Kodiak gas raises full-year outlook on power generation deal

Kodiak Gas Services (NYSE:KGS) reported record financial results for the first quarter of 2026, punctuated by a significant upward revision to its full-year earnings outlook.

The Montgomery, Texas-based company increased its 2026 adjusted EBITDA guidance to a range of $820 million to $860 million, reflecting the integration of its recently closed acquisition of Distributed Power Solutions (DPS).

The company’s expansion into power generation was further underscored by the procurement of over 260 megawatts (MW) of additional capacity.

Kodiak management stated they expect to add between 300 and 500 MW per year through 2030, signaling a strategic pivot toward becoming a broader energy infrastructure provider beyond its core natural gas compression business.

For the first quarter, Kodiak reported record Contract Services revenue of $307 million and record adjusted EBITDA of $190.1 million, a 7% increase year-over-year.

Net income for the period stood at $17.8 million, or $0.20 per diluted share, while adjusted net income reached $52 million.

Meanwhile, Kodiak bolstered its balance sheet during the quarter by issuing $1 billion in senior unsecured notes, a move aimed at reducing weighted average borrowing costs and increasing liquidity for future growth.

Operationally, the firm completed a 20,700-horsepower purchase-leaseback transaction with a major producer in the Permian Basin, reinforcing its dominant position in the region.

The acquisition of DPS, which closed on April 1, 2026, allows Kodiak to capitalize on the growing demand for on-site power in the oilfield and industrial sectors.

Of the newly procured 260 MW, the company expects to take delivery of 61 MW this year, with the remainder slated for 2027 through 2029.