On this page of StockholderLetter.com we present the latest annual shareholder letter from Archrock, Inc. — ticker symbol AROC. Reading current and past AROC letters to shareholders can bring important insights into the investment thesis.
2024 ANNUAL REPORT
FINANCIAL HIGHLIGHTS Year ended December 31, 2024 2023 2022 Revenue: Contract operations Aftermarket services Total revenue $980,405 177,186 $1,157,591 $809,439 180,898 $990,337 $677,801 167,767 $845,568 Adjusted Gross margin: (1) Contract operations Aftermarket services Total adjusted gross margin $657,353 41,737 $699,090 $502,691 38,627 $541,318 $398,903 27,181 $426,084 67% 24% 62% 21% 59% 16% $595,434 $450,387 $363,325 $3,824,205 2,198,376 1,323,531 $2,655,950 1,584,869 871,021 $2,598,750 1,548,334 860,693 $172,231 1.05 $104,998 0.67 $44,296 0.28 $0.695 $0.625 $0.580 (Dollars in thousands, except per share amounts) Adjusted gross margin percentage: (1) Contract operations Aftermarket services Adjusted EBITDA (2) Total assets Long-term debt Total equity Net income Net income per common share Dividend declared for the period per share (1) See Non-GAAP Financial Measures in Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations of our accompanying 2024 Form 10-K for information on adjusted gross margin and adjusted gross margin percentage. (2) See Reconciliation of Net Income to Adjusted EBITDA below. RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA Year ended December 31, (In thousands) Net income Depreciation and amortization Long-lived and other asset impairment Unrealized change in fair value of investment in unconsolidated affiliate Restructuring charges Debt extinguishment loss Interest expense Transaction-related costs Stock-based compensation expense Amortization of capitalized implementation costs Provision for income taxes Adjusted EBITDA(1) (1) 2024 $172,231 193,194 10,681 1,484 3,181 123,610 13,249 14,646 3,009 60,149 $595,434 2023 $104,998 166,241 12,041 973 1,775 111,488 12,998 2,624 37,249 $450,437 2022 $44,296 164,259 21,442 1,864 101,259 11,928 1,984 16,293 $363,325 Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, long-lived and other asset impairment, unrealized change in fair value of investment in unconsolidated affiliate, debt extinguishment loss, transaction-related costs, non-cash stock-based compensation expense, amortization of capitalized implementation costs and other items.
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AROC Shareholder/Stockholder Letter Transcript:

2024 ANNUAL REPORT

FINANCIAL HIGHLIGHTS
Year ended December 31,
2024
2023
2022
Revenue:
Contract operations
Aftermarket services
Total revenue
$980,405
177,186
$1,157,591
$809,439
180,898
$990,337
$677,801
167,767
$845,568
Adjusted Gross margin: (1)
Contract operations
Aftermarket services
Total adjusted gross margin
$657,353
41,737
$699,090
$502,691
38,627
$541,318
$398,903
27,181
$426,084
67%
24%
62%
21%
59%
16%
$595,434
$450,387
$363,325
$3,824,205
2,198,376
1,323,531
$2,655,950
1,584,869
871,021
$2,598,750
1,548,334
860,693
$172,231
1.05
$104,998
0.67
$44,296
0.28
$0.695
$0.625
$0.580
(Dollars in thousands, except per share amounts)
Adjusted gross margin percentage: (1)
Contract operations
Aftermarket services
Adjusted EBITDA (2)
Total assets
Long-term debt
Total equity
Net income
Net income per common share
Dividend declared for the period per share
(1)
See    Non-GAAP Financial Measures    in Part II Item 7    Management   s Discussion and Analysis of Financial Condition and
Results of Operations    of our accompanying 2024 Form 10-K for information on adjusted gross margin and adjusted gross
margin percentage.
(2)
See    Reconciliation of Net Income to Adjusted EBITDA    below.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
Year ended December 31,
(In thousands)
Net income
Depreciation and amortization
Long-lived and other asset impairment
Unrealized change in fair value of investment in unconsolidated affiliate
Restructuring charges
Debt extinguishment loss
Interest expense
Transaction-related costs
Stock-based compensation expense
Amortization of capitalized implementation costs
Provision for income taxes
Adjusted EBITDA(1)
(1)
2024
$172,231
193,194
10,681
1,484
3,181
123,610
13,249
14,646
3,009
60,149
$595,434
2023
$104,998
166,241
12,041
973
1,775
111,488
12,998
2,624
37,249
$450,437
2022
$44,296
164,259
21,442
1,864
101,259
11,928
1,984
16,293
$363,325
Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) excluding interest expense, income taxes, depreciation
and amortization, long-lived and other asset impairment, unrealized change in fair value of investment in unconsolidated
affiliate, debt extinguishment loss, transaction-related costs, non-cash stock-based compensation expense, amortization of
capitalized implementation costs and other items.



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