USA Compression Partners, LP

USA Compression Partners maintains a highly leveraged capital structure, with long-term debt of $2.98 billion against total assets of $3.73 billion. The company holds minimal cash reserves of $14.5 million, resulting in a negative net cash position. Liquidity is supported by a current ratio of 1.55, indicating adequate short-term coverage of liabilities. Operating cash flow for Q1 2026 reached $86.1 million, while free cash flow stood at $61.9 million after capital expenditures of $24.2 million. The company funded the J-W Power Acquisition largely through debt issuance and equity, with $599.2 million in proceeds from its revolving credit facility offsetting the $444.4 million acquisition cost.

Profitability metrics show a return on assets of 2.98% for the period. Operating income increased to $91.4 million in Q1 2026, up from $69.4 million in the prior year period, driven by higher contract operations revenue. Net income attributable to common unitholders rose to $38.3 million from $16.1 million year-over-year. Interest expense remains a significant cost, totaling $49.0 million, which reflects the high debt load associated with recent acquisitions. The company maintains a distribution of $0.525 per common unit, which is fully covered by net income per unit of $0.27 when adjusted for the significant increase in weighted average units outstanding due to the acquisition.

Revenue concentration is high within the contract operations segment, which generated $293.5 million of the total $331.3 million in Q1 2026 revenue. Parts and service revenue contributed $21.9 million, while related-party revenue accounted for $15.9 million. The company discloses customer concentration risk, with one customer representing a significant portion of revenue and trade accounts receivable. Geographic exposure is primarily domestic, with operations focused on major U.S. shale basins, as indicated by the Texas Comptroller tax disclosures.

Growth trajectory is characterized by aggressive expansion through acquisitions, notably the J-W Power Acquisition completed in early 2026. Total revenues increased 35% year-over-year to $331.3 million in Q1 2026, compared to $245.2 million in Q1 2025. This growth is largely attributable to the addition of J-W Power assets, which were issued 456,564 common units in connection with the acquisition. The weighted average common units outstanding increased significantly from 117,513 in Q1 2025 to 142,750 in Q1 2026, reflecting the dilutive impact of the acquisition.

Risk factors include medium liquidity and dilution risks, with key flags noting negative net cash and potential offering risks. The company faces operational hazards, including natural disasters and cyberattacks, as well as financial risks related to interest rate fluctuations and customer creditworthiness. The high level of long-term debt imposes restrictive covenants and increases sensitivity to changes in the cost of capital. Integration risks associated with the J-W Power Acquisition and shared services with Energy Transfer are also highlighted.

Recent events include the filing of an 8-K reporting material agreements and departures of directors or officers, with items 3.03 and 5.03 flagged as medium severity. The company also disclosed subsequent events related to the J-W Power Acquisition, including the issuance of common units and cash payments. Management’s Discussion and Analysis highlights operating results, liquidity, and non-GAAP financial measures for the quarter ended March 31, 2026.

USA Compression generated $277 million in free cash flow for FY2025, demonstrating strong cash generation capabilities.

Net income grew at a 20.8% compound annual growth rate from FY2023 to FY2025, indicating robust profitability expansion.

USA Compression's cash conversion ratio of 3.54 ranks above the 75th percentile of its peer cohort.

The company carries a high leverage band with a net debt to EBITDA ratio of 4.25.

USA Compression faces a high credit risk flag, indicating potential challenges in meeting financial obligations.

Revenue decreased by 4.8% year-over-year in FY2025, reflecting a contraction in top-line growth.

The entity is subject to medium liquidity risk, which may constrain operational flexibility during market stress.

Revenue $331.3M; Operating income $91.4M.

• ▍Revenue $331.3M
• ▍Operating income $91.4M
• ▍Net margin 11.6%

Revenue $745.6M; Operating income $229.9M.

• ▍Revenue $745.6M
• ▍Operating income $229.9M
• ▍Net margin 11.2%

Revenue $495.4M; Operating income $146.0M.

• ▍Revenue $495.4M
• ▍Operating income $146.0M
• ▍Net margin 9.9%

Revenue $998.1M; Operating income $306.5M.

• ▍Revenue $998.1M
• ▍Operating income $306.5M
• ▍Net margin 11.2%

Revenue $950.4M; Operating income $294.4M.

• ▍Revenue $950.4M
• ▍Operating income $294.4M
• ▍Net margin 10.5%

Revenue $950.4M; Operating income $294.4M.

• ▍Revenue $950.4M
• ▍Operating income $294.4M
• ▍Net margin 10.5%

Revenue $846.2M; Operating income $232.0M.

• ▍Revenue $846.2M
• ▍Operating income $232.0M
• ▍Net margin 8.1%

Revenue $846.2M; Operating income $232.0M.

• ▍Revenue $846.2M
• ▍Operating income $232.0M
• ▍Net margin 8.1%