USA Compression Partners, LP - 10-Q Summary (Q3 2025)
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. USA Compression Partners, LP (USAC) is a leading independent provider of natural gas compression services in the United States, operating under fixed-term contracts. The company is managed by USA Compression GP, LLC, which is wholly owned by Energy Transfer. As of September 30, 2025, the company had 122,685,471 common units outstanding.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Total Revenues | $250.3 million | $240.0 million | $745.6 million | $704.6 million |
| Net Income | $34.5 million | $19.3 million | $83.6 million | $74.1 million |
| Net Income (Common Unitholders) | $32.5 million | $14.9 million | $75.3 million | $61.0 million |
| Operating Income | $83.9 million | $75.7 million | $229.9 million | $219.9 million |
| Adjusted EBITDA | $160.3 million | $145.7 million | $459.3 million | $428.8 million |
| Distributable Cash Flow (DCF) | $103.8 million | $86.6 million | $282.5 million | $259.1 million |
| Long-Term Debt (Net) | $2.53 billion | $2.50 billion | $2.53 billion | $2.50 billion |
| Cash and Equivalents | $0 | $14,000 | $0 | $14,000 |
Capital Structure: As of September 30, 2025, the company held $750 million in Senior Notes 2027, $1.0 billion in Senior Notes 2029, and $750 million in Senior Notes 2033. Outstanding borrowings under the revolving credit facility were $54.7 million.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 4.3% in Q3 2025 and 5.8% YTD 2025 compared to prior year periods. This was driven by a 4.2% increase in average revenue per revenue-generating horsepower per month due to higher market rates and CPI adjustments.
- Related Party Revenue: Related-party revenue surged 23.4% in Q3 and 91.7% YTD, primarily due to the reclassification of revenue from customers acquired by Energy Transfer.
- Profitability: Net income attributable to common unitholders increased 118% in Q3 and 23% YTD. Operating income rose 10.9% in Q3.
- Asset Impairments: The company recorded $0.6 million in asset impairments for Q3 2025 and $7.5 million YTD, compared to $0.3 million YTD 2024. This resulted from retiring 26 compression units (approx. 19,000 horsepower) deemed unmarketable or cost-prohibitive to retrofit.
- Cost Management: Cost of operations (excl. D&A) decreased 5.9% in Q3 due to lower fluid prices and a sales tax refund, offset by higher labor and parts costs.
Guidance, Outlook, and Risks
- Capital Expenditures: Management plans to spend $38.0–$42.0 million on maintenance CapEx and $115.0–$125.0 million on expansion CapEx for the full year 2025. As of September 30, binding commitments for new units totaled $33.7 million.
- Debt Refinancing: On September 24, 2025, the company issued $750 million of Senior Notes 2033 at 6.250%. Proceeds were used to fund the redemption of the Senior Notes 2027 ($750 million), which was completed on October 15, 2025.
- Liquidity: The company maintains a $1.75 billion revolving credit facility. As of September 30, 2025, $1.69 billion was unused, with $1.02 billion available to be drawn after covenant restrictions. The company was in compliance with all financial covenants.
- Tax Contingency: The IRS has issued preliminary partnership examination changes for tax years 2019 and 2020, resulting in an imputed underpayment of approximately $29.7 million. The company has accrued $2.9 million as a reasonable estimate of the potential loss.
- Preferred Units: 100,000 Preferred Units were converted into common units in June 2025. Remaining Preferred Units (80,000) continue to receive quarterly distributions of $24.375 per unit.
Investor Verification Checklist
- Debt Maturity Profile: Verify the impact of the October 2025 redemption of Senior Notes 2027 on future interest expense and liquidity.
- Asset Fleet Quality: Review the specific criteria used for the $7.5 million YTD impairment charge and the remaining age/utilization of the idle fleet.
- Tax Exposure: Monitor the status of the IRS audit for 2019–2020 and the potential for the accrued $2.9 million to increase toward the $29.7 million preliminary assessment.
- Related Party Concentration: Assess the sustainability of the 91.7% YTD increase in related-party revenue and its impact on diversification.
- CapEx Execution: Track actual maintenance and expansion capital expenditures against the $153–$167 million full-year 2025 guidance range.