Kodiak raises 2026 guidance as West Texas power project starts

By Tom Whitfield

Kodiak Gas Services raised its 2026 adjusted EBITDA guidance to $840 million to $860 million after record third-quarter adjusted EBITDA reached $224.5 million, up 28.5% from a year earlier. The natural gas compression company reported total quarterly revenue of $401.8 million, up 24.5% from a year earlier, while adding a power business acquired in April.

What drove the third-quarter result?

Power Infrastructure revenue increased 27.6% from the second quarter to $42.0 million, and the segment posted a 75.2% adjusted gross margin. Kodiak formed the segment after its April 1, 2026 purchase of Distributed Power Solutions. The operating fleet totaled 413 MW, but 382 MW generated revenue during the quarter, giving the segment 92.5% utilization.

CEO Mickey McKee said the generator sets "are realizing meaningful increases in pricing and, importantly, are staying on location longer." The statement points to two operating trends in the power business: higher pricing and longer periods on site. The fleet figures show how much installed capacity generated revenue during the quarter.

Compression Infrastructure revenue rose 7.2% to a record $318.4 million. Fleet utilization reached 98.3%, while adjusted gross margin remained at 70% for a third consecutive quarter. Kodiak added 102,000 horsepower of new large compression units during the period.

Net income attributable to common shareholders reached $71.5 million, or $0.70 per diluted share. The year-earlier comparison was a $14.0 million loss, or $0.17 per diluted share, and included a sales tax reserve and a loss on a business disposal. Kodiak's Nov. 9 release and SEC-derived financials trace three reported quarters:

Quarter	Revenue	Power Infrastructure revenue	Net income (loss)*	Diluted EPS	Adjusted EBITDA
Q3 2025	$322.7M	—	($14.0M)	($0.17)	$174.7M
Q2 2026	$391.1M	$32.9M	$52.0M	$0.53	$216.8M
Q3 2026	$401.8M	$42.0M	$71.5M	$0.70	$224.5M

Net income (loss) is attributable to common shareholders. Power Infrastructure began with the DPS acquisition on April 1, 2026.

At $42.0 million, Power Infrastructure remained much smaller than Compression Infrastructure's $318.4 million. The acquired segment therefore adds growth without yet matching the scale of the compression fleet.

Power now has a revenue base of its own, but compression still generates most of Kodiak's revenue.

What does the West Texas contract add?

Kodiak has begun site work and started setting equipment for a 76 MW behind-the-meter data center project in West Texas. The six-year contract, announced in September, covers baseload gas power, balance of plant and about 40 reciprocating engine units. Kodiak expects project revenue in 2027, while deployment runs from the fourth quarter into the first quarter of 2027.

The operator holds a contract with an investment-grade hyperscaler, and a GPU designer guarantees the data center lease. McKee described the award as Kodiak's "second long-term contract to supply primary power to a data center."

The commercial chain includes the operator's contract with an investment-grade hyperscaler and the GPU designer's lease guarantee. The six-year term and stated 2027 revenue schedule give the project a defined commercial timetable.

West Texas gives Kodiak a stated 2027 revenue milestone and a second long-term data center contract.

How are lead times changing deployment?

Long lead times for new generating equipment have pushed some data center developers toward used turbines and converted jet engines. Kodiak cut Power Infrastructure growth capital spending to $350 million to $400 million, citing updated expectations for when new equipment will be delivered.

In August, Kodiak had guided to $830 million to $860 million of adjusted EBITDA and $570 million to $600 million of discretionary cash flow. It raised the EBITDA range to $840 million to $860 million and the cash-flow range to $580 million to $600 million.

Total debt stood at $2.8 billion, and leverage reached 3.1 times. Kodiak also raised its quarterly dividend 4.1% to $0.51.

Future power capacity will depend on equipment delivery timing, while higher pricing and longer on-site deployments will shape revenue growth.