NYSE:AROC
Archrock, Inc.
Archrock delivers high-margin pressure pumping and completion services to major upstream operators in North America's most prolific shale basins.
Key Metrics
Investment Thesis
Bull Case
Archrock offers an attractive opportunity due to the sustained long-term demand for hydraulic fracturing services driven by US energy independence goals and expanding production in the Permian Basin. The company's strong balance sheet, growing market share in high-margin completions services, and consistent ability to generate cash flow provide a solid foundation for future growth and shareholder returns.
Bear Case
Potential headwinds include the cyclical nature of the oilfield services industry which ties earnings directly to oil prices and operator spending levels. High debt levels relative to equity could constrain flexibility if credit markets tighten or if capital expenditures decline sharply in response to lower energy prices.
About Archrock, Inc.
Archrock (AROC) is a leading provider of integrated energy services focusing on upstream oil and gas operations. The company serves major operators in the Permian Basin, Marcellus/Utica, Eagle Ford, and other unconventional resource plays across North America. Key products include well completions equipment, drilling rigs, pressure pumping services, and hydraulic fracturing solutions designed to maximize hydrocarbon recovery.
Analysis
Management Discussion
Archrock delivered robust financial performance in 2025, posting revenue of $1.49B and net income of $322.3M, reflecting a significant year-over-year increase from $1.16B revenue and $172.2M profit in 2024. Strong operating cash flow of $622.1M funded substantial debt issuances and repayments while returning value to shareholders through dividends and repurchases.
Industry Overview
The North American oil and gas equipment and services market is highly competitive but characterized by recurring demand from major operators seeking to optimize production costs and maximize recovery rates. The industry has seen a consolidation trend favoring larger, integrated service providers capable of delivering comprehensive solutions for complex well completions and drilling operations.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $845.6M | $990.3M | $1.16B | $1.49B |
| Cost of Revenue | $419.5M | $449.0M | $458.5M | $509.4M |
| Gross Profit | $426.1M | $541.3M | $505.9M | $723.6M |
| Operating Expenses | $365.5M | $399.1M | $273.5M | $300.0M |
| Operating Income | $60.6M | $142.2M | $232.4M | $423.6M |
| G&A | $117.2M | $116.6M | $139.1M | $147.8M |
| Stock-Based Comp | $11.9M | $13.0M | $14.6M | $19.0M |
| D&A | $164.3M | $166.2M | $193.2M | $256.8M |
| Depreciation | $155.4M | $159.3M | $185.1M | $242.3M |
| Amortization | $8.9M | $6.9M | $8.1M | $14.5M |
| Other OpEx | $248.3M | $282.4M | $134.4M | $152.2M |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Interest Expense | $101.3M | $111.5M | — | — |
| Pre-Tax Income | $60.6M | $142.2M | $232.4M | $423.6M |
| Income Tax | $16.3M | $37.2M | $60.1M | $100.8M |
| Continuing Ops | $44.3M | $105.0M | $172.2M | $322.8M |
| Discontinued Ops | $0 | $0 | $0 | $-503.0K |
| Net Income | $44.3M | $105.0M | $172.2M | $322.3M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $44.3M | $105.0M | $172.2M | $322.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $232.0M | $213.2M | $233.1M | $304.2M |
| Cash & Equivalents | $1.6M | $1.3M | $4.4M | $1.6M |
| Accounts Receivable | — | — | — | $142.3M |
| Inventory | $84.6M | $81.8M | $89.7M | $109.7M |
| Other Current Assets | $145.8M | $130.1M | $139.0M | $50.5M |
| Long-Term Assets | $2.37B | $2.44B | $3.59B | $4.05B |
| PP&E (Net) | $2.20B | $2.30B | $3.32B | $3.66B |
| Intangibles | $37.1M | $30.2M | $98.3M | $143.9M |
| Goodwill | — | — | $52.2M | $125.2M |
| Operating Leases | $16.7M | $14.1M | $15.4M | $13.6M |
| Other LT Assets | $113.8M | $96.5M | $101.5M | $104.3M |
| Total Assets | $2.60B | $2.66B | $3.82B | $4.35B |
| Current Liabilities | $148.6M | $152.1M | $188.6M | $197.1M |
| Accounts Payable | $64.3M | $61.0M | $57.6M | $43.7M |
| Current Leases | $3.2M | $3.2M | $4.1M | $4.3M |
| Deferred Revenue | $7.3M | $5.7M | $6.9M | $8.4M |
| Other Current Liab | $-3.2M | $-3.2M | $-4.1M | $-4.3M |
| Long-Term Liabilities | $1.59B | $1.63B | $2.31B | $2.66B |
| Long-Term Debt | $1.55B | $1.58B | $2.20B | $2.41B |
| LT Operating Leases | $14.9M | $12.3M | $12.4M | $10.2M |
| Other LT Liab | $26.3M | $35.6M | $101.3M | $239.6M |
| Total Liabilities | $1.74B | $1.78B | $2.50B | $2.86B |
| Shareholders' Equity | $860.7M | $871.0M | $1.32B | $1.49B |
| Paid-In Capital | $3.46B | $3.47B | $3.88B | $3.88B |
| Retained Earnings | $-2.51B | $-2.50B | $-2.44B | $-2.26B |
| Total L&E | $2.60B | $2.66B | $3.82B | $4.35B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $44.3M | $105.0M | $172.2M | $322.3M |
| Non-Cash Adjustments | $112.5M | $210.4M | $269.1M | $231.4M |
| Working Capital Changes | $46.6M | $-5.2M | $-11.8M | $68.4M |
| Cash from Operations | $203.4M | $310.2M | $429.6M | $622.1M |
| Cash from Investing | $-130.9M | $-232.5M | $-1.16B | $-606.9M |
| Debt Issuances | $826.7M | $802.8M | — | $2.14B |
| Debt Repayments | $810.0M | $767.0M | — | $1.63B |
| Share Buybacks | $2.4M | $8.9M | $13.3M | $70.2M |
| Dividends Paid | $90.3M | $95.8M | $110.4M | $141.6M |
| Cash from Financing | $-72.5M | $-77.9M | $733.6M | $-18.1M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-3.0K | $-228.0K | $3.1M | $-2.9M |
| Beginning Cash | $1.6M | $1.6M | $1.3M | $4.4M |
| Ending Cash | $1.6M | $1.3M | $4.4M | $1.6M |
Frequently Asked Questions
How does Archrock, Inc. make money?
The company's revenue is primarily derived from three core segments: Completions Services (hydraulic fracturing, coiled tubing), Drilling & Well Construction (drilling rigs, directional drilling), and Well Intervention (staging, workovers). A smaller portion of revenue comes from Equipment Sales and other ancillary services supporting upstream development.
What are the main risks for AROC?
Investors should consider exposure to volatile commodity prices that drive customer capex budgets, intense competition from lower-cost providers in the services sector, regulatory and environmental uncertainties affecting drilling permits, and potential supply chain disruptions impacting equipment availability or costs.
What is AROC's competitive advantage?
Archrock benefits from deep expertise in complex well completions, a scalable fleet of high-tech drilling rigs, and strong relationships with top-tier major oil and gas operators. The company's integrated service model allows for efficient project execution in harsh environments, while its focus on safety and technology differentiation creates barriers to entry for competitors.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.