USA Compression Partners Reports Q2 Earnings Beat
Why am I focusing on USA Compression Partners LP (NYSE:USAC) today?
Well, depending on where we are in the economic cycle, energy stocks can provide investors with some pretty stellar gains. But when the economy slows and demand for oil and gas wanes, solid returns can be difficult to come by.
Not always of course. For some energy companies, their success is not tied to the strength of the entire sector. USA Compression Partners, a provider of energy infrastructure services, is a prime example of that.
Why? Because, regardless of where oil and gas prices are, natural gas companies always need their infrastructure serviced.
Dallas-Texas-based USA Compression Partners is one of the country’s largest independent providers of natural gas compression services. It has a major operating presence in each of the gas growth basins in the U.S., including the Marcellus/Utica, DJ, Gulf Coast, Permian, and Barnett/Haynesville basins. (Source: “Investor Presentation,” Delek Logistics Partners LP, September 3, 2025.)
USA Compression provides its services under fixed-term contracts to oil and gas companies, including independent producers, processors, gatherers, and transporters of natural gas and crude oil.
Due to distance and friction, natural gas loses pressure as it moves through pipelines. Compression ensures that the gas continues to move smoothly through pipelines. Compressors are also used at above-ground and underground natural gas storage facilities.
Morever, the company has fixed-fee, take-or-pay contracts that provide it with consistent cash flows. On top of that, the majority of contract terms are at three to five years. This essential service has helped USA Compression generate stable cash flows during all commodity cycles.
Record Q2 Revenue
In 2024, USA Compression Partners reported record results. That strong momentum has carried into 2025. For the second quarter ended June 30, revenue increased approximately six percent on an annual basis to a record $250.1 million. (Source: “USA Compression Partners Reports Second-Quarter 2025 Results; Confirms 2025 Outlook; Achieves Record Revenues,” USA Compression Partners LP, August 6, 2025.)
Second-quarter net income slipped to $28.6 million from $31.2 million in the second quarter of 2024. Net cash provided by operating activities was up more than 28% at $124.2 million.
The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed four percent to $149.5 million. Distributable cash flow grew 4.6% to $85.9 million.
Commenting on the results, Clint Green, USA Compression’s president and chief executive officer, said, “USA Compression’s second-quarter financial and operational results reflected another record-setting quarter for revenues and average revenue per-horsepower of $21.31, up 5% from a year ago.”
Confirms Business Outlook
Looking ahead, USA Compression’s management confirmed its 2025 guidance. It expects to report:
- Adjusted EBITDA in the range of $590.0 million to $610.0 million
- Distributable cash flow of $350.0 million to $370.0 million
Quarterly Dividend of $0.525/Share Maintained
Investors love a limited partnership like USA Compression because it has to generate 90% of its income through activities or interest and dividend payments related to natural resources. This results in some of the biggest, most reliable dividends on Wall Street.
Since Its initial public offering in 2023, the company has never missed or lowered its dividend payout. USA Compression has also returned in excess of $1.6 billion in cash to unitholders. (Source: “Distributions & Splits,” USA Compression Partners LP, last accessed September 12, 2025.)
In the second quarter, the company reported distributable cash flow of $85.9 million, with coverage of 1.4 times. That’s more than enough to cover its distribution payments.
USA Compression currently pays a dividend of $0.525 per unit, or $2.10 on an annual basis, for a yield of 8.82%.
USAC Stock: 25% Upside Potential?
In spite of market volatility and ongoing uncertainty about a global trade war, USAC units have had a pretty solid year. At least so far. On February 10, USAC units hit a record high of $29.47.
They took a big dive in early April, along with the rest of the markets, after President Donald Trump unveiled his global tariffs. USAC has rebounded to some degree but continues to trade within a tight range.
Nevertheless, a bullish Wall Street thinks USA Compression Partners stock has what it takes to hit fresh highs over the coming quarters, with analysts providing a 12-month share price target range of $26.50 to $30.00 per share. This points to potential upside of approximately 10% to 25%.
Chart courtesy of StockCharts.com
The Lowdown on USA Compression Partners LP
USA Compression Partners LP continues to be a great energy stock that provides natural gas compression services in each of the gas growth basins in the U.S. This helps provide it with secure, stable cash flows.
The company reported record 2023 and 2024 results, plus it expects 2025 to be another great year. Up to this point in the year, management has said that it continues to see strong demand for its services across both oil- and gas-producing basins, which drove year-over-year increases in revenues, adjusted EBITDA, and distributable cash flow.
This should energize USA Compression’s units and help it maintain a reliable, high-yield distribution.