UPS Releases 2Q 2025 Earnings
UPS announced second-quarter 2025 consolidated revenues of $21.2 billion.
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For the second quarter of 2025, GAAP results include a net charge of $29 million, or $0.04 per diluted share, comprised of after-tax transformation strategy costs of $57 million, partially offset by a $15 million gain from the divestiture of a business within Supply Chain Solutions and a $13 million benefit from the partial reversal of an income tax valuation allowance.
'I want to thank all UPSers for their dedication and hard work in what continues to be a dynamic and evolving trade environment,' said Carol Tomé, UPS chief executive officer. 'Our second quarter results reflect both the complexity of the landscape and the strength of our execution. We are making meaningful progress on our strategic initiatives, and we're confident these actions are positioning the company for stronger long-term financial performance and enhanced competitive advantage."
U.S. Domestic Segment †
2Q 2025
Non-GAAP
Adjusted
2Q 2025
2Q 2024
Non-GAAP
Adjusted
2Q 2024
Revenue
$14,083 M
$14,201 M
Operating profit
$916 M
$982 M
$988 M
$996 M
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Revenue declined 0.8%, primarily driven by the expected decline in volume, partially offset by increases in air cargo and revenue per piece.
Operating margin was 6.5%; non-GAAP adjusted operating margin was 7.0%.
International Segment
2Q 2025
Non-GAAP
Adjusted
2Q 2025
2Q 2024
Non-GAAP
Adjusted
2Q 2024
Revenue
$4,485 M
$4,370 M
Operating profit
$672 M
$682 M
$718 M
$824 M
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Revenue increased 2.6%, driven by a 3.9% increase in average daily volume.
Operating margin was 15.0%; non-GAAP adjusted operating margin was 15.2%.
Supply Chain Solutions 1 †
Revenue declined 18.3%, primarily due to the impact from the third quarter 2024 divestiture of Coyote.
Operating margin was 8.8%; non-GAAP adjusted operating margin was 8.0%.
2025 Outlook
Given the current macro-economic uncertainty, the company is not providing revenue or operating profit guidance, but confirms the following for the full year 2025:
Capital expenditures of approximately $3.5 billion
Dividend payments expected to be around $5.5 billion, subject to Board approval
Effective tax rate of approximately 23.5%
$1.4 billion in pension contributions (of which $921 million have been made)
Share repurchases of around $1.0 billion, which have been completed
$3.5 billion in expected expense reductions due to its network reconfiguration and Efficiency Reimagined initiatives
* 'Non-GAAP Adjusted' or 'Non-GAAP Adj.' amounts are non-GAAP adjusted financial measures. See the appendix to this release for a discussion of non-GAAP adjusted financial measures, including a reconciliation to the most closely correlated GAAP measure.
† Certain prior year amounts have been reclassified to conform to the current year presentation, including the recast of air cargo results to U.S. Domestic, with no change to consolidated results. Certain amounts are calculated based on unrounded numbers.
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Conference Call Information
UPS CEO Carol Tomé and CFO Brian Dykes will discuss second-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, July 29, 2025. That call will be open to others through a live Webcast. To access the call, go to the UPS Investor Relations page and click on 'Earnings Conference Call.' Additional financial information is included in the detailed financial schedules being posted on www.investors.ups.com under 'Quarterly Earnings and Financials' and as furnished to the SEC as an exhibit to our Current Report on Form 8-K.
About UPS
UPS (NYSE: UPS) is one of the world's largest companies, with 2024 revenue of $91.1 billion, and provides a broad range of integrated logistics solutions for customers in more than 200 countries and territories. Focused on its purpose statement, 'Moving our world forward by delivering what matters,' the company's approximately 490,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to reducing its impact on the environment and supporting the communities we serve around the world. More information can be found at www.ups.com, about.ups.com and www.investors.ups.com.
Forward-Looking Statements
This release, our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the Securities and Exchange Commission contain and in the future may contain 'forward-looking statements'. Statements other than those of current or historical fact, and all statements accompanied by terms such as 'will,' 'believe,' 'project,' 'expect,' 'estimate,' 'assume,' 'intend,' 'anticipate,' 'target,' 'plan,' and similar terms, are intended to be forward-looking statements.
From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Forward-looking statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future results, or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, cannot be predicted with certainty.
Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are not limited to: changes in general economic conditions in the U.S. or internationally, including as a result of changes in the global trade policy and new or increased tariffs; significant competition on a local, regional, national and international basis; changes in our relationships with our significant customers; our ability to attract and retain qualified employees; strikes, work stoppages or slowdowns by our employees; increased or more complex physical or operational security requirements; a significant cybersecurity incident, or increased data protection regulations; our ability to maintain our brand image and corporate reputation; impacts from global climate change; interruptions in or impacts on our business from natural or man-made events or disasters including terrorist attacks, epidemics or pandemics; exposure to changing economic, political, regulatory and social developments in international and emerging markets; our ability to realize the anticipated benefits from acquisitions, dispositions, joint ventures or strategic alliances; the effects of changing prices of energy, including gasoline, diesel, jet fuel, other fuels and interruptions in supplies of these commodities; changes in exchange rates or interest rates; our ability to accurately forecast our future capital investment needs; increases in our expenses or funding obligations relating to employee health, retiree health and/or pension benefits; our ability to manage insurance and claims expenses; changes in business strategy, government regulations or economic or market conditions that may result in impairments of our assets; potential additional U.S. or international tax liabilities; increasingly stringent regulations related to climate change; potential claims or litigation related to labor and employment, personal injury, property damage, business practices, environmental liability and other matters; and other risks discussed in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequently filed reports. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations, or the occurrence of unanticipated events after the date of those statements, except as required by law.
The Company routinely posts important information, including news releases, announcements, materials provided or displayed at analyst or investor conferences, and other statements about its business and results of operations, that may be deemed material to investors on the Company's Investors Relations website at www.investors.ups.com. The Company uses its website as a means of disclosing material, nonpublic information and for complying with the Company's disclosure obligations under Regulation FD. Investors should monitor the Company's Investor Relations website in addition to following the Company's press releases, filings with the SEC, public conference calls and webcasts. We do not incorporate the contents of any website into this or any other report we file with the SEC.
Reconciliation of GAAP and Non-GAAP Adjusted Financial Measures
We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP adjusted financial measures. Management views and evaluates business performance on both a GAAP basis and by excluding costs and benefits associated with these non-GAAP adjusted financial measures. As a result, we believe the presentation of these non-GAAP adjusted financial measures better enables users of our financial information to view and evaluate underlying business performance from the same perspective as management.
Non-GAAP adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP adjusted financial measures do not represent a comprehensive basis of accounting and therefore may not be comparable to similarly titled measures reported by other companies.
Forward-Looking Non-GAAP Adjusted Financial Measures
From time to time when presenting forward-looking non-GAAP adjusted financial measures, we are unable to provide quantitative reconciliations to the most closely correlated GAAP measure due to the uncertainty in the timing, amount or nature of any adjustments, which could be material in any period.
Expense for Regulatory Matter
We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of an expense to settle a regulatory matter. We do not believe this is a component of our ongoing operations and we do not expect this or similar payments to recur.
One-Time Payment for International Regulatory Matter
We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of a payment to settle a previously-disclosed international tax regulatory matter. We do not believe this payment was a component of our ongoing operations and we do not expect this or similar payments to recur.
Transformation Strategy Costs
We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of charges related to activities within our transformation strategy. Our transformation strategy activities have spanned several years and are designed to fundamentally change the spans and layers of our organization structure, processes, technologies and the composition of our business portfolio. Our transformation strategy includes initiatives within our Transformation 2.0, Fit to Serve, and Network Reconfiguration and Efficiency Reimagined programs.
Various circumstances have precipitated these initiatives, including developments and changes in competitive landscapes, inflationary pressures, consumer behaviors, and other factors including post-COVID normalization and volume diversions attributed to our 2023 labor negotiations.
Our transformation strategy has included the following programs and initiatives:
Transformation 2.0: We identified opportunities to reduce spans and layers of management, began a review of our business portfolio and identified opportunities to invest in certain technologies, including financial reporting and certain schedule, time and pay systems, to reduce global indirect operating costs, provide better visibility, and reduce reliance on legacy systems and coding languages. Costs associated with Transformation 2.0 have primarily consisted of compensation and benefit costs related to reductions in our workforce and fees paid to third-party consultants. We expect any remaining costs to be incurred during 2025.
Fit to Serve: We undertook our Fit to Serve initiative with the intent to right-size our business to create a more efficient operating model that was more responsive to market dynamics through a workforce reduction of approximately 14,000 positions, primarily within management. Fit to Serve is expected to conclude in 2025.
Network Reconfiguration and Efficiency Reimagined: Our Network of the Future initiative is intended to enhance the efficiency of our network through automation and operational sort consolidation in our U.S. Domestic network. In connection with our anticipation of lower volumes from our largest customer, we began our Network Reconfiguration, which is an expansion of Network of the Future and will lead to consolidations of our facilities and workforce as well as an end-to-end process redesign. We launched our Efficiency Reimagined initiatives to undertake the end-to-end process redesign effort which will align our organizational processes to the network reconfiguration. We expect to reduce our operational workforce by approximately 20,000 positions during 2025. We closed daily operations at 74 leased and owned buildings by June 30. We continue to review expected changes in volume in our integrated air and ground network to identify additional buildings for closure. We anticipate $3.5 billion of total cost savings will be achieved from Network Reconfiguration and Efficiency Reimagined in 2025.
In connection with the Network Reconfiguration and Efficiency Reimagined programs described above, we expect to record between $400 and $650 million in non-GAAP adjusted expense during 2025, related primarily to third-party consulting fees, employee separation benefits, and certain programmatic expenses. We expect the costs associated with these actions may increase should we determine to close additional buildings. In addition, we believe that workforce reductions may require a remeasurement of defined benefit plan benefit obligations and assets during 2025. We are not yet able to estimate the timing or potential impact of such an event.
We do not consider the related costs to be ordinary because each program involves separate and distinct activities that may span multiple periods and are not expected to drive incremental revenue, and because the scope of the programs exceeds that of routine, ongoing efforts to enhance profitability. These initiatives are in addition to ordinary, ongoing efforts to enhance business performance.
Goodwill and Asset Impairments
We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of goodwill and certain asset impairment charges, including impairments of long-lived assets and equity method investments. We do not consider these charges when evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards.
Gains and Losses Related to Divestitures
We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of gains (or losses) related to the divestiture of businesses. We do not consider these transactions to be a component of our ongoing operations, nor when evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards.
Reversal of Income Tax Valuation Allowance
We previously recorded non-GAAP adjustments for transactions that resulted in capital loss deferred tax assets not expected to be realized. We now expect a portion of these capital losses to be realized in future periods. We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of subsequent changes in the valuation allowances against these deferred tax assets as we believe such treatment is consistent with how the valuation allowance was initially established.
Non-GAAP Adjusted Cost per Piece
We evaluate the efficiency of our operations using various metrics, including non-GAAP adjusted cost per piece. Non-GAAP adjusted cost per piece is calculated as non-GAAP adjusted operating expenses in a period divided by total volume for that period. Because non-GAAP adjusted operating expenses exclude costs or charges that we do not consider a part of underlying business performance when monitoring and evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards, we believe this is the appropriate metric on which to base reviews and evaluations of the efficiency of our operational performance.
Free Cash Flow
We calculate free cash flow as cash flows from operating activities less capital expenditures, proceeds from disposals of property, plant and equipment, and plus or minus the net changes in other investing activities. We believe free cash flow is an important indicator of how much cash is generated by our ongoing business operations and we use this as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners.
United Parcel Service, Inc.
Reconciliation of GAAP and Non-GAAP Adjusted Measures
(unaudited)
Three Months Ended
June 30,
(amounts in millions)
2025
2025
Net Income (GAAP)
$
1,283
Diluted Earnings Per Share (GAAP)
$
1.51
Transformation Strategy Costs:
Transformation Strategy Costs:
Transformation 2.0
Transformation 2.0
Business portfolio review
(13
)
Business portfolio review
(0.01
)
Financial systems
11
Financial systems
0.01
Transformation 2.0 total
(2
)
Transformation 2.0 total
—
Fit to Serve
7
Fit to Serve
0.01
Network Reconfiguration and Efficiency Reimagined
52
Network Reconfiguration and Efficiency Reimagined
0.07
Total Transformation Strategy Costs
57
Total Transformation Strategy Costs
0.08
Gain on Divestiture (1)
(15
)
Gain on Divestiture (1)
(0.02
)
(1) Reflects pre-tax gain of $20 million and related tax effect on the divestiture of a business within Supply Chain Solutions.
(2) Reflects the partial reversal of an income tax valuation allowance.
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United Parcel Service, Inc.
Reconciliation of GAAP and Non-GAAP Adjusted Measures
(unaudited)
Three Months Ended
June 30,
(amounts in millions)
2024
2024
Operating Profit (GAAP)
$
1,944
Diluted Earnings Per Share (GAAP)
$
1.65
Transformation Strategy Costs:
Transformation Strategy Costs:
Transformation 2.0
Transformation 2.0
Business portfolio review
(10
)
Business portfolio review
(0.01
)
Financial systems
13
Financial systems
0.01
Transformation 2.0 total
3
Transformation 2.0 total
—
Fit to Serve
24
Fit to Serve
0.02
Total Transformation Strategy Costs
27
Total Transformation Strategy Costs
0.02
One-Time Payment for Int'l Regulatory Matter (1)
88
One-Time Payment for Int'l Regulatory Matter (1)
0.11
(1) Reflects a one-time payment for an international regulatory matter of $88 million and related interest of $6 million.
(2) Reflects expense related to the settlement of a regulatory matter.
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United Parcel Service, Inc.
Reconciliation of GAAP and Non-GAAP Adjusted Measures
(unaudited)
Six Months Ended
June 30
(amounts in millions)
2025
2025
Operating Profit (GAAP)
$
3,488
Operating Margin (GAAP)
8.2
%
Transformation Strategy Costs:
Transformation Strategy Costs:
Transformation 2.0
Transformation 2.0
Business portfolio review
(18
)
Business portfolio review
(0.1
)%
Financial systems
31
Financial systems
0.1
%
Transformation 2.0 total
13
Transformation 2.0 total
—
%
Fit to Serve
28
Fit to Serve
0.1
%
Network Redesign and Efficiency Reimagined
91
Network Redesign and Efficiency Reimagined
0.2
%
Total Transformation Strategy Costs
132
Total Transformation Strategy Costs
0.3
%
Gain on Divestiture (1)
(20
)
Gain on Divestiture (1)
(0.1
)%
Goodwill and Asset Impairment Charges (2)
39
Goodwill and Asset Impairment Charges (2)
0.1
%
Non-GAAP Adjusted Operating Profit
$
3,639
Non-GAAP Adjusted Operating Margin
8.5
%
(amounts in millions)
2025
Other Income (Expense) (GAAP)
$
(303
)
Goodwill and Asset Impairment Charges (2)
19
Non-GAAP Adjusted Other Income (Expense)
$
(284
)
(1) Reflects a pre-tax gain of $20 million on the divestiture of a business within Supply Chain Solutions.
(2) Reflects impairment charges for long-lived assets and related tax effect charges for a business within Supply Chain Solutions and the write-down of an equity investment in 2025.
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United Parcel Service, Inc.
Reconciliation of GAAP and Non-GAAP Adjusted Measures
(unaudited)
Six Months Ended
June 30
(amounts in millions)
2025
Income Tax Expense (GAAP)
$
715
Transformation Strategy Costs:
Transformation 2.0
Business portfolio review
(5
)
Financial systems
8
Transformation 2.0 total
3
Fit to Serve
6
Network Redesign and Efficiency Reimagined
22
Total Transformation Strategy Costs
31
Gain on Divestiture (1)
(5
)
Goodwill and Asset Impairment Charges (2)
9
Reversal of Income Tax Valuation Allowance (3)
23
Non-GAAP Adjusted Income Tax Expense
$
773
(1) Reflects a pre-tax gain of $20 million on the divestiture of a business within Supply Chain Solutions.
(2) Reflects impairment charges for long-lived assets and related tax effect charges for a business within Supply Chain Solutions and the write-down of an equity investment in 2025.
(3) Reflects the partial reversal of an income tax valuation allowance.
Expand
United Parcel Service, Inc.
Reconciliation of GAAP and Non-GAAP Adjusted Measures
(unaudited)
Six Months Ended
June 30
(amounts in millions)
2025
2025
Net Income (GAAP)
$
2,470
Diluted Earnings Per Share (GAAP)
$
2.91
Transformation Strategy Costs:
Transformation Strategy Costs:
Transformation 2.0
Transformation 2.0
Business portfolio review
(13
)
Business portfolio review
(0.02
)
Financial systems
23
Financial systems
0.03
Transformation 2.0 total
10
Transformation 2.0 total
0.01
Fit to Serve
22
Fit to Serve
0.03
Network Redesign and Efficiency Reimagined
69
Network Redesign and Efficiency Reimagined
0.08
Total Transformation Strategy Costs
101
Total Transformation Strategy Costs
0.12
Gain on Divestiture (1)
(15
)
Gain on Divestiture (1)
(0.02
)
Goodwill and Asset Impairment Charges (2)
49
Goodwill and Asset Impairment Charges (2)
0.06
Reversal of Income Tax Valuation Allowance (3)
(23
)
Reversal of Income Tax Valuation Allowance (3)
(0.03
)
(1) Reflects a pre-tax gain of $20 million on the divestiture of a business within Supply Chain Solutions.
(2) Reflects impairment charges for long-lived assets and related tax effect charges for a business within Supply Chain Solutions and the write-down of an equity investment in 2025.
(3) Reflects the partial reversal of an income tax valuation allowance.
Expand
United Parcel Service, Inc.
Reconciliation of GAAP and Non-GAAP Adjusted Measures by Segment
(unaudited)
Six Months Ended
June 30
2025
2024
2025
2024
2025
2024
Adjusted for:
Goodwill and Asset Impairment Charges
—
(5
)
—
5
—
%
—
%
Adjusted for:
Transformation Strategy Costs
(23
)
(42
)
23
42
0.3
%
0.6
%
Goodwill and Asset Impairment Charges
—
(2
)
—
2
—
%
—
%
One-Time Int'l Regulatory Matter
—
(88
)
—
88
—
%
1.0
%
GAAP
$
5,086
$
6,069
(16.2
)%
$
280
$
362
(22.7
)%
5.2
%
5.6
%
Adjusted for:
Transformation Strategy Costs
(11
)
(14
)
11
14
0.2
%
0.2
%
Gain on Divestiture
20
—
(20
)
—
(0.4
)%
—
%
Goodwill and Asset Impairment Charges
(39
)
(41
)
39
41
0.8
%
0.7
%
Expense for Regulatory Matter
—
(45
)
—
45
—
%
0.7
%
Non-GAAP Adjusted Measure
$
5,056
$
5,969
(15.3
)%
$
310
$
462
(32.9
)%
5.8
%
7.2
%
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United Parcel Service, Inc.
Reconciliation of Free Cash Flow (Non-GAAP measure)
(unaudited):
Six Months Ended
June 30,
(amounts in millions)
2025
Cash flows from operating activities
$
2,666
Capital expenditures
(1,999
)
Proceeds from disposals of property, plant and equipment
91
Other investing activities
(16
)
Free Cash Flow (Non-GAAP measure)
$
742
Expand
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CTP N.V. H1-2025 Results
AMSTERDAM--(BUSINESS WIRE)--Regulatory News: CTP N.V. ( ('CTP', the 'Group' or the 'Company') recorded in H1-2025 Gross Rental Income of €367.2 million, up 14.4% y-o-y, and like-for-like y-o-y rental growth of 4.9%, mainly driven by indexation and reversion on renegotiations and expiring leases. Leasing remained strong in the first half of the year with 11% more leases signed y-o-y. The average monthly rent on the new leases signed increased by 5% y-o-y 1. As at 30 June 2025, the annualised rental income increased to €757 million, while occupancy remained at 93% and the rent collection rate was 99.7%. In the first half of the year, CTP delivered 224,000 sqm at a Yield on Cost ('YoC') of 10.3% with 100% let at completion, bringing the Group's standing portfolio to 13.5 million sqm of GLA. The like-for-like revaluation came to 4.0%, driven by ERV growth of 2.5%, with an average 11bps reversionary yield compression, while the Gross Asset Value ('GAV') increased by 7.2% to €17.1 billion, and 15.9% y-o-y. EPRA NTA per share increased by 7.1% in H1 to €19.36 and 13.5% y-o-y, supported also by progress in the development pipeline. Company specific adjusted EPRA earnings increased by 12.2% y-o-y to €199.3 million. CTP's Company-specific adjusted EPRA EPS amounted to €0.42, an increase of 6.2%. The y-o-y increase in Company-specific adjusted EPRA EPS was negatively affected by the increased number of shares resulting from the equity raise in H2-2024. Thanks to our backloaded deliveries and net development income to the second half of the year, the Group is on track to reach the guidance of €0.86 – €0.88 for 2025, which represents 8 – 10% growth compared to 2024. As at 30 June 2025, projects under construction totalled 2.0 million sqm with an expected YoC of 10.3%, and a potential rental income of €160 million when fully leased. The Group's landbank amounted to 26.1 million sqm, of which 22.2 million sqm is owned and on-balance sheet. This landbank secures substantial future growth potential for CTP, with 90% located around the existing business parks (58% in existing parks, 31% in new parks with a potential of over 100,000 GLA). Combined with its industry-leading YoC, CTP expects to continue to generate double-digit NTA growth in the years to come. Remon Vos, CEO, comments: 'We leased 1,015,000 sqm in H1-2025, 11% more than in the same period last year, illustrating the continued strong demand in CEE, despite the geopolitical and tariff volatility. Looking ahead, we have a strong lead-list for the second half of the year as reflected in the increased number of Heads of Terms signed. We are benefiting particularly from the nearshoring trend, shown by our growth with Asian manufacturing tenants, who made up around 20% of our overall leasing activity in the last 18 months, compared to an over 10% share of our overall portfolio. The annualised rental income increased to €757 million. Our next phase of growth is already locked in through our 2.0 million sqm of GLA under construction and landbank of 26.1 million sqm, meaning we can continue generating double-digit NTA growth over the coming years. We are confident that we can achieve our ambitious goals and reach 1 billion annualized rental income in 2027.' Key Highlights Continued strong tenant demand drives rental growth In H1-2025, CTP signed leases for 1,015,000 sqm, an increase of 11% compared to the same period in 2024, with an average monthly rent per sqm of €5.98 (H1-2024: €5.59). Adjusting for the differences among the country mix, rents increased on average by 5%. Average monthly rent leases signed per sqm (€) Q1 Q2 YTD Q3 Q4 FY 2023 5.31 5.56 5.47 5.77 5.81 5.69 2024 5.65 5.55 5.59 5.69 5.79 5.68 2025 6.17 5.91 5.98 Expand Around two-thirds of leases signed were with existing tenants, in line with CTP's business model of growing with existing tenants in existing parks. Cashflow generation through standing portfolio and acquisitions CTP's average market share in the Czech Republic, Romania, Hungary, and Slovakia came to 28.2% as at 30 June 2025 and it remains the largest owner and developer of industrial and logistics real estate assets in those markets. The Group is also the market leader in Serbia and Bulgaria. With more than 1,500 clients, CTP has a wide and diversified international tenant base, consisting of blue-chip companies with strong credit ratings. CTP's tenants represent a broad range of industries, including manufacturing, high-tech/IT, automotive, e-commerce, retail, wholesale, and 3PLs. The tenant base is highly diversified, with no single tenant accounting for more than 2.5% of the Company's annual rent roll, which leads to a stable income stream. CTP's top 50 tenants only account for 36.0% of its rent roll and the vast majority of clients rent space in multiple CTParks. The Company's occupancy came to 93% (FY-2024: 93%). The Group's client retention rate remains strong at 85% (FY-2024: 87%) and demonstrates CTP's ability to leverage long-standing client relationships. The portfolio WAULT stood at 6.2 years (FY-2024: 6.4 years), in line with the Company's target of >6 years. Rent collection level stood at 99.7% in H1-2025 (FY-2024: 99.8%), with no deterioration in the payment profile of tenants. Rental income in H1-2025 amounted to €367.2 million, up 14.4% y-o-y on an absolute basis, mainly driven by deliveries and like-for-like growth. On a like-for-like basis, rental income grew 4.9%, thanks to indexation and reversion on renegotiations and expiring leases. The Group has put measures in place to limit service charge leakage, which resulted in the improvement of the Net Rental Income to Rental Income ratio from 97.8% in H1-2024 to 98.1% in H1-2025. Consequently, the Net Rental Income increased 14.8% y-o-y. An increasing proportion of the rental income generated by CTP's investment portfolio benefits from inflation protection. Since end-2019, all the Group's new lease agreements include a CPI linked indexation clause, which calculates annual rental increases as the higher of: a fixed increase of 1.5%–2.5% a year; or the Consumer Price Index 2. As at 30 June 2025, 72% of income generated by the Group's portfolio includes this double indexation clause, and the Group expects this to increase further. The reversionary potential came to 14.9%. New leases have been signed continuously above the Estimated Rental Value ('ERV'), illustrating continued strong market rental growth and supporting valuations. The annualised rental income came to €757 million as at 30 June 2025, an increase of 11.5% y-o-y, showcasing the strong cash flow growth of CTP's investment portfolio. H1 developments delivered with a 10.3% YoC and 100% let at delivery CTP continued its disciplined investment in its highly profitable pipeline. In H1-2025, the Group completed 224,000 sqm of GLA (H1-2024: 328,000 sqm). The developments were delivered at a YoC of 10.3%, 100% let and will generate contracted annual rental income of €12.1 million. As usual, the deliveries in 2025 are skewed to the fourth quarter. While average construction costs in 2022 were around €550 per sqm, in 2023 and 2024 they came to €500 per sqm and remained stable in H1-2025. This allows the Group to continue to deliver its industry-leading YoC above 10%, which is also supported by CTP's unique park model and in-house construction and procurement expertise. As at 30 June 2025, the Group had 2.0 million sqm of buildings under construction with a potential rental income of €160 million and an expected YoC of 10.3%. CTP has a long track record of delivering sustainable growth through its tenant-led development in its existing parks. 79% of the Group's projects under construction are in existing parks, while 9% are in new parks which have the potential to be developed to more than 100,000 sqm of GLA. Planned 2025 deliveries are 53% pre-let, up from 35% as at FY-2024. Pre-let in existing parks stood at 47%, while the new parks pre-let was at 80%, showcasing the low risk embedded in the pipeline. CTP expects to reach 80%-90% pre-letting at delivery, in line with historical performance. As CTP acts as general contractor in most markets, it is fully in control of the process and timing of deliveries, allowing the Company to speed-up or slow-down depending on tenant demand, while also offering tenants flexibility in terms of their building requirements. In 2025 the Group is expecting to deliver between 1.2 – 1.7 million sqm, depending on tenant demand. The 106,000 sqm of leases that are already signed for future projects — construction of which hasn't started yet — are a further illustration of continued occupier demand. CTP's landbank amounted to 26.1 million sqm as at 30 June 2025 (31 December 2024: 26.4 million sqm), which allows the Company to reach its target of 20 million sqm GLA by the end of the decade. The Group is focusing on mobilising the existing landbank, while maintaining disciplined capital allocation in landbank replenishment. 58% of the landbank is located within CTP's existing parks, while 31% is in, or is adjacent to, new parks which have the potential to grow to more than 100,000 sqm. 15% of the landbank was secured by options, while the remaining 85% was owned and accordingly reflected in the balance sheet. Assuming a build-up ratio of 2 sqm of land to 1 sqm of GLA, CTP can build over 13 million sqm of GLA on its secured landbank. CTP's land is held on balance sheet at around €60 per sqm and construction costs amount on average to approximately €500 per sqm, bringing total investment costs to approximately €620 per sqm. The Group's standing portfolio is valued around €1,040 per sqm, resulting in a revaluation potential of around €400 per sqm built. Monetisation of the energy business CTP continues with its expansion plan for the roll-out of photovoltaic systems. With an average cost of ~€750,000 per MWp, the Group targets a YoC of 15% for these investments. CTP has an installed PV capacity of 138 MWp, of which 108 MWp is fully operational. In H1-2025 the revenues from renewable energy came to €8.0 million, up 136% y-o-y mainly driven by the increase in capacity installed throughout 2024. CTP's sustainability ambition goes hand in hand with more and more tenants requesting green energy from photovoltaic systems, as they provide them with i) improved energy security, ii) a lower cost of occupancy, iii) compliance with increased regulation iv) compliance with their clients' requirements and v) the ability to fulfil their own ESG ambitions. Valuation results driven by pipeline and positive revaluation of standing portfolio Investment Property ('IP') valuation increased from €14.7 billion as at 31 December 2024 to €15.5 billion as at 30 June 2025, driven by the transfer of completed projects from Investment Property under Development ('IPuD') to IP and positive revaluation of standing portfolio. IPuD increased by 31.5% from 31 December 2024 to €1.4 billion as at 30 June 2025, driven by the CAPEX spent, the revaluation due to increase pre-letting and construction progress, and the start of new construction projects in H1-2025. GAV increased to €17.1 billion as at 30 June 2025, up 7.2% compared to 31 December 2024. The revaluation in H1-2025 came to €597.9 million, driven by the positive revaluation of IPuD projects (+€181.3 million), landbank (+€43.1 million), and the standings assets (+€373.6 million). On a like-for-like basis, CTP's portfolio saw a valuation increase of 4.0% during H1-2025, driven by an ERV growth of 2.5%. CTP expects further positive ERV growth on the back of continued tenant demand, which is positively impacted by the secular growth drivers in the CEE region. CEE rental levels remain affordable; despite the strong growth seen as they have started from significantly lower absolute levels than in Western European countries. In real terms, rents in many CEE markets are still below 2010 levels. The Group's portfolio has conservative valuation yields of 7.0%. CTP saw further yield compression during the first half of 2025 of 11bps on average across the portfolio and expects further yield compression over second part of 2025. The yield differential between CEE and Western European logistics is expected to decrease over time, driven by the higher growth expectations for the CEE region and increasing activity in the investment markets. EPRA NTA per share increased from €18.08 as at 31 December 2024 to €19.36 as at 30 June 2025, representing an y-o-y increase of 13.5% and an increase of 7.1% in H1-2025. The increase is mainly driven by the revaluation (+€1.25), Company specific adjusted EPRA EPS (+€0.42) and offset by final 2024 dividend paid out in May (-€0.30) and other items (-€0.09). Robust balance sheet and strong liquidity position In line with its proactive and prudent approach, the Group benefits from a solid liquidity position to fund its growth ambitions, with a fixed cost of debt and conservative repayment profile. During H1-2025, the Group secured €1.7 billion to fund its organic growth: A €1.0 billion dual-tranche green bond with a €500 million six-year tranche at MS +145bps at a coupon of 3.625% and a €500 million ten-year tranche at MS +188bps at a coupon of 4.25%; A JPY30 billion (€185 million equivalent) five-year unsecured loan facility with a syndicate of Asian banks at TONAR +130bps and fixed all-in cost of 4.1%; and A €500 million five-year unsecured sustainability-linked loan facility with a syndicate of 13 European and Asian banks at fixed all-in cost of 3.7%, undrawn as of 30 June 2025. CTP continued to actively manage its bank loan portfolio in H1-2025. Margin reduction on a further €159 million of secured bank loans was negotiated and €441 million of unsecured term loan signed in 2023 was prepaid and will be refinanced by the new €500 million unsecured loan. Both allowed CTP to achieve material interest rate savings and reduce the overall cost of debt going forward. The Group's liquidity position stood at €2.1 billion, comprised of €0.8 billion of cash and cash equivalents, and an undrawn RCF of €1.3 billion. CTP's average cost of debt stood at 3.2% (FY-2024: 3.1%), slightly up compared to year-end 2024, due to new funding. 99.9% of the debt is fixed rate or hedged until maturity. The Group doesn't capitalise interest on developments, therefore all interest expenses are included in the P&L. The average debt maturity came to 5.1 years (FY-2024: 5.0 years). The Group repaid €272 million bond in June 2025 from its available cash. Next upcoming maturity is a €185 million bond due in October 2025, which will also be repaid from available cash reserves. CTP's LTV decreased to 44.9% as at 30 June 2025 mainly due to the positive revaluation of standing portfolio and investment properties under development. The Group's higher yielding assets, thanks to their gross portfolio yield of 6.6%, lead to a healthy level of cash flow leverage that is also reflected in the normalized Net Debt to EBITDA of 9.2x (FY-2024: 9.1x), which the Group targets to keep below 10x. The Group had 66% unsecured debt and 34% secured debt as at 30 June 2025, with ample headroom under its Secured Debt Test and Unencumbered Asset Test covenants. As pricing in the bond market rationalised, the conditions are now more competitive than the pricing in the bank lending market, which will allow the Group to re-balance more towards unsecured lending. In Q3-2024, S&P confirmed CTP's BBB- credit rating with a stable outlook. In January 2025, CTP was assigned an A- credit rating with a stable outlook by the Japanese rating agency JCR. In Q2-2025, Moody's upgraded outlook from stable to positive on Baa3 credit rating. Guidance Leasing dynamics remain strong, with robust occupier demand, and decreasing new supply leading to continued rental growth. CTP is well positioned to benefit from these trends. The Group's pipeline is highly profitable, and tenant led. The YoC for CTP's current pipeline remained at industry leading 10.3%. The next stage of growth is built in and financed, with 2.0 million sqm under construction as at 30 June 2025, with a target to deliver between 1.2 – 1.7 million sqm in 2025. CTP's robust capital structure, disciplined financial policy, strong credit market access, industry-leading landbank, in-house construction expertise and deep tenant relationships allow CTP to deliver on its targets. CTP expects to reach €1.0 billion rental income in 2027, driven by development completions, indexation and reversion, and is on track to reach 20 million sqm of GLA and €1.2 billion rental income before the end of the decade. The Group set a guidance of €0.86 - €0.88 Company-specific adjusted EPRA EPS for 2025. This is driven by our strong underlying growth, with around 4% like-for-like growth, partly offset by a higher average cost of debt due to the (re)-financing in 2024 and 2025. Dividend CTP announces an interim dividend of €0.31 per ordinary share, an increase of 6.9% compared to interim dividend 2024, and which represents a pay-out of 74% of the Company specific adjusted EPRA EPS, in line with the Group's 70% - 80% dividend policy pay-out ratio. The default is a scrip dividend, but shareholders can opt for payment of the dividend in cash. WEBCAST AND CONFERENCE CALL FOR ANALYSTS AND INVESTORS Today at 9am (GMT) and 10am (CET), the Company will host a video presentation and Q&A session for analysts and investors, via a live webcast and audio conference call. To view the live webcast, please register ahead at: To join the presentation by telephone, please dial one of the following numbers and enter the participant access code 893972. A recording will be available on CTP's website within 24 hours after the presentation: CTP FINANCIAL CALENDAR Action Date Capital Market Days (Wuppertal, Germany) 24-25 September 2025 Q3-2025 results 6 November 2025 FY-2025 results 26 February 2026 Expand About CTP CTP is Europe's largest listed owner, developer, and manager of logistics and industrial real estate by gross lettable area, owning 13.5 million sqm of GLA across 10 countries as at 30 June 2025. CTP certifies all new buildings to BREEAM Very good or better and earned a negligible-risk ESG rating by Sustainalytics, underlining its commitment to being a sustainable business. For more information, visit CTP's corporate website: Disclaimer This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of CTP. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "targets", "may", "aims", "likely", "would", "could", "can have", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Forward-looking statements may and often do differ materially from actual results. As a result, undue influence should not be placed on any forward-looking statement. This press release contains inside information as defined in article 7(1) of Regulation (EU) 596/2014 of 16 April 2014 (the Market Abuse Regulation).
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UnitedHealth Group Just Released More Bad News. Should You Avoid the Stock?
Key Points UnitedHealth's recent numbers showed a deep decline in profit. The company's earnings forecast for 2025 came in well below analyst expectations. The stock is trading at a significant discount and is well below where it has been in recent years. 10 stocks we like better than UnitedHealth Group › Things are going from bad to worse for UnitedHealth Group (NYSE: UNH). Investors were already enduring a tough year in 2025, with the company facing myriad bits of bad news, including poor financial results, a change in CEO, and an investigation involving the Department of Justice. Then, the company reported its latest earnings numbers last Tuesday, and shares fell again. As of the close of trading on July 31, the stock had lost half of its value in 2025. And worst of all, it may not have bottomed out just yet. After the company's recent earnings report, which featured even more bad news, investors shouldn't be surprised to see this struggling stock fall even lower in the weeks and months ahead. Are you better off simply avoiding it, or could UnitedHealth actually make for a good contrarian investment? UnitedHealth's forecast badly missed expectations On July 29, UnitedHealth reported its latest earnings numbers, and while the business was growing, its bottom line wasn't. Revenue for the period ending June 30 totaled $111.6 billion and rose by a modest 2% from the same period last year. But what was concerning was that its earnings (the bottom line), which totaled $5.2 billion, were down a staggering 43%. A big problem for the health insurer is rising medical costs. Its medical care ratio rose from 85.1% a year ago to 89.4% this past quarter, which signifies that it's paying out a higher amount of medical expenses relative to the premiums it collects. The higher the ratio, the less profitable the company. In recent years, patients have been resuming treatments and electing to take surgeries that they put off during the earlier days of the pandemic, which has contributed to this increase. Earlier this year, the healthcare company suspended its guidance amid uncertainty around healthcare costs. But under CEO Stephen Hemsley, who took over from Andrew Witty a few months ago, it has released new guidance. The problem is, it's far below what analysts were expecting. UnitedHealth's adjusted earnings per share is projected to come in at $16 or better this year, but Wall Street was expecting $20.91 in adjusted per-share profit. Unsurprisingly, amid such a drastic shortfall, the stock proceeded to drop yet again after the news. How cheap is UnitedHealth stock right now? Shares of UnitedHealth haven't been trading this low since the COVID-19 crash of 2020. Its five-year return is now -16% before factoring in dividends. Based on analyst earnings estimates, the stock is trading at a forward price-to-earnings multiple of 13. But if analysts reduce their expectations for the stock, then that earnings multiple could end up rising. Based on the company's trailing earnings, investors are paying a multiple of around 11. The chart below shows just how extremely low that is compared to where UnitedHealth stock has traded in the past. The stock is trading at a significant discount and could potentially make for an intriguing investment option. Should you avoid UnitedHealth stock, or take a chance on it? Things look bleak for UnitedHealth's stock as the bad news just keeps coming. But if you're willing to take a contrarian position in the company, be patient, and plan to hang on for multiple years, it may not be a bad move to invest in the business today. Given how significantly discounted it is, there's a good margin of safety here for investors. Consider that the average stock on the S&P 500 trades at a price-to-earnings multiple of 25 -- UnitedHealth is nowhere near that. It could take time for the business to turn things around, but it is working on improving profitability, including exiting some Medicare Advantage markets to curb costs. And with an attractive dividend that yields more than 3% as I write this, there's plenty of incentive just to buy and wait. There's some risk with the stock, but I think the sell-off is a bit overblown. While I wouldn't expect a quick turnaround, UnitedHealth can be a good long-term stock to buy on weakness. Should you buy stock in UnitedHealth Group right now? Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $631,505!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,103,313!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. UnitedHealth Group Just Released More Bad News. Should You Avoid the Stock? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Kodiak Gas Services Reports Second Quarter 2025 Financial Results, Announces $100 Million Increase to Share Repurchase Program and Provides Updated Full Year 2025 Guidance
THE WOODLANDS, Texas, August 06, 2025--(BUSINESS WIRE)--Kodiak Gas Services, Inc. (NYSE: KGS) ("Kodiak" or the "Company"), a leading provider of critical energy infrastructure and contract compression services, today reported financial and operating results for the quarter ended June 30, 2025. The Company also announced that its Board of Directors has approved a $100 million increase to its share repurchase program, and increased full-year 2025 guidance for adjusted EBITDA and discretionary cash flow. Net income attributable to common shareholders for the quarter ended June 30, 2025 was $39.5 million, compared to $30.4 million and $6.2 million for the quarters ended March 31, 2025, and June 30, 2024, respectively. Second Quarter 2025 and Recent Highlights Record earnings per share attributable to common shareholders of $0.43 per diluted share Record quarterly adjusted EBITDA(1) of $178.2 million, a 15.5% increase compared to second quarter 2024 Contract Services adjusted gross margin percentage(1) increased to 68.3%, a 430 basis point increase compared to second quarter 2024 Generated record quarterly free cash flow(1) of $70.3 million Returned over $50 million to stockholders through dividends and share repurchases Deployed 31,800 horsepower of new, large horsepower compression units Fleet utilization increased to 97.2%, a 290 basis point increase compared to second quarter 2024 Added to the S&P SmallCap 600 index effective August 6, 2025 Revised 2025 Outlook Highlights Raised full-year 2025 adjusted EBITDA guidance to a range of $700 to $725 million, a $5 million increase to the low end of the range Increased full-year 2025 discretionary cash flow(1) guidance to a range of $445 to $465 million (1) Adjusted EBITDA, adjusted gross margin percentage, free cash flow and discretionary cash flow are non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measure are included herein. "Kodiak's performance in the second quarter reflects our commitment to operational excellence and the strong fundamentals for contract gas compression," said Mickey McKee, Kodiak's President and Chief Executive Officer. "Our fourth consecutive quarterly increase in Contract Services adjusted gross margin percentage and our record quarterly adjusted EBITDA are the product of our strategic focus on large horsepower compression, fleet optimization and significant investments in both technology and our people. This approach not only strengthens our market position but also ensures we continue to meet the evolving needs of our customers with reliability and efficiency. "Despite the challenges posed by global economic instabilities and energy market dynamics, our production-focused business model remains robust. The resilience of our operations is evident in our ability to maintain high fleet utilization and increase margins. As we look ahead, the highly visible Permian Basin natural gas production growth combined with the strong demand outlook driven by power demand for data centers and domestic LNG projects, reinforce our confidence in the long-term growth prospects for contract compression. "The meaningful increase in our share repurchase program reflects that confidence and underscores Kodiak's commitment to returning capital to shareholders. Our focus remains on delivering superior service and maintaining one of the safest and most reliable compression fleets in the industry. Kodiak is well-positioned to capitalize on future opportunities, continue to drive profitable growth and increase shareholder value." Segment Information Contract Services segment revenue was $293.5 million in the second quarter of 2025, a 6.3% increase compared to $276.3 million in the second quarter of 2024. Contract Services segment gross margin was $134.3 million in the second quarter of 2025, a 24.9% increase compared to $107.5 million in the second quarter of 2024 and adjusted gross margin was $200.4 million in the second quarter of 2025, a 13.3% increase compared to $176.9 million in the second quarter of 2024. Other Services segment revenue was $29.3 million in the second quarter of 2025, a 12.3% decrease compared to $33.4 million in the second quarter of 2024. Other Services segment gross margin and adjusted gross margin were each $7.2 million in the second quarter of 2025, a 31.6% increase compared to $5.5 million in the second quarter of 2024. Long-Term Debt and Liquidity During the second quarter 2025, the Company reduced debt outstanding by approximately $48 million. Total debt outstanding was $2.6 billion as of June 30, 2025, comprised primarily of borrowings on the ABL Facility and senior notes due 2029. At June 30, 2025, the Company had $366.4 million available on its ABL Facility, and Kodiak's credit agreement leverage ratio was 3.6x. S&P SmallCap 600 S&P Dow Jones Indices announced on August 1, 2025 that Kodiak would join the S&P SmallCap 600 index effective prior to the opening of trading on Wednesday, August 6, 2025. The Company's addition represents a significant milestone and affirms its financial strength and commitment to profitable growth. For more information about S&P Dow Jones Indices, please visit Share Repurchase Program The Company's Board of Directors approved a $100 million increase to the Company's share repurchase program and extended the program's expiration date to December 31, 2026. Including the increased repurchase authorization announced today, the Company has $115.0 million available for repurchases under its share repurchase program. Repurchases under the share repurchase program may be made from time to time through open market repurchases or through privately negotiated transactions subject to market conditions, applicable legal requirements, and other relevant factors. To date, the Company has repurchased approximately 2.0 million shares for an aggregate amount of $60.0 million (at a weighted average price of $30.24). Summary Financial Data Three Months Ended (in thousands, excluding percentages) June 30, 2025 March 31, 2025 June 30, 2024 Total revenues $ 322,843 $ 329,642 $ 309,653 Net income attributable to common shareholders $ 39,496 $ 30,411 $ 6,228 Adjusted EBITDA (1) $ 178,216 $ 177,664 $ 154,342 Adjusted EBITDA percentage (1) 55.2 % 53.9 % 49.8 % Contract Services revenue $ 293,534 $ 288,956 $ 276,250 Contract Services adjusted gross margin (1) $ 200,397 $ 195,721 $ 176,917 Contract Services adjusted gross margin percentage (1) 68.3 % 67.7 % 64.0 % Other Services revenue $ 29,309 $ 40,686 $ 33,403 Other Services adjusted gross margin (1) $ 7,195 $ 5,460 $ 5,467 Other Services adjusted gross margin percentage (1) 24.5 % 13.4 % 16.4 % Maintenance capital expenditures $ 17,565 $ 16,407 $ 19,147 Growth capital expenditures (2) $ 37,966 $ 55,983 $ 77,257 Other capital expenditures (3) 16,398 22,258 13,133 Total Growth and Other capital expenditures $ 54,364 $ 78,241 $ 90,390 Discretionary cash flow (1) $ 116,424 $ 116,084 $ 90,617 Free cash flow (1) $ 70,290 $ 47,219 $ 638 (1) Adjusted EBITDA, adjusted EBITDA percentage, adjusted gross margin, adjusted gross margin percentage, discretionary cash flow and free cash flow are non-GAAP financial measures. For definitions and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP, see "Non-GAAP Financial Measures" below. (2) Growth capital expenditures made to (1) expand the operating capacity or operating income capacity of assets including, but not limited to, the acquisition of additional compression units, upgrades to existing equipment, expansion of supporting infrastructure, and implementation of new technologies, (2) maintain the operating capacity or operating income capacity of assets by acquisition of replacement compression units and their supporting infrastructure, and (3) expand the operating capacity or operating income capacity of existing assets. (3) Other capital expenditures made on assets required to support our operations—such as rolling stock, leasehold improvements, technology hardware and software and related implementation expenditures, safety enhancements to equipment, and other general items that are typically capitalized and that have a useful life beyond one year. Other capital expenditures were previously included in growth capital expenditures, but are now shown separately for both current and historical periods. Summary Operating Data (as of the dates indicated) June 30, 2025 March 31, 2025 June 30, 2024 Fleet horsepower (1) 4,419,884 4,422,914 4,481,900 Revenue-generating horsepower (2) 4,296,978 4,284,103 4,224,839 Fleet compression units 4,881 4,941 7,317 Revenue-generating compression units 4,514 4,545 5,753 Revenue-generating horsepower per revenue-generating compression unit (3) 952 943 734 Fleet utilization (4) 97.2 % 96.9 % 94.3 % (1) Fleet horsepower includes (x) revenue-generating horsepower and (y) idle horsepower, which is comprised of compression units that do not have a signed contract or are not subject to a firm commitment from our customer and therefore are not currently generating revenue. (2) Revenue-generating horsepower includes compression units that are operating under contract and generating revenue and compression units which are available to be deployed and for which we have a signed contract or are subject to a firm commitment from our customer. (3) Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end. (4) Fleet utilization is calculated as (i) revenue-generating horsepower divided by (ii) fleet horsepower. Full-Year 2025 Guidance Kodiak is providing revised guidance for the full year 2025. Full-Year 2025 Guidance (in thousands, excluding percentages) Low High Adjusted EBITDA (1) $ 700,000 $ 725,000 Discretionary cash flow (1)(2) $ 445,000 $ 465,000 Segment Information Contract Services revenues $ 1,160,000 $ 1,200,000 Contract Services adjusted gross margin percentage (1) 67.0 % 69.0 % Other Services revenues $ 120,000 $ 140,000 Other Services adjusted gross margin percentage (1) 14.0 % 17.0 % Capital Expenditures Maintenance capital expenditures $ 75,000 $ 85,000 Growth capital expenditures $ 180,000 $ 205,000 Other capital expenditures 60,000 65,000 Total Growth and Other capital expenditures $ 240,000 $ 270,000 (1) The Company is unable to reconcile projected adjusted EBITDA to projected net income (loss) and discretionary cash flow to projected net cash provided by operating activities and projected adjusted gross margin percentage to projected gross margin percentage, the most comparable financial measures calculated in accordance with GAAP, respectively, without unreasonable efforts because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, unknown future events, and estimating certain future GAAP measures. The inability to project certain components of the calculation would significantly affect the accuracy of the reconciliations. (2) Discretionary cash flow guidance assumes no change to Secured Overnight Financing Rate futures. Conference Call Kodiak will conduct a conference call on Thursday, August 7, 2025, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss financial and operating results for the quarter ended June 30, 2025. To listen to the call by phone, dial 877-407-4012 and ask for the Kodiak Gas Services call at least 10 minutes prior to the start time. To listen to the call via webcast, please visit the Investors tab of Kodiak's website at About Kodiak Kodiak is a leading contract compression services provider in the United States, serving as a critical link in the infrastructure that enables the safe and reliable production and transportation of natural gas and oil. Headquartered in The Woodlands, Texas, Kodiak provides contract compression and related services to oil and gas producers and midstream customers in high–volume gas gathering systems, processing facilities, multi-well gas lift applications and natural gas transmission systems. More information is available at Non-GAAP Financial Measures Adjusted EBITDA is defined as net income (loss) before interest expense; income tax expense; and depreciation and amortization; plus (i) loss on extinguishment of debt; (ii) loss (gain) on derivatives; (iii) equity compensation expense; (iv) severance expenses; (v) transaction expenses; (vi) loss (gain) on sale of assets; and (vii) impairment of compression equipment. Adjusted EBITDA percentage is defined as adjusted EBITDA divided by total revenues. Adjusted EBITDA and adjusted EBITDA percentage are used as supplemental financial measures by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess: (i) the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; (ii) the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; (iii) the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and (iv) our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure. We believe adjusted EBITDA and adjusted EBITDA percentage provide useful information because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business. Reconciliations of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and net cash provided by operating activities are presented below. Adjusted gross margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense. Adjusted gross margin percentage is defined as adjusted gross margin divided by total revenues. We believe adjusted gross margin and adjusted gross margin percentage are useful as supplemental measures to investors of our operating profitability. Reconciliations of adjusted gross margin to gross margin are presented below. Discretionary cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; and (iii) certain other expenses; plus (w) cash loss on extinguishment of debt; (x) severance expenses; and (y) transaction expenses. We believe discretionary cash flow is a useful liquidity and performance measure and supplemental financial measure for us in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. A reconciliation of discretionary cash flow to net cash provided by operating activities is presented below. Free cash flow is defined as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; (iii) certain other expenses; and (iv) growth and other capital expenditures; plus (w) cash loss on extinguishment of debt; (x) severance expenses; (y) transaction expenses; and (z) proceeds from sale of assets. We believe free cash flow is a liquidity measure and useful supplemental financial measure for us in assessing our ability to pursue business opportunities and investments to grow our business and to service our debt. A reconciliation of free cash flow to net cash provided by operating activities is presented below. Cautionary Note Regarding Forward-Looking Statements This news release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding: (i) expected operating results, such as revenue growth and earnings, including upon the continued integration of CSI Compressco LP ("CSI Compressco") into our operations, and our ability to service our indebtedness; (ii) anticipated levels of capital expenditures and uses of capital; (iii) current or future volatility in the credit markets and future market conditions; (iv) potential or pending acquisition transactions or other strategic transactions, the timing thereof, the receipt of necessary approvals to close such acquisitions, our ability to finance such acquisitions, and our ability to achieve the intended operational, financial, and strategic benefits from any such transactions; (v) expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities and governmental and regulatory investigations and proceedings; (vi) production and capacity forecasts for the natural gas and oil industry; (vii) strategy for customer retention, growth, fleet maintenance, market position and financial results; (viii) our interest rate hedges; and (ix) strategy for risk management. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) a reduction in the demand for natural gas and oil and/or a decrease in natural gas and oil prices; (ii) the loss of, or the deterioration of the financial condition of, any of our key customers; (iii) nonpayment and nonperformance by our customers, suppliers or vendors; (iv) competitive pressures that may cause us to lose market share; (v) the structure of our Contract Services contracts and the failure of our customers to continue to contract for services after expiration of the primary term; (vi) our ability to successfully integrate any acquired businesses, including CSI Compressco, and realize the expected benefits thereof in the expected timeframe or at all; (vii) our ability to fund purchases of additional compression equipment; (viii) our ability to successfully implement our share repurchase program; (ix) a deterioration in general economic, business, geopolitical or industry conditions, including as a result of the conflict between Russia and Ukraine, the Israel-Hamas war, and the hostilities in the Middle East, inflation, and slow economic growth in the United States; (x) a downturn in the economic environment, as well as continued inflationary pressures; (xi) international operations and related mobilization and demobilization of compression units, operational interruptions, delays, upgrades, refurbishment and repair of compression assets and any related delays and costs overruns or reduced payment of contracted rates; (xii) our ability to successfully manage our international operations and comply with any applicable laws and regulations, including risks associated with doing business in foreign countries, and our ability to comply with the U.S. Foreign Corrupt Practices Act ("FCPA") or other anti-corruption laws; (xiii) the outcome of any pending internal review or any future related government enforcement actions; (xiv) tax legislation and the impact of changes to applicable tax laws, including the passage of the One Big Beautiful Bill Act, and administrative initiatives or challenges to our tax positions; (xv) the loss of key management, operational personnel or qualified technical personnel; (xvi) our dependence on a limited number of suppliers; (xvii) the cost of compliance with existing and new governmental regulations, as well as the associated uncertainty given the new U.S. federal government administration; (xviii) changes in trade policies and regulations, including increases or changes in duties, current and potentially new tariffs and other actions; (xix) the cost of compliance with regulatory initiatives and stakeholders' pressures, including sustainability and corporate responsibility; (xx) the inherent risks associated with our operations, such as equipment defects and malfunctions; (xxi) our reliance on third-party components for use in our IT systems; (xxii) legal and reputational risks and expenses relating to the privacy, use and security of employee and client information; (xxiii) threats of cyber-attacks or terrorism; (xxiv) agreements that govern our debt contain features that may limit our ability to operate our business and fund future growth and also increase our exposure to risk during adverse economic conditions; (xxv) volatile and/or elevated interest rates and associated central bank policy actions; (xxvi) our ability to access the capital and credit markets or borrow on affordable terms (or at all) to obtain additional capital that we may require; (xxvii) major natural disasters, severe weather events or other similar events that could disrupt operations; (xxviii) unionization of our labor force, labor interruptions and new or amended labor regulations; (xxix) renewal of insurance; (xxx) the effectiveness of our disclosure controls and procedures; and (xxxi) such other factors as discussed throughout the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission.("SEC") on March 7, 2025, as may be updated by subsequent filings under the Securities Exchange Act of 1934, as amended, including Forms 10-Q and 8-K, each of which can be obtained free of charge on the SEC's website at Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. Except as may be required by applicable law, we undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future developments or otherwise. KODIAK GAS SERVICES, CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) Three Months Ended (in thousands, except per share data) June 30, 2025 March 31, 2025 June 30, 2024 Revenues: Contract Services $ 293,534 $ 288,956 $ 276,250 Other Services 29,309 40,686 33,403 Total revenues 322,843 329,642 309,653 Operating expenses: Cost of operations (exclusive of depreciation and amortization shown below): Contract Services 93,137 93,235 99,333 Other Services 22,114 35,226 27,936 Depreciation and amortization 66,135 70,529 69,463 Selling, general and administrative 35,121 32,255 59,927 Loss (gain) on sale of assets 6,606 9,211 (1,173 ) Total operating expenses 223,113 240,456 255,486 Income from operations 99,730 89,186 54,167 Other income (expenses): Interest expense (45,755 ) (47,224 ) (52,133 ) Gain on derivatives — — 6,797 Other income (expense), net (546 ) (402 ) 218 Total other expenses, net (46,301 ) (47,626 ) (45,118 ) Income before income taxes 53,429 41,560 9,049 Income tax expense 13,445 10,524 2,336 Net income 39,984 31,036 6,713 Less: Net income attributable to noncontrolling interests 488 625 485 Net income attributable to common shareholders $ 39,496 $ 30,411 $ 6,228 Earnings per share attributable to common shareholders: Basic $ 0.44 $ 0.34 $ 0.07 Diluted $ 0.43 $ 0.33 $ 0.06 Weighted average shares outstanding: Basic 87,699 87,879 84,202 Diluted 90,040 90,606 90,669 KODIAK GAS SERVICES, CONSOLIDATED BALANCE SHEETS(UNAUDITED) (in thousands) June 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 5,428 $ 4,750 Accounts receivable, net 224,656 253,637 Inventories, net 101,004 103,341 Fair value of derivative instruments — 3,672 Contract assets 5,274 7,575 Prepaid expenses and other current assets 9,163 10,686 Total current assets 345,525 383,661 Property, plant and equipment, net 3,392,339 3,395,022 Operating lease right-of-use assets, net 47,866 53,754 Finance lease right-of-use assets, net 7,574 5,696 Goodwill 415,213 415,213 Identifiable intangible assets, net 158,999 162,747 Fair value of derivative instruments 6,978 17,544 Other assets 1,433 1,486 Total assets $ 4,375,927 $ 4,435,123 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 50,385 $ 57,562 Accrued liabilities 178,541 188,732 Contract liabilities 84,392 73,075 Total current liabilities 313,318 319,369 Long-term debt, net of unamortized debt issuance cost 2,545,019 2,581,909 Operating lease liabilities 43,735 49,748 Finance lease liabilities 5,394 3,514 Deferred tax liabilities 118,087 103,826 Other liabilities 1,908 3,150 Total liabilities $ 3,027,461 $ 3,061,516 Stockholders' equity: Preferred stock 8 9 Common stock 895 892 Additional paid-in capital 1,317,475 1,305,375 Treasury stock, at cost (59,956 ) (40,000 ) Noncontrolling interest 12,347 13,694 Accumulated other comprehensive loss (8,316 ) — Retained earnings 86,013 93,637 Total stockholders' equity 1,348,466 1,373,607 Total liabilities and stockholders' equity $ 4,375,927 $ 4,435,123 KODIAK GAS SERVICES, CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED) Six Months Ended June 30, (in thousands) 2025 2024 Cash flows from operating activities: Net income $ 71,020 $ 36,945 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 136,664 116,407 Equity compensation expense 13,269 8,159 Amortization of debt issuance costs 6,267 4,946 Non-cash lease expense 6,265 1,648 Provision for credit losses 995 4,589 Inventory reserve 123 476 Loss (gain) on sale of assets 15,817 (1,173 ) Change in fair value of derivatives — (14,293 ) Amortization of interest rate swap 4,147 — Deferred tax provision 17,134 7,104 Changes in operating assets and liabilities, exclusive of effects of business acquisition: Accounts receivable 27,986 (45,933 ) Inventories 2,214 (3,147 ) Contract assets 2,301 12,000 Prepaid expenses and other current assets 1,380 4,671 Accounts payable (13,162 ) 21,983 Accrued and other liabilities (13,334 ) 11,871 Contract liabilities 11,317 6,308 Other assets 1,097 63 Net cash provided by operating activities 291,500 172,624 Cash flows from investing activities: Net cash acquired in acquisition of CSI Compressco LP — 9,458 Purchase of property, plant and equipment (160,171 ) (177,186 ) Proceeds from sale of assets 17,606 411 Other — (35 ) Net cash used for investing activities (142,565 ) (167,352 ) Cash flows from financing activities: Borrowings on debt instruments 686,921 1,945,775 Payments on debt instruments (730,078 ) (1,867,851 ) Principal payments on other borrowings (3,455 ) (1,843 ) Payment of debt issuance cost — (16,346 ) Principal payments on finance leases (1,540 ) (408 ) Offering costs — (1,162 ) Dividends paid to stockholders (76,593 ) (62,393 ) Repurchase of common shares (19,956 ) — Cash paid for shares withheld to cover taxes (3,286 ) (294 ) Net effect on deferred taxes and taxes payable related to the vesting of restricted stock 424 — Distributions to noncontrolling interest (694 ) (2,460 ) Net cash used for financing activities (148,257 ) (6,982 ) Net increase (decrease) in cash and cash equivalents 678 (1,710 ) Cash and cash equivalents - beginning of period 4,750 5,562 Cash and cash equivalents - end of period $ 5,428 $ 3,852 KODIAK GAS SERVICES, OF NET INCOME (LOSS) TO ADJUSTED EBITDA(UNAUDITED) Three Months Ended (in thousands, excluding percentages) June 30, 2025 March 31, 2025 June 30, 2024 Net income $ 39,984 $ 31,036 $ 6,713 Interest expense 45,755 47,224 52,133 Income tax expense 13,445 10,524 2,336 Depreciation and amortization 66,135 70,529 69,463 Gain on derivatives — — (6,797 ) Equity compensation expense 6,291 6,978 5,311 Severance expense (1) — 376 8,969 Transaction expenses (2) — 1,786 17,387 Loss (gain) on sale of assets 6,606 9,211 (1,173 ) Adjusted EBITDA $ 178,216 $ 177,664 $ 154,342 Net income percentage 12.4 % 9.4 % 2.2 % Adjusted EBITDA percentage 55.2 % 53.9 % 49.8 % (1) Represents severance expense related to the CSI Acquisition. (2) Represents certain costs associated with non-recurring professional services and other costs, primarily related to the CSI Acquisition and secondary offerings. KODIAK GAS SERVICES, OF ADJUSTED GROSS MARGIN TO GROSS MARGIN(UNAUDITED) Contract Services Three Months Ended (in thousands, excluding percentages) June 30, 2025 March 31, 2025 June 30, 2024 Total revenues $ 293,534 $ 288,956 $ 276,250 Cost of operations (excluding depreciation and amortization) (93,137 ) (93,235 ) (99,333 ) Depreciation and amortization (66,135 ) (70,529 ) (69,463 ) Gross margin $ 134,262 $ 125,192 $ 107,454 Gross margin percentage 45.7 % 43.3 % 38.9 % Depreciation and amortization 66,135 70,529 69,463 Adjusted gross margin $ 200,397 $ 195,721 $ 176,917 Adjusted gross margin percentage 68.3 % 67.7 % 64.0 % Other Services Three Months Ended (in thousands, excluding percentages) June 30, 2025 March 31, 2025 June 30, 2024 Total revenues $ 29,309 $ 40,686 $ 33,403 Cost of operations (excluding depreciation and amortization) (22,114 ) (35,226 ) (27,936 ) Depreciation and amortization — — — Gross margin $ 7,195 $ 5,460 $ 5,467 Gross margin percentage 24.5 % 13.4 % 16.4 % Depreciation and amortization — — — Adjusted gross margin $ 7,195 $ 5,460 $ 5,467 Adjusted gross margin percentage 24.5 % 13.4 % 16.4 % KODIAK GAS SERVICES, OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO DISCRETIONARY CASH FLOW AND FREE CASH FLOW(UNAUDITED) Three Months Ended (in thousands) June 30, 2025 March 31, 2025 June 30, 2024 Net cash provided by operating activities $ 177,172 $ 114,328 $ 121,082 Maintenance capital expenditures (17,565 ) (16,407 ) (19,147 ) Severance expense (1) — 376 8,969 Transaction expenses (2) — 1,786 17,387 Change in operating assets and liabilities (38,478 ) 18,679 (32,372 ) Other (3) (4,705 ) (2,678 ) (5,302 ) Discretionary cash flow $ 116,424 $ 116,084 $ 90,617 Growth capital expenditures (4)(5) (37,966 ) (55,983 ) (77,257 ) Other capital expenditures (4) (16,398 ) (22,258 ) (13,133 ) Proceeds from sale of assets 8,230 9,376 411 Free cash flow $ 70,290 $ 47,219 $ 638 (1) Represents severance expense related to the CSI Acquisition. (2) Represents certain costs associated with non-recurring professional services and other costs, primarily related to the CSI Acquisition and secondary offerings. (3) Includes non-cash lease expense, provision for credit losses and inventory reserve. (4) For the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, growth and other capital expenditures includes a $10.7 million decrease, a $14.1 million increase and a $12.6 million decrease in accrued capital expenditures, respectively. (5) For the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, growth capital expenditures includes a $0.3 million decrease, a $1.2 million increase and a $19.8 million increase, in a non-cash sales tax accrual on compression equipment purchases, respectively. These accrual amounts are estimated based on the best-known information as it relates to open audit periods with the State of Texas. View source version on Contacts Investor Contact Graham Sones, VP – Investor Relationsir@ (936) 755-3529 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
