted average cost of capital, and reviewing the work of third-party specialists.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) current market data, (3) cost to replace certain assets, and (4) assumptions used in the discounted cash flows, including testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing our estimates to those used by management.

• We assessed the reasonableness of management’s projections of contract revenue by comparing the assumptions used in the projections to projected capital expenditures, historical data, and results from other areas of the audit.

Our audit procedures also included testing the effectiveness of internal controls over the long-lived asset impairment process, including those over the identification of units to be retired from the active fleet and assessed for impairment.

• We assessed the reasonableness of management’s projections of contract revenue by comparing the assumptions used in the projections to projected compressor horsepower, historical data, and results from other areas of the audit.

/s/ DELOITTE & TOUCHE LLP

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Accounts receivable, net of allowance of $ 1,205 and $ 414 , respectively

Tax refund receivable

Other current assets

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Gain on sale of assets, net

Other expenses, net

Other expense, net

Income before income taxes

Provision for income taxes

Income before equity in net loss of unconsolidated affiliate

Equity in net loss of unconsolidated affiliate

Basic and diluted earnings per common share

2 unchanged sentences

Archrock, Inc.

Consolidated Statements of Comprehensive Income

(in thousands, except share amounts)

Year Ended December 31,

Other comprehensive income, net of tax:

Interest rate swap gain, net of reclassifications to earnings

Amortization of dedesignated interest rate swap

Total other comprehensive income, net of tax

Comprehensive income

The accompanying notes are an integral part of these consolidated financial statements.

Archrock, Inc.

Consolidated Statements of Equity

(in thousands, except share amounts)

Comprehensive

Treasury Stock

Income (Loss)

Balance at December 31, 2022

1 unchanged sentence

( 7,810,548 )

Shares repurchased

Shares withheld related to net settlement of equity awards

2 unchanged sentences

Stock-based compensation, net of forfeitures

Net proceeds from issuance of common stock

Comprehensive income

Other comprehensive income

Balance at December 31, 2023

7 unchanged sentences

Net proceeds from issuance of common stock

Comprehensive income

Shares issued for TOPS Acquisition

Balance at December 31, 2024

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Shares repurchased

( 2,978,111 )

Shares retired

( 3,813,831 )

Shares withheld related to net settlement of equity awards

2 unchanged sentences

Stock-based compensation, net of forfeitures

Net proceeds from issuance of common stock

Shares issued for TOPS Acquisition

Comprehensive income

Time-based cash or equity settled units settled as equity

Contribution to Enerflex

Shares issued for NGCS Acquisition

Balance at December 31, 2025

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Non-cash restructuring charges

Equity in net loss of unconsolidated affiliate

Unrealized change in fair value of investment in unconsolidated affiliate

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Amortization of capitalized implementation costs

Amortization of dedesignated interest rate swap

Interest rate swaps

Debt extinguishment loss

2 unchanged sentences

Gain on sale of assets, net

Gain on sale of business

Deferred income tax provision

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Cash paid in TOPS Acquisition, net of cash acquired

Investments in unconsolidated entities

Cash paid in NGCS Acquisition, net of cash acquired

Investments in unconsolidated affiliates

Net cash used in investing activities

4 unchanged sentences

( 1,633,001 )

( 1,308,200 )

Redemption and partial repayment of 2027 Notes

Proceeds from 2032 Notes offering

Partial repayment of 2027 Notes

Payments of debt issuance costs

Payments for settlement of interest rate swaps that include financing elements

Dividends paid to stockholders

3 unchanged sentences

Proceeds from stock issued under ESPP

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Contribution to Enerflex

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Archrock, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Supplemental disclosure of cash flow information:

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Issuance of Archrock common stock pursuant to TOPS Acquisition

Issuance of Archrock common stock pursuant to NGCS Acquisition

The accompanying notes are an integral part of these consolidated financial statements .

4 unchanged sentences

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.

Our business supports a must–run service that is essential to the production, processing, transportation and storage of natural gas.

We operate in two business segments:

contract operations and aftermarket services.

Our predominant segment, contract operations, 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.

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.

Basis of Presentation and Significant Accounting Policies

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Management believes that the estimates and assumptions used are reasonable.

Except as otherwise noted, any capitalized term used but not defined in our Financial Statements shall have the same meaning provided in our 2024 Form 10-K.

Except as otherwise noted, any capitalized term used but not defined in our Financial Statements or our 2025 Form 10-K shall have the same meaning provided in our 2024 Form 10-K.

Significant Accounting Policies

6 unchanged sentences

Due to the short–term nature of our trade accounts receivable, we consider the amortized cost to be the same as the carrying value amount of the receivable, excluding the allowance for credit losses.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

We recognize an allowance for credit losses when a receivable is recorded, even when the risk of loss is remote.

4 unchanged sentences

Each reporting period, we reassess our customers’ risk profiles and determine the appropriate asset pool classification, or perform individual assessments of expected credit losses, based on the customers’ risk characteristics at the reporting date.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Loss rates are separately determined for each asset pool based on the length of time a trade receivable has been outstanding.

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Repairs and maintenance are expensed as incurred.

The goodwill acquired in connection with the TOPS Acquisition represents the excess of consideration transferred over the fair value of the assets and liabilities acquired.

We review the carrying amount of our goodwill in the fourth quarter of every year, 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.

We perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is impaired.

The goodwill acquired in connection with the TOPS Acquisition and the NGCS Acquisition represents the excess of consideration transferred over the fair value of the assets acquired and liabilities assumed.

We review the carrying amount of our goodwill 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.

In addition, we perform an annual qualitative assessment 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.

Our qualitative assessment includes consideration of various events and circumstances and their potential impact to a reporting unit’s fair value, including macroeconomic and industry conditions such as a deterioration in our operating environment and limitations on access to capital and other developments in the equity and credit markets, cost factors that could have a negative effect on earnings and cash flows, relevant entity-specific and reporting unit-specific events and overall financial performance such as declining earnings or cash flows or a sustained decrease in share price.

The quantitative impairment test (i) allocates goodwill and our other assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit).

All of the goodwill recognized in the TOPS Acquisition was attributed to our contract operations reporting unit.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The quantitative impairment test (i) allocates our assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit).

All of the goodwill recognized in the TOPS Acquisition and the NGCS Acquisition was attributed to our contract operations reporting unit.

We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

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Short–term leases, those with an initial term of 12 months or less, are not recorded on the balance sheet.

Variable costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred.

Variable lease costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred.

Operating lease expense for lease payments is recognized on a straight–line basis over the term of the lease.

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Internal–Use Software

Certain of our contracts have been deemed to be hosting arrangements that are service contracts, including those related to the cloud migration of our ERP system and cloud services for our mobile workforce, telematics and inventory management tools.

Certain of our contracts have been deemed to be hosting arrangements that are service contracts.

Certain costs incurred for the implementation of a hosting arrangement that is a service contract are capitalized and amortized on a straight–line basis over the term of the respective contract.

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We consider this credit risk to be limited due to these companies’ financial resources, the nature of the products and services we provide and the terms of our customer agreements.

During the year ended December 31, 2024, one customer accounted for $ 121.4 million, or more than 10 % of our consolidated revenue, and another customer accounted for more than 13 % of our consolidated trade accounts receivable, both primarily related to our contract operations segment.

As of December 31, 2025, two customers accounted for approximately 30 % of our consolidated trade accounts receivable, primarily related to our contract operations segment.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Investments in Unconsolidated Affiliates and Other Strategic Investments

We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a VIE.

We are the primary beneficiary of a VIE when we have the power to direct activities that most significantly affect the economic performance of the VIE and have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance, including evaluating the nature of relationships and activities of the parties involved.

We consolidate a VIE if we are the primary beneficiary.

If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

We periodically reassess whether any changes in an entity’s capital structure or our relationship with the entity affect our VIE determination and, if so, whether we are the primary beneficiary.

Investments in which we are deemed to exert significant influence, but not control, are accounted for using the equity method of accounting, except in cases where the fair value option is elected.

For such investments where we have elected the fair value option, the election is irrevocable and is applied on an investment–by–investment basis at initial recognition.

For investments that are not accounted for under the equity method and that do not have readily determinable fair values, we have elected the fair value measurement alternative to record these investments at cost minus impairment, if any, including adjustments for observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Investments in equity securities measured using the fair value measurement alternative are reviewed for impairment or observable price changes in orderly transactions each reporting period.

Recent Accounting Developments

Accounting Standards Updates Implemented

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends Topic 326 to provide for a practical expedient for all entities and an accounting policy election for entities other than public business entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB ASU 2016-10, Revenue from Contracts with Customers (Topic 606).

All entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

We adopted ASU 2025-05 on January 1, 2026 and elected the practical expedient.

The adoption did not have a material impact on our consolidated financial statements.

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires additional disclosures, primarily focused on the disclosure of income taxes paid and the rate reconciliation table.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025.

We adopted ASU 2023-09 retrospectively during the year ended December 31, 2025.

See Note 23 (“Income Taxes”) for further details.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Segment Reporting

4 unchanged sentences

See Note 28 (“Segments”) for further details.

Accounting Standards Updates Not Yet Implemented

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which will require significant additional disclosures, primarily focused on the disclosure of income taxes paid and the rate reconciliation table.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, and should be applied on a prospective basis, with a retrospective option.

Early adoption is permitted.

We are assessing and modifying our systems and processes to comply with our future adoption of ASU 2023-09.

Business Combinations – Joint Venture Formations

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Early adoption is permitted in any interim or annual period in which financial statements have not been issued or been made available for issuance, either prospectively or retrospectively.

We expect that the adoption of ASU 2023-05 will have no impact on our consolidated financial statements.

We adopted ASU 2023-05 during the year ended December 31, 2025 and its adoption had no impact on our consolidated financial statements.

Accounting Standards Updates Not Yet Implemented

Accounting for Internal-Use Software Costs

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, to clarify and modernize the accounting for costs related to internal-use software.

ASU 2025-06 removes all references to software project development stages in Subtopic 350-40 and clarifies cost capitalization may begin when (1) management has authorized and committed to funding the project and (2) it is probable the project will be completed, and the software will be used to perform its intended function and provides new examples to illustrate its application.

ASU 2025-06 specifies that the property, plant and equipment disclosure requirements apply to capitalized software costs accounted for under Subtopic 350-40, regardless of how those costs are presented in the financial statements.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

Entities may apply the guidance using a prospective, retrospective or modified transition approach.

Early adoption is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Disaggregation of Income Statement Expenses

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Business Transactions

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, for aggregate total consideration of $ 71.0 million.

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.

The disposal group was classified as held for sale as of June 30, 2025, and its carrying value was adjusted to estimated fair value less costs to sell.

We recorded a write-down of $ 9.6 million during the year ended December 31, 2025, which is included in long-lived and other asset impairment in our consolidated statements of operations.

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.

In accordance with the terms of the Merger Agreement, customary post-closing adjustments were made during the third quarter of 2025, resulting in a reduction to the purchase price of approximately $ 2.0 million.

The NGCS Acquisition was accounted for 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 NGCS acquisition date.

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

The preliminary allocation of the purchase price, which is subject to certain adjustments, was based upon preliminary valuations.

Our estimates and assumptions are subject to change upon the completion of management’s review of the final valuations.

We are in the process of finalizing valuations related to deferred tax liabilities, tax contingencies and goodwill, which could impact future income tax expense.

The final valuation of net assets acquired is expected to be completed as soon as practicable, but no later than one year from the NGCS acquisition date.

The following table summarizes the preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed as of the NGCS acquisition date:

(in thousands)

Accounts receivable

Other current assets

Property, plant and equipment

Operating lease right of use asset

Intangible assets

Accounts payable, trade

Accrued liabilities

Operating lease liabilities

Deferred tax liabilities

Other liabilities

Purchase price

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The amount of goodwill resulting from the NGCS Acquisition is attributable to the expansion of our services in the Permian Basin where we currently operate and was allocated to our contract operations segment.

The goodwill recorded is considered to have an indefinite life and will be reviewed annually for impairment or more frequently if indicators of potential impairment exist.

None of the goodwill recorded for the NGCS Acquisition is expected to be deductible for U.S.

federal income tax purposes.

Tax Contingency and Indemnification

We recorded a non-income tax-based contingency of $ 0.5 million and a corresponding indemnification asset of $ 0.5 million based on facts existing on the NGCS acquisition date.

The non-income tax-based contingency arose from pre-acquisition activity at NGCS.

As part of the NGCS Acquisition, the sellers agreed to indemnify us for certain non-income tax and environmental contingencies up to $ 11.4 million as of the NGCS acquisition date.

Dependent upon facts and circumstances, the sellers’ indemnification obligation may be reduced over a period of four years from the NGCS acquisition date but may also be extended until the resolution of claims timely submitted to the sellers.

Results of Operations

The results of operations attributable to the NGCS Acquisition have been included in our consolidated financial statements as part of our contract operations segment since the NGCS acquisition date.

Revenue attributable to the assets acquired from the NGCS acquisition date through December 31, 2025 was $ 52.5 million.

We are unable to provide earnings attributable to the assets acquired and liabilities assumed since the NGCS acquisition date, as we do not prepare full stand-alone earnings reports for those assets and liabilities.

Transaction-Related Costs

The following table presents transaction-related costs incurred in connection with the NGCS Acquisition by cost type:

(in thousands)

Year Ended December 31, 2025

Professional fees (1)

Compensation-related costs (2)

Total transaction-related costs

(1) Professional fees include legal, advisory, consulting and other fees.

(2) Compensation-related costs include amounts related to NGCSI employee retention and severance associated with the NGCS Acquisition.

Payments are due and payable at various times up to and including the one-year anniversary of the NGCS Acquisition.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information for the years ended December 31, 2025 and 2024 was derived by adjusting our historical financial statements in order to give effect to the assets acquired and liabilities assumed in the NGCS Acquisition.

The NGCS Acquisition is presented in this unaudited pro forma financial information as though the acquisition occurred as of January 1, 2024, and reflects the following:

● the effects of the NGCSI employee retention and other compensation-related arrangements associated with the NGCS Acquisition;

● the application of our accounting policies and adjusting the results of NGCS to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant, and equipment, and intangible assets had been applied from January 1, 2024;

● the interest expense resulting from borrowings under the Credit Facility used to fund the cash portion of the purchase price;

● the amortization of debt issuance costs associated with the Second Amendment to the Amended and Restated Credit Agreement;

● the exclusion of $ 7.4 million of nonrecurring financial advisory, legal, audit and other professional fees incurred related to the NGCS Acquisition and recorded to transaction-related costs in our consolidated statements of operations during the year ended December 31, 2025.

The year ended December 31, 2024 pro forma earnings were adjusted to reflect these charges;

● the income tax effects of the adjustments based on the estimated blended statutory tax rate of 23 % .

The unaudited pro forma financial information below combines the effects of the NGCSI Merger Agreement and the NGCSE Merger Agreement, as the Merger Agreements were negotiated as a single transaction and mutually dependent to close.

The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the NGCS Acquisition been consummated at the beginning of the period presented, nor is it necessarily indicative of future results.

Year ended December 31,

(in thousands)

Net income attributable to Archrock stockholders

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, including approximately 530,000 operating 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.

In accordance with the terms of the purchase and sale agreement, customary post-closing adjustments were made during the fourth quarter of 2024, resulting in a $ 0.4 million reduction to the purchase price .

The TOPS Acquisition was accounted for 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 acquisition date.

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

The following table summarizes the purchase price allocation based on the fair values of the assets acquired and liabilities assumed as of the acquisition date:

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table summarizes the purchase price allocation based on the fair values of the assets acquired and liabilities assumed as of the TOPS acquisition date:

(in thousands)

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Purchase price

The valuation methodologies and significant inputs for fair value measurements are detailed by significant asset class below.

The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and therefore represent Level 3 measurements.

Property, Plant and Equipment

Property, plant and equipment is primarily comprised of electric motor drive compression equipment that will depreciate on a straight-line basis over an estimated average remaining useful life of 25 years .

The fair value of the property, plant and equipment was determined using both the cost and market approach.

For most of the compression equipment, we estimated the replacement cost using the direct cost method by evaluating recent purchases of similar assets or published data, then adjusting the replacement cost for physical deterioration and functional and economic obsolescence, as applicable.

For certain compression equipment, we then considered the market approach by comparing our estimated dollar per horsepower to market comparables and market participant assumptions and adjusted as necessary.

Other fixed assets were valued using the indirect cost method, whereby we applied asset-specific trend information using published indexes to calculate the estimated replacement cost of assets that were identified to be reflected at historical cost.

Other assets were depreciated based on published normal useful life estimates and prior experience with similar assets.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Intangible Assets

The intangible assets consist of customer relationships and trade names that have estimated useful lives of 12 years and five years , respectively.

The amount of intangible assets and their associated useful life were determined based on the period over which the assets are expected to contribute directly or indirectly to our future cash flows.

The fair value of the identifiable intangible assets related to customer relationships was determined using the multi-period excess earnings method, which is a specific application of the discounted cash flow method, an income approach, whereby we estimated and then discounted the future cash flows of the intangible asset by adjusting overall business revenue for attrition, obsolescence, cost of sales, operating expenses, taxes and the required returns attributable to other contributory assets acquired.

Significant estimates made in arriving at expected future cash flows included our expected customer attrition rate and the amount of earnings attributable to the assets.

To discount the estimated future cash flows, we utilized a discount rate that was at a premium to our WACC to reflect the less liquid nature of the customer relationships relative to the tangible assets acquired.

It is generally accepted that the fair market value of a trade name is best measured by the relief-from-royalty method under the income approach, whereby we calculated the royalty savings by estimating a reasonable royalty rate that a third party would negotiate in a licensing agreement expressed as a percentage of total revenue involving a trade name.

The revenue related to the trade name was multiplied by the selected royalty rate over the estimated expected useful life of the trade name to arrive at the royalty savings.

The royalty savings were tax effected and discounted to present value using a discount rate commensurate with the risk profile of the trade name relative to our WACC and the return on the other acquired assets.

The amount of goodwill resulting from the TOPS Acquisition is attributable to the expansion of our services in the Permian Basin, where we currently operate, and was allocated to our contract operations segment.

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Tax Contingency and Indemnification Asset

We recorded a non-income tax based contingency of $ 4.3 million and a corresponding indemnification asset of $ 4.3 million based on facts existing on the acquisition date.

We recorded a non-income tax based contingency of $ 4.3 million and a corresponding indemnification asset of $ 4.3 million based on facts existing on the TOPS acquisition date.

The tax contingency arose from pre-acquisition activities of TOPS.

As part of the acquisition, the sellers agreed to indemnify us for certain tax contingencies up to $ 21.6 million as of the acquisition date.

Dependent upon facts and circumstances, the sellers’ indemnification obligation may be reduced over a period of five years from the acquisition date but may also be extended until the resolution of claims timely submitted to the sellers.

As part of the acquisition, the sellers agreed to indemnify us for certain tax contingencies up to $ 21.6 million as of the TOPS acquisition date.

Dependent upon facts and circumstances, the sellers’ indemnification obligation may be reduced over a period of five years from the TOPS acquisition date but may also be extended until the resolution of claims timely submitted to the sellers.

Results of Operations

The results of operations attributable to the TOPS Acquisition have been included in our consolidated financial statements as part of our contract operations segment since the acquisition date.

Revenue attributable to the assets acquired from the acquisition date through December 31, 2024 was $ 65.5 million.

We are unable to provide earnings attributable to the assets and liabilities acquired since the acquisition date, as we do not prepare full stand-alone earnings reports for those assets and liabilities.

The results of operations attributable to the TOPS Acquisition have been included in our consolidated financial statements as part of our contract operations segment since the TOPS acquisition date.

Revenue attributable to the assets acquired from the TOPS acquisition date through December 31, 2024 was $ 65.5 million.

We are unable to provide earnings attributable to the assets acquired and liabilities assumed since the TOPS acquisition date, as we do not prepare full stand-alone earnings reports for those assets and liabilities.

Transaction-Related Costs

We recorded $ 13.2 million of transaction-related costs in our consolidated statements of operations during the year ended December 31, 2024.

We recorded $ 3.6 million and $ 13.2 million of transaction-related costs in our consolidated statements of operations during the years ended December 31, 2025 and December 31, 2024, respectively.

Archrock, Inc.

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The following table presents transaction-related cost incurred by cost type:

Year Ended December 31,

(in thousands)

December 31, 2024

Professional fees (1)

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Unaudited Pro Forma Financial Information

The unaudited pro forma financial information for the years ended December 31, 2024 and 2023 was derived by adjusting our historical financial statements in order to give effect to the assets and liabilities acquired in the TOPS Acquisition.

The TOPS Acquisition is presented in this unaudited pro forma financial information as though the acquisition occurred as of January 1, 2023, and reflects the following:

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● the interest expense resulting from the 2032 Notes, the 2027 Notes Tender Offer, and the First Amendment to the Amended and Restated Credit Agreement;

● the exclusion of $ 11.4 million of nonrecurring financial advisory, legal, audit and other professional fees incurred related to the acquisition and recorded to transaction-related costs in our consolidated statements of operations during the year ended December 31, 2024, respectively.

For the year ended December 31, 2023, pro forma earnings were adjusted to reflect these charges;

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The unaudited pro forma financial information below is presented for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results.

Year Ended December 31,

(in thousands)

Net income attributable to Archrock stockholders

During 2022, we completed sales of certain contract operations customer service agreements and approximately 770 compressors, comprising approximately 172,000 horsepower, used to provide compression services under those agreements, as well as other assets used to support the operations.

The sale constituted a business, and accordingly, we allocated customer–related and contract–based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group.

We recognized an aggregate gain of $ 28.1 million.

Valuation Methodologies

The valuation methodologies and significant inputs for fair value measurements associated with our business acquisitions are detailed by significant asset class below.

The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and therefore represent Level 3 measurements.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Property, Plant and Equipment

The fair value of the property, plant and equipment was determined using both the cost and market approach.

Other assets were depreciated based on published normal useful life estimates and prior experience with similar assets.

Intangible Assets

The intangible assets consist of customer relationships and trade names that have estimated useful lives of 12 years and five years , respectively.

The amount of intangible assets and their associated useful lives were determined based on the period over which the assets are expected to contribute directly or indirectly to our future cash flows.

Significant estimates made in arriving at expected future cash flows included our expected customer attrition rate and the amount of earnings attributable to the assets.

The trade name fair market value was measured using the relief-from-royalty method under the income approach, whereby we calculated the royalty savings by estimating a reasonable royalty rate that a third party would negotiate in a licensing agreement expressed as a percentage of total revenue involving a trade name.

The revenue related to the trade name was multiplied by the selected royalty rate over the estimated expected useful life of the trade name to arrive at the royalty savings.

Accounts Receivable, net

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Accounts receivable, net

(1) See Note 29 (“Related Party Transactions”) for additional information.

(2) Other receivables primarily consist of amounts due from the sale of used equipment.

As December 31, 2024 and 2023, our receivables from contracts with customers, net of allowance for credit losses, were $ 126.3 million and $ 119.7 million, respectively.

(1) See Note 27 (“ Related Party Transactions ”) for further details.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

As of December 31, 2025 and 2024, our receivables from contracts with customers, net of allowance for credit losses, were $ 128.9 million and $ 126.3 million, respectively.

Allowance for Credit Losses

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During the years ended December 31, 2025, 2024 and 2023 we recorded write–downs to inventory of $ 0.9 million, $ 0.6 million and $ 0.5 million, respectively, for inventory considered to be excess, obsolete or carried at an amount in excess of net realizable value.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Property, Plant and Equipment, net

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Assets under construction of $ 95.7 million and $ 125.0 million at December 31, 2025 and 2024, respectively, primarily consisted of compression equipment and other fleet assets .

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

We have operating leases for office space, temporary housing, storage and shops.

Our leases have remaining lease terms of less than one year to approximately eight years and most include options to extend the lease term, at our discretion, for an additional one to ten years .

Our leases have remaining lease terms of less than one year to approximately seven years and most include options to extend the lease term, at our discretion, for an additional one to ten years .

We are not, however, reasonably certain that we will exercise any of the options to extend them and as such, they have not been included in the remaining lease terms.

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Total lease cost

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Year Ended December 31,

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Operating lease ROU assets obtained in exchange for lease liabilities, net (1)

(1) Includes decreases to our ROU assets of $ 0.4 million, and $ 0.2 million related to lease amendments and terminations during 2023 and 2022 respectively.

There were no lease amendments or terminations during 2024 that resulted in decreases to our ROU assets.

(1) Includes decreases to our ROU assets of $ 0.9 million, and $ 0.4 million related to lease modifications during 2025 and 2023 respectively.

There were no lease modifications during 2024 that resulted in decreases to our ROU assets.

Weighted-average remaining lease term (in years)

Weighted-average discount rate

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Remaining maturities of our lease liabilities as of December 31, 2025 are as follows:

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Total lease liabilities

Goodwill and Intangible Assets, net

The amount of goodwill resulting from the TOPS Acquisition and the NGCS Acquisition is attributable to the expansion of our services in the Permian Basin where we currently operate and was allocated to our contract operations segment.

Goodwill is considered to have an indefinite life and is reviewed on a quarterly basis for impairment or more frequently if indicators of potential impairment exist.

During the fourth quarter of 2025, we performed an annual qualitative goodwill impairment assessment and determined that it is not more-likely-than-not that the fair value of our reporting unit is impaired.

As a result, we determined that performance of a quantitative impairment test is not required.

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

The changes in goodwill are as follows:

(in thousands)

Balance at beginning of period

TOPS Acquisition

NGCS Acquisition

Flowco Disposition

Balance at end of period

Intangible Assets, net

Intangible assets include customer relationships associated with various business and asset acquisitions as well as a trade name intangible asset associated with the TOPS Acquisition.

These acquired intangible assets were recorded at fair value determined as of the acquisition date and are being amortized over the period we expect to benefit from the assets.

Intangible assets include customer relationships associated with various business and asset acquisitions as well as trade name intangible assets associated with the TOPS Acquisition and the NGCS Acquisition.

These acquired intangible assets were recorded at fair value determined as of the TOPS acquisition date and the NGCS acquisition date and are being amortized over the period we expect to benefit from the assets.

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

Intangible assets, net is comprised of the following:

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Intangible assets, net

Intangible assets are amortized on a straight–line basis with estimated useful lives ranging from five to 25 years .

Amortization expense was $ 8.1 million, $ 6.9 million and $ 8.9 million during the years ended December 31, 2024, 2023 and 2022, respectively.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Intangible assets are amortized on a straight–line basis with estimated useful lives ranging from five to 25 years .

Amortization expense was $ 14.5 million, $ 8.1 million and $ 6.9 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Estimated amortization expense for each of the subsequent five fiscal years and thereafter is expected to be as follows:

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We had contract costs of $ 20.2 million and $ 19.8 million associated with freight and mobilization recorded in our consolidated balance sheets as of December 31, 2025 and 2024, respectively.

Contract operations obtainment and fulfillment costs are amortized based on the transfer of service to which the assets relate, which is estimated to be 46 months based on average contract term, including anticipated renewals.

Annually, we assess whether the 46–month estimate fairly represents the average contract term and adjust as appropriate.

Contract operations costs to obtain and fulfill a contract are amortized based on the transfer of service to which the assets relate, which is estimated based on the average contract term, including anticipated renewals.

Annually, we assess whether the estimate fairly represents the average contract term and adjust as appropriate.

Contract costs associated with commissions are amortized to SG&A.

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Hosting Arrangements

We have hosting arrangements that are service contracts for cloud applications including our ERP, mobile workforce, telematics and inventory management tools.

Capitalized implementation costs and accumulated amortization related to our hosting arrangements that are service contracts are as follows:

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These costs are included in other assets in our consolidated balance sheets.

Amortization expense, which is recorded in SG&A in our consolidated statements of operations, was $ 3.0 million, $ 2.6 million and $ 2.0 million during December 31, 2024, 2023 and 2022, respectively.

Investments in Unconsolidated Affiliates

Investments in which we are deemed to exert significant influence, but not control, are accounted for using the equity method of accounting, except in cases where the fair value option is elected.

For such investments where we have elected the fair value option, the election is irrevocable and is applied on an investment–by–investment basis at initial recognition.

For ownership interests that are not accounted for under the equity method and that do not have readily determinable fair values, we have elected the fair value measurement alternative to record these investments at cost minus impairment, if any, including adjustments for observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Investments in equity securities measured using the fair value measurement alternative are reviewed for impairment or observable price changes in orderly transactions each reporting period

Investment in ECOTEC

In April 2022, we agreed to acquire for cash a 25 % equity interest in ECOTEC, a company specializing in methane emissions detection, monitoring and management.

We have elected the fair value option to account for this investment, and during the years ended December 31, 2024, 2023 and 2022, we recognized unrealized losses of $ 1.5 million, $ 1.0 million and $ 1.9 million, respectively, related to the change in fair value of our investment (see Note 27 (“Fair Value Measurements”)).

Changes in the fair value of this investment are recognized in other expense, net in our consolidated statements of operations.

During the years ended December 31, 2024 and 2023, we contributed $ 1.3 million and $ 3.1 million, respectively, to maintain our 25 % ownership interest in ECOTEC, which is included in other assets in our consolidated balance sheets.

Amortization expense, which is recorded in SG&A in our consolidated statements of operations, was $ 3.3 million, $ 3.0 million and $ 2.6 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Investments in Unconsolidated Affiliates and Other Strategic Investments

Investment in FGC Holdco

On October 1, 2024, we, together with ColdStream, entered into a limited liability agreement with FGC Holdco, a company that designs, manufactures and sells MaCH 4 NRS equipment, through distributors.

As of the effective date of the agreement, FGC Holdco had initial authorized capital of 1.0 million units, with 68 % of its units issued to ColdStream and 32 % of its units issued to us at a cost of $ 0.001 per unit.

Subject to certain contractual provisions, we are obligated to fund, as capital contributions, our proportionate share of FGC Holdco’s general, administrative and operational costs and expenses.

During the year ended December 31, 2025, we invested $ 0.5 million in FGC Holdco, and as of both December 31, 2025 and 2024, the carrying value of our investment in FGC Holdco, including transaction costs of $ 0.2 million, was $ 0.2 million, which is included in other assets in our consolidated balance sheets.

We determined FGC Holdco is a VIE over which we do not have the power to direct the activities that most significantly impact economic performance and therefore are not the primary beneficiary.

The board of directors of FGC Holdco have control over the activities that most significantly impact the economic performance, and while we have voting rights through board participation, we do not have the ability to control board decisions.

We apply the equity method of accounting to account for this investment.

The carrying value of our equity investment is impacted by our share of investee income or loss, distributions, amortization or accretion of basis differences and other-than-temporary impairments.

As of December 31, 2025, we had a $ 0.2 million basis difference between the cost of our investment and our proportionate share of the carrying value of FGC Holdco’s underlying net assets.

The basis difference is primarily attributed to intangible assets and is being amortized over the estimated 20-year useful life.

Basis differences are updated as needed to reflect the impact of additional capital contributions.

We recognized losses of $ 0.5 million related to our investment in FGC Holdco for the year ended December 31, 2025, which is included in equity in net loss of unconsolidated affiliate, in our consolidated statements of operations.

The investment is included in other assets in our consolidated balance sheets.

Cash contributions are included in the investing activities section of our consolidated statements of cash flows.

See Note 27 (“Related Party Transactions”) for further details.

Investment in Ionada

In November 2023, we agreed and made initial investment of $ 3.8 million, to serve as the lead investor in a series A preferred financing round for Ionada, a global carbon capture technology company committed to reducing GHG emissions and creating a sustainable future.

Ionada has developed a post-combustion carbon capture solution to reduce carbon dioxide emissions from various small to mid-sized industrial emitters in the energy, marine and e-fuels industries, among others.

As of December 31, 2024 and 2023, we had a fully diluted ownership equity interest in Ionada of 12 % and 10 %, respectively.

We have elected the fair value measurement alternative to account for this investment (see Note 27 (“Fair Value Measurements”)).

On November 19, 2024, subject to the same terms and conditions of our initial investment, we invested an additional $ 1.2 million and as a result, the carrying value of our investment in Ionada at December 31, 2024 was $ 5.5 million, including cumulative transaction costs of $ 0.5 million, and is included in other assets in our consolidated balance sheets.

There were no upward adjustments, impairments or downward adjustments to the carrying value of the investment as of December 31, 2024.

Subject to certain contractual conditions, we may invest on the same terms and conditions as the initial and secondary investments, $ 1.3 million in November 2025 and $ 4.8 million prior to July 2026, for a fully diluted ownership interest of 15 % and 24 %, respectively.

We are the lead investor in a series A preferred financing round for Ionada, a global carbon capture technology company committed to reducing GHG emissions and creating a sustainable future.

As of December 31, 2025 and 2024, we had a fully diluted ownership equity interest in Ionada of 12 %.

We have elected the fair value measurement alternative to account for this investment.

See Note 25 (“Fair Value Measurements”) for further details.

At December 31, 2025 and 2024, the carrying value of our investment in Ionada was $ 5.5 million, including cumulative transaction costs of $ 0.5 million, and is included in other assets in our consolidated balance sheets.

Subject to certain contractual conditions, we may invest on the same terms and conditions as the initial and secondary investments up to $ 6.1 million prior to July 2026, for a fully diluted ownership interest up to 24 %.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Investment in ECOTEC

We hold a 25 % equity interest in ECOTEC, a company specializing in methane emissions detection, monitoring and management.

We have elected the fair value option to account for this investment, and during the years ended December 31, 2025, 2024 and 2023, we recognized unrealized losses of $ 0.0 million, $ 1.5 million and $ 1.0 million, respectively, related to the change in fair value of our investment.

Changes in the fair value of this investment are recognized in other expense, net in our consolidated statements of operations.

During the year ended December 31, 2024, we contributed $ 1.3 million to maintain our 25 % ownership interest in ECOTEC, which is included in other assets in our consolidated balance sheets.

See Note 25 (“Fair Value Measurements”) for further details.

Other Strategic Investments

On December 19, 2025, we entered into a SAFE with Shoreline AI, a software-as-a-service company, focused on predictive maintenance for energy infrastructure assets.

We have elected the fair value measurement alternative to account for this investment and at December 31, 2025, the carrying value of our investment was equal to its $ 5.2 million cost, including cumulative transaction costs of $ 0.2 million, and is included in other assets in our consolidated balance sheets.

Accrued Liabilities

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Accrued interest

Accrued sales and use tax audit settlement liabilities

Other accrued liabilities

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The revenue recognized and deferred during the periods is primarily related to freight billings for contract operations and milestone billings for aftermarket services.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Long–Term Debt

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(in thousands)

December 31, 2025

December 31, 2024

Credit Facility

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Long-term debt

Credit Facility

Third Amendment to the Amended and Restated Credit Agreement

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.

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

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

The weighted average annual interest rate on the outstanding balance under our Credit Facility was 5.8 % and 6.8 % at December 31, 2025 and 2024, respectively.

We incurred $ 1.9 million, $ 2.1 million and $ 1.7 million in commitment fees during the years ended December 31, 2025, 2024 and 2023, respectively.

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

Additionally, all undrawn capacity on our Credit Facility was available for borrowings as of December 31, 2025.

Second Amendment to the Amended and Restated Credit Agreement

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 to 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).

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Credit Facility

During the year ended December 31, 2025, we incurred $ 1.9 million in transaction costs related to the Second Amendment to the Amended and Restated Credit Agreement, which were included in other assets in our consolidated balance sheets and are being amortized over the remaining term of the Credit Facility.

First Amendment to the Amended and Restated Credit Agreement

On August 28, 2024, we amended our Amended and Restated Credit Agreement to, among other things:

In August 2024, we amended our Amended and Restated Credit Agreement to, among other things:

● increase the borrowing capacity of the Credit Facility from $ 750.0 million to $ 1.1 billion;

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Amended and Restated Credit Agreement

On May 16, 2023, we amended and restated our Credit Facility to, among other things:

● extend the maturity date of the Credit Facility from November 8, 2024 to May 16, 2028 (or December 2, 2026 or December 3, 2027 if any portion of the 2027 Notes and 2028 Notes, respectively, remain outstanding at such date);

In May 2023, we amended and restated our Credit Facility to, among other things:

● extend the maturity date of the Credit Facility from November 8, 2024 to May 16, 2028 or December 3, 2027 (if any portion of the 2028 Notes remain outstanding at such date);

● change the referenced rate from LIBOR to SOFR so that borrowings under the Credit Facility bear interest at, based on our election, either a base rate or SOFR, plus an applicable margin;

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In addition, we wrote off $ 1.0 million of unamortized deferred financing costs as a result of the Amended and Restated Credit Agreement, which was recorded to interest expense in our consolidated statements of operations during the year ended December 31, 2023.

As of December 31, 2024, there were $ 4.0 million letters of credit outstanding under the Credit Facility and the applicable margin on borrowings was 2.2 %.

The weighted average annual interest rate on the outstanding balance under our Credit Facility was 6.8 % and 7.7 % at December 31, 2024 and 2023, respectively.

As of December 31, 2024, we were in compliance with all covenants under our Amended and Restated Credit Agreement.

Additionally, all undrawn capacity on our Credit Facility was available for borrowings as of December 31, 2024.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Other Facility Terms

As of December 31, 2024, our Credit Facility had an aggregate borrowing commitment of $ 1.1 billion.

Subject to certain conditions, including approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional $ 750.0 million.

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.

The Credit Facility bears interest at either a base rate or SOFR, at our option, plus an applicable margin.

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Depending on our leverage ratio, the applicable margin varies (i) in the case of base rate loans, from 0.75 % to 1.50 % and (ii) in the case of SOFR loans, from 1.75 % to 2.5 %.

Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.25 % to 0.375 % depending on the ratio of the outstanding balance to the aggregate borrowing commitment.

We incurred $ 2.1 million, $ 1.7 million and $ 1.9 million in commitment fees during the years ended December 31, 2024, 2023 and 2022, respectively.

The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors, the largest of which is compressors.

Borrowings under the Credit Facility are secured by substantially all of our personal property assets and certain of our subsidiaries.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The Amended and Restated Credit Agreement contains various covenants including, but not limited to, 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.

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(1) Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter.

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 were 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.

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.

The 2034 Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the U.S.

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in accordance with Regulation S under the Securities Act.

The 2034 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us, and by all of our existing subsidiaries, other than Archrock Partners Finance Corp., which is the issuer of the 2034 Notes.

The 2034 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness.

We may, at our option, redeem all or part of the 2034 Notes at any time on or after February 1, 2029, at specified redemption prices, plus any accrued and unpaid interest.

In addition, prior to February 1, 2029, we may redeem up to 40 % of the 2034 Notes, in an amount equal to the net cash proceeds of one or more equity offerings, at a specified redemption price, plus any accrued and unpaid interest.

We may also redeem all or part of the 2034 Notes at any time prior to February 1, 2029 at a redemption price equal to the principal amount and a make whole premium, plus any accrued and unpaid interest.

The indenture governing the 2034 Notes contains covenants that, among other things, limit our ability to pay dividends on, repurchase or redeem our common stock or repurchase or redeem subordinated debt;

make investments;

incur or guarantee additional indebtedness or issue preferred securities;

create or incur certain liens;

consolidate, merge or transfer all or substantially all of our assets;

enter into agreements that restrict distributions or other payments from our restricted subsidiaries to us;

engage in transactions with affiliates;

and create unrestricted subsidiaries.

If the 2034 Notes achieve an investment grade rating from any two out of three of Moody’s Investors Service, Inc., Fitch Ratings, Inc.

and S&P Global Ratings and no default has occurred and is continuing, many of these covenants will terminate.

The indenture governing the 2034 Notes also contains customary events of default.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

In August 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 2032 Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the U.S.

except pursuant to a registration exemption under the Securities Act and applicable state securities laws.

We offered and issued the 2032 Notes only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to certain non-U.S.

persons outside the U.S.

in accordance with Regulation S under the Securities Act.

The 2032 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us, and by all of our existing subsidiaries, other than Archrock Partners Finance Corp., which is the issuer of the 2032 Notes.

The 2032 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness.

We may, at our option, redeem all of part of the 2032 Notes at any time on or after September 1, 2027, at specified redemption prices, plus any accrued and unpaid interest.

We may, at our option, redeem all or part of the 2032 Notes at any time on or after September 1, 2027, at specified redemption prices, plus any accrued and unpaid interest.

In addition, prior to September 1, 2027, we may redeem up to 40 % of the 2032 Notes, in an amount equal to the net cash proceeds of one or more equity offerings, at a specified redemption price, plus any accrued and unpaid interest.

We may also redeem all or part of the 2032 Notes at any time prior to September 1, 2027 at a redemption price equal to the principal amount and a make whole premium, plus any accrued and unpaid interest.

2027 Notes Tender Offer

In connection with the 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 during the year ended December 31, 2024.

2027 Notes and 2028 Notes

The indenture governing the 2032 Notes contains covenants that, among other things, limit our ability to pay dividends on, repurchase or redeem our common stock or repurchase or redeem subordinated debt;

make investments;

incur or guarantee additional indebtedness or issue preferred securities;

create or incur certain liens;

consolidate, merge or transfer all or substantially all of our assets;

enter into agreements that restrict distributions or other payments from our restricted subsidiaries to us;

engage in transactions with affiliates;

and create unrestricted subsidiaries.

If the 2032 Notes achieve an investment grade rating from each of Moody’s Investors Service, Inc.

and S&P Global Ratings and no default has occurred and is continuing, many of these covenants will terminate.

The indenture governing the 2032 Notes also contains customary events of default.

In December 2020, we completed a private offering of $ 300.0 million aggregate principal amount of 6.25 % senior notes due April 2028, which were issued pursuant to the indenture under which we completed a private offering of $ 500.0 million aggregate principal amount of 6.25 % senior notes in December 2019.

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We received net proceeds of $ 309.9 million, after deducting issuance costs of $ 4.7 million, from our December 2020 offering and net proceeds of $ 491.8 million, after deducting issuance costs of $ 8.2 million, from our December 2019 offering.

The net proceeds from the 2028 Notes were used to repay borrowings outstanding under our Credit Facility.

Issuance costs related to the 2028 Notes are considered deferred financing costs, and together with the issue premium of the December 2020 offering of 2028 Notes, are recorded within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statements of operations over the terms of the notes.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us and all of our existing subsidiaries, other than Archrock Partners, L.P.

and Archrock Partners Finance Corp., which are co–issuers of both offerings, and certain of our future subsidiaries.

The 2028 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness.

The 2028 Notes may be redeemed at any time, in whole or in part, at specified redemption prices and make–whole premiums, plus any accrued and unpaid interest.

The indenture governing the 2028 Notes contains covenants that, among other things, limit our ability to pay dividends on, repurchase or redeem our common stock or repurchase or redeem subordinated debt;

make investments;

incur or guarantee additional indebtedness or issue preferred securities;

create or incur certain liens;

consolidate, merge or transfer all or substantially all of our assets;

enter into agreements that restrict distributions or other payments from our restricted subsidiaries to us;

engage in transactions with affiliates;

and create unrestricted subsidiaries.

If the 2028 Notes achieve an investment grade rating from each of Moody’s Investors Service, Inc.

and S&P Global Ratings and no default has occurred and is continuing, many of these covenants will terminate.

The indenture governing the 2028 Notes also contains customary events of default.

In March 2019, we completed a private offering of $ 500.0 million aggregate principal amount of 6.875 % senior notes due April 2027 and received net proceeds of $ 491.2 million after deducting issuance costs of $ 8.8 million.

The $ 500.0 million of notes were issued at 100 % of their face value and have an effective interest rate of 7.9 %.

In August 2024, we completed a cash tender offer to purchase $ 200 million aggregate principal amount of the 2027 Notes, after which $ 300 million aggregate principal amount of the 2027 Notes remained outstanding.

The net proceeds from the 2027 Notes and 2028 Notes were used to repay borrowings outstanding under our Credit Facility.

Issuance costs related to the 2027 Notes and 2028 Notes are considered deferred financing costs, and together with the issue premium of the December 2020 offering of 2028 Notes, are recorded within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statements of operations over the terms of the notes.

The 2027 Notes and 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us and all of our existing subsidiaries, other than Archrock Partners, L.P.

and Archrock Partners Finance Corp., which are co–issuers of both offerings, and certain of our future subsidiaries.

The 2027 Notes and 2028 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness.

The 2027 Notes and 2028 Notes may be redeemed at any time, in whole or in part, at specified redemption prices and make–whole premiums, plus any accrued and unpaid interest.

The net proceeds from the 2027 Notes were used to repay borrowings outstanding under our Credit Facility.

Issuance costs related to the 2027 Notes were considered deferred financing costs and were recorded within long-term debt in our consolidated balance sheets and were being amortized to interest expense in our consolidated statements of operations over the terms of the notes.

2027 Notes Tender Offer

In connection with the offering of the 2032 Notes, we completed a concurrent cash tender offer of $ 202.0 million, which reflects approximately 101 % of the $ 200.0 million aggregate principal amount of the tendered 2027 Notes and $ 0.2 million of agent and legal fees.

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.

Debt Covenant Compliance

As of December 31, 2025, we were in compliance with all covenants under our Debt Agreements, excluding the 2034 Notes, which were issued in January 2026 and not subject to covenant compliance as of December 31, 2025.

Archrock, Inc.

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Maturities of Long–Term Debt

As of December 31, 2024, the maturities of our long–term debt, excluding interest to be accrued, are as follows:

Principal maturities of long–term debt over the next five years are as follows:

(in thousands)

Long-term debt maturities through 2030

Commitments and Contingencies

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We are also self–insured for property damage to our offshore assets.

In August 2021, Hurricane Ida made landfall in Louisiana, causing operational disruptions, damage to compressors and a temporary shutdown of facilities in Louisiana that negatively impacted our financial performance in the quarter.

As of December 31, 2021, we had an insurance recovery of $ 2.8 million related to the facility and compressor damages, which we received in cash during the three months ended March 31, 2022.

In September 2022, we received an additional $ 0.4 million related to business interruption insurance recovery proceeds.

We are subject to a number of state and local taxes that are not income–based.

As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due.

As many of these taxes are subject to audit by the taxing authorities, it is reasonably possible that an audit could result in additional taxes due.

We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability.

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We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim.

We believe the likelihood is remote that the impact of potential unasserted claims from non–income–based tax audits could be material to our consolidated financial position, but it is possible that the resolution of future audits could be material to our consolidated results of operations or cash flows.

As of both December 31, 2024 and 2023, $ 0.6 million of the tax contingencies mentioned above related to audits that have advanced from the audit review phase to the contested hearing phase.

As of December 31, 2024, $ 4.3 million of the tax contingencies mentioned above had an offsetting indemnification asset.

None were indemnified as of December 31, 2023.

We believe the likelihood is remote that the impact of potential unasserted claims from non–income–based tax audits could be material to our consolidated financial position, but it is reasonably possible that the resolution of future audits could be material to our consolidated results of operations or cash flows.

As of December 31, 2024, $ 0.6 million of the tax contingencies mentioned above related to audits that had advanced to the contested hearing phase, and by December 31, 2025, these audits are now closed.

As of December 31, 2025 and 2024, $ 3.1 million and $ 4.3 million of the tax contingencies mentioned above had an offsetting indemnification asset, respectively.

We settled certain sales and use tax audits for which we recorded a net benefit of $ 27.8 million during the year ended December 31, 2025, which is primarily reflected as a decrease to cost of sales, exclusive of depreciation and amortization.

For subsequent open certain sales and use tax periods, we recorded tax credits as a net benefit of $ 8.0 million during the year ended December 31, 2025, which is primarily reflected as a decrease to cost of sales, exclusive of depreciation and amortization.

As of December 31, 2025, these settlements and credits were reflected in our consolidated balance sheet as a $ 41.5 million tax refund receivable and an offsetting $ 9.9 million in accrued liabilities and $ 1.0 million in other liabilities.

Archrock, Inc.

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Stockholders’ Equity

NGCS Acquisition

On May 1, 2025, we completed the NGCS Acquisition and issued approximately 2.3 million shares of common stock to NGCSE sellers as part of the acquisition purchase price.

The NGCS acquisition date fair value was $ 53.0 million and is reflected in common stock and additional paid-in capital in our consolidated statements of equity.

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

TOPS Acquisition

In August 2024, we completed the TOPS Acquisition and issued approximately 6.9 million shares of common stock to the sellers as part of the acquisition purchase price.

The TOPS acquisition date fair value was $ 139.1 million and is reflected in common stock and additional paid-in capital in our consolidated statements of equity.

See Note 4 (“Business Transactions”) 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.

In July 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.

TOPS Acquisition

On August 30, 2024, we completed the TOPS Acquisition and issued approximately 6.9 million shares of common stock to the sellers as part of the acquisition purchase price.

The acquisition date fair value was $ 139.1 million and is reflected in common stock and additional paid-in capital in our consolidated statements of equity.

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

Share Repurchases

Share Repurchase Program

On April 27, 2023, our Board of Directors authorized a share repurchase program that allowed us to repurchase up to $ 50.0 million of outstanding common stock.

Our Board of Directors authorized the Share Repurchase Program in April 2023 that allowed us to repurchase and retire up to $ 50.0 million of outstanding common stock.

Between April 2024 and October 2025, extensions of the Share Repurchase Program were approved by our Board of Directors authorizing an additional $ 200.0 million, or a total of $250.0 million, to repurchase and retire outstanding common stock through December 31, 2026.

As of December 31, 2025, available capacity under the Share Repurchase Program was $ 117.7 million.

Under the Share Repurchase Program, shares of our common stock may be repurchased periodically, including in the open market, privately negotiated transactions, or otherwise in accordance with applicable federal securities laws, at any time.

On April 25, 2024, our Board of Directors approved an extension of the Share Repurchase Program upon expiry of the current authorization on April 27, 2024, for an additional 24-month period.

In connection with the extension, the Board of Directors replenished the amount of shares authorized for repurchase under the Share Repurchase Program, resulting in available capacity of $ 50.0 million at that time.

Through December 31, 2024, we had repurchased 1,483,200 common shares at an average price of $ 14.97 per share for an aggregate of $ 22.2 million.

As of December 31, 2024, $ 37.9 million remained available for purchase under the Share Repurchase Program.

The actual timing, manner, number, and value of shares repurchased under the program will be determined by us at our discretion.

Shares Withheld to Cover

The 2020 Plan allows us to withhold shares upon vesting of restricted stock at the then-current market price to cover taxes required to be withheld on the vesting date.

Through December 31, 2025, we repurchased 4,461,311 common shares at an average price of $ 20.72 per share for an aggregate of $ 92.4 million and retired 3,813,831 common shares at an average price of $ 20.09 per share for an aggregate of $ 76.6 million under the Share Repurchase Program.

On January 9, 2026, we retired 647,480 common shares at an average price of $ 24.44 per share for an aggregate of $ 15.8 million for shares repurchased during the fourth quarter 2025.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table summarizes shares repurchased:

December 31, 2024

Shares Withheld to Cover

The 2020 Plan allows us to withhold shares upon vesting of restricted stock at the then-current market price to cover taxes required to be withheld on the vesting date.

The following table summarizes shares repurchased and shares withheld:

Year Ended December 31, 2025

(dollars in thousands, except per share amounts)

Total Number of Shares Repurchased

Total Number of Shares

Average Price per Share

Total Cost of Shares Repurchased

Total Cost of Shares

Shares repurchased under the Share Repurchase Program

Shares withheld related to net settlement of equity awards

December 31, 2023

Year Ended December 31, 2024

(dollars in thousands, except per share amounts)

Total Number of Shares Repurchased

Total Number of Shares

Average Price per Share

Total Cost of Shares Repurchased

Total Cost of Shares

Shares repurchased under the Share Repurchase Program

Shares withheld related to net settlement of equity awards

At–the–Market Continuous Equity Offering Program

In February 2021, we entered into the ATM Agreement, pursuant to which we may offer and sell shares of our common stock from time to time for an aggregate offering price of up to $ 50.0 million.

We use the net proceeds of these offerings, after deducting sales agent fees and offering expenses, for general corporate purposes.

Offerings of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject to the ATM Agreement or (ii) the termination of the ATM Agreement by us or by each of the sales agents.

Any sales agent may also terminate the ATM Agreement but only with respect to itself.

During the year ended December 31, 2022, we sold 447,020 shares of common stock, for net proceeds of $ 4.2 million, pursuant to the ATM Agreement.

There were no shares of common stock sold during the years ended December 31, 2024 and 2023.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Cash Dividends

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On January 29, 2026 , our Board of Directors declared a quarterly dividend of $ 0.22 per share of common stock, or approximately $ 38.7 million, which was paid on February 18, 2026 to stockholders of record at the close of business on February 10, 2026 .

Accumulated Other Comprehensive Loss

Components of comprehensive income are net income (and all changes in equity during a period except those resulting from transactions with owners.

Our accumulated other comprehensive loss consists of changes in the fair value of our interest rate swap derivative instruments, net of tax.

See Note 26 (“Derivatives and Hedging”) for further details on our interest rate swap derivative instruments.

The following table presents the changes in accumulated other comprehensive loss, net of tax:

(in thousands)

December 31, 2022

Beginning accumulated other comprehensive loss

Other comprehensive income, net of tax:

Loss recognized in other comprehensive income

Loss reclassified from accumulated other comprehensive loss to interest expense

Total other comprehensive income

Ending accumulated other comprehensive loss

Archrock, Inc.

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Revenue from Contracts with Customers

The following table presents our revenue from contracts with customers by segment (see Note 30 (“Segments”)) and disaggregated by revenue source:

The following table presents our revenue from contracts with customers by segment and disaggregated by revenue source:

Year Ended December 31,

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OTC parts and components sales and other revenue is recognized at a point in time.

See Note 28 (“Segments”) for further details.

Performance Obligations

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(in thousands)

Thereafter (1)

Remaining performance obligations

(1) Performance obligations of $ 0.7 million and $ 0.6 million during the years ended December 31, 2031 and 2032 , respectively.

We do not disclose the aggregate transaction price for the remaining performance obligations for aftermarket services as there are no contracts with customers with an original contract term that is greater than one year.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Stock–Based Compensation

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Total stock-based compensation expense

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Stock Incentive Plans

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Restricted Stock Awards and Performance–Based Restricted Stock Units

Grants of restricted stock are subject to forfeiture, restrictions on transfer and certain other conditions until vesting, which generally occurs in three equal installments following the date of grant.

Grants of restricted stock are subject to forfeiture, restrictions on transfer and certain other conditions until vesting, which generally occurs on the one-year anniversary of the grant date or in three equal installments following the date of grant.

Compensation expense is recognized over the vesting period equal to the fair value of our common stock at the grant date.

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The final number of shares of common stock issuable upon vesting can range from 0 % to 250 % of the initial grant depending on the level of achievement as determined by the Compensation Committee of our Board of Directors.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The fair value of the horsepower utilization performance-based restricted stock units is equal to the fair value of our common stock at the grant date.

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The dividend yield used is 0.0 % to approximate accumulation of earnings.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The assumptions that were used to estimate the fair value of our restricted stock units and performance–based stock units are as follows:

The assumptions that were used to estimate the fair value of our total shareholder return performance–based restricted stock units are as follows:

Year Ended December 31,

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The grant date fair value of the cash settled performance units granted during the years ended December 31, 2025, 2024 and 2023 was $ 3.0 million, $ 2.1 million and $ 1.9 million, respectively.

The performance criteria for the cash settled performance units granted during the year ended December 31, 2020, were not met over the performance period;

therefore, the Compensation Committee of our Board of Directors determined that no payout was earned, and no cash was paid upon vesting during the year ended December 31, 2023.

Cash paid upon vesting of the cash settled performance units during the years ended December 31, 2025 and 2024 was $ 12.2 million and $ 4.3 million, respectively.

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Time-Based Cash or Equity Settled Performance Units

In 2024, we issued time-based equity awards that vest in three equal installments following the grant date.

These awards are payable in either cash or restricted stock units, at the employees’ option, based on the value of the Company’s common stock at the vesting date.

Grants of time-based cash or equity settled performance units vest in three equal installments following the grant date.

These awards are payable in either cash or restricted stock units, at the employees’ option, based on the fair value of our common stock at the vesting date.

These awards are subject to certain qualifying retirement provisions, are classified as liability awards and expense recognized based on the fair value measured at the end of each reporting period.

These awards also include dividend equivalent rights that accumulate during the vesting period.

During the year ended December 31, 2024, 187,500 restricted stock units were granted, with a total grant date fair value of $ 3.0 million, none of which vested during the year.

As of December 31, 2024, we expect $ 1.8 million of unrecognized compensation cost related to non-vested restricted stock units over a weighted-average period of 1.5 years.

Activity related to our time-based cash or equity settled performance units is as follows:

(in thousands, except per share amounts)

Non-vested time-based cash or equity settled performance units, December 31, 2024

Adjustment for performance

Non-vested time-based cash or equity settled performance units, December 31, 2025

The grant date fair value of the time-based cash or equity settled performance units granted during the years ended December 31, 2025 and 2024 was $ 2.6 million and $ 3.0 million, respectively.

The first installment of these time-based cash or equity settled performance awards were settled as restricted stock units.

The fair value of the restricted stock units vested during the year ended December 31, 2025 was $ 1.9 million.

As of December 31, 2025, we expect $ 0.6 million of unrecognized compensation cost related to non-vested time-based cash or equity settled performance units over a weighted-average period of 0.2 years.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Employee Stock Purchase Plan

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As of December 31, 2025, 208,878 shares remained available for purchase under the ESPP.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Directors’ Stock and Deferral Plan

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Based on that review, we may reduce the expected proceeds from disposition and record additional impairment to reduce the book value of each unit to its estimated fair value.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

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

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Impairment recorded on idle compressors retired from the active fleet

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Assets Held For Sale

In connection with the Flowco Disposition, we adjusted the carrying value of the disposal group to its estimated fair value less costs to sell and recorded a write-down of $ 9.6 million during the year ended December 31, 2025, which is included in long-lived and other asset impairment in our consolidated statements of operations.

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

Restructuring Charges

During the second quarter of 2025, management approved and initiated a plan to exit certain facilities that were no longer deemed economical for our business, and during the year ended December 31, 2025, we executed the plan and incurred $ 0.9 million of costs to exit these facilities.

The facility closure costs incurred under the above restructuring plan were recorded to restructuring charges in our consolidated statements of operations.

We expect to incur additional restructuring charges of $ 0.3 million to $ 0.5 million over the next six months related to these restructuring activities.

During the first quarter of 2025, management approved and executed a plan to exit a facility no longer deemed economical for our business, and in the first quarter of 2025, we incurred $ 0.7 million of costs to exit this facility.

The severance and property disposal costs incurred under this restructuring plan were recorded to restructuring charges in our consolidated statements of operations.

We do no t expect to incur additional restructuring charges related to these restructuring activities.

During the first quarter of 2023, a plan to further streamline our organization and more fully align our teams to improve our customer service and profitability was approved by management.

We did not incur restructuring charges during the year ended December 31, 2024, and we do no t expect to incur additional restructuring charges related to these restructuring activities .

We did no t incur restructuring charges during the year ended December 31, 2024, and we do no t expect to incur additional restructuring charges related to these restructuring activities .

The following table presents restructuring charges incurred by segment:

(in thousands)

Facility closure

Total restructuring charges

Organizational restructuring

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(1) Represents expense incurred within our corporate function and not directly attributable to our segments.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table presents restructuring charges incurred by cost type:

Year Ended December 31,

(in thousands)

December 31, 2023

Facility closure

Severance costs

Property disposal and closure costs

Total facility closure

Organizational restructuring

1 unchanged sentence

Other restructuring costs

Total organizational restructuring costs

Total restructuring costs

Current and Deferred Tax Provision

Our provision for income taxes consisted of the following:

Tax Provision and Payments

The following table presents income before income taxes:

Year Ended December 31,

(in thousands)

The following table presents our provision for income taxes:

Year Ended December 31,

(in thousands)

Current tax provision:

3 unchanged sentences

Provision for income taxes

The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 resulted in effective tax rates of 26 %, 26 % and 27 %, respectively.

During the years ended December 31, 2024, 2023 and 2022, we paid income taxes, net of $2.2 million, $1.3 million and $0.4 million, respectively.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The reconciliation of these effective tax rates to the U.S.

statutory rate of 21 % is as follows:

The following table presents income taxes paid, net:

Year Ended December 31,

(in thousands)

Income taxes at U.S.

federal statutory rate

Net state income taxes

Unrecognized tax benefits (1)

Valuation allowances and write off of tax attributes (2)

Total income taxes paid, net

The following table reconciles the U.S.

Federal statutory tax rate to our effective tax rate:

Year Ended December 31,

(in thousands)

Federal statutory tax rate

State and local income taxes, net of federal income tax effect (1)

Changes in valuation allowance (2)

Nontaxable or nondeductible items

Executive compensation limitation

Provision for income taxes

Benefit from equity-settled long-term incentive compensation

Changes in unrecognized tax benefits (3)

Effective tax rate

(1) During the years ended December 31, 2025 and 2024, state taxes in New Mexico made up greater than 50% of the tax effect in this category.

During the year ended December 31, 2023, state taxes in New Mexico and Texas made up greater than 50% of the tax effect in this category.

(2) See “Tax Attributes and Valuation Allowances” below for further details.

(3) Includes the expiration of statute of limitations.

See “Unrecognized Tax Benefits” below for further details.

(2) See “Tax Attributes and Valuation Allowances” below for further details.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Deferred income tax balances are the direct effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the taxes are actually paid or recovered.

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Total deferred tax liabilities

Net deferred tax asset (liability) (2)

Net deferred tax liability (2)

(1) See “Tax Attributes and Valuation Allowances” below for further details.

(2) The 2024 and 2023 net deferred tax asset or liability are reflected in our consolidated balance sheets as deferred tax assets of $ 3.0 million and $ 3.2 million, respectively, and deferred tax liabilities of $ 62.5 million and $ 4.9 million, respectively.

Both the 2024 and 2023 balances are based on a U.S.

federal tax rate of 21 %.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

(2) The net deferred tax liability as of December 31, 2025 and 2024 is reflected in our consolidated balance sheets as deferred tax assets of $ 2.1 million and $ 3.0 million, respectively, and deferred tax liabilities of $ 198.3 million and $ 62.5 million, respectively.

Tax Attributes and Valuation Allowances

Changes in our valuation allowance are as follows:

The following table presents changes in our valuation allowance:

Year Ended December 31,

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Balance at end of period

Pursuant to Sections 382 and 383 of the Code, utilization of loss and credit carryforwards are subject to annual limitations due to any ownership changes of 5% stockholders.

Pursuant to Section 382 and Section 383 of the Code, utilization of loss and credit carryforwards are subject to annual limitations due to any ownership changes of 5% stockholders.

In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a rolling three–year period.

We do not currently expect that any loss carryforwards or credit carryforwards will expire as a result of any 382 or 383 limitations.

We do not currently expect that any loss carryforwards or credit carryforwards will expire as a result of any Section 382 or Section 383 limitations.

Our ability to utilize loss carryforwards and credit carryforwards against future U.S.

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federal income tax may be limited in the future if we have a 50% or more ownership change in our 5% stockholders.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

We record valuation allowances when it is more-likely-than-not that some portion or all of our deferred tax assets will not be realized.

1 unchanged sentence

If we do not meet our expectations with respect to taxable income, we may not realize the full benefit from our deferred tax assets, which would require us to record a valuation allowance in our tax provision in future years.

As of each reporting date, we consider new evidence to evaluate the realizability of our net deferred tax asset position by assessing the available positive and negative evidence.

Changes to the valuation allowance are reflected in the statement of operations.

As of each reporting date, we consider new evidence to evaluate the realizability of our deferred tax assets by assessing the available positive and negative evidence.

Changes to the valuation allowance are reflected in our consolidated statement of operations.

The amount of our deferred tax assets considered realizable could be adjusted if projections of future taxable income are reduced or objective negative evidence in the form of a three–year cumulative loss is present or both.

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This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets.

As of December 31, 2024, we recorded a valuation allowance of $ 0.9 million on our deferred tax asset associated with our ECOTEC investment.

At December 31, 2024, we had U.S.

As of December 31, 2025, we recorded a valuation allowance of $ 0.9 million on our deferred tax asset associated with our investment in ECOTEC.

As of December 31, 2025, we had U.S.

federal and state NOL carryforwards of $ 648.6 million and $ 271.7 million, respectively, included in our NOL deferred tax asset that are available to offset future taxable income.

If not used, the federal and state NOL carryforwards will begin to expire in 2037 and 2026, respectively, though $ 629.4 million of the U.S.

federal and $ 162.9 million of the state NOL carryforwards have no expiration date.

In connection with the state NOL deferred tax asset, we recorded a valuation allowance of $ 0.5 million as of both December 31, 2024 and 2023.

At December 31, 2024, we had a U.S.

federal NOL carryforwards have no expiration.

If not used, the state NOL carryforwards will begin to expire in 2026, although $ 174.3 million of the state NOL carryforwards have no expiration date.

In connection with the state NOL deferred tax asset, we recorded a valuation allowance of $ 0.6 million and $ 0.5 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, we had a U.S.

federal tax credit carryforward of $ 1.7 million.

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These carryforwards have no expiration.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Unrecognized Tax Benefits

Changes in our unrecognized tax benefits (including discontinued operations) are as follows:

The following table presents changes in our unrecognized tax benefits, including discontinued operations:

Year Ended December 31,

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Ending balance

We had $ 19.5 million, $ 19.5 million and $ 19.7 million of unrecognized tax benefits at December 31, 2024, 2023 and 2022, respectively, of which $( 0.6 ) million, $ 1.1 million and $ 1.1 million, respectively, would affect the effective tax rate if recognized and $ 7.9 million, $ 7.9 million and $ 7.9 million, respectively, would be reflected in income from discontinued operations, net of tax if recognized.

We recorded $ 2.7 million, $ 2.5 million and $ 2.1 million of potential interest expense and penalties related to unrecognized tax benefits associated with uncertain tax positions (including discontinued operations) in our consolidated balance sheets as of year ended December 31, 2024, 2023 and 2022, respectively.

We had $ 31.3 million, $ 19.5 million and $ 19.5 million of unrecognized tax benefits at December 31, 2025, 2024 and 2023, respectively, of which $ 9.5 million, $( 0.6 ) million and $ 1.1 million, respectively, would affect the effective tax rate, if recognized.

For each of the years ended December 31, 2025, 2024 and 2023, $ 7.9 million would be reflected in income from discontinued operations, net of tax, if recognized.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

We recorded potential interest expense and penalties related to unrecognized tax benefits associated with uncertain tax positions, including discontinued operations, in our consolidated balance sheets of $ 2.8 million, $ 2.7 million and $ 2.5 million as of December 31, 2025, 2024 and 2023, respectively.

To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as reductions in income tax expense.

We recorded $ 0.3 million of potential expenses or releases of interest or penalties in our consolidated statements of operations during 2024, $ 0.3 million of potential expenses or releases of interest or penalties during 2023, and no potential interest expense and penalties during 2022.

We recorded potential interest expense and penalties in our consolidated statements of operations of $ 0.1 million, $ 0.3 million and $ 0.3 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Subject to the provisions of our tax matters agreement with Exterran Corporation, both parties agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin–off, including any ongoing or future amendments and audits for these returns, for the portion of the tax liability, including interest and penalties, that relates to their respective operations reported in the filing.

As of December 31, 2024 and 2023, we recorded an indemnification asset (including penalties and interest) of $ 7.9 million and $ 7.9 million, respectively, which is related to unrecognized tax benefits in our consolidated balance sheets (see Note 28 (“Discontinued Operations”)).

As of both December 31, 2025 and 2024, we recorded an indemnification asset, including penalties and interest, of $ 7.9 million, which is related to unrecognized tax benefits in our consolidated balance sheets.

See Note 26 (“Discontinued Operations”) for further details.

We and our subsidiaries file consolidated and separate income tax returns in the U.S.

7 unchanged sentences

We are not currently involved in federal nor any state income tax audits.

As of December 31, 2024, we believe it is reasonably possible that $ 3.6 million of our unrecognized tax benefits, including penalties, interest and discontinued operations, will be reduced prior to December 31, 2025 due to the settlement of audits or the expiration of statutes of limitations or both.

However, due to the uncertain and complex application of the tax regulations, it is possible that the ultimate resolution of these matters may result in liabilities that could materially differ from this estimate.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Impact of New Legislation

The Organization for Economic Co-operation and Development has proposed a framework to implement a global minimum tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2).

During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws.

While it is uncertain whether the U.S.

will enact legislation to adopt Pillar 2, certain countries in which our unconsolidated affiliates operate have adopted legislation.

Based on enacted law we have determined that Pillar 2 does not have a material impact on our Financial Statements.

The OB3 Tax Law made permanent certain key elements of the Tax Cuts and Jobs Act, including reinstating:

the add-back for depreciation and amortization in the business interest expense limitation, the allowance for 100% bonus depreciation, and a full expensing option for domestic research and experimental expenditures.

These certain key elements allow for acceleration of certain deductions, which could reduce cash tax payments in future periods.

The OB3 Tax Law did not have a material impact on our consolidated balance sheet as of December 31, 2025, or on our consolidated statement of operations for the year ended December 31, 2025.

The Pillar 2 framework establishes a global minimum corporate income tax rate and has been enacted in certain jurisdictions.

We evaluated the potential impact of Pillar 2 and related enacted legislation on our operations, including our interests in unconsolidated affiliates, and have determined that Pillar 2 does not have a material impact on our consolidated financial statements.

Earnings per Common Share

4 unchanged sentences

Diluted earnings per common share is computed using the weighted-average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding performance-based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would have been anti-dilutive.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table shows the calculation of net income attributable to common stockholders, which is used in the calculation of basic and diluted earnings per common share, potential shares of common stock that were included in computing diluted earnings per common share and the potential shares of common stock issuable that were excluded from computing diluted earnings per common share as their inclusion would have been anti-dilutive:

8 unchanged sentences

Performance-based restricted stock units

Time-based restricted stock units

Weighted-average common shares outstanding used in diluted earnings per common share

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Derivatives and Hedging

Prior to the expiration of our interest rate swaps in March 2022, we used derivative instruments to manage our exposure to fluctuations in the variable interest rate of our Credit Facility.

We did not use derivative instruments for trading or other speculative purposes.

The effect of our derivative instruments on our consolidated statements of operations is as follows:

Year Ended December 31,

(in thousands)

Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded

Interest rate swaps designated as cash flow hedging instruments:

Pre-tax loss recognized in other comprehensive income

Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense

Interest rate swaps not designated as hedging instruments:

Gain recognized in interest expense

See Note 18 (“Stockholders’ Equity”) for further details on our derivative instruments.

Fair Value Measurements

7 unchanged sentences

Investment in ECOTEC

As of December 31, 2024, we owned a 25 % equity interest in ECOTEC (see Note 13 (“Investments in Unconsolidated Affiliates”)).

We have elected the fair value option to account for this investment.

As of December 31, 2024, the fair value of our investment in ECOTEC is $ 14.7 million.

As of December 31, 2025, we owned a 25 % equity interest in ECOTEC in which we have elected the fair value option to account for this investment.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The fair value determination of this investment primarily consisted of unobservable inputs, which creates uncertainty in the measurement of fair value as of the reporting date.

The fair value determination of our investment in ECOTEC primarily consisted of unobservable inputs, which creates uncertainty in the measurement of fair value as of the reporting date.

The significant unobservable inputs used in the fair value measurement, which was valued through an average of an income approach (discounted cash flow method) and a market approach (guideline public company method), are the WACC and the revenue multiples.

13 unchanged sentences

The reconciliation of changes in the fair value of our investment in ECOTEC is as follows:

Year Ended December 31,

(in thousands)

3 unchanged sentences

Balance at end of period

Included in other expense, net in our consolidated statements of operations.

(1) Included in other expense, net in our consolidated statement of operations.

See Note 12 (“Investments in Unconsolidated Affiliates”) for further details.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Investment in Ionada

As of December 31, 2024 and 2023, we had a fully diluted ownership equity interest in Ionada of 12 % and 10 %, respectively, (see Note 13 (“Investments in Unconsolidated Affiliates”)).

We have elected the fair value measurement alternative to account for this investment.

On November 19, 2024, subject to the same terms and conditions of our initial investment of $ 3.8 million, we invested an additional $ 1.2 million dollars and as a result, the carrying value of our investment in Ionada at December 31, 2024 was $ 5.5 million, which includes cumulative transaction costs of $ 0.5 million.

There were no upward adjustments, impairments or downward adjustments to the carrying value of the investment as of December 31, 2024.

Investments in Unconsolidated Affiliates and Other Strategic Investments

As of December 31, 2025 and 2024, the carrying value of our investments in which we have elected the fair value measurement alternative was $ 10.6 million and $ 5.5 million, respectively, and is included in other assets in our consolidated balance sheets.

There were no upward adjustments, impairments or downward adjustments to the carrying value of these investments as of both December 31, 2025 and 2024.

See Note 12 (“Investments in Unconsolidated Affiliates”) for further details.

Compression Fleet

During the years ended December 31, 2025 and 2024, we recorded nonrecurring fair value measurements related to our idle compressors.

Our estimate of the compressors’ fair value was primarily based on the expected net sale proceeds compared to other 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.

Our estimate of the compressors’ fair value was primarily based on the expected net sale proceeds compared to other fleet units we recently sold, and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

We discounted the expected proceeds, net of selling and other carrying costs, using a weighted average disposal period of four years.

These fair value measurements are classified as Level 3.

The fair value of our impaired compression fleet impaired is as follows:

The fair value of our impaired compression fleet impaired was as follows:

(in thousands)

Impaired compression fleet

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Impaired compression fleet

The significant unobservable inputs used to develop the above fair value measurements were weighted by the relative fair value of the compression fleet being measured.

18 unchanged sentences

Fair value of fixed rate debt

(1) Carrying amounts are shown net of unamortized debt premium and deferred financing costs.

See Note 16 (“Long-Term Debt”).

(1) Carrying amounts exclude unamortized debt premium and deferred financing costs.

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

Discontinued Operations

7 unchanged sentences

Deferred tax liabilities

Liabilities of discontinued operations

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Liabilities of discontinued operations

The acquisition of Exterran Corporation by Enerflex, Ltd.

1 unchanged sentence

Related Party Transactions

During the year ended December 31, 2024, we made purchases of $ 0.5 million from our unconsolidated affiliate ECOTEC for use in our operations.

During the years ended December 31, 2025 and 2024, we made purchases of $ 0.4 million and $ 0.5 million, respectively from our unconsolidated affiliate ECOTEC for use in our operations.

We are a distributer of MaCH 4 NRS equipment in the U.S.

market and had committed to purchase from FGC Holdco, at arm’s length, a minimum of $ 64.3 million of MaCH 4 NRS equipment through March 31, 2026, subject to certain contractual provisions under the limited liability agreement that we, together with ColdStream, entered into with FGC Holdco on October 1, 2024.

On August 26, 2025, we amended the limited liability agreement and agreed to, among other items, cancel our remaining MaCH 4 NRS purchase commitments.

We incurred and paid an amendment fee of $ 3.6 million to FGC Holdco, which is included in other expense, net, in our consolidated statements of operations.

During the years ended December 31, 2025 and 2024, we made MaCH 4 NRS purchases of $ 3.5 million and $ 6.1 million, respectively, from our unconsolidated affiliate FGC Holdco to sell to third parties or for use in our operations.

The carrying value of assets and liabilities recognized in our consolidated balance sheets related to our variable interests in FGC Holdco and our maximum exposure to loss related to our involvement with an unconsolidated VIE were as follows:

(in thousands)

Investment in unconsolidated affiliate

Total VIE assets

Maximum exposure to loss

From August 2019 to present, our Board of Directors has included a member affiliated with our customer Hilcorp or its subsidiaries or affiliates.

Revenue from Hilcorp and affiliates was $ 40.5 million, $ 40.7 million and $ 35.4 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Accounts receivable, net due from Hilcorp and affiliates was $ 3.6 million and $ 3.8 million as of December 31, 2024 and 2023, respectively (see Note 6 (“Accounts Receivable, net”)).

Proceeds from the sale of used equipment to Hilcorp and affiliates was $ 9.9 million, $ 0.9 million and $ 0.2 million, during the years ended December 31, 2025, 2024 and 2023, respectively.

Accounts receivable, net due from Hilcorp and affiliates was $ 1.7 million and $ 3.6 million as of December 31, 2025 and 2024, respectively.

See Note 5 (“Accounts Receivable, net”) for further details.

During the year ended December 31, 2025, we made purchases of $ 0.3 million from our unconsolidated affiliate Shoreline AI for use in our operations.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

We manage our business segments primarily based on the type of product or service provided.

We operate two segments within the U.S.:

We have two segments that we operate within the U.S.:

contract operations and aftermarket services.

The contract operations segment provides natural gas compression services to meet specific customer requirements.

The aftermarket services segment provides a full range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.

The CODM of Archrock is our President & CEO.

Our contract operations segment primarily provides natural gas compression services to meet specific customer requirements.

Our aftermarket services segment provides a full range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.

Our CODM is our President & Chief Executive Officer.

Our CODM evaluates the performance of our segments and allocates resources primarily based on adjusted gross margin, defined as revenue less cost of sales, exclusive of depreciation and amortization, which are key components of segment operations.

1 unchanged sentence

Our CODM considers adjusted gross margin forecast to actual results and period over period financial variances in conjunction with product and customer service metrics and market trends when assessing segment performance and deciding how to allocate resources.

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.

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.

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Summarized financial information for our reporting segments is shown below:

7 unchanged sentences

(1) Segment revenue includes only sales to external customers.

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,

5 unchanged sentences

Adjusted gross margin

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table reconciles total adjusted gross margin to income before income taxes:

1 unchanged sentence

(in thousands)

Total adjusted gross margin

Adjusted gross margin

Selling, general and administrative

6 unchanged sentences

Gain on sale of assets, net

Other expenses, net

Other expense, net

Income before income taxes

Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table reconciles capital expenditures by segment to total capital expenditures:

13 unchanged sentences

Assets of discontinued operations

(1) Corporate–related items.

(1) Corporate–related items and our investments in unconsolidated affiliates.

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 9A. Controls and Procedures