As filed with the Securities and Exchange Commission on June 20, 2023.

Registration No. 333-271050

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 4

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Kodiak Gas Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware	4922	83-3013440
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

15320 Highway 105 W, Suite 210

Montgomery, Texas 77356

(936) 539-3300

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Robert M. McKee

President and Chief Executive Officer

15320 Highway 105 W, Suite 210

Montgomery, Texas 77356

(936) 539-3300

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Matthew R. Pacey Jennifer Wu Atma J. Kabad Kirkland & Ellis LLP 609 Main Street, Suite 4700 Houston, Texas 77002 (713) 836-3600 Ryan J. Maierson Nick S. Dhesi Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, Texas 77002 (713) 546-5400

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐
					Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated June 20, 2023.

16,000,000 Shares

Kodiak Gas Services, Inc.

Common Stock

This is an initial public offering of shares of common stock of Kodiak Gas Services, Inc. All of the 16,000,000 shares of common stock are being sold by us.

Prior to this offering, there has been no public market for our common stock. It is currently expected that the initial public offering price per share will be between $19.00 and $22.00. We intend to list our common stock on the New York Stock Exchange (“NYSE”) under the symbol “KGS.”

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, we have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings. See “Risk Factors” and “Prospectus Summary—Emerging Growth Company.”

After the completion of this offering, an investment fund advised by an affiliate of EQT AB will beneficially own approximately 79% of our outstanding common stock (or 76% if the underwriters exercise in full their option to purchase additional shares of common stock). As a result, we will be a “controlled company” within the meaning of the rules of the NYSE; however, we do not currently intend to rely on any exemptions from the corporate governance requirements of the NYSE available to “controlled companies.” See “Management—Controlled Company Status.”

See “Risk Factors” beginning on page 28 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission (“SEC”) nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per share	Total
Initial public offering price	$	$
Underwriting discount and commissions(1)	$	$
Proceeds, before expenses, to us	$	$

(1) See “Underwriting” for additional information regarding underwriting compensation.

The underwriters have the option, for a period of 30 days, to purchase up to an additional 2,400,000 shares from us at the initial price to the public less the underwriting discount and commissions.

The underwriters expect to deliver the shares of common stock against payment on or about                 .

Goldman Sachs & Co. LLC J.P. Morgan

Barclays

BofA Securities
Raymond James	RBC Capital Markets	Stifel	Truist Securities	TPH&Co.

Comerica Securities Fifth Third Securities Regions Securities LLC Texas Capital Securities

    AmeriVet Securities Guzman & Company R. Seelaus & Co., LLC Siebert Williams Shank    

Prospectus dated                 , 2023

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY		1
RISK FACTORS		28
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		56
USE OF PROCEEDS		58
DIVIDEND POLICY		59
CAPITALIZATION		60
DILUTION		61
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION		62
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		68
BUSINESS		93
MANAGEMENT		113
EXECUTIVE COMPENSATION		120
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		129
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		132
DESCRIPTION OF CAPITAL STOCK		133
CERTAIN CONSIDERATIONS FOR ERISA AND OTHER U.S. BENEFIT PLANS		138
SHARES ELIGIBLE FOR FUTURE SALE		140
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS		142
UNDERWRITING		147
LEGAL MATTERS		154
EXPERTS		154
WHERE YOU CAN FIND MORE INFORMATION		154
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF KODIAK GAS SERVICES, INC.		F-1

Neither we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we and the underwriters have prepared. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell shares of common stock and seeking offers to buy shares of common stock only in jurisdictions where such offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

Through and including                 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Commonly Used Defined Terms

As used in this prospectus, unless the context indicates or otherwise requires, the terms listed below have the following meanings:

• “Annual Financial Statements” means the audited consolidated financial statements for the years ended December 31, 2022 and 2021;

• “ABL Credit Agreement” means that certain Fourth Amended and Restated Credit Agreement, dated as of March 22, 2023, among Frontier Intermediate Holding, LLC, Kodiak Gas Services, LLC, the other obligors party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent;

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• “ABL Facility” means our senior secured asset-based revolving credit facility provided under and governed by the ABL Credit Agreement;

• “Company” means Kodiak Gas Services, Inc. and its consolidated subsidiaries;

• “EQT” or “EQT AB Group” means, as the context may require, EQT AB or EQT AB and its direct and indirect subsidiaries including, for the avoidance of doubt, investment vehicles managed and/or operated by affiliates of EQT AB and their respective portfolio companies;

• “EQT AB” means EQT AB (publ), a Swedish public limited liability company registered with the Swedish Companies Registration Office (Reg. No. 556849-4180) and whose ordinary shares are listed on Nasdaq Stockholm stock exchange;

• “Holdco Term Loan” means the Term Loan after the consummation of the Term Loan Transaction as described below;

• “Kodiak Holdings” means Frontier TopCo Partnership, L.P., an affiliate of EQT AB and holder of record of Kodiak Gas Services, Inc. common stock;

• “Term Loan” means the term loan facility governed by the Term Loan Credit Agreement;

• “Term Loan Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as of May 19, 2022, as amended by that certain First Amendment, dated March 31, 2023, among Kodiak Gas Services, LLC, Frontier Intermediate Holding, LLC, Wells Fargo Bank, N.A. as Administrative Agent, and the lenders party thereto;

• “Term Loan Derivative Settlement” means the termination of the Company’s interest rate swaps and collars attributable to the Term Loan in connection with the Term Loan Transaction.

• “Term Loan Transaction” means the assumption of all of the Company’s and its subsidiaries’ remaining obligations under the Term Loan (after the application of the proceeds of this offering as described in “Use of Proceeds”) by a parent entity of Kodiak Holdings, and pursuant to which the Company’s obligations thereunder will be terminated. Following the consummation of the Term Loan Transaction, the Company will no longer be a borrower or guarantor under, nor otherwise be obligated with respect to the debt outstanding under the Term Loan; and

• “Quarterly Financial Statements” means the unaudited condensed consolidated financial statements for the three months ended March 31, 2023 and 2022.

Presentation of Information

Unless otherwise indicated, information presented in this prospectus (i) assumes that the underwriters’ option to purchase additional common stock is not exercised, (ii) assumes that the initial public offering price of the shares of our common stock will be $20.50 per share (which is the midpoint of the estimated price range set forth on the cover page of this prospectus) and (iii) assumes the filing and effectiveness of the Amended and Restated Certificate of Incorporation (our “charter”) and the Amended and Restated Bylaws (our “bylaws”), both of which will be adopted immediately prior to the consummation of this offering. See “Description of Capital Stock” for a description of our charter and bylaws.

Industry and Market Data

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, government publications or other published independent sources. These sources include the United States Energy Information Administration (“EIA”) and the International Energy Agency. Information referred to herein from the EIA is based on the EIA’s Annual Energy Outlook 2023, released on March 16, 2023. Information referred to herein from the International Energy Agency is based on its 2022 World Energy Outlook, dated November 2022. Although we believe these third-party sources are reliable as of their respective dates, neither we nor the underwriters have independently verified the accuracy or

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completeness of this information. Some data is also based on our good faith estimates and our management’s understanding of industry conditions. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these publications.

Trademarks and Trade Names

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply, a relationship with us or an endorsement or sponsorship by or of us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ^®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names.

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PROSPECTUS SUMMARY

This summary provides a brief overview of information contained elsewhere in this prospectus. Because it is abbreviated, this summary does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully before making an investment decision, including the information presented under the headings “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes thereto included elsewhere in this prospectus.

Company Overview

We are a leading operator of contract compression infrastructure in the United States (“U.S.”). Our compression operations are critical to our customers’ ability to reliably produce natural gas and oil to support growing global energy demand. We are a market leader in the Permian Basin, which is the largest producing natural gas and oil basin in the U.S. We operate our large horsepower compression units under stable, fixed-revenue contracts with blue-chip upstream and midstream customers. Our compression assets have long useful lives consistent with the expected production lives of the key regions where we operate. We believe our partnership-focused business model positions us as the preferred contract compression operator for our customers and creates long-standing relationships. We strategically invest in the training, development, and retention of our highly skilled and dedicated employees and believe their expertise and commitment to excellence enhances and differentiates our business model. Furthermore, we maintain an intense focus on being one of the most sustainable and responsible operators of contract compression infrastructure.

Eighty-four percent of our compression assets are strategically deployed in the Permian Basin and Eagle Ford Shale, which the EIA expects to maintain significant production volumes through at least 2050. We believe these two regions have the largest and lowest-cost unconventional resources in the U.S. Additionally, there are significant liquefied natural gas (“LNG”) export projects in development, and overall LNG capacity is expected to meaningfully grow over the next decade. We expect this to translate into Permian Basin and Eagle Ford Shale natural gas production growth, requiring substantial additional compression horsepower. We believe these regions will play an increasingly important role in global energy security as the world continues to require reliable and growing natural gas and oil production to support increasing global energy demand.

We are a leader in large horsepower compression, with approximately 81% of our approximately 3.2 million horsepower fleet comprised of compression units larger than 1,000 horsepower. Due to lower initial reservoir pressures, production from unconventional resources, such as the Permian Basin and Eagle Ford Shale, requires significantly more compression horsepower than from conventional production, which supports our large horsepower strategy. Additionally, increased demand for large horsepower infrastructure is driven by multi-well pad drilling, overall well density, and large-scale gathering systems. We believe large horsepower compression units serve more stable applications, receive longer initial contracts, are more likely to be renewed, and produce higher margins, ultimately generating recurring cash flow and return on invested capital.

We believe the quality of our relationships with blue-chip customers, the reliability of our compression operations and the structure of our contracts produce stable, recurring cash flow. We derive substantially all of our revenues from fixed-revenue contracts. Approximately 38% and 39% of our total revenues come from our four largest customers for the three months ended March 31, 2023 and the year ended December 31, 2022, respectively, which customers are all S&P 500 constituents and investment grade rated upstream and midstream companies in the Permian Basin. Our partnership-focused business model provides best-in-class reliability, which we believe is critical to securing and maintaining long-term relationships with our customers. Our assets and supporting operations have an industry-leading historical average mechanical availability (which measures

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the percentage of time in a given period that compression operations are being provided or are capable of being provided) of over 99.5% since inception. The strength of our customer relationships and contract structures, combined with the reliability and critical nature of our assets, have resulted in a five-year 99% average fleet utilization (which measures the revenue-generating horsepower divided by our total fleet horsepower).

Below is a presentation of our average fleet utilization and our total revenue-generating horsepower since 2017:

Countries around the world are moving toward a lower carbon future while providing secure low-cost sources of energy for their citizens. Recent world events have resulted in renewed attention on environmentally responsible and secure energy production provided by the U.S., and we are committed to continuing to play a meaningful role in our industry. We are focused on being the most resilient and sustainable enterprise, and we have ambitious sustainability goals. We will continue to innovate processes and technologies to assist our customers in meeting their emission reduction goals, while striving to provide a safe, inclusive and supportive environment for our employees and the communities where we operate. Finally, we intend to do business with integrity and ethics and maintain a corporate governance structure that includes appropriate oversight and transparency in all aspects of our operations.

Our Business Model

Our business model is focused on large horsepower contract compression operations, which we believe is central to our customers’ efforts to meet the expected growing natural gas and oil demand from the Permian Basin and other regions in the U.S. Large horsepower compression operations allow us to enter into longer-term contracts that we believe are more predictable and stable for us and our customers. We believe our focus on customer service in top-tier regions, and the critical nature of our assets results in long-term customer relationships and financial stability for our business.

Our preventative and predictive maintenance and overhaul programs are designed to maximize mechanical availability and extend the useful lives of our assets over multiple decades. These programs allow us to contract all of our compression assets at rates that are comparable to our newest compression units. Our standardized fleet also enables streamlined and systematic training and on-site maintenance maximizing uptime for our customers. We are developing advanced systems to proactively analyze and monitor the operating conditions of our equipment, allowing for maximum uptime for our customers. Our maintenance culture is foundational to our partnership-focused business model and allows us to provide over 99.5% mechanical availability to our customers.

We believe that our customers will continue to outsource their compression infrastructure needs allowing them to limit their capital investments in compression equipment and increase their free cash flow or deploy capital on projects directly related to their core businesses. By outsourcing compression infrastructure, customers can efficiently address their changing compression requirements over time. Additionally, our customers benefit from the technical skills of our specialized personnel, and our focus on reliability and emissions reduction helps them advance their sustainability goals.

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We manage our business through two operating segments: Compression Operations and Other Services. Compression Operations consists of operating company-owned and customer-owned compression infrastructure for our customers, pursuant to fixed-revenue contracts to enable the production, gathering and transportation of natural gas and oil. Other Services consists of a full range of contract services to support the needs of our customers, including station construction, maintenance and overhaul and other ancillary time and material based offerings. Our Other Services offerings are often cross-sold, bolstering cash flow generation with no associated capital expenditures.

We have a proven track record of steady growth, cash flow generation, strong financial results driven by increasing overall compression demand (particularly for large horsepower compression units), long-standing customer relationships, the fixed-revenue nature of our contracts and best-in-class reliability of our assets. From the years ended December 31, 2021 to 2022 and the three months ended March 31, 2022 to 2023:

• Our revenue-generating horsepower increased nearly 5% from 3.0 million horsepower at March 31, 2022 to 3.2 million horsepower at March 31, 2023, and our revenue-generating horsepower increased nearly 7% from 2.9 million horsepower at December 31, 2021 to 3.1 million horsepower at December 31, 2022;

• Our revenue increased by 13% from $168.3 million to $190.1 million and our net income decreased from $28.0 million to ($12.3) million for the three months ended March 31, 2022 and March 31, 2023, respectively. Revenue increased by 17% from $606.4 million to $707.9 million and our net income decreased from $181.0 million to $106.3 million for the years ended December 31, 2021 and December 31, 2022, respectively;

• Our Adjusted Gross Margin increased by 11% from $106.6 million to $118.4 million for the three months ended March 31, 2022 to March 31, 2023, respectively. Adjusted Gross Margin increased by 11% from $396.2 million to $440.6 million for the years ended December 31, 2021 and December 31, 2022, respectively; and

• Our Adjusted EBITDA increased by 9% from $97.4 million to $106.3 million for the three months ended March 31, 2022 and March 31, 2023, respectively. Adjusted EBITDA increased by 11% from $361.0 million to $399.0 million for the years ended December 31, 2021 and December 31, 2022, respectively.

Additionally, as of March 31, 2023, the aggregate commitments under our ABL Facility, which matures in March 2028, were $2.2 billion. After the completion of this offering, we expect to have approximately $386 million of total availability under the ABL Facility, subject to certain restrictions described herein which may reduce such amounts available. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness.”

Adjusted Gross Margin and Adjusted EBITDA are not financial measures calculated in accordance with GAAP, but we believe they provide important perspective regarding our operating results and cash flow. “—Non-GAAP Financial Measures” below contains a descriptions of Adjusted Gross Margin and Adjusted EBITDA and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Our Assets

As of March 31, 2023, our compression asset base consists of 3,033 revenue-generating compression units amounting to approximately 3.2 million horsepower of owned compression, with an average of 1,045 horsepower per revenue-generating compression unit. The average age of our fleet is 3.7 years and 83% of our compression fleet is less than five years old. Approximately 81% of our fleet is comprised of large horsepower compression units, aligning with the evolving industry demand. Large compression units enable multi-well pad development, reduce downtime, improve overall unit economics and provide lower emissions per horsepower relative to small horsepower compression units. Fleet standardization and continued geographic concentration allow us to lower cost of operations and improve margins through economies of scale.

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Below is a tabular overview of our fleet by horsepower as of March 31, 2023.

	Fleet Horsepower		Percent of Horsepower			Horsepower Utilization (Period End)
Large horsepower >1,000 horsepower		2,566,022		81	%		99.8	%
Medium & small horsepower <1,000 horsepower		608,984		19	%		99.8	%
Total		3,175,006		100	%

We have standardized our fleet and operational processes, creating an effective and seamless fleet maintenance program, spare parts inventory and efficient and resilient supply chain. Additionally, our assets are designed to serve a wide variety of large horsepower applications, such as gathering, processing and transportation of natural gas and centralized gas lift of oil.

Our Key Areas of Operation

The following map illustrates our key areas of operation and corresponding revenue-generating horsepower as of March 31, 2023:

HP = Revenue-generating horsepower

We strategically focus on deploying our compression assets in the most economic areas of leading onshore U.S. regions with the longest production horizons. We believe partnering with top-tier customers in regions with multi-decade resource life will support continued strong utilization and recontracting of our assets through industry and broader macroeconomic cycles.

Eighty-four percent of our compression assets are deployed in the Permian Basin and Eagle Ford Shale, which the EIA expects to maintain significant production volumes through at least 2050. Based on data from the EIA, these two regions represented 29% of U.S. Lower 48 natural gas production and 66% of U.S. Lower 48 oil production in 2022.

The Permian Basin and Eagle Ford Shale are connected through long-haul natural gas pipelines to the nearby U.S. Gulf Coast and are critical natural gas supply basins for the LNG export capacity expansion occurring in the

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region. In addition to the Permian Basin and Eagle Ford Shale, we have assets in the Powder River Basin, Mid-Continent Region, DJ Basin, Appalachian Basin, Barnett Shale / East Texas Region and Black Warrior Basin. Below is a table showing revenue-generating horsepower in our areas of operations as of March 31, 2023:

	Revenue-Generating Horsepower		Percent of Horsepower
Permian Basin		2,217,383		70%
Eagle Ford Shale		429,938		14%
Other Areas of Operation		521,980		16%
Total		3,169,301		100%

Our Customers and Contracts

We have developed long-term commercial relationships with premier upstream and midstream customers in our key areas of operations. We believe that alignment with our customers’ goals is a key differentiator to our business, and we have built a reputation backed by our leading mechanical availability to earn and strengthen customer loyalty. We believe mechanical availability is the key consideration for a customer in making its contract compression decisions. It is our priority to maintain over 99.5% mechanical availability in addition to providing uninterrupted “first-call” service for any and all downtime events across our fleet. This commitment to mechanical availability maximizes total customer operational uptime and revenue stability. We believe these factors make us the leading choice for our customers.

We have developed a systematic and selective customer evaluation methodology, based on key criteria including customers’ credit rating, size, and geological asset quality. Our four largest customers for the three months ended March 31, 2023 and for the year ended December 31, 2022 are all S&P 500 constituents and investment grade rated upstream and midstream companies in the Permian Basin. Approximately 84% of initially contracted large horsepower for our top four customers is still in service with those customers today. The table below provides further information on our top four customers:

Top 4 Customer Overview
Top 4 customers	Customer A	Customer B	Customer C	Customer D
Primary geography	Midland Basin	Delaware Basin	Delaware Basin	Delaware Basin
Credit rating (Moody’s / S&P)	Baa1/BBB	A3/A-	Baa2/BBB	Baa3/BBB-
HP CAGR since start of relationship	48%	57%	21%	54%
% of 2022 compression operations revenue	13%	11%	9%	6%
Length of relationship (years)	10	9	9	9

Our contracts are designed to provide us with predictable, stable, and recurring cash flows through industry and broader macroeconomic cycles. To maximize cash flow stability our contracts typically include:

• fixed-revenue structures similar to midstream take-or-pay contracts;

• annual built-in inflation adjustments;

• pre-billing structure for the following month’s service fees;

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• primary contract terms of one to seven years in duration (with large horsepower compression units typically contracted for a primary term of three years); and

• provisions requiring customers to pay for all mobilization and demobilization costs, which can be significant.

Additionally, because of our historically high mechanical availability and the multi-decade resource life in our key areas of operations, our contracts are typically renewed multiple times.

Our customer selection methodology and standardized contract structure have helped insulate our business from industry and broader macroeconomic cycles and have enabled us to drive better customer retention and increase our cash flow.

Our Sustainability Leadership

The energy industry is in a pivotal time as the world moves toward ambitious emissions reduction targets while maintaining affordable and reliable sources of energy. We maintain an intense focus on being one of the most sustainable and responsible operators of contract compression infrastructure. Furthermore, we strive to provide a safe, inclusive and supportive environment for the communities in which we live and the customers and employees with whom we work. We seek to continuously improve our operations, relationships with our stakeholders and ultimately maintain our position as a sustainable and responsible operator of contract compression infrastructure. We have a demonstrated track record of establishing programs and setting tangible targets to achieve initiatives for continuous improvement in each of these areas to create value for all of our stakeholders.

Ninety-six percent of our current fleet is capable of operating in the most stringent emissions regulatory environments in the U.S., which require emissions of 0.5g NOx or less. We also believe it is imperative that we continue to develop and implement innovative strategies and technologies that further reduce emissions intensity and improve the operational reliability of our business. Many of our upstream and midstream customers have significantly increased their commitments to reduce emissions and rely on us to help them achieve their reduction goals. We have also developed several technologies targeting additional emissions reductions including, ecoView, which is our patented emissions monitoring and leak detection system that can be used to monitor,

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analyze and manage emissions (including greenhouse gas emissions) data and operating data from a natural gas compressor, and other fugitive methane reduction solutions. We expect to begin broad scale integration of ecoView across our large horsepower compression fleet during 2023.

Electric motor drive compression is also part of our long-term strategy to reduce emissions intensity across our fleet. We have begun deploying electric motor drive compression with select customers and have additional assets that we will deploy in the near future under long-term fixed-revenue contracts. In addition, in select geographic areas where electric infrastructure exists, we assist our customers in building out their electric compression infrastructure.

Our people are vital to the success of our business. As a result, we have developed a robust safety culture that permeates all aspects of our business. Our comprehensive training program emphasizes safety, improving technical skills and professional development for employees across all functional areas. This program is further bolstered through a virtual training program currently in development to better prepare our employees to safely address situations in the field. Diversity and inclusion are paramount to our organization. We also require 100% compliance across our Company in diversity and inclusion training. Diversity is also important at our board level, where we expect 56% of our directors to identify as gender or ethnically diverse. We recently created the Kodiak Cares Foundation to support employees and charitable causes in the community. We are also committed to supporting veterans and do so through our recruiting and hiring efforts as well as supporting several causes that assist veterans and active-duty military.

Competitive Strengths

We believe that the following strengths of our business differentiate us from our competitors, reinforce our leadership position and enable us to capitalize on expected demand growth for natural gas compression infrastructure:

Premier, partnership-focused business model drives long-standing relationships with top-tier customers

We believe that we have a premier, partnership-focused business model that has created long-term relationships with our customers who depend on our compression operations as a critical element of their core production infrastructure. We treat our customers as partners, helping them optimize their compression infrastructure and bolster their cash flows.

We seek to maximize uptime and revenue for our customers with a historical average mechanical availability of over 99.5%. We maintain 24/7/365 “first-call” service for all instances of downtime across all horsepower classes. We also employ a robust inventory management system to ensure that spare parts required for maintenance and repairs are readily available in close proximity to our fleet. Our operational excellence and partnership-focused business model create substantial value for customers who benefit from increased throughput allowing them to generate additional revenue.

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Our customers are leading upstream and midstream companies operating in the top U.S. basins. As a testament to the quality of the relationships with our top four customers, approximately 84% of the large horsepower initially contracted with such customers remains under contract.

Our critical natural gas infrastructure in the most prolific U.S. regions is optimally positioned to support natural gas and oil production to satisfy growing global energy demand

We focus on strategically deploying our critical compression assets in leading onshore U.S. regions. We have 84% of our horsepower deployed in the Permian Basin and Eagle Ford Shale. We believe these two regions rank among the largest inventory unconventional resources in the U.S. and based on data from the EIA, represented 29% of U.S. Lower 48 natural gas production and 66% of U.S. Lower 48 oil production in 2022. As these resources continue to be developed, increases in well-density driven by multi-well pad drilling, will result in increased demand for large compression equipment, which aligns with our large horsepower strategy.

Our business supports growing global energy demand by facilitating production of natural gas and oil. The Permian Basin and Eagle Ford Shale are increasingly providing the world with a reliable and secure supply of low-cost natural gas. We believe that projected U.S. Gulf Coast LNG liquefaction capacity additions will require incremental natural gas produced from the Permian Basin and Eagle Ford Shale. Global LNG demand is expected to almost double from 380 million ton per annum (“MTPA”) in 2021 to approximately 700 MTPA by 2040. Increase in demand for U.S. LNG exports to Europe is likely to be driven by the need to backfill the disrupted supply of Russian natural gas.

Purpose built, standardized large horsepower compression fleet that is critical to our customers’ operations

We began deploying large horsepower compression units for centralized gas lift in the Permian Basin in 2013, which became the industry standard by 2016. We are an industry leader in large horsepower compression units with approximately 81% of our fleet in large horsepower compression units and an average of 1,045 horsepower per revenue-generating compression unit as of March 31, 2023. We believe our concentration of large horsepower compression units positions us to obtain longer contract tenor, extended time on location, greater renewal success and higher margins per compression unit relative to smaller horsepower compression units.

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We have built a standardized compression fleet designed to support our customers’ needs, resulting in higher mechanical availability for our customers and lower maintenance costs for us. Our rigorous maintenance program enables our compression units of all ages to operate with similar efficiency and generate similar contract rates. This operational consistency enables us to generate stable revenues through the expected multi-decade operating life of a compression unit.

Stability of our cash flow provides a strong financial profile supporting our return of capital and growth objectives

We believe that our contract structure provides strong visibility and predictability of cash flows while insulating revenues from industry and broader macroeconomic cycles. Substantially all of our revenue is derived from fixed-revenue contracts that charge a flat monthly rate with annual built-in inflation adjustments, providing us with cash flow stability as well as downside protection. Our 5-year average fleet utilization of over 99% enabled our revenue stability.

Compression costs are a non-discretionary operating expense for our customers. Our business is essential to maintain natural gas and oil production and is insulated from commodity price fluctuations or drilling and completion activities, which enabled us to grow revenue and earnings during the COVID-19 pandemic. The versatility of our units to support a variety of applications further enhances the stability of cash flows. Once our compression units are installed on customers’ locations, prolonged production disruptions and significant mobilization and demobilization costs, typically borne by our customers, would be required to displace our compression units.

Our disciplined approach to deploying capital with a proven track record of achieving high returns has enabled our significant growth. We order compression units when we have a customer commitment in place. Additionally, our business model benefits from growth capital spending flexibility, which allows us to rapidly increase or decrease spending as industry conditions warrant. This flexibility was evident during the COVID-19 pandemic when we reduced equipment orders and utilized a portion of our additional cash flow to repay outstanding debt. This reduction in growth capital spending was approximately $134 million, representing a 44% reduction to our start of the year budget. Our average utilization for 2020 was 98%.

Differentiated sustainability practices are core to our business model

We see the opportunity to continue to lead our industry in sustainability practices with a keen focus on doing our part to safeguard the environment, positively impact society, and maintain integrity and high governance standards.

We have a low emission compression fleet, with 96% capable of operating in the most stringent emissions regulatory environments in the U.S., which require emissions of 0.5g NOx or less, aligning us with our customers’ emissions reduction initiatives. Furthermore, we are deploying large horsepower electric motor drive compression, reducing our emissions intensity across our fleet. Our experience of deploying electric units and working with our customers in building the infrastructure required to power electric compression has allowed us to develop expertise in electric compression construction and operations.

Our strong sustainability commitment also focuses on social and governance aspects. Our employees and the communities that we serve are central to what we do. We have implemented a variety of initiatives to support our people and deliver better service to our customers. Diversity and inclusion is paramount to a successful organization. We have a 42% gender or ethnically diverse workforce, and we require 100% compliance across our Company in diversity and inclusion training. Diversity is also important at our board level, where we expect 56% of our directors to identify as gender or ethnically diverse. We have implemented robust required safety

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training programs that have resulted in a leading safety record, developed virtual training programs to better prepare our employees for situations in the field, and offer various mentorship and technical training programs that grow our employees’ skillsets.

Founder-led, experienced team with a proven track record of value creation

We are led by our founder and CEO, Robert M. (“Mickey”) McKee, and an experienced management team with a proven track record of value creation. Management’s extensive experience and strong leadership has resulted in a unique culture centered on entrepreneurship, responsibility, and a partnership-focused business model. We were founded and operate on the principle that our people, customers and vendors are the foundation of our success. Since our inception, this approach has contributed to significant growth, and we now have a compression fleet of 3.2 million horsepower.

Business Strategies

Our primary business objective is to maximize stockholder value, which we intend to do by pursuing disciplined growth while returning capital to our stockholders and maintaining strong financial and balance sheet flexibility. We intend to accomplish this objective by executing on the following business strategies:

Generate a stable cash flow profile by focusing on fixed-revenue contracts in the lowest cost, largest inventory regions

Our fixed-revenue contract structures with pre-billing of monthly fees further insulate our business from fluctuations in commodity prices and provides strong cash flow visibility. We target multi-year contracts with recurring contract renewals to take full advantage of the long-life inventory of our areas of operations.

Our strategic positioning in the Permian Basin and Eagle Ford Shale enables us to capitalize on the large and low-cost existing production base in two of the most critical U.S. natural gas and oil producing regions. We believe that continuing to deploy our assets in these multi-decade resource life regions will help us to maintain high asset utilization through industry and broader macroeconomic cycles and provide cash flow stability.

Continue to focus on reliable and low-emission large horsepower compression infrastructure

Our low-emission large horsepower compression infrastructure assets have an industry-leading historical average mechanical availability of over 99.5%. Our compression operations maximize uptime and consequently our customers’ cash flows, while lower emissions assets support our Company’s and our customers’ sustainability goals.

The growing share of unconventional production in the U.S. will continue to support the need for compression, which requires more horsepower compared to that of conventional production. Additionally, as customers continue to shift to multi-well pad drilling, they will increasingly require centralized compression models, relying on large horsepower compression units for their natural gas gathering, processing and transportation and gas lift operations. We believe that our industry leading large horsepower fleet, with approximately 81% of our compression units larger than 1,000 horsepower, and our focus on reliability and low-emissions will allow us to benefit from growing demand for these types of assets.

Pursue high return growth opportunities alongside our leading customer base

We have grown our total revenue-generating horsepower since inception in 2011 to approximately 3.2 million horsepower while achieving industry leading fleet utilization and strong margins. We believe organic growth opportunities with existing and new customers in our current areas of operation will be a driver of long-term

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value creation. Increasing well density and the trend toward unconventional resource development will drive the need for additional large horsepower. In addition to expanding our horsepower base, we can grow our revenue base by pursuing ancillary opportunities tailored to our customers’ needs including station construction and third-party services. Additionally, our compression operations contracts include built-in inflation adjustments resulting in continued growth of our revenue base.

We actively seek to partner and grow with customers who have meaningful acreage positions in long-life and low-cost producing regions with significant infrastructure development needs. We collaborate with our customers to jointly develop long-term solutions designed to optimize their lifecycle compression costs, positioning us as their contract compression operator of choice.

Return capital to our stockholders while maintaining a conservative balance sheet with flexibility to pursue growth objectives

We believe that our resilient business model and the strength and flexibility of our balance sheet will support an attractive through-cycle dividend to our stockholders. We plan to maintain conservative balance sheet leverage. We intend to maintain a prudent financial policy which will enable us to maintain our commitment to capital returns while pursuing capital efficient growth projects.

Our business model focuses on growing our cash flow, which provides us flexibility to further enhance stockholder returns by growing our dividend, implementing share buybacks, or paying down debt.

Our disciplined approach to deploying capital with a proven track record of achieving high returns has enabled our significant growth. We typically only order compression units when we have a customer commitment in place.

Invest in attracting, retaining, and developing world-class talent

We believe the quality and relentless focus of our workforce is key to our success, and differentiates us from our competitors and positions us as a leader in the compression industry. We seek to attract and retain a diverse workforce with equal opportunities and prospects for advancement, which we believe is fundamental to our success. Furthermore, we have made a significant commitment to training our employees across relevant aspects of the business to ensure that they continue to excel in their roles.

Keeping our workforce, customers, vendors, and communities safe is paramount, and we strive to maintain an industry-leading safety record. Our strong organizational safety culture centers around open communication. regular training, and safety reviews, to ensure that our health and safety program is operating to achieve desired outcomes and remains compliant with all applicable laws, rules, and regulations as well as customer requirements.

Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as we are an emerging growth company, unlike public companies that are not emerging growth companies under the JOBS Act, we will not be required to:

• provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

• provide more than two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations;

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• comply with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

• provide certain disclosures regarding executive compensation required of larger public companies or hold stockholder advisory votes on executive compensation required by the Dodd-Frank Wall Street Reform and Consumer Protection Act; or

• obtain stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for adopting new or revised financial accounting standards. We intend to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act until we are no longer an emerging growth company. Our election to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the longer phase-in periods under Section 107 of the JOBS Act and who will comply with new or revised financial accounting standards. See “Risk Factors—Risks Related to this Offering and Owning Our Common Stock—Taking advantage of the reduced disclosure requirements applicable to ‘emerging growth companies’ may make our common stock less attractive to investors.” If we were to subsequently elect instead to comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act.

We will cease to be an emerging growth company upon the earliest of:

• the last day of the fiscal year in which we have $1.235 billion or more in annual revenues;

• the date on which we become a “large accelerated filer” (the fiscal year-end on which the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30);

• the date on which we issue more than $1.0 billion of non-convertible debt securities over a three-year period; or

• the last day of the fiscal year following the fifth anniversary of our initial public offering.

Summary of Risk Factors

An investment in our common stock involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:

• A long-term reduction in the demand for natural gas or oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues.

• The loss or deterioration of the financial condition of any of our key customers would result in a decrease in our revenues and could adversely affect our financial results.

• Nonperformance by our suppliers or vendors could impact our revenues, increase our expenses and otherwise have a negative impact on our ability to conduct our business, operating results and cash flows.

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• We face significant competition that may cause us to lose market share.

• Our customers may choose to purchase and operate their own compression fleet, increase the number of compression units they currently own or use alternative technologies for enhancing oil production.

• After the primary term of our contracts, such contracts are cancellable on 30 to 90 days’ notice. Any non-renewals, renewals at reduced rates or the loss of contracts with any significant customer could adversely impact our financial results.

• The majority of our operations are located in the Permian Basin and Eagle Ford Shale, making us vulnerable to risks associated with operating in limited geographic areas.

• We may be unable to integrate effectively the businesses we may acquire, which may impact our operations and limit our growth.

• We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require, and terms of subsequent financings may adversely impact stockholder equity.

• Our fleet may require additional operating or capital expenses to maintain over time, which could adversely impact our financial results.

• A prolonged downturn in the economic environment could cause an impairment of goodwill or other intangible assets and reduce our earnings, and impairment in the carrying value of long-lived assets could reduce our earnings.

• Our ability to manage and grow our business effectively may be adversely affected if we lose key members of our management or we are unable to employ or retain qualified technical personnel.

• We depend on a limited number of suppliers and, particularly as a result of supply chain disruptions, we are vulnerable to product shortages, long lead times and price increases, which could have a negative impact on our results of operations.

• Our operations are subject to stringent environmental, health and safety regulation, and changes in these regulations could increase our costs or liabilities.

• New regulations, proposed regulations and proposed modifications to existing environmental regulations, such as increased regulation of hydraulic fracturing, if implemented, could result in increased compliance costs or adversely impact our revenue.

• Our business is subject to climate-related transitional risks including evolving climate change legislation, regulatory initiatives and stakeholder pressures in respect of ESG and sustainability practices could result in decreased demand for natural gas and oil and our services, and increased operating expenses and capital costs.

• We are subject to significant legal and reputational risks and expenses relating to the privacy, use and security of employee and customer information. We have experienced cybersecurity incidents or IT system disruptions in the past, and cybersecurity breaches or IT system disruptions may adversely affect our business in the future.

• Our substantial indebtedness could adversely affect our financial condition, and the terms of the ABL Credit Agreement restrict our operations, particularly our ability to respond to changes or to take certain actions.

• Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

• EQT controls a significant percentage of our voting power. A significant reduction by Kodiak Holdings of its ownership interests in us could adversely affect us.

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• After the completion of this offering, EQT will be subject to contractual restrictions that may affect Kodiak Holdings’ exercise of its rights to approve corporate actions under the Stockholders’ Agreement.

• We may elect to rely on exemptions from certain corporate governance requirements available to controlled companies under NYSE rules.

• EQT may have interests that conflict with the interests of our other stockholders. Certain of our director nominees may also have conflicts of interest because they are also employees of EQT or directors or officers of EQT. The resolution of these conflicts of interest may not be in our or your best interests.

• EQT is not limited in its ability to compete with us, and the corporate opportunity provisions in our charter could enable EQT to benefit from corporate opportunities that may otherwise be available to us.

• The requirements of being a public company may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

• There is no existing market for our common stock, and a trading market that will provide you with adequate liquidity may not develop. The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

• Our charter and bylaws will contain provisions that could discourage or prevent a takeover attempt even if it might be beneficial to our stockholders, and such provisions may adversely affect the market price of our common stock.

• Our charter will designate the Court of Chancery of Delaware as the exclusive forum for certain types of actions that may be brought by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum.

• We cannot assure you that we will be able to pay dividends on our common stock.

• Future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.

Our Principal Stockholder

EQT is a purpose-driven global investment organization with EUR 113 billion in assets under management within two business segments—Private Capital and Real Assets. EQT owns portfolio companies and assets in Europe, Asia-Pacific and the Americas and supports them in achieving sustainable growth, operational excellence and market leadership. EQT has offices in 20 countries across Europe, Asia and the Americas and has close to 1,800 employees.

In February 2019, investment funds affiliated with EQT, together with certain other institutional and other investors, acquired a majority of the indirect equity interests in us.

Frontier GP is the general partner of Kodiak Holdings. Investment vehicles affiliated with EQT own 100% of the membership interests in Frontier GP, and EQT indirectly has exclusive responsibility for the management and control of such investment vehicles. As such, EQT indirectly has the power to control the business and affairs of Kodiak Holdings. After completion of this offering, EQT will indirectly own, through its ownership of Kodiak Holdings, approximately 79% of our outstanding common stock (or 76% if the underwriters exercise in full their option to purchase additional shares of common stock). As a result, we will be a “controlled company” within the meaning of the rules of the NYSE; however we do not currently intend to rely on any exemptions from the corporate governance requirements of the NYSE available to “controlled companies.”

On June 20, 2023, the Company’s board of directors approved a 590,000-for-1 split of the common stock held by Kodiak Holdings prior to the consummation of this offering, which is to be effective upon filing of the Company’s Amended and Restated Certificate of Incorporation in connection with the consummation of this offering. The par value will not be adjusted as a result of the stock split, however, the number of shares that the Company is authorized to issue will be increased to 750,000,000. As a result of the stock split, upon the consummation of this offering, Kodiak Holdings will own 59,000,000 shares of common stock.

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Simplified Ownership Structure

The following diagram depicts our organizational structure and ownership after giving effect to this offering:

(1) Frontier Topco GP, LLC (“Frontier GP”) is the general partner of Kodiak Holdings. EQT Infrastructure III SCSp (“EQT Infrastructure III”) owns 100% of the membership interests in Frontier GP. EQT Fund Management S.à r.l. (“EFMS”) has exclusive responsibility for the management and control of the business and affairs of investment vehicles which constitute the majority of the total commitments to EQT Infrastructure III. As such, EFMS has the power to control Frontier GP’s voting and investment decisions and may be deemed to have beneficial ownership of the securities held by Kodiak Holdings.

(2) Interests in Kodiak Holdings consist of incentive awards held by certain members of management. See Note 9 (“Stockholders’ Equity”) to our Annual Financial Statements for details. Interests in the Company are expected to consist of awards under the 2023 Omnibus Incentive Plan. See “Executive Compensation—2023 Omnibus Incentive Plan” for details.

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Corporate Information

Our principal executive offices are located at 15320 Highway 105 W, Suite 210, Montgomery, Texas 77356, and our telephone number at that address is (936) 539-3300. Our website is available at www.kodiakgas.com. We expect to make our periodic reports and other information filed with or furnished to the SEC available free of charge through our website as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference herein and does not constitute a part of this prospectus.

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The Offering

Issuer Kodiak Gas Services, Inc.

Common Stock Offered by Us 16,000,000 shares (or 18,400,000 shares if the underwriters exercise in full their option to purchase additional shares of common stock).

Common Stock Outstanding After this Offering 75,000,000 shares (or 77,400,000 shares if the underwriters exercise in full their option to purchase additional shares of common stock).

Underwriters’ Option to Purchase Additional
Shares We have granted the underwriters an option for a period of 30 days to purchase up to an aggregate of 2,400,000 additional shares of our common stock.

Use of Proceeds We will receive net proceeds from this offering of approximately $298.1 million, assuming an initial public offering price of $20.50 per share (the midpoint of the price range set forth on the cover page of this prospectus), after deducting estimated expenses and underwriting discounts and commissions payable by us. Each $1.00 increase (decrease) in the public offering price would increase (decrease) our net proceeds by approximately $15.0 million.

We intend to use the net proceeds from this offering, together with a portion of the proceeds resulting from the Term Loan Derivative Settlement, to repay $314 million of borrowings outstanding under the Term Loan and fees relating to the Term Loan Transaction. Any net proceeds from this offering together with proceeds resulting from the Term Loan Derivative Settlement in excess of $314 million will be used for general corporate purposes. In addition, any net proceeds resulting from the exercise of the underwriters’ option to purchase additional shares will be used for general corporate purposes. See “Use of Proceeds.”

Dividend Policy We intend to recommend to our board of directors that we regularly return capital to our stockholders in the future through a dividend framework that will be communicated to stockholders in the future. Following the completion of this offering, our board of directors may elect to declare cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness (as further discussed herein). The payment of any future dividends will be at the discretion of our board of directors, which will be constituted upon completion of this offering and be comprised of a majority of independent directors.

Directed Share Program At our request, J.P. Morgan Securities LLC, a participating Underwriter, has reserved for sale, at the initial public offering price, up to approximately 5% of the shares offered by this prospectus for

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sale to some of our directors, officers, employees, distributors, dealers, business associates and related persons. If these persons purchase reserved shares it will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus. Please read “Underwriting.”

Risk Factors You should carefully read and consider the information set forth under the heading “Risk Factors” beginning on page 28 of this prospectus and all other information set forth in this prospectus before deciding to invest in our common stock.

Listing and Trading Symbol We intend to list our common stock on the NYSE under the symbol “KGS.”

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Summary Financial and Operating Data

The following table sets forth the summary historical financial and operating data for the periods and as of the dates presented. The summary historical financial data as of December 31, 2022 and 2021 and for the years ended December 31, 2022 and 2021 has been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary historical financial data for the three months ended March 31, 2023 and 2022 has been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The summary historical financial and operating data presented below is not indicative of the results to be expected for any future period.

The following information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and our audited consolidated financial statements and related notes thereto included elsewhere in this prospectus.

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Statement of operations data:
Revenues:
Compression Operations	$	177,697	$	157,495	$	654,957	$	583,070
Other Services		12,415		10,846		52,956		23,305
Total revenues		190,112		168,341		707,913		606,375
Cost of operations (exclusive of depreciation and amortization shown below)
Compression Operations		62,770		52,937		225,715		192,813
Other Services		8,988		8,827		41,636		17,364
Depreciation and amortization		44,897		42,405		174,463		160,045
Selling, general and administrative expenses		13,085		9,830		44,882		37,665
Long-lived asset impairment		—		—		—		9,107
Loss (gain) on sale of fixed assets		17		(7)		(874)		426
Total operating expenses		129,757		113,992		485,822		417,420
Income from operations		60,355		54,349		222,091		188,955
Interest expense, net		(58,723)		(25,640)		(170,114)		(107,293)
Unrealized (loss) gain on derivatives		(17,934)		7,838		87,363		40,827
Other (expense) income		(31)		16		17		(99)
Income tax (benefit) expense		(3,990)		8,624		33,092		(58,573)
Net (loss) income	$	(12,343)	$	27,939	$	106,265	$	180,963
Statement of cash flows data:
Cash flows provided by (used in):
Operating activities	$	23,290	$	54,796	$	219,846	$	249,978
Investing activities	$	(48,574)	$	(71,829)	$	(251,382)	$	(202,034)
Financing activities	$	18,853	$	13,629	$	23,172	$	(43,254)
Balance sheet data (at period end):
Working capital(1)	$	44,555	$	12,259	$	15,061	$	20,087
Total assets	$	3,213,748	$	3,069,169	$	3,205,540	$	3,011,599
Total liabilities	$	2,996,312	$	2,080,676	$	2,976,447	$	2,051,528
Total equity	$	217,436	$	988,492	$	229,093	$	960,071

(1) Working capital is defined as current assets minus current liabilities.

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	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(dollars in thousands)				(dollars in thousands)
Operating data (at period end):
Fleet horsepower(1)		3,175,006		3,037,061		3,134,306		2,935,826
Revenue-generating horsepower(2)		3,169,301		3,032,511		3,131,631		2,933,203
Fleet compression units(1)		3,041		2,956		3,024		2,904
Revenue-generating compression units(2)		3,033		2,952		3,021		2,900
Revenue-generating horsepower per revenue-generating compression unit(3)		1,045		1,027		1,037		1,011
Horsepower utilization(4)		99.8%		99.9%		99.9%		99.9%
Other financial data:
Net (Loss) Income	$	(12,343)	$	27,939	$	106,265	$	180,963
Gross Margin		73,457		64,172		266,099		236,153
Gross Margin Percentage		38.6%		38.1%		37.6%		38.9%
Adjusted Gross Margin(5)	$	118,354	$	106,577	$	440,562	$	396,198
Adjusted Gross Margin Percentage(5)		62.3%		63.3%		62.2%		65.3%
Adjusted EBITDA(5)	$	106,318	$	97,382	$	399,038	$	361,009
Adjusted EBITDA Percentage(5)		55.9%		57.8%		56.4%		59.5%
Discretionary Cash Flow(5)	$	49,689	$	63,913	$	189,421	$	219,747
Free Cash Flow(5)	$	13,906	$	(7,976)	$	(15,450)	$	48,954

(1) Fleet horsepower includes revenue-generating horsepower and idle horsepower, which are compression units that do not have a signed contract or are not subject to a firm commitment from our customer and are not yet generating revenue. Fleet horsepower excludes 58,645 and 65,355 of non-marketable or obsolete horsepower as of March 31, 2023 and March 31, 2022, respectively. Fleet horsepower excludes 58,645 and 65,355 of non-marketable or obsolete horsepower as of December 31, 2022 and December 31, 2021, respectively.

(2) Revenue-generating horsepower includes compression units that are operating under contract and generating revenue and compression units which are available to be deployed and for which we have a signed contract or are subject to a firm commitment from our customer.

(3) Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end.

(4) Horsepower utilization is calculated as (i) revenue-generating horsepower divided by (ii) fleet horsepower.

(5) Adjusted Gross Margin, Adjusted Gross Margin Percentage, Adjusted EBITDA, Adjusted EBITDA Percentage, Discretionary Cash Flow and Free Cash Flow are non-GAAP financial measures. For definitions of Adjusted Gross Margin, Adjusted EBITDA, Discretionary Cash Flow and Free Cash Flow and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP, see “—Non-GAAP Financial Measures” below.

Non-GAAP Financial Measures

Adjusted Gross Margin and Adjusted Gross Margin Percentage

Adjusted Gross Margin is a non-GAAP financial measure. We define Adjusted Gross Margin as revenue less cost of operations, exclusive of depreciation and amortization expense. We believe that Adjusted Gross Margin is useful as a supplemental measure to investors of our operating profitability. Adjusted Gross Margin is impacted primarily by the pricing trends for service operations and cost of operations, including labor rates for service technicians, volume and per compression unit costs for lubricant oils, quantity and pricing of routine preventative maintenance on compression units and property tax rates on compression units. Adjusted Gross Margin should not be considered an alternative to, or more meaningful than, gross margin or any other measure of financial performance presented in accordance with GAAP. Moreover, Adjusted Gross Margin as presented may not be comparable to similarly titled measures of other companies. Because we capitalize assets, depreciation and

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amortization of equipment is a necessary element of our costs. To compensate for the limitations of Adjusted Gross Margin as a measure of our performance, we believe that it is important to consider gross margin determined under GAAP, as well as Adjusted Gross Margin, to evaluate our operating profitability.

Adjusted Gross Margin for Compression Operations

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Total Revenues	$	177,697	$	157,495	$	654,957	$	583,070
Cost of operations (excluding depreciation and amortization)		(62,770)		(52,937)		(225,715)		(192,813)
Depreciation and amortization		(44,897)		(42,405)		(174,463)		(160,045)
Gross Margin	$	70,030	$	62,153	$	254,779	$	230,212
Gross Margin Percentage		39.4%		39.5%		38.9%		39.5%
Depreciation and amortization		44,897		42,405		174,463		160,045
Adjusted Gross Margin	$	114,927	$	104,558	$	429,242	$	390,257
Adjusted Gross Margin Percentage(1)		64.7%		66.4%		65.5%		66.9%

(1) Calculated using Adjusted Gross Margin for Compression Operations as a percentage of total Compression Operations revenues.

Adjusted Gross Margin for Other Services

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Total Revenues		$12,415		$10,846		$    52,956		$    23,305
Cost of operations (excluding depreciation and amortization)		(8,988)		(8,827)		(41,636)		(17,364)
Depreciation and amortization		—		—		—		—
Gross Margin	$	3,427	$	2,019	$	11,320	$	5,941
Gross Margin Percentage		27.6%		18.6%		21.4%		25.5%
Depreciation and amortization		—		—		—		—
Adjusted Gross Margin	$	3,427	$	2,019	$	11,320	$	5,941
Adjusted Gross Margin Percentage(1)		27.6%		18.6%		21.4%		25.5%

(1) Calculated using Adjusted Gross Margin for Other Services as a percentage of total Other Services revenues.

Adjusted EBITDA and Adjusted EBITDA Percentage

We define Adjusted EBITDA as net income before interest expense, net; tax expense (benefit); depreciation and amortization; unrealized loss (gain) on derivatives; equity compensation expense; transaction expenses; loss (gain) on sale of assets; and impairment of compression equipment. We define Adjusted EBITDA Percentage as Adjusted EBITDA divided by total revenues. Adjusted EBITDA and Adjusted EBITDA Percentage are used as supplemental financial measures by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess:

• the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;

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• the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;

• the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and

• our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure.

We believe that Adjusted EBITDA and Adjusted EBITDA Percentage provide useful information to investors because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business.

Adjusted EBITDA and Adjusted EBITDA Percentage should not be considered as alternatives to, or more meaningful than, revenues, net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance and liquidity. Moreover, our Adjusted EBITDA and Adjusted EBITDA Percentage as presented may not be comparable to similarly titled measures of other companies.

Given we are a capital intensive business, depreciation, impairment of compression equipment and the interest cost of acquiring compression equipment are necessary elements of our costs. To compensate for these limitations, we believe that it is important to consider both net income and net cash provided by operating activities determined under GAAP, as well as Adjusted EBITDA and Adjusted EBITDA Percentage, to evaluate our financial performance and our liquidity. Our Adjusted EBITDA and Adjusted EBITDA Percentage exclude some, but not all, items that affect net income and net cash provided by operating activities, and these measures may vary among companies. Management compensates for the limitations of Adjusted EBITDA and Adjusted EBITDA Percentage as an analytical tool by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating this knowledge into management’s decision-making processes.

The following table reconciles net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA, its most directly comparable GAAP financial measure, for each of the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Net (loss) income	$	(12,343)	$	27,939	$	106,265	$	180,963
Interest expense, net		58,723		25,640		170,114		107,293
Tax (benefit) expense		(3,990)		8,624		33,092		(58,573)
Depreciation and amortization		44,897		42,405		174,463		160,045
Unrealized loss (gain) on derivatives		17,934		(7,838)		(87,363)		(40,827)
Equity compensation expense(1)		879		619		971		1,224
Transaction expenses(2)		201		—		2,370		1,351
Loss (gain) on sale of assets		17		(7)		(874)		426
Impairment of compression equipment(3)		—		—		—		9,107
Adjusted EBITDA	$	106,318	$	97,382	$	399,038	$	361,009
Adjusted EBITDA Percentage		55.9%		57.8%		56.4%		59.5%

(1) For the three months ended March 31, 2023 and 2022, there were $0.9 million and $0.6 million, respectively, of non-cash adjustments for equity compensation expense related to the Company’s time-based vested shares. For the years ended December 31, 2022 and 2021, there were $1.0 million and $1.2 million, respectively, of non-cash adjustments for equity compensation expense related to the Company’s time-based vested shares.

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(2) Represents certain costs associated with non-recurring professional services, our equity owners’ expenses and other costs. We believe it is useful to investors to exclude these expenses.

(3) Represents non-cash charges incurred to write down long-lived assets with recorded values that are not expected to be recovered through future cash flows.

The following table reconciles Net cash provided by operating activities to Adjusted EBITDA for each of the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Net cash provided by operating activities	$	23,290	$	54,796	$	219,846	$	249,978
Interest expense, net		58,723		25,640		170,114		107,293
Tax (benefit) expense		(3,990)		8,624		33,092		(58,573)
Deferred tax provision (benefit)		2,521		(7,104)		(27,301)		60,972
Transaction expenses(1)		201		—		2,370		1,351
Other(2)		(6,346)		(2,597)		(17,130)		(6,406)
Change in operating assets and liabilities		31,919		18,023		18,047		6,394
Adjusted EBITDA	$	106,318	$	97,382	$	399,038	$	361,009

(1) Represents certain costs associated with non-recurring professional services, our equity owners’ expenses and other costs. We believe it is useful to investors to exclude these expenses.

(2) Includes amortization of debt issuance costs, non-cash lease expense, provision for bad debt and inventory reserve.

Discretionary Cash Flow

We define Discretionary Cash Flow as net cash provided by operating activities less maintenance capital expenditures, transaction expenses, certain changes in operating assets and liabilities and certain other expenses. We believe Discretionary Cash Flow is a useful liquidity and performance measure and supplemental financial measure for us and our investors in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. Our ability to pay dividends is subject to limitations due to restrictions contained in our ABL Credit Agreement as further described elsewhere herein. Discretionary Cash Flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, such as revenues, net income, operating income (loss) or cash flows from operating activities. Discretionary Cash Flow as presented may not be comparable to similarly titled measures of other companies.

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities less maintenance and growth capital expenditures, transaction expenses, certain changes in operating assets and liabilities and certain other expenses. We believe Free Cash Flow is a liquidity measure and useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments to grow our business and to service our debt. Free Cash Flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, such as revenues, net income (loss), operating income (loss) or cash flows from operating activities. Free Cash Flow as presented may not be comparable to similarly titled measures of other companies.

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The following table reconciles Net cash provided by operating activities, to Discretionary Cash Flow and Free Cash Flow, for each of the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Net cash provided by operating activities	$	23,290	$	54,796	$	219,846	$	249,978
Maintenance capital expenditures(1)		(4,803)		(8,111)		(48,313)		(38,088)
Transaction expenses(2)		201		—		2,370		1,351
Change in operating assets and liabilities		31,919		18,023		18,047		6,394
Other(3)		(918)		(795)		(2,529)		112
Discretionary Cash Flow		49,689		63,913		189,421		219,747
Growth capital expenditures(4)		(43,777)		(63,713)		(211,035)		(163,845)
Proceeds from sale of capital assets		32		12		8,082		13
Change in accrued capital expenditures		7,962		(8,188)		(1,918)		(6,961)
Free Cash Flow	$	13,906	$	(7,976)	$	(15,450)	$	48,954

(1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Requirements—Capital Expenditures” for information regarding amounts designated as maintenance capital expenditures.

(2) Represents certain costs associated with non-recurring professional services, our equity owners’ expenses and other costs. We believe it is useful to investors to exclude these expenses.

(3) Includes non-cash lease expense, provision for bad debt, inventory reserve and (gain) loss on sales of assets.

(4) For the three months ended March 31, 2023 and 2022, there were $2.4 million and $0.5 million of non-unit growth capital expenditures, respectively. Remaining amounts for the three months ended March 31, 2023 and 2022 represent growth capital expenditures to expand the operating capacity of the Company. For the years ended December 31, 2022 and 2021, there were $7.4 million and $4.4 million of non-unit growth capital expenditures, respectively. Remaining amounts for the years ended December 31, 2022 and 2021 represent growth capital expenditures to expand the operating capacity of the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Requirements—Capital Expenditures” for information regarding amounts designated as growth capital expenditures.

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The following table reconciles Net income to Discretionary Cash Flow and Free Cash Flow, for each of the periods presented:

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Net (loss) income	$	(12,343)	$	27,939	$	106,265	$	180,963
Depreciation and amortization		44,897		42,405		174,463		160,045
Unrealized loss (gain) on derivatives		17,934		(7,838)		(87,363)		(40,827)
Deferred tax provision (benefit)		(2,521)		7,104		27,301		(60,972)
Amortization of debt issuance costs		5,445		1,795		13,727		6,944
Equity compensation expense(1)		879		619		971		1,224
Transaction expenses(2)		201		—		2,370		1,351
Impairment of compression equipment(3)		—		—		—		9,107
Maintenance capital expenditures(4)		(4,803)		(8,111)		(48,313)		(38,088)
Discretionary Cash Flow		49,689		63,913		189,421		219,747
Growth capital expenditures(5)		(43,777)		(63,713)		(211,035)		(163,845)
Proceeds from sale of capital assets		32		12		8,082		13
Change in accrued capital expenditures		7,962		(8,188)		(1,918)		(6,961)
Free Cash Flow	$	13,906	$	(7,976)	$	(15,450)	$	48,954

(1) For the three months ended March 31, 2023 and 2022, there were $0.9 million and $0.6 million, respectively, of non-cash adjustments for equity compensation expense related to the Company’s time-based vested shares. For the years ended December 31, 2022 and 2021, there were $1.0 million and $1.2 million, respectively, of non-cash adjustments for equity compensation expense related to the Company’s time-based vested shares.

(2) Represents certain costs associated with non-recurring professional services, our equity owners’ expenses and other costs. We believe it is useful to investors to exclude these expenses.

(3) Represents non-cash charges incurred to write down long-lived assets with recorded values that are not expected to be recovered through future cash flows.

(4) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Requirements—Capital Expenditures” for information regarding amounts designated as maintenance capital expenditures.

(5) For the three months ended March 31, 2023 and 2022, there were $2.4 million and $0.5 million of non-unit growth capital expenditures, respectively. Remaining amounts for the three months ended March 31, 2023 and 2022 represent growth capital expenditures to expand the operating capacity of the Company. For the years ended December 31, 2022 and 2021, there were $7.4 million and $4.4 million of non-unit growth capital expenditures, respectively. Remaining amounts for the years ended December 31, 2022 and 2021 represent growth capital expenditures to expand the operating capacity of the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Requirements—Capital Expenditures” for information regarding amounts designated as growth capital expenditures.

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Summary Unaudited Pro Forma Consolidated Financial Data

We derived the summary unaudited pro forma consolidated financial data set forth below by the application of pro forma adjustments to the historical financial statements of Kodiak Gas Services, Inc. appearing elsewhere in this prospectus.

The unaudited pro forma consolidated balance sheet as of March 31, 2023 gives effect to the Offering Transactions as if they had occurred as of March 31, 2023. The unaudited pro forma consolidated statement of operations for the three months ended March 31, 2023 and the unaudited pro forma consolidated statement of operations for the year ended December 31, 2022 give effect to the Offering Transactions as if they had occurred on January 1, 2022.

We have derived the unaudited pro forma consolidated balance sheet and the unaudited pro forma consolidated statements of operations from our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023 and our consolidated audited financial statements as of and for the year ended December 31, 2022, which are included elsewhere in this prospectus. The unaudited pro forma consolidated financial information was prepared in accordance with Article 11 of Regulation S-X.

The pro forma adjustments are based on available information and upon assumptions that management believes are reasonable in order to reflect, on a pro forma basis, the effect of the Offering Transactions on the historical financial information of Kodiak Gas Services, Inc. The adjustments are described in the notes to the unaudited pro forma consolidated balance sheet and the unaudited pro forma consolidated statement of operations. Except as otherwise indicated, the unaudited pro forma consolidated financial information presented assumes no exercise by the underwriters of their over-allotment option.

The unaudited pro forma consolidated financial information is included for informational purposes only. The unaudited pro forma consolidated financial information should not be relied upon as being indicative of our results of operations or financial condition had the Offering Transactions occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations or financial position for any future period or date. The unaudited pro forma consolidated statement of operations and balance sheet should be read in conjunction with the “Risk Factors,” “—Summary Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Consolidated Financial Information” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	Unaudited Pro Forma
	Three Months Ended March 31, 2023		Year Ended December 31, 2022
	(in thousands)
Consolidated Statement of Operations Data:
Revenues:
Compression Operations	$	177,697	$	654,957
Other Services		12,415		52,956
Total net revenues		190,112		707,913
Operating Expenses:
Compression Operations		62,770		225,715
Other Services		8,988		41,636
Depreciation and amortization		44,897		174,463
Selling, general and administrative expenses		14,708		52,274
Long-lived asset impairment		—		—

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	Unaudited Pro Forma
	Three Months Ended March 31, 2023		Year Ended December 31, 2022
	(in thousands)
Loss (gain) on sale of fixed assets		17		(874)
Total operating expenses		131,380		493,214
Income from operations	$	58,732	$	214,699
Other Income (Expense):
Interest expense, net	$	(33,137)	$	(93,880)
Unrealized (loss) gain on derivatives		(11,968)		42,214
Other expense		(31)		(29,802)
Total other income (expense)		(45,136)		(81,468)
Income before income taxes		13,596		133,231
Income tax expense		2,295		31,806
Net income	$	11,301	$	101,426
Pro forma net income per share:
Basic and diluted	$	0.15	$	1.35
Weighted average shares outstanding		75,000,000		75,000,000
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	14,713
Total assets		3,182,529
Total liabilities		2,039,092
Total stockholders’ equity		1,143,437

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below together with other information set forth in this prospectus before investing in shares of our common stock. If any of the following risks or uncertainties actually occur, our business, financial condition, prospects, results of operations and cash flow could be materially adversely affected. The risks discussed below are not the only risks we face. Additional risks or uncertainties not known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition, prospects, results of operations or cash flows. We cannot assure you that any of the events discussed in the risk factors below will not occur. In that case, the market price of our common stock could decline and you may lose all or a part of your investment.

Risks Related to Our Business and Our Industry

A long-term reduction in the demand for, or production of, natural gas or oil could adversely affect the demand for our compression operations or the prices we charge for our compression operations, which could result in a decrease in our revenues.

The demand for our compression operations depends upon the continued demand for, and production of, natural gas and oil. The natural gas and oil industry is historically cyclical with levels of activity that are significantly affected by the levels and volatility of natural gas and oil prices. We may experience fluctuations in operating results as a result of the reactions of our customers to changes in natural gas and oil prices. Demand may be affected by, among other factors, natural gas prices, oil prices, weather, availability of alternative energy sources, governmental regulation and the overall demand for energy. Any prolonged, substantial, material reduction in the demand for natural gas or oil would likely depress the level of production activity and result in a decline in the demand for our compression operations, which could result in a reduction in our revenues.

We have several key customers. The loss of one or more of these customers would result in a decrease in our revenues and could adversely affect our financial results.

We provide compression operations under contracts with several key customers. The loss of one or more of these key customers may have an adverse effect on our financial results. Our two largest customers accounted for approximately 22% and 24% of our total revenues for the years ended December 31, 2022 and 2021, respectively, and approximately 23% and 24% of our total revenues for the three months ended March 31, 2023 and 2022, respectively. Our largest customer accounted for approximately 13% and 12% of our revenues for the years ended December 31, 2022 and December 31, 2021, respectively, and approximately 14% and 13% of our revenues for the three months ended March 31, 2023 and 2022, respectively. Additionally, our ten largest customers accounted for approximately 59% of our revenue for each of the years ended December 31, 2022 and 2021, and approximately 58% and 59% of our revenue for the three months ended March 31, 2023 and 2022, respectively. The loss of all or even a portion of the compression operations we provide to our key customers, as a result of competition or otherwise, could have a material adverse effect on our business, results of operations and financial condition.

The deterioration of the financial condition of our customers could adversely affect our business.

During times when the natural gas or oil markets weaken, our customers are more likely to experience financial difficulties, including being unable to access debt or equity financing, which could result in a reduction in our customers’ spending for our services. For example, our customers could seek to preserve capital by using lower cost providers, not renewing month-to-month contracts or determining not to enter into any new compression operations contracts. A significant decline in commodity prices may cause certain of our customers to reconsider their near-term capital budgets, which may impact large-scale natural gas infrastructure and oil production activities. Reduced demand for our services could adversely affect our business, results of operations, financial condition and cash flows. In addition, in the event of the financial failure of a customer, we could experience a

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loss of all or a portion of our outstanding accounts receivable associated with that customer. For example, an affiliate of one of our customers in the Powder River Basin has been undergoing a bankruptcy proceeding since 2019. Such customer has from time to time been late in remitting payment for our compression services, which we have continued to deliver, and we are pursuing prompt payment of the amount owed. We do not expect the amount owed presents any material concentration risk. If payment is not timely remitted, the Company expects to suspend services to such customer.

We face significant competition that may cause us to lose market share.

The compression business is competitive. Our ability to renew or replace existing contracts with our customers at rates sufficient to maintain current revenue and cash flows could be adversely affected by the activities of our competitors and our customers. If our competitors substantially increase the resources they devote to the development and marketing of competitive services or substantially decrease the prices at which they offer their services, we may be unable to compete effectively. Our competitors may be able to adapt more quickly to technological changes within our industry and changes in economic and market conditions and more readily take advantage of acquisitions and other opportunities. In addition, we could face significant competition from new entrants into our industry. Some of these competitors may expand or construct newer, more powerful or more flexible compression fleets, which would create additional competition for us. All of these competitive pressures could have a material adverse effect on our business, results of operations and financial condition.

Our customers may choose to vertically integrate their operations by purchasing and operating their own compression fleet, increasing the number of compression units they currently own or using alternative technologies for enhancing oil production.

Our customers that are significant producers, processors, gatherers and transporters of natural gas and oil may choose to vertically integrate their operations by purchasing and operating their own compression fleets in lieu of using our compression operations. The historical availability of attractive financing terms from financial institutions and equipment manufacturers facilitates this possibility by making the purchase of individual compression units increasingly affordable to our customers. In addition, there are many technologies available for the artificial enhancement of oil production, and our customers may elect to use these alternative technologies instead of the gas lift compression operations we provide. Such vertical integration or use of alternative technologies could result in decreased demand for our compression operations, which may have a material adverse effect on our business, results of operations and financial condition.

After the primary term of our contracts, such contracts are cancellable on 30 to 90 days’ notice, and we cannot be sure that such contracts will be extended or renewed after the end of the initial contractual term. Any such non-renewals, or renewals at reduced rates or the loss of contracts with any significant customer could adversely impact our financial results.

The length of our contract compression operations contracts with customers varies based on operating conditions and customer needs. As of March 31, 2023, approximately 10.5% of our compression operations on a revenue basis were provided on a month-to-month basis to customers who continue to utilize our services following expiration of the primary term of their contracts. These customers can generally terminate their month-to-month compression operations contracts on 30 to 90 days’ notice. We cannot be sure that a substantial number of these contracts will be extended or renewed by our customers or that any of our customers will continue to contract with us. The inability to negotiate extensions or renew a substantial portion of our contract compression operations contracts, the renewal of such contracts at reduced rates, the inability to contract for additional services with our customers or the loss of all or a significant portion of our services contracts with any significant customer could lead to a reduction in revenue and net income and could require us to record additional asset impairments. This could have a material adverse effect upon our business, results of operations and financial condition.

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The majority of our operations are located in the Permian Basin and Eagle Ford Shale, making us vulnerable to risks associated with operating in limited geographic areas.

Our operations are geographically concentrated in the Permian Basin and Eagle Ford Shale. As a result, we may be disproportionately exposed to the impact of regional supply and demand factors in the Permian Basin or Eagle Ford Shale caused by significant governmental regulation, curtailment of production or interruption of the processing or transportation of natural gas and oil produced from the wells in these areas. In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic natural gas and oil producing areas such as the Permian Basin and Eagle Ford Shale, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions. Due to the concentrated nature of our operations, we could experience any of the same conditions at the same time, resulting in a relatively greater impact on our revenue than they might have on other companies that have more geographically diverse operations.

We may be unable to integrate effectively the businesses we may acquire, which may impact our operations and limit our growth.

From time to time, we may choose to make business acquisitions to pursue market opportunities, increase our existing capabilities and expand into new geographic areas of operations. We may not be successful in integrating any future acquisitions into our existing operations, which may result in unforeseen operational difficulties or diminished financial performance or require a disproportionate amount of our management’s attention. Even if we are successful in integrating future acquisitions into our existing operations, we may not derive the benefits, such as operational or administrative synergies, that we expected from such acquisitions which may result in the commitment of our capital resources without the expected returns on such capital. Our inability to integrate acquisitions successfully into our existing operations, may adversely impact our operations and limit our growth.

We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require.

We have financed acquisitions, operating expenditures and capital expenditures with a combination of cash provided by operating and financing activities. However, to the extent we are unable to finance our operating expenditures, capital expenditures, scheduled interest and debt repayments and any future dividends with net cash provided by operating activities and borrowings under the ABL Credit Agreement or future financing arrangements, we may require additional capital. Periods of instability in the capital and credit markets (both generally and in the natural gas and oil industry in particular) could limit our ability to access these markets to raise debt or equity capital on affordable terms or to obtain additional financing. Among other things, our lenders may seek to increase interest rates, enact tighter lending standards, refuse to refinance existing debt at maturity at favorable terms or at all and may reduce or cease to provide funding to us. If we are unable to access the capital and credit markets on favorable terms, or if we are not successful in raising capital within the time period required or at all, we may not be able to grow or maintain our business, which could have a material adverse effect on our business, results of operations and financial condition. Additionally, we may be unable to refinance borrowings under the ABL Credit Agreement.

Our fleet may require additional operating or capital expenses to maintain over time, which could adversely impact our financial results.

Our fleet may require additional operating or capital expenses to maintain over time, which could adversely impact our financial results. Such costs may include direct costs such as labor, parts, materials and any other services that are unique in nature to each individual compression unit. The cost of additions or improvements to our fleet could adversely impact our financial results.

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Impairment in the carrying value of long-lived assets could reduce our earnings.

We have a significant number of long-lived assets on our consolidated balance sheet. Under GAAP, we are required to review our long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets may not be recoverable or such assets will no longer be utilized in the operating fleet. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If business conditions or other factors cause the expected undiscounted cash flows to decline, we may be required to record non-cash impairment charges. Events and conditions that could result in impairment in the value of our long-lived assets include changes in the industry in which we operate, long-term extended reduction in demand for natural gas and oil, competition, advances in technology, adverse changes in the regulatory environment or other factors leading to a reduction in our expected long-term profitability.

A prolonged downturn in the economic environment could cause an impairment of goodwill or other intangible assets and reduce our earnings.

As of March 31, 2023, we had approximately $306 million of goodwill and identifiable intangible assets of approximately $130 million. Goodwill is recorded when the purchase price of a business exceeds the fair market value of the tangible and separately measurable intangible net assets. GAAP requires us to test goodwill for impairment on an annual basis or when events or circumstances occur indicating that goodwill might be impaired. Any event that causes a reduction in demand for our services could result in a reduction of our estimates of future cash flows and growth rates in our business. These events could cause us to record impairments of goodwill or other intangible assets.

We have in the past been, and may in the future be, subject to sales tax audits in jurisdictions where we operate. As a result we may incur material unanticipated sales tax liabilities.

Taxing authorities in the jurisdictions in which we operate have in the past, and may in the future, audit us or otherwise challenge the amount of sales tax we have collected or paid. As a result, we may incur material unanticipated sales tax liabilities. Beginning in October 2019 through March 2023, we received notices of audits from the State of Texas Comptroller’s office for the periods covering December 2015 through October 2022 (the “Sales Tax Audit”). Based on the information currently available, we have accrued a contingent liability of $28.1 million for the periods set forth in the notices of audit. This accrual may not be sufficient to cover the expenses and liabilities related to a future audit for such period.

If we are unable to make all payments required by any taxing authority as a result of an audit, settlement or otherwise, we could face additional interest or penalties, or other punitive actions, up to and including seizure of our assets or forfeiture of our sales tax permit. Payments and penalties related to sales taxes could have a material adverse effect on our business, financial condition and result of operations.

We qualify as a Heavy Equipment Dealer for ad valorem tax purposes under revised Texas statutes. If in the future we do not qualify as a Heavy Equipment Dealer or our compression units do not qualify as Heavy Equipment because of new or revised Texas statutes or different interpretations by Texas governmental authorities, we will incur additional taxes, which would adversely impact our results of operations and financial condition.

In 2011, the Texas Legislature enacted changes related to the appraisal of natural gas compression units for ad valorem tax purposes by expanding the definitions of “Heavy Equipment Dealer” and “Heavy Equipment” effective from the beginning of 2012. If legislation is enacted in Texas that repeals or alters the Heavy Equipment statutes or a Texas governmental authority takes a different position such that we do not qualify as a Heavy Equipment Dealer or our compression units do not qualify as Heavy Equipment, then we would likely be required to pay additional ad valorem taxes with respect to prior and future periods, which would increase our quarterly cost of sales expense unless passed on to our customers, thereby impacting our future results of operations and financial condition. We may not be able to pass this cost along to our customers.

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Our ability to manage and grow our business effectively may be adversely affected if we lose key members of our management.

We depend on the continuing efforts of our executive officers, and the departure of any of our executive officers could have a significant negative effect on our business, operating results, financial condition and on our ability to compete effectively in the marketplace.

We might be unable to employ or retain qualified technical personnel, which could hamper our present operations, limit our ability to grow or increase our costs.

Many of the compression units that we operate are mechanically complex and often must perform in harsh conditions. We believe that our success depends upon our ability to employ and retain a sufficient number of technical personnel who have the ability to utilize, enhance and maintain these compression units. Our ability to maintain and expand our operations depends in part on our ability to utilize, replace, supplement and increase our skilled labor force. The demand for skilled workers is high, and supply is limited, especially in the Permian Basin. A significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force or cause an increase in the wage rates that we must pay or both. If either of these events were to occur, our cost structure could increase, and our operations and growth potential could be impaired. Employee turnover may also lead to lost productivity and decrease employee engagement which could adversely impact our business.

Additionally, our ability to hire, train and retain qualified personnel could become more challenging as we grow and to the extent energy industry market conditions are competitive. When general industry conditions are favorable, the competition for experienced operational and field technicians increases as other energy and manufacturing companies’ needs for the same personnel increases. Our ability to grow or even to continue our current level of service to our current customers could be adversely impacted if we are unable to successfully hire, train and retain these important personnel. In addition, effective succession planning for our employees and expansion planning is important to our long-term success. Failure to achieve these plans could hinder our strategic planning and execution and have a material adverse impact on our business, financial condition or results of operations.

Any unionization efforts or labor regulation changes in certain jurisdictions in which we operate could divert management’s attention and could have a materially adverse effect on our operating results or limit our operational flexibility.

We consider our relationship with our employees to be satisfactory, and none of our employees are represented by a union in collective bargaining with us. However, efforts could be made by employees and third parties from time to time to unionize portions of our workforce. In addition, we may be subject to strikes or work stoppages and other labor disruptions in the future. Any unionization efforts, collective bargaining agreements or work stoppages could have a materially adverse effect on our operating results or limit our operational flexibility.

We depend on a limited number of suppliers and, particularly as a result of supply chain and logistics disruptions that began during the COVID-19 pandemic and the resulting inflationary environment, we are vulnerable to product shortages, long lead times and price increases, which could have a negative impact on our results of operations.

The substantial majority of the components for our natural gas compression equipment are supplied by a limited number of key vendors. Our reliance on these suppliers involves several risks, including price increases and a potential inability to obtain an adequate supply of required components in a timely manner. We also rely primarily on a limited number of vendors to package and assemble our compression units. We do not have long-term contracts with these suppliers or packagers, and a partial or complete loss of any of these sources could have a negative impact on our results of operations and could damage our customer relationships. In addition, the preferences of our customers with respect to particular vendors may change, which could require us to find new

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vendors. Some of these suppliers manufacture the components we purchase in a single facility, and any damage to that facility could lead to significant delays in delivery of completed compression units to us.

If we are unable to purchase compression equipment or components for our compression equipment on a timely basis to meet the demands of our customers, our existing customers may terminate their contractual relationships with us, or we may not be able to compete for business from new or existing customers, which, in each case, could have a material adverse effect on our business, results of operations and financial condition. Further, supply chain bottlenecks resulting from the COVID-19 pandemic could adversely affect our ability to obtain necessary materials, parts or other components used in our operations or increase the costs of such items. A significant increase in the price of such equipment, materials and services, as a result of the COVID-19 pandemic, the resulting supply chain and logistics disruptions, or otherwise, could have a negative impact on our business, results of operations, financial condition and cash flows.

Nonperformance by our suppliers or vendors could impact our revenues, increase our expenses and otherwise have a negative impact on our ability to conduct our business, operating results and cash flows.

Weak economic conditions or widespread financial distress could reduce the liquidity of our suppliers or vendors, making it more difficult for them to meet their commitments or obligations to us. Nonperformance by suppliers or vendors who have committed to provide us with critical products or services could raise our costs or interfere with our ability to successfully conduct our business.

Our operations entail inherent risks that may result in interruption of our operations and/or substantial liability. We do not insure against all potential losses and could be seriously harmed by unexpected liabilities.

Our operations are subject to inherent risks such as equipment defects, malfunctions and failures, natural disasters and other incidents that can result in uncontrollable flows of gas or well fluids, fires and explosions. These risks could cause the interruption of our operations and the operations of our customers, and we may endure significant equipment damage, revenue losses and reputational harm, all of which could have an adverse effect on our business, prospects and financial condition. Moreover, such risks could expose us to substantial liability for personal injury, death, property damage, pollution and other environmental damages. Our insurance may be inadequate to cover our liabilities or subject to cancellation notices. Further, insurance covering the risks we face or in the amounts we desire may not be available in the future or, if available, the premiums may not be commercially justifiable. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, resulted in cancellation of our policy, or if we were to incur liability at a time when we are not able to obtain liability insurance, our business, results of operations and financial condition could be adversely affected.

If we do not satisfy our mechanical availability guarantee, a customer has the ability to terminate its gas compression contracts.

Our gas compression contracts provide a guarantee of specified “mechanical availability,” of 98.0% to 98.5%. We define “mechanical availability” as the percentage of time each month that our compression operations equipment is “mechanically available” to compress gas under design and operating conditions set forth in the contract. The calculation for mechanical availability includes any downtime that is incurred as a result of our operations, such as mechanical shutdowns, maintenance events, repairs or overhauls, but does not include any downtime caused by a mechanical failure or shutdown that occurs as a result of improper gas or objectionable liquids or solids in the gas or fuel stream, insufficient gas available for compression or fuel, any shutdown due to the applicable customer’s production or processing operations or downtime not directly caused by us, including downtime do to “force majeure” events, such as acts of God, acts related to terrorism, strikes, lockouts and/or accidents. A failure to satisfy mechanical availability requirements under a contract for three consecutive months could result in termination of the applicable contract by the customer, which could have an adverse effect on our financial results.

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Terrorist attacks, the threat of terrorist attacks or other sustained military campaigns may adversely impact our results of operations.

The long-term impact of terrorist attacks and the magnitude of the threat of future terrorist attacks on the energy industry in general and on us in particular are not known at this time. Uncertainty surrounding sustained military campaigns may affect our operations in unpredictable ways, including disruptions of natural gas and oil supplies and markets for natural gas, natural gas liquids and oil and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act of terror or war. Changes in the insurance markets attributable to terrorist attacks may make insurance against such attacks more difficult for us to obtain, if we choose to do so. Moreover, the insurance that may be available to us may be significantly more expensive than our existing insurance coverage. Instability in the financial markets resulting from terrorism or war could also negatively affect our ability to raise capital.

Risks Related to Regulatory Matters

Our operations are subject to stringent environmental, health and safety regulation, and changes in these regulations could increase our costs or liabilities.

Our operations at customer sites are subject to stringent and complex federal, state and local environmental, health and safety laws and regulations, including laws and regulations governing the discharge of materials into the environment, emissions controls and other environmental protection and occupational health and safety concerns. Environmental laws and regulations, such as the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and comparable state laws, may impose strict, as well as joint and several, liability for environmental contamination, which could render us potentially liable for remediation costs, natural resource damages and other damages, regardless of whether we were responsible for the release or contamination, and even if our operations were lawful at the time of the release or if contamination was caused by third parties. In addition, third parties, including neighboring landowners, could file claims for personal injury, property damage and recovery of response costs. Remediation costs and other damages arising as a result of environmental laws and regulations, and costs associated with changes in existing environmental laws and regulations or the adoption of new environmental laws and regulations over time could adversely impact our or our customers’ financial condition or results of operations. Moreover, failure by us or our customers to comply with these environmental laws and regulations could result in the imposition of administrative, civil and criminal penalties and the issuance of injunctions delaying or prohibiting operations, which could in turn have an adverse impact on our customers and our business.

We conduct operations in a wide variety of customer locations across the continental United States (“U.S.”) Our customers are required to hold certain U.S. federal, state or local environmental permits or other authorizations and may require new or amended facility permits or licenses from time to time with respect to storm water discharges, waste handling or air emissions relating to equipment operations, including compression units, which subject our customers to new or revised permitting conditions that may be onerous or with respect to which compliance may be costly. These permits and authorizations frequently contain numerous compliance requirements, including monitoring and reporting obligations and operational restrictions, such as emissions limits. Given the wide variety of locations in which our customers operate, and the number of environmental permits and other authorizations that are applicable to our customers’ operations, our customers may occasionally identify or be notified of violations of or noncompliance with certain requirements existing under various permits or may be required to obtain additional permits. Although we do not hold the permits, such noncompliance with required permits or the failure to obtain additional permits by our customers could subject our customers to future penalties, operating restrictions, or delays in obtaining new or amended permits which could in turn have a material adverse effect on our business, financial condition, and results of operations.

Environmental, health and safety laws and regulations are constantly evolving and may become increasingly complex and more stringent over time. Future environmental health and safety laws and regulations (or changes to existing laws and regulations) may also negatively impact natural gas and oil exploration and production,

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gathering and pipeline companies, including our customers, which in turn could have a material adverse effect on our business, financial conditions, and results of our operations.

New regulations, proposed regulations and proposed modifications to existing regulations under the Clean Air Act, if implemented, could result in increased compliance costs and changes in customers’ demand and desired suppliers.

New regulations or proposed modifications to existing regulations under the Clean Air Act (“CAA”) may lead to adverse impacts on our business, financial condition and results of operations. For example, in 2015, the Environmental Protection Agency (“EPA”) finalized a rule strengthening the primary and secondary National Ambient Air Quality Standards (“NAAQS”) for ground level ozone, both of which are eight-hour concentration standards of 70 parts per billion. In December 2020, the EPA published its decision to retain the 2015 NAAQS for ground-level ozone; however, in October 2021, the EPA announced it will reconsider its December 2020 decision. While a draft assessment released in April 2022 indicates that EPA staff have reached a preliminary conclusion that the December 2020 decision will stand, the EPA is targeting the end of 2023 to complete its reconsideration. After the EPA revises a NAAQS standard, the states are expected to establish revised attainment/non-attainment regions. State implementation of the revised NAAQS could result in stricter permitting requirements, delay or prohibit our customers’ ability to obtain such permits, and result in increased expenditures for pollution control equipment, which could negatively impact our customers’ operations, increase the cost of additions to property, plants and equipment and negatively impact our business.

In 2012, the EPA finalized rules that establish new air emissions controls for natural gas and oil production and natural gas processing operations. Specifically, the EPA’s rule package included New Source Performance Standards to address emissions of sulfur dioxide and volatile organic compounds (“VOCs”) and a separate set of emissions standards to address hazardous air pollutants frequently associated with natural gas and oil production and processing activities. The rules established specific new requirements regarding emissions from compression units and controllers at natural gas processing plants, dehydrators, storage tanks and other production equipment as well as the first federal air standards for natural gas wells that are hydraulically fractured. In June 2016, the EPA took steps to expand on these regulations when it published New Source Performance Standards, known as Subpart OOOOa, that required certain new, modified or reconstructed facilities in the natural gas and oil sector to reduce methane gas and VOC emissions. These Subpart OOOOa standards expanded the 2012 New Source Performance Standards by using certain equipment-specific emissions control practices, requiring additional controls for pneumatic controllers and pumps as well as compression units, and imposing leak detection and repair requirements for natural gas compression units and booster stations.

In September 2020, the EPA, under the Trump Administration, finalized two sets of amendments to the 2016 Subpart OOOOa standards. The first, known as the 2020 Technical Rule, reduced the 2016 rule’s fugitive emissions monitoring requirements, among other changes. The second, known as the 2020 Policy Rule, rescinded the methane-specific requirements for certain natural gas and oil sources in the production and processing segments. On January 20, 2021, President Biden issued an Executive Order directing the EPA to rescind the 2020 Technical Rule by September 2021 and consider revising the 2020 Policy Rule. In June 2021, President Biden signed a Congressional Review Act resolution passed by Congress that revoked the 2020 Policy Rule but did not address the 2020 Technical Rule. Further, on November 15, 2021, the EPA issued a proposed rule intended to reduce methane emissions from natural gas and oil sources. The proposed rule would make the existing regulations in Subpart OOOOa more stringent and create a Subpart OOOOb to expand reduction requirements for new, modified, and reconstructed natural gas and oil sources, including standards focusing on certain source types that have never been regulated under the Clean Air Act (including intermittent vent pneumatic controllers, oil well associated gas, and liquids unloading facilities). In addition, the proposed rule would establish “Emissions Guidelines,” creating a Subpart OOOOc that would require states to develop plans to reduce methane emissions from existing sources that must be at least as effective as presumptive standards set by EPA. The EPA issued a supplemental proposed rule on November 15, 2022 to update, strengthen and expand its November 2021 proposed rule. The supplemental proposed rule would impose more stringent requirements on the natural gas and

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oil industry. The public comment period expired in February 2023, and the rule is expected to be finalized in August 2023. We cannot predict whether and in what form EPA will finalize these amendments; however, Subpart OOOOa and any additional regulation of air emissions from the natural gas and oil sector could result in increased expenditures for pollution control equipment, which could impact our customers’ operations and negatively impact our business.

Additionally, in August 2022, President Biden signed into law the Inflation Reduction Act of 2022. Among other things, the Inflation Reduction Act includes a methane emissions reduction program that amends the CAA to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems. This program requires the EPA to impose a “waste emissions charge” on certain natural gas and oil sources that are already required to report under EPA’s Greenhouse Gas Reporting Program. Implementation of such programs could increase our operating costs and accelerate the transition away from fossil fuels, which could in turn have an adverse impact on our customers and thus adversely impact our business.

A climate-related decrease in demand for natural gas and oil could negatively affect our business.

Supply and demand for natural gas and oil is dependent upon a variety of factors, many of which are beyond our control. These factors include, among others, the potential adoption of new government regulations, including those related to fuel conservation measures and climate change regulations, technological advances in fuel economy, an economy-wide transition to lower greenhouse gas (“GHG”) energy sources and energy generation devices. For example, legislative, regulatory or executive actions intended to reduce emissions of GHGs could increase the cost of consuming natural gas and oil, thereby potentially causing a reduction in the demand for such products. A broader transition to alternative fuels or energy sources, whether resulting from potential new government regulation, carbon taxes or consumer preferences, could result in decreased demand for natural gas and oil. Any decrease in demand for these products could consequently reduce demand for our services and could have a negative effect on our business.

Efforts by governments, international bodies, businesses and consumers to reduce GHGs and otherwise mitigate the effects of climate change are ongoing. The nature of these efforts and their effects on our business are inherently unpredictable and subject to change. However, any activism directed at shifting funding and/or demand away from companies with energy-related assets could result in a reduction of funding for the energy sector overall, which could have an adverse effect on our ability to obtain external financing as well as negatively affect the cost of, and terms for, financing to fund capital expenditures or other aspects of our business.

Our business is subject to climate-related transitional risks, including evolving climate change legislation, regulatory initiatives and stakeholder pressures could result in increased operating expenses and capital costs, financial risks and potential reduction in demand for our services.

Combating the effects of climate change continues to attract considerable attention in the United States and internationally, including from regulators, legislators, companies in a variety of industries, financial market participants and other stakeholders. Climate change legislation and regulatory initiatives may arise from a variety of sources, including international, national, regional and state levels of government and associated administrative bodies, seeking to monitor, restrict or regulate existing emissions of GHGs, such as carbon dioxide and methane, as well as to restrict or eliminate future emissions. Accordingly, our business and operations, and those of our customers, are subject to executive, regulatory, political and financial risks associated with natural gas and the emission of GHGs.

Congress has previously considered legislation to restrict or regulate emissions of GHGs. Energy legislation and other initiatives continue to be proposed that may be relevant to GHG emissions issues. Almost half of the states, either individually or through multi-state regional initiatives, have begun to address GHG emissions, primarily through the planned development of emission inventories or regional GHG cap and trade programs. Although most of the state-level initiatives have to date been focused on large sources of GHG emissions, such as electric

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power plants, it is possible that smaller sources such as our natural gas-powered compression units could become subject to GHG-related regulation. Depending on the particular program, we could be required to control emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. The $1 trillion legislative infrastructure package passed by Congress in November 2021 includes a number of climate-focused spending initiatives targeted at climate resilience, enhanced response and preparation for extreme weather events, and clean energy and transportation investments. The Inflation Reduction Act of 2022 also provides significant funding and incentives for research and development of low-carbon energy production methods, carbon capture, and other programs directed at addressing climate change.

Independent of Congress, the EPA has promulgated regulations controlling GHG emissions under its existing CAA authority. The EPA has adopted rules requiring many facilities, including petroleum and natural gas systems, to inventory and report their GHG emissions. In addition, the EPA rules provide air permitting requirements for certain large sources of GHG emissions. The requirement for facilities and large sources of GHG emissions to obtain and comply with permits will affect some of our customers’ largest new or modified facilities going forward but is not expected to cause us to incur material costs. As noted above, the EPA has undertaken efforts to regulate emissions of methane, considered a GHG, in the natural gas and oil sector, with the development of additional, more stringent rules under way.

In an executive order issued on January 20, 2021, President Biden asked the heads of all executive departments and agencies to review and take action to address any federal regulations, orders, guidance documents, policies and any similar agency actions promulgated during the prior administration that may be inconsistent with or present obstacles to the administration’s stated goals of protecting public health and the environment, and conserving national monuments and refuges. The executive order also established an Interagency Working Group on the Social Cost of Greenhouse Gases, which is called on to, among other things, capture the full costs of GHG emissions, including the “social cost of carbon,” “social cost of nitrous oxide” and “social cost of methane,” which are “the monetized damages associated with incremental increases in greenhouse gas emissions,” including “changes in net agricultural productivity, human health, property damage from increased flood risk, and the value of ecosystem services.” The EPA published a draft report in September 2022 with the social cost of carbon at $190 per metric ton of carbon dioxide emitted in 2020 at a 2% discount rate. That figure is intended to be used to guide federal decisions on the costs and benefits of various policies and approvals, although such efforts have been the subject of a series of judicial challenges. At this time, we cannot determine whether the administration’s efforts on social cost or other interagency climate efforts will lead to any particular actions that give rise to a material adverse effect on our business, financial condition, results of operations and cash flows.

At the international level, the U.S. joined the international community at the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France (“COP21”), which resulted in an agreement intended to nationally determine their contributions and set GHG emission reduction goals every five years beginning in 2020 (the “Paris Agreement”). While the Paris Agreement did not impose direct requirements on emitters, national plans to meet its pledge could have resulted in new regulatory requirements. In April 2021, the current administration announced a new “nationally determined contribution” for U.S. GHG emissions that would achieve emissions reductions of at least 50% relative to 2005 levels by 2030. Those national commitments by themselves create no binding requirements on individual companies or facilities, but they do provide indications of the current administration’s policy direction and the types of legislative and regulatory requirements—such as the EPA’s proposed methane rules—that may be needed to achieve those commitments. Relatedly, the U.S. and European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector. Since its formal launch at the 26th Conference of the Parties in Glasgow, Scotland, over 150 countries have joined the pledge. With the exception of those proposed EPA methane rules and related updates, which were announced by President Biden at COP26 and COP27, we cannot predict whether re-entry into the Paris Agreement or pledges made in connection therewith will result in any particular new regulatory requirements or whether such requirements will cause us to incur material costs. Additionally, the SEC issued a proposed rule in March 2022 that would mandate extensive disclosure of climate-related data, risks,

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and opportunities, including financial impacts, physical and transition risks, related governance and strategy, and GHG emissions, for certain public companies.

Although it is not currently possible to predict how these executive orders, national commitments or any proposed or future GHG or climate change legislation or regulation promulgated by Congress, the states or multi-state regions and their respective regulatory agencies will impact our business, any legislation or regulation of GHG emissions that may be imposed in areas in which we conduct business or on the assets we operate could result in increased compliance or operating costs or additional operating restrictions or reduced demand for our services, and could have a material adverse effect on our business, financial condition and results of operations.

Apart from governmental regulation, there are also increasing financial risks for companies in the energy sector as stockholders and bondholders currently invested in energy companies may elect in the future to shift some or all of their investments toward non-fossil fuel energy sources. In recent years ESG goals and programs, which may include policies, practices and extralegal targets related to environmental stewardship, social responsibility, and corporate governance, have become an increasing focus of investors and stakeholders across the industry, and companies without robust ESG programs may find access to capital and investors more challenging in the future. For example, certain investment banks and asset managers based both domestically and internationally have announced that they are adopting climate change guidelines for their banking and investing activities. Institutional lenders who provide financing to energy companies such as ourselves have become more attentive to sustainable lending practices, and some may elect not to provide traditional energy producers or companies that support such producers with funding. ESG considerations may also affect others in the investment community, including investment advisers, sovereign wealth funds, public pension funds, insurance companies and other groups, and may result in their divestment of energy-related equities or otherwise limit their willingness to finance our or our customer’s operations. Limitation of investments in and financings for energy companies could result in the restriction, delay or cancellation of infrastructure projects and energy production activities. This potential for reduced access to the capital and financial markets, whether impacting our customers and/or our Company, may further adversely affect the demand for and price of our securities.

Furthermore, some scientists have concluded that increasing concentrations of GHGs in the earth’s atmosphere are changing global climate patterns in a manner that results in significant weather-related effects, such as increased frequency and severity of storms, droughts, floods and other such events, in addition to more chronic changes such as shifting temperature, precipitation, and other meteorological patterns. Energy needs could increase or decrease as a result of extreme weather conditions depending on the duration and magnitude of any such climate changes. Increased energy use due to weather changes may require us to invest in additional equipment to serve increased demand. A decrease in energy use due to weather changes may affect our financial condition through decreased revenues. To the extent the frequency of extreme weather events increases, this could impact our operations in various ways, including damage to our facilities interruptions in service or supply chain, increased insurance premiums or increases to our cost of providing service. Such impacts may be proportionately more severe given the geographical concentration of our operations. Demand for our operations also depends in part on the volume of products being produced and/or transported by our customers, which may also be impacted by similar risks. If any of these results occur, it could have an adverse effect on our assets and operations and cause us to incur costs in preparing for and responding to them.

Litigation risks are also increasing as a number of parties have sought to bring suit against various natural gas and oil companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts. Should we be targeted by any such litigation, we may incur liability, which, to the extent that societal pressures or political or other factors are involved, could be imposed without regard to causation or contribution to the asserted damage, or to other mitigating factors. Moreover, any such litigation targeting our customers could negatively impact their operation and, in turn, decrease demand for our operations.

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An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

In sum, any legislation, regulatory programs or social pressures related to climate change could increase our costs and require substantial capital, compliance, operating and maintenance costs, reduce demand for our services and reduce our access to financial markets. Current, as well as potential future, laws and regulations that limit emissions of GHGs or that otherwise promote the use of renewable energy over fossil fuel energy sources could increase the cost of our services and, thereby, further reduce demand and adversely affect our sales volumes, revenues and margins.

Regulatory initiatives relating to the protection of endangered or threatened species in the United States could have an adverse impact on our and our customers’ ability to expand operations.

In the United States, the Endangered Species Act (the “ESA”) restricts activities that may affect endangered or threatened species or their habitats. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act (the “MBTA”). To the extent species that are listed under the ESA or similar state laws, or are protected under the MBTA, live in the areas where we or our customers operate, both our and our customers’ abilities to conduct or expand operations and construct facilities could be limited or be forced to incur material additional costs.

The designation of previously unidentified endangered or threatened species or new critical or suitable habitat designations could indirectly cause us to incur additional costs, cause our or our customers’ operations to become subject to operating restrictions or bans, and limit future development activity in affected areas. In June and July 2022, the U.S. Fish and Wildlife Service issued final rules rescinding Trump-era regulations concerning the definition of “habitat” and critical habitat exclusions. As a result of these rules, the potential designation of previously unprotected species as threatened or endangered or new critical or suitable habitat designations in areas where we or our customers might conduct operations could result in limitations or prohibitions on our operations and could adversely impact our business. There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take other measures which may adversely impact our business or operations.

Increased regulation of hydraulic fracturing could result in reductions of, or delays in, natural gas and oil production by our customers, which could adversely impact our revenue.

A significant portion of our customers’ natural gas and oil production is developed from unconventional sources that require hydraulic fracturing as part of the completion process. Hydraulic fracturing involves the injection of water, sand and chemicals under pressure into the rock formation to stimulate gas production. The U.S. Congress has from time to time considered legislation to amend the Safe Drinking Water Act (“SDWA”) to repeal the exemption for hydraulic fracturing from the definition of “underground injection” and require federal permitting and regulatory control of hydraulic fracturing, and disclosure of the chemical constituents of the fluids used in the fracturing process. Scrutiny of hydraulic fracturing activities continues in other ways, with the EPA having commenced a multi-year study of the potential environmental impacts of hydraulic fracturing. In December 2016, the EPA issued a report on the potential impacts of hydraulic fracturing on drinking water resources. The final report concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources “under some circumstances,” noting that the following hydraulic fracturing water cycle activities and local- or regional-scale factors are more likely than others to result in more frequent or more severe impacts: water withdrawals for fracturing in times or areas of low water availability; surface spills during the management of fracturing fluids, chemicals or produced water; injection of fracturing fluids into wells with inadequate mechanical integrity; injection of fracturing fluids directly into groundwater resources; discharge of inadequately treated fracturing wastewater to surface waters; and disposal or storage of fracturing wastewater in unlined pits. To date, EPA has taken no further action in response to the December 2016 report. Under the federal Clean Water Act (“CWA”), the EPA also prohibits the discharge of wastewater from hydraulic fracturing and certain other natural gas operations to publicly owned wastewater treatment plants.

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State and federal regulatory agencies have also recently focused on a possible connection between the operation of injection wells used for natural gas and oil waste disposal and seismic activity. Similar concerns have been raised that hydraulic fracturing may also contribute to seismic activity. When caused by human activity, such events are called induced seismicity. Developing research suggests that the link between seismic activity and wastewater disposal may vary by region, and that only a very small fraction of the tens of thousands of injection wells have been suspected to be, or have been, the likely cause of induced seismicity. In March 2016, the United States Geological Survey identified six states with the most significant hazards from induced seismicity, including Oklahoma, Kansas, Texas, Colorado, New Mexico and Arkansas, some of which are states where we operate. In light of these concerns, some state regulatory agencies have modified their regulations or issued orders to address induced seismicity. Increased regulation and attention given to induced seismicity could lead to greater opposition to, and litigation concerning, natural gas and oil activities utilizing hydraulic fracturing or injection wells for waste disposal, which could indirectly impact our business, financial condition and results of operations. In addition, these concerns may give rise to private tort suits against our customers from individuals who claim they are adversely impacted by seismic activity they allege was induced. Such claims or actions could result in liability to our customers for property damage, exposure to waste and other hazardous materials, nuisance or personal injuries, and require our customers to expend additional resources or incur substantial costs or losses. This could in turn adversely affect the demand for our services.

We cannot predict the future of any such legislation or tort liability. If additional levels of regulation, restrictions and permits were required through the adoption of new laws and regulations at the federal or state level or the development of new interpretations of those requirements by the agencies that issue the required permits, that could lead to operational delays, increased operating costs and process prohibitions that could reduce demand for our compression operations, which would materially adversely affect our revenue and results of operations.

Increasing scrutiny and changing stakeholder expectations in respect of ESG and sustainability practices may impose additional costs or risks.

In recent years, companies across all industries are facing increasing scrutiny from stakeholders related to their ESG and sustainability practices. A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including increasing attention and demands for action related to climate change, promoting the use of substitutes to fossil fuel products and encouraging the divestment of companies in the fossil fuel industry. Investor advocacy groups, proxy advisory firms, certain institutional investors and lenders, investment funds and other influential investors and rating agencies are also increasingly focused on ESG and sustainability practices and matters and on the implications and social cost of their investments and loans. We have established a long-term strategy intended to meet ESG-related objectives, which currently includes certain sustainability targets. However, we cannot guarantee that this long-term strategy will meet our ESG-related objectives. Such initiatives are voluntary, not binding on our business or management and subject to change. We may determine in our discretion that it is not feasible or practical to implement or complete certain of our ESG-related initiatives, or to meet previously set goals and targets based on cost, timing or other considerations. If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters (or meet ESG-related goals and targets that we have set), as they continue to evolve, if we are perceived to have not responded appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, or if estimates, assumptions, and/or third-party information we currently believe to be reasonable are subsequently considered erroneous or misinterpreted, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially and adversely affected.

Further, our operations, projects and growth opportunities require us to have strong relationships with various key stakeholders, including our stockholders, employees, suppliers, customers, local communities and others. We may face pressures from stakeholders, many of whom are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability while at the same time remaining a successfully operating public company. If we do not successfully manage expectations across these

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varied stakeholder interests, it could erode our stakeholder trust and thereby affect our brand and reputation. Such erosion of confidence could negatively impact our business through decreased demand and growth opportunities, delays in projects, increased legal action and regulatory oversight, adverse press coverage and other adverse public statements, difficulty hiring and retaining top talent, difficulty obtaining necessary approvals and permits from governments and regulatory agencies on a timely basis and on acceptable terms and difficulty securing investors and access to capital. The occurrence of any of the foregoing could have a material adverse effect on our business and financial condition. In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters, which will likely lead to increase compliance costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Such ESG matters may also impact our suppliers or customers, which could augment existing or cause additional impacts to our business or operations.

We may be involved in legal proceedings that could result in substantial liabilities.

We are, from time to time, involved in various legal and other proceedings in the ordinary course of our business. Such legal proceedings are inherently uncertain and their results cannot be predicted. Regardless of the outcome, such proceedings could have an adverse impact on us because of legal costs, diversion of management and other personnel and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in liability, penalties or sanctions, as well as judgments, consent decrees or orders requiring a change in our business practices, which could materially and adversely affect our business, operating results and financial condition. Accruals for such liability, penalties or sanctions may be insufficient. Judgments and estimates to determine accruals or range of losses related to legal and other proceedings could change from one period to the next, and such changes could be material.

Risks Related to Intellectual Property, Information Technology and Cybersecurity

We may be sued by third parties for infringement, misappropriation, dilution or other violation of their intellectual property or proprietary rights.

Third parties may in the future assert, that we have infringed, misappropriated or otherwise violated their intellectual property rights (“IPR”). Such claims, administrative proceedings and litigation may involve patent holding companies or other adverse IPR holders who have no relevant product revenue, and therefore our own IPR may provide little or no deterrence to these rights holders in bringing IPR claims against us. There may be IPR owned by third parties, including issued or pending patents and trademarks, that cover significant aspects of our technologies, content, branding or business methods, and we cannot assure that we are not infringing, misappropriating or otherwise violating, and have not infringed, misappropriated or otherwise violated, any third-party IPR or that we will not be held to have done so or be accused of doing so in the future. We expect that we may receive in the future notices that claim we allegedly have infringed, misappropriated or otherwise violated third parties’ IPR. We cannot assure you that we will be able to detect potential or actual misappropriation or infringement of our IPR or trade secrets. Even if we detect misappropriation or infringement by a third party, we cannot assure you that we will be able to enforce our rights at a reasonable cost, or at all.

Any claim that we have infringed, misappropriated or otherwise violated IPR of third parties, with or without merit, and whether or not it results in litigation, is settled out of court or is determined in our favor, could be time-consuming and costly to address and resolve, and could divert the time and attention of management and technical personnel from our business. Furthermore, an adverse outcome of a dispute may result in an injunction and could require us to pay substantial monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a third party’s IPR. Any settlement or adverse judgment resulting from such a claim could require us to enter into a licensing agreement to continue using the technology, content or other IPR that is the subject of the claim; restrict or prohibit our use of such technology, or other IPR; require us to expend significant resources to redesign our technology or solutions; and require us to indemnify third parties if they become subject to third party claims relating to IPR that we license or otherwise provide to them, which could be costly. Royalty or licensing agreements, if required or desirable, may be unavailable on terms

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acceptable to us, or at all, and may require significant royalty payments and other expenditures. We may also be required to develop alternative non-infringing technology, which could require significant time and expense. There also can be no assurance that we would be able to develop or license suitable alternative technology, or other IPR to permit us to continue offering the affected technology. If we cannot develop or license technology for any allegedly infringing aspect of our business, we would be forced to limit our service and may be unable to compete effectively. In addition, our rights to IPR and trade secrets may not prevent independent third-party development and commercialization of competing products or services. Any of these events could materially harm our business, financial condition and results of operations.

We may find it necessary or appropriate to initiate claims or litigation to enforce our IPR or determine the validity and scope of IPR claimed by others. In any lawsuit we bring to enforce our IPR, a court may refuse to stop the other party from using the technology at issue on grounds that our IPR do not cover the use or technology in question. Further, in such proceedings, the defendant could counterclaim that our IPR is invalid or unenforceable and the court may agree, in which case we could lose valuable IPR. Litigation is inherently uncertain and any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and results of operations. If we fail to obtain, maintain, protect and enforce our intellectual property, our business and results of operations may be harmed.

Our reliance on third-party components for use in our IT systems could result in delays in service or disrupt our business.

Components of our information technology (“IT”) systems include various types of software and services licensed or provided from unaffiliated third parties, most of which we obtain on Software as a Service basis, without any ongoing support or maintenance obligations. Our business would be disrupted if any of the software or services we obtain from others or functional equivalents thereof were either no longer available to us or no longer offered on commercially reasonable terms, or if they fail and we cannot obtain maintenance and support on reasonable terms. In either case, we could be required to either redesign our IT systems to function with software or services available from other parties or develop these components ourselves, which could result in increased costs and could result in delays in services. Furthermore, we might be forced to limit the features available in our IT system due to changes by our third-party software and service providers, or due to price increases by such vendors. In addition, if we fail to maintain or renegotiate any of these software or service agreements, we could face significant delays and diversion of resources in attempting to obtain and integrate functional equivalents.

We are subject to significant legal and reputational risks and expenses relating to the privacy, use and security of employee and customer information.

We receive, maintain, and store the non-public personal information (“PII”) of our employees and customers. The sharing, use, disclosure and protection of this information are governed by the privacy and data security policies maintained by us. Moreover, there are federal and state laws and regulations regarding privacy and the storing, sharing, use, disclosure, and protection of PII and user data. Specifically, PII is increasingly subject to legislation and regulations in numerous jurisdictions, the intent of which is to protect the privacy of personal information that is collected, processed and transmitted in or from the governing jurisdiction. California enacted a privacy law (the “California Consumer Privacy Act” or “CCPA”) which limits how we may collect and use PII, and which came into effect on January 1, 2020. In addition, California enacted, effective January 1, 2023, a privacy law, the California Privacy Rights Act (the “CPRA”), which significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain PII and creating a new state agency to oversee implementation and enforcement efforts. There are more states considering similar privacy laws. We could be adversely affected if the CCPA, CPRA and other states’ legislation or regulations require changes in our business practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations.

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We have experienced cybersecurity incidents or IT system disruptions in the past, and cybersecurity breaches or IT system disruptions may adversely affect our business in the future.

We rely on our IT systems to operate and record a significant portion of our business. This may include confidential or PII belonging to us, our employees, customers, suppliers, or others. Similar to other companies, our systems and networks, and those of third parties with whom we do business, may be subject to cybersecurity breaches caused by, among other things, illegal hacking, insider threats, computer viruses, phishing, malware, ransomware, or acts of vandalism or terrorism, or those perpetrated by criminals or nation-state actors. Furthermore, we may also experience increased cybersecurity risk as some of our personnel continue to work remotely as a result of the ongoing COVID-19 pandemic. We have experienced cyber incidents in the past, although none have been material or had a material adverse effect on our business or financial condition. We may experience cybersecurity incidents and security breaches in the future. In addition to our own systems and networks, we use third-party service providers to process certain data or information on our behalf. Due to applicable laws and regulations, we may be held responsible for cybersecurity incidents attributed to our service providers to the extent it relates to information we share with them. Although we seek service providers that implement and maintain reasonable security measures, we cannot control third parties and cannot guarantee that a security breach will not occur in their systems or networks.

Despite our efforts to continually refine our procedures, educate our employees, and implement tools and security measures to protect against such cybersecurity risks, there can be no assurance that these measures will prevent unauthorized access or detect every type of attempt or attack. Our potential future upgrades, refinements, tools and measures may not be completely effective or result in the anticipated improvements, if at all, and may cause disruptions in our IT systems. In addition, despite our best efforts, a cyberattack or security breach could go undetected for an extended period of time, and the ensuing investigation of the incident would take time to complete. During that period, we would not necessarily know the impact to our IT systems, or the costs and actions required to fully remediate and our initial remediation efforts may not be successful. Additionally, a cyberattack or security breach could be repeated before they are fully contained and remediated. A breach or failure of our systems or networks, critical third-party systems on which we rely, or those of our customers or suppliers, could result in an interruption in our operations, unplanned capital expenditures, unauthorized publication of our confidential business or proprietary information, unauthorized release of customer, employee or third party data, theft or misappropriation of funds, violation of privacy or other laws, and exposure to litigation or indemnity claims including resulting from customer-imposed cybersecurity controls or other related contractual obligations. There could also be increased costs to detect, prevent, respond or recover from cybersecurity incidents. Any such breach, or our delay or failure to make adequate or timely disclosures to the public, regulatory or law enforcement agencies or affected individuals following such an event, could have a material adverse effect on our business, reputation, financial position, results of operations and cash flows and cause reputational damage.

Our ability to manage our business and monitor our results is highly dependent upon information and communication systems, and a failure of these systems or our enterprise resource planning (“ERP”) system could disrupt our business.

We are dependent upon a variety of information and communication systems to operate our business, including our ERP system. Any disruptions, delays or deficiencies in these systems, or in the design or implementation of any new ERP system, could adversely affect our ability to effectively run and manage information. Further, we depend on our ability to gather and promptly transmit accurate information to key decision makers, and our business, results of operations and financial condition may be adversely affected if our information systems fail, even for a short period of time. Failure to properly or adequately address these issues could impact our ability to perform necessary business operations, which could adversely affect our reputation, competitive position, business, results of operations and financial condition.

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We may not realize the intended benefits of our process and technology transformation projects, which could have an adverse effect on our business.

In 2022, we began two process and technology transformation projects, which will, among other things, replace our existing human capital management platform and consolidate several systems onto a single ERP system. The implementation of the process and technology transformation projects will require human capital and other resources from which we may not realize the benefits we expect to realize. Any such difficulties could have an adverse effect on our business, results of operations and financial condition.

Risks Related to Our Indebtedness

Our substantial indebtedness could adversely affect our financial condition.

We have a significant amount of indebtedness. As of March 31, 2023, after giving effect to this offering and the use of proceeds therefrom, our total long-term debt was approximately $1.8 billion in aggregate principal amount.

Subject to the limits contained in the ABL Credit Agreement, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, dividends or for other purposes. If we do so, the risks related to our substantial indebtedness could intensify. Specifically, our substantial indebtedness could have important consequences, including the following:

• making it more difficult for us to satisfy our obligations with respect to our debt;

• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general company requirements on favorable terms or at all;

• requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions, future business opportunities and other general purposes;

• increasing our vulnerability to general adverse economic and industry conditions;

• exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the ABL Credit Agreement, are at variable rates of interest;

• limiting our flexibility in planning for and reacting to changes in the industry in which we compete;

• consequences relating to adverse borrowing base redeterminations;

• placing us at a disadvantage compared to other, less leveraged competitors; and

• increasing our cost of borrowing.

In addition, our ability to refinance our indebtedness prior to maturity is dependent on the condition of the capital and credit markets and our financial condition. We can provide no assurance that we will be able to refinance our indebtedness or that any indebtedness incurred to refinance our indebtedness will be on comparable terms. See “—We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require.”

The terms of the ABL Credit Agreement restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

The ABL Credit Agreement contains restrictive covenants (which contain a number of exceptions and qualifications that may be material) that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:

• incur additional indebtedness and guarantee indebtedness;

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• pay dividends or make other distributions or repurchase or redeem equity interests;

• prepay, redeem or repurchase certain debt;

• issue certain preferred units or similar equity securities;

• make loans and investments;

• sell, transfer or otherwise dispose of assets;

• incur liens;

• enter into transactions with affiliates;

• enter into agreements restricting our restricted subsidiaries’ ability to pay dividends;

• enter into certain swap agreements;

• amend certain organizational documents;

• enter into sale and leaseback transactions; and

• consolidate, merge or sell all or substantially all of our assets.

In addition, the ABL Credit Agreement contains certain operating and financial covenants and requires us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to comply with those covenants and meet those financial ratios and tests can be affected by events beyond our control, and we may be unable to meet them. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness” for further information about these covenants.

A breach of the covenants or restrictions under the ABL Credit Agreement could result in an event of default. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the ABL Credit Agreement would permit the lenders under the ABL Credit Agreement to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under the ABL Credit Agreement, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:

• limited in how we conduct our business;

• unable to raise additional debt or equity financing to operate during general economic or business downturns; or

• unable to compete effectively or to take advantage of new business opportunities.

These restrictions may affect our ability to grow in accordance with our strategy. In addition, our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under the ABL Credit Agreement are at variable rates of interest and expose us to interest rate risk. If interest rates were to continue to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. We have in the past entered into,

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and in the future may enter into, interest rate swaps that involve the exchange of floating for fixed rate interest payments to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

General Risks

A financial crisis or deterioration in general economic, business or industry conditions could materially adversely affect our results of operations, financial condition and ability to pay dividends on our common stock.

Concerns over global economic conditions, stock market volatility, energy costs, geopolitical issues, inflation and U.S. Federal Reserve interest rate increases in response, the availability and cost of credit, and slowing of economic growth in the United States and fears of a recession have contributed and may continue to contribute to economic uncertainty and diminished expectations for the global economy.

Concerns about global economic growth can result in a significant adverse impact on global financial markets and commodity prices. In addition, any financial crisis may cause us to face limitations on our ability to borrow under our debt agreements, service our debt obligations, access the debt and equity capital markets and complete asset purchases or sales and may cause increased counterparty credit risk on our derivative instruments and such counterparties to cause us to post collateral guaranteeing performance.

Further, if there is a financial crisis or the economic climate in the United States or abroad deteriorates, worldwide demand for natural gas or oil could materially decrease, which would likely depress the level of production activity and result in a decline in the demand for our compression operations and ultimately materially adversely impact our results of operations and financial condition. If a material adverse change occurs in our business such that an event of default occurs under our debt agreements, the lenders under such agreements may be able to accelerate the maturity of our debt.

Events outside of our control, including an epidemic or outbreak of an infectious disease or the threat thereof, could have a material adverse effect on our business, liquidity, financial condition, results of operations, cash flows and ability to pay dividends on our common stock.

We face risks related to pandemics, epidemics, outbreaks or other public health events, or the threat thereof, that are outside of our control, and could significantly disrupt our business and operational plans and adversely affect our liquidity, financial condition, results of operations, cash flows and ability to pay dividends on our common stock. The COVID-19 pandemic has adversely affected the global economy and has resulted in unprecedented governmental actions in the United States and countries around the world, including, among other things, social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in activity in the global economy and the demand for oil, and to a lesser extent, natural gas.

The nature, scale and scope of the above-described events, combined with the uncertain duration and extent of governmental actions, prevent us from identifying all potential risks to our business.

Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future traditional debt financing.

Inflation has adversely affected us by increasing costs of critical components, equipment, labor and other services we may rely on, and continued inflationary pressures could prevent us from operating at capacity, decreasing our revenues or having an adverse effect on our profitability. In addition, inflation is often accompanied by higher interest rates. Such higher interest rates may affect our ability to enter into future traditional debt financing, as high inflation may result in an increase in cost to borrow.

Although inflation in the United States had been relatively low for many years, there was a significant increase in inflation beginning in the second half of 2021, which has continued into 2022, due to a substantial increase in the

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money supply, a stimulation focused fiscal policy, a significant rebound in consumer demand as COVID-19 restrictions were relaxed, the Russian-Ukrainian conflict and worldwide supply chain disruptions resulting from the economic contraction caused by COVID-19 and lockdowns followed by a rapid recovery. Between June 2021 and December 2022, the Consumer Price Index for all urban consumers (a widely used measure of inflation) rose 10.5%, and the Producer Price Index for Industrial Commodities rose 12.2%.

A deterioration in general economic, business, geopolitical or industry conditions could materially adversely affect our results of operations, financial condition and cash flows.

Concerns over global economic conditions, energy costs, geopolitical issues, including the conflict between Russia and Ukraine, the impacts of the COVID-19 pandemic, inflation, the availability and cost of credit and slow economic growth in the United States have contributed to general economic uncertainty and diminished expectations for the global economy. Additionally, acts of protest and civil unrest have caused economic and political disruption in the United States. Meanwhile, continued hostilities in Europe and the Middle East and the occurrence or threat of terrorist attacks in the United States or other countries could adversely affect the economies of the United States and other countries. If the economic climate in the United States or abroad deteriorates, worldwide demand for energy could destabilize, which could materially adversely affect our and our customers’ operations, financial condition and cash flows.

Our ability to use NOLs to offset future income may be limited.

Our ability to use any NOLs generated by us could be substantially limited if we were to experience an “ownership change” as defined under Section 382 of the Code. In general, an “ownership change” would occur if our “5-percent stockholders,” as defined under Section 382 of the Code, including certain groups of persons treated as “5-percent stockholders,” collectively increased their ownership in us by more than 50 percentage points over a rolling three-year period. An ownership change can occur as a result of a public offering of our common stock, as well as through secondary market purchases of our common stock and certain types of reorganization transactions. Such a limitation could, for any given year, have the effect of increasing the amount of our U.S. federal income tax liability, which would negatively impact our financial condition and the amount of after-tax cash available for distribution to our stockholders.

Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.

We operate in locations throughout the U.S. and, as a result, we are subject to the tax laws and regulations of U.S. federal, state and local governments. From time to time, various legislative or administrative initiatives may be proposed that could adversely affect our tax positions. There can be no assurance that our tax provision or tax payments will not be adversely affected by these initiatives. In addition, U.S. federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge.

Risks Related to this Offering and Owning Our Common Stock

EQT controls a significant percentage of our voting power.

Upon completion of this offering, Kodiak Holdings will own approximately 79% of our outstanding common stock (or 76% of our common stock if the underwriters exercise in full their option to purchase additional shares of common stock). Frontier GP is the general partner of Kodiak Holdings. Investment vehicles affiliated with EQT own 100% of the membership interests in Frontier GP, and EQT indirectly has exclusive responsibility for the management and control of such investment vehicles. As such, EQT indirectly has the power to control the business and affairs of Kodiak Holdings. In addition, certain of our directors are currently employed by EQT. Consequently, EQT will be able to influence matters that require approval by our stockholders, including the

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election and removal of directors, changes to our organizational documents and approval of acquisition offers and other significant corporate transactions. This concentration of ownership will limit your ability to influence corporate matters, and as a result, actions may be taken that you may not view as beneficial. This concentration of stock ownership may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with a controlling stockholder.

Furthermore, our Stockholders’ Agreement provides that certain corporate actions require the approval of Kodiak Holdings, including amendments to our organizational documents, equity issuances, incurrence of certain indebtedness, changing the size of our board of directors, dispositions of assets, modifying our dividend policy, consummating a change of control transaction or entering into voluntary liquidation or the commencement of bankruptcy proceedings. After the completion of this offering, EQT will be subject to contractual restrictions that may affect Kodiak Holdings’ exercise of its rights to approve corporate actions under the Stockholders’ Agreement. See “Certain Relationships and Related Party Transactions—Kodiak Holdings—Stockholders’ Agreement.”

After the completion of this offering, EQT will be subject to contractual restrictions that may affect Kodiak Holdings’ exercise of its rights to approve corporate actions under the Stockholders’ Agreement.

In connection with the closing of this offering, we will enter into a Stockholders’ Agreement with Kodiak Holdings, which will grant Kodiak Holdings rights to approve certain of our corporate actions, including, among other things, amendments to our organizational documents, equity issuances, incurrence of certain indebtedness, changing the size of our board of directors, dispositions of assets, modifying our dividend policy, consummating a change of control transaction or entering into voluntary liquidation or the commencement of bankruptcy proceedings. In connection with the closing of this offering, Kodiak Holdings will pledge the shares it owns in us as collateral under the Holdco Term Loan and will grant the lenders thereunder certain consent rights over Kodiak Holdings’ exercise of its rights under the Stockholders’ Agreement. The lenders under the Holdco Term Loan have different interests than our stockholders and may exercise these consent rights in ways that are adverse to the interests of our stockholders. For further information regarding the Stockholders’ Agreement and Kodiak Holdings’ consent rights thereunder, see “Certain Relationships and Related Party Transactions—Kodiak Holdings—Stockholders’ Agreement.”

EQT may have interests that conflict with the interests of our other stockholders. Certain of our directors may also have conflicts of interest because they are also employees of EQT, investment advisors to EQT managed funds or directors or officers of EQT. The resolution of these conflicts of interest may not be in our or your best interests.

EQT may have interests that conflict with the interests of our other stockholders. In connection with the closing of this offering, EQT will pledge its shares in us as collateral under the Holdco Term Loan. The lenders under the Holdco Term Loan are funds or accounts managed by (i) the Infrastructure Debt strategy of Ares Management Corporation and (ii) Caisse de dépôt et placement du Québec. Pursuant to the Holdco Term Loan, EQT will be limited from taking or causing its subsidiaries from approving or taking certain actions without the consent of the lenders, including amending organizational documents, authorizing equity issuances in excess of certain thresholds, incurring indebtedness for borrowed money (other than indebtedness under our ABL Facility, certain working capital and ordinary course financings, and indebtedness otherwise permitted by the ABL Facility (other than certain unsecured debt)), materially modifying our dividend policy, entering into certain affiliate transactions or entering into a voluntary liquidation or the commencement of bankruptcy proceedings. These restrictions are consistent with the consent rights held by Kodiak Holdings under the Stockholders’ Agreement. For further information regarding the Stockholders’ Agreement and such consent rights, see “Certain Relationships and Related Party Transactions—Kodiak Holdings—Stockholders’ Agreement.”

In addition, certain of our directors may also have conflicts of interest because they are also employees of EQT, investment advisors to EQT managed funds or directors or officers of EQT. These positions may conflict with

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such individuals’ duties as one of our directors or officers regarding business dealings and other matters between EQT and us. The resolution of these conflicts may not always be in our or your best interest.

Upon the listing of our shares on the NYSE, we will be a “controlled company” within the meaning of the rules of the NYSE and, as a result, will qualify for, but do not currently intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Upon completion of this offering, Kodiak Holdings will directly control (and EQT will indirectly control) a majority of our voting power. As a result, we will be a “controlled company” within the meaning of the NYSE corporate governance standards. Under the NYSE rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and need not comply with certain requirements, including the requirement that a majority of the board of directors consist of independent directors and the requirements that our compensation and nominating and governance committees be composed entirely of independent directors. Following this offering, we do not intend to utilize these exemptions. However, for so long as we qualify as a “controlled company,” we will maintain the option to utilize some or all of these exemptions. If we utilize these exemptions, we may not have a majority of independent directors and our compensation and nominating and governance committees may not consist entirely of independent directors, and such committees will not be subject to annual performance evaluations. Accordingly, in the event we elect to rely on these exemptions in the future, you would not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. See “Management—Controlled Company Status.”

EQT is not limited in its ability to compete with us, and the corporate opportunity provisions in our charter could enable EQT to benefit from corporate opportunities that may otherwise be available to us.

EQT may invest in other companies in the future that may compete with us. Conflicts of interest could arise in the future between us, on the one hand, and EQT, on the other hand, concerning among other things, potential competitive business activities or business opportunities.

Our charter will provide that, to the fullest extent permitted by applicable law, we renounce any interest or expectancy in any business opportunity that involves any aspect of the energy equipment or services business or industry and that may be from time to time presented to EQT or any of our directors or officers who is also an employee, partner, member, manager, officer or director of EQT or any affiliate of EQT, even if the opportunity is one that we might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so. Our charter will further provide that no such person or party shall be liable to us by reason of the fact that such person pursues any such business opportunity or fails to offer any such business opportunity to us. As a result, any of our directors or officers who is also an employee, partner, member, manager, officer or director of EQT or any affiliate of EQT may become aware, from time to time, of certain business opportunities, such as acquisition opportunities, and may direct such opportunities to other businesses in which they have invested, in which case we may not become aware of or otherwise have the ability to pursue such opportunity. Further, such businesses may choose to compete with us for these opportunities. As a result, by renouncing our interest and expectancy in any business opportunity that may be from time to time presented to any member of EQT or an affiliate of EQT or any of our directors or officers who is also an employee, partner, member, manager, officer or director of EQT or any affiliate of EQT, our business or prospects could be adversely affected if attractive business opportunities are procured by such parties for their own benefit rather than for ours. Our charter will provide that, at any time EQT beneficially owns less than 35% of our common stock, any amendment to or adoption of any provision inconsistent with our charter’s provisions governing the renouncement of business opportunities must be approved by the holders of at least 66 2/3% of the voting power of the outstanding stock of the corporation entitled to vote thereon. See “Description of Capital Stock—Renouncement of Business Opportunities” for more information. Any actual or perceived conflicts of interest with respect to the foregoing could have an adverse impact on the trading price of our common stock.

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The requirements of being a public company, including compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the requirements of the Sarbanes-Oxley Act of 2002 (“SOX”) and the NYSE, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a public company, we will need to comply with new laws, regulations and requirements, certain corporate governance provisions of SOX, related regulations of the SEC and the requirements of the NYSE, with which we are not required to comply as a private company. Complying with these statutes, regulations and requirements will occupy a significant amount of time of our board of directors and management and will significantly increase our costs and expenses. We will need to:

• institute a more comprehensive compliance function;

• comply with rules promulgated by the NYSE;

• continue to prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;

• establish new internal policies, such as those relating to insider trading; and

• involve and retain to a greater degree outside counsel and accountants in the above activities.

In addition, we expect that being a public company subject to these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

Furthermore, while we generally must comply with Section 404 of SOX, we are not required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until our first annual report subsequent to our ceasing to be an “emerging growth company.” We may not be required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until as late as our annual report for the year ending December 31, 2028. At any time, we may conclude that our internal controls, once tested, are not operating as designed or that the system of internal controls does not address all relevant financial statement risks. Once required to attest to control effectiveness, our independent registered public accounting firm may issue a report that concludes it does not believe our internal controls over financial reporting are effective. Compliance with SOX requirements may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

There is no existing market for our common stock, and a trading market that will provide you with adequate liquidity may not develop. The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

Prior to this offering, there has been no public market for our common stock. After this offering, there will be only 16,000,000 publicly traded shares of common stock held by our public common stockholders (18,400,000 shares of common stock if the underwriters exercise in full their option to purchase additional shares of common stock). Kodiak Holdings will own 59,000,000 shares of common stock (after giving effect to a pre-IPO stock split), representing an aggregate 79% of outstanding shares of our common stock (76% if the underwriters exercise in full their option to purchase additional shares of common stock). We do not know the extent to which investor interest will lead to the development of an active trading market or how liquid that market might become. If an active trading market does not develop, you may have difficulty reselling any of our common stock at or above the initial public offering price. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the common stock and limit the number of investors who are able to buy the common stock.

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The initial public offering price for the common stock offered hereby will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of the market price of the common stock that will prevail in the trading market. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price paid by you in this offering.

The following is a non-exhaustive list of factors that could affect our stock price:

• our operating and financial performance;

• quarterly variations in the rate of growth of our financial indicators, such as net income per share, net income and revenues;

• the public reaction to our press releases, our other public announcements and our filings with the SEC;

• strategic actions by our competitors;

• our failure to meet revenue or earnings estimates by research analysts or other investors;

• changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;

• speculation in the press or investment community;

• the failure of research analysts to cover our common stock;

• sales of our common stock by us or other stockholders, or the perception that such sales may occur;

• changes in accounting principles, policies, guidance, interpretations or standards;

• additions or departures of key management personnel;

• actions by our stockholders;

• general market conditions, including fluctuations in commodity prices;

• domestic and international economic, legal and regulatory factors unrelated to our performance; and

• the realization of any risks described under this “Risk Factors” section.

The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.

If securities or industry analysts do not publish research reports or publish unfavorable research about our business, the price and trading volume of our common stock could decline.

The trading market for our common stock will depend in part on the research reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of us, the trading price for our common stock and other securities would be negatively affected. In the event we obtain securities or industry analyst coverage, and one or more of the analysts who covers us downgrades our securities, the price of our securities would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.

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Our charter and bylaws will contain provisions that could delay, discourage or prevent a takeover attempt even if a takeover might be beneficial to our stockholders, and such provisions may adversely affect the market price of our common stock.

Provisions that will be contained in our charter and bylaws could make it more difficult for a third party to acquire us. Our charter and bylaws will also impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. For example, our charter will authorize our board of directors to determine the rights, preferences, privileges and restrictions of unissued series of preferred stock without any vote or action by our stockholders. Thus, our board of directors can authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of holders of our capital stock. These rights may have the effect of delaying or deterring a change of control of our Company. Additionally, for example, our bylaws will (i) establish limitations on the removal of directors and on the ability of our stockholders to call special meetings, (ii) include advance notice requirements for nominations for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings, (iii) provide that our board of directors is expressly authorized to adopt, or to alter or repeal, our bylaws, and (iv) provide for a classified board of directors, consisting of three classes of approximately equal size, each class serving staggered three-year terms, so that only approximately one-third of our directors will be elected each year.

See “Description of Capital Stock—Anti-Takeover Effects of Provisions of Our Charter, Our Bylaws and Delaware Law.” These provisions could limit the price that certain investors might be willing to pay in the future for shares of our common stock.

Our charter will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our charter will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our charter or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Notwithstanding the foregoing sentence, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under U.S. federal securities laws, including the Securities Act and the Exchange Act. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our charter described in the preceding sentences. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

Investors in this offering will experience immediate and substantial dilution of $11.16 per share.

Based on an assumed initial public offering price of $20.50 per share (the midpoint of the price range set forth on the cover of this prospectus), purchasers of our common stock in this offering will experience an immediate and substantial dilution of $11.16 per share in the net tangible book value per share of common stock from the initial

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public offering price, and our historical and pro forma net tangible book value as of March 31, 2023 would be $9.34 per share. See “Dilution.”

We cannot assure you that we will be able to pay dividends on our common stock.

After completion of this offering, our board of directors may elect to declare cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness (as further discussed below). The declaration and amount of any future dividends is subject to the discretion of our board of directors and we have no obligation to pay any dividends at any time. We have not adopted, and do not currently expect to adopt, a written dividend policy. Our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. See Note 7 (“Debt and Credit Facilities”) to our Annual Financial Statements.

Our ABL Facility contains restrictions on the payment of dividends. Such restrictions allow us to pay dividends after the completion of this offering only when (1) no default or event of default has occurred and is continuing or would result after giving effect to such dividends, (2) availability under the borrowing base under the ABL Facility exceeds the greater of (x) 10% of the total commitments under the facility of $2.2 billion or (y) $200 million and (3) we are in compliance with the financial covenants under the ABL Facility applicable at such time. Such covenants provide that, after the completion of this offering, (1) we maintain an interest coverage ratio of at least 2.50 to 1.00 and (2) we maintain a leverage ratio not to exceed (i) 5.50 to 1.00 for the fiscal quarters through June 30, 2023, (ii) 5.25 to 1.00 for the fiscal quarters thereafter through December 31, 2023, (iii) 5.00 to 1.00 for the fiscal quarter ended March 31, 2024, (iv) 4.75 to 1.00 for the fiscal quarter ended June 30, 2024 and (v) 4.50 to 1.00 for each fiscal quarter thereafter. In the event we issue certain unsecured debt after the completion of this offering, we must (1) maintain an unsecured leverage ratio not to exceed 5.75 to 1.00 for the first four fiscal quarters after such issuance and 5.25 to 1.00 for each fiscal quarter thereafter and (2) maintain a secured leverage ratio not to exceed 3.50 to 1.00 for the first four fiscal quarters after such issuance and 3.00 to 1.00 for each fiscal quarter thereafter.

Due to the foregoing, we cannot assure you that we will be able to pay a dividend in the future or continue to pay a dividend after we commence paying dividends.

Future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.

We may sell additional shares of common stock in subsequent public offerings. We may also issue additional shares of common stock or convertible securities. After the completion of this offering, we will have outstanding 75,000,000 shares of our common stock. Kodiak Holdings will own 59,000,000 shares of our common stock (after giving effect to a pre-IPO stock split) or approximately 79% of our total outstanding shares, all of which are restricted from immediate resale under the federal securities laws and are subject to the lock-up agreements with the underwriters described in “Underwriting” but may be sold into the market in the future. See “Shares Eligible for Future Sale.” Kodiak Holdings will be party to a registration rights agreement (as described in “Certain Relationships and Related Party Transactions—Kodiak Holdings—Registration Rights Agreement”), which, among other things, requires us to register all of their shares of common stock no earlier than the expiration of the lock-up period contained in the underwriting agreement entered into in connection with this offering.

In connection with this offering, we intend to file a registration statement with the SEC on Form S-8 providing for the registration of shares of our common stock issued or reserved for issuance under our equity incentive plan. Subject to the satisfaction of vesting conditions, the expiration of lock-up agreements and the requirements of Rule 144, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction.

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We cannot predict the size of future issuances of our common stock or securities convertible into common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our common stock.

Terms of subsequent financings may adversely impact stockholder equity.

If we raise more equity capital from the sale of common stock, such equity could be offered at a price more favorable than the then current market price of our common stock. If we issue debt securities, the holders of the debt would have a claim to our assets that would be prior to the rights of stockholders until the debt is paid. Interest on these debt securities would increase costs and could negatively impact our operating results.

In accordance with Delaware law and the provisions of our certificate of incorporation and Stockholders’ Agreement, we may issue one or more classes or series of preferred stock that ranks senior in right of dividends, liquidation or voting to our common stock. Preferred stock may have such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine, and the issuance of preferred stock would dilute the ownership of our existing stockholders. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock. The terms of any series of preferred stock may also reduce or eliminate the amount of cash available for payment of dividends to our holders of common stock or subordinate the claims of our holders of common stock to our assets in the event of our liquidation. Our common stock will not be subject to redemption or sinking fund provisions.

The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our common stock.

Prior to this offering, we, all of our directors and executive officers and Kodiak Holdings will enter into lock-up agreements with respect to their common stock, pursuant to which they are subject to certain resale restrictions for a period of 180 days following the effectiveness date of the registration statement of which this prospectus forms a part. Any two of Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC or Barclays Capital Inc. may, at any time and without notice, release all or any portion of the common stock subject to the foregoing lock-up agreements. If the restrictions under the lock-up agreements are waived, then common stock will be available for sale into the public markets, which could cause the market price of our common stock to decline and impair our ability to raise capital.

A significant reduction by Kodiak Holdings of its ownership interests in us could adversely affect us.

We believe that Kodiak Holdings’ substantial ownership interest in us provides them with an economic incentive to assist us to be successful. Upon the expiration or earlier waiver of the lock-up restrictions on transfers or sales of our securities following the completion of this offering, Kodiak Holdings will not be subject to any obligation to maintain its ownership interest in us and may elect at any time thereafter to sell all or a substantial portion of or otherwise reduce its ownership interest in us. If Kodiak Holdings sells all or a substantial portion of its ownership interest in us, it may have less incentive to assist in our success and its affiliates that are expected to serve as members of our board of directors may resign.

Furthermore, the shares that Kodiak Holdings owns are subject to a pledge as collateral under the Holdco Term Loan. In the event that Kodiak Holdings is subject to a continuing event of default under the Holdco Term Loan, after the expiration of any applicable grace period and subject to the exercise of applicable cure rights, the

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lenders may foreclose on such shares and acquire a controlling interest in us. In such case, the lenders would assume Kodiak Holdings’ rights under the Stockholders’ Agreement and would thereafter have consent rights over many aspects of our business, including any modifications to our dividend policy and the ability to nominate directors, as more fully described under “Certain Relationships and Related Party Transactions—Kodiak Holdings—Stockholders’ Agreement.” The lenders under the Holdco Term Loan may have different interests than Kodiak Holdings and may have interests that are different from, or conflict with, those of our other stockholders.

Such actions could adversely affect our ability to successfully implement our business strategies which could adversely affect our cash flows or results of operations.

Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.

We qualify as an “emerging growth company” as defined in the JOBS Act. An emerging growth company may take advantage of certain reduced reporting and other requirements that are otherwise applicable generally to public companies. Pursuant to these reduced disclosure requirements, emerging growth companies are not required to, among other things, comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, provide certain disclosures regarding executive compensation, holding stockholder advisory votes on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved. In addition, emerging growth companies have longer phase-in periods for the adoption of new or revised financial accounting. We will cease to be an emerging growth company upon the earliest of (i) the last day of the fiscal year in which we have $1.235 billion or more in annual revenues; (ii) the date on which we become a “large accelerated filer” (the fiscal year-end on which the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30); (iii) the date on which we issue more than $1.0 billion of non-convertible debt securities over a three-year period; or (iv) the last day of the fiscal year following the fifth anniversary of this offering.

We intend to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act, until we are no longer an emerging growth company. If we were to subsequently elect instead to comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act.

Our election to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the longer phase-in periods under Section 107 of the JOBS Act and who will comply with new or revised financial accounting standards. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our common stock price may be more volatile. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

• Expected operating results, such as revenue growth and earnings;

• Anticipated levels of capital expenditures and uses of capital;

• Current or future volatility in the credit markets and future market conditions;

• Expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities and governmental and regulatory investigations and proceedings;

• Strategy for customer retention, growth, fleet maintenance, market position, financial results; and

• Strategy for risk management.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

• A reduction in the demand for natural gas and oil;

• The loss of, or the deterioration of the financial condition of, any of our key customers;

• Nonpayment and nonperformance by our customers, suppliers or vendors;

• Competitive pressures that may cause us to lose market share;

• The structure of our contract operations services contracts and the failure of our customers to continue to rent equipment after expiration of the primary rental term;

• Our ability to make acquisitions on economically acceptable terms;

• Our ability to fund purchases of additional compression equipment;

• A downturn in the economic environment, as well as inflationary pressures;

• Tax legislation and administrative initiatives or challenges to our tax positions;

• The loss of key management, operational personnel or qualified technical personnel;

• Our dependence on a limited number of suppliers;

• The cost of compliance with existing governmental regulations and proposed governmental regulations, including climate change legislation and regulatory initiatives and stakeholder pressures, including ESG scrutiny;

• The inherent risks associated with our operations, such as equipment defects and malfunctions;

• Our reliance on third-party components for use in our IT systems;

• Legal and reputational risks and expenses relating to the privacy, use and security of employee and client information;

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• Threats of cyber-attacks or terrorism;

• Agreements that govern our debt limit our ability to fund future growth and operate our business and increase our exposure to risk during adverse economic conditions;

• Volatility in interest rates;

• Our ability to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require; and

• Such other factors as discussed throughout the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus.

Any forward-looking statement made by us in this prospectus is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future developments or otherwise.

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USE OF PROCEEDS

We will receive net proceeds of approximately $298.1 million from the sale of the common stock by us in this offering assuming an initial public offering price of $20.50 per share (the midpoint of the price range set forth on the cover page of this prospectus) and after deducting estimated expenses and underwriting discounts and commissions payable by us. If the underwriters exercise their option to purchase additional shares in full, we estimate the net proceeds will be approximately $344.4 million after deducting estimated expenses and underwriting discounts and commissions payable by us.

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock, and facilitate our future access to the capital markets.

We intend to use the net proceeds from this offering, together with a portion of the proceeds resulting from the Term Loan Derivative Settlement, to repay $314 million of borrowings outstanding under the Term Loan and fees relating to the Term Loan Transaction. Any net proceeds from this offering together with proceeds resulting from the Term Loan Derivative Settlement in excess of $314 million will be used for general corporate purposes. In addition, any net proceeds resulting from the exercise of the underwriters’ option to purchase additional shares will be used for general corporate purposes. The maturity date of the Term Loan is September 22, 2028. The interest rate on borrowings under the Term Loan was 11.73% and 10.67% as of March 31, 2023 and December 31, 2022, respectively.

A $1.00 increase or decrease in the assumed initial public offering price of $20.50 per share would cause the net proceeds from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses, received by us to increase or decrease, respectively, by approximately $15.0 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

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DIVIDEND POLICY

We intend to recommend to our board of directors that we regularly return capital to our stockholders in the future through a dividend framework that will be communicated to stockholders in the future. Following the completion of this offering, our board of directors may elect to declare cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness (as further discussed below). The payment of any future dividends will be at the discretion of our board of directors, which will be constituted upon completion of this offering and be comprised of a majority of independent directors. We have not adopted, and do not currently expect to adopt, a written dividend policy.

Our ABL Facility contains restrictions on the payment of dividends. Such restrictions allow us to pay dividends after the completion of this offering only when (1) no default or event of default has occurred and is continuing or would result after giving effect to such dividends, (2) availability under the borrowing base under the ABL Facility exceeds the greater of (x) 10% of the total commitments under the facility of $2.2 billion or (y) $200 million (the “RP Availability Requirement”) and (3) we are in compliance with the financial covenants under the ABL Facility applicable at such time. Such covenants provide that, after the completion of this offering, (1) we maintain an interest coverage ratio of at least 2.50 to 1.00 and (2) we maintain a leverage ratio not to exceed (i) 5.50 to 1.00 for the fiscal quarters through June 30, 2023, (ii) 5.25 to 1.00 for the fiscal quarters thereafter through December 31, 2023, (iii) 5.00 to 1.00 for the fiscal quarter ended March 31, 2024, (iv) 4.75 to 1.00 for the fiscal quarter ended June 30, 2024 and (v) 4.50 to 1.00 for each fiscal quarter thereafter. In the event we issue certain unsecured debt after the completion of this offering, we must (1) maintain an unsecured leverage ratio not to exceed 5.75 to 1.00 for the first four fiscal quarters after such issuance and 5.25 to 1.00 for each fiscal quarter thereafter and (2) maintain a secured leverage ratio not to exceed 3.50 to 1.00 for the first four fiscal quarters after such issuance and 3.00 to 1.00 for each fiscal quarter thereafter.

See “Risk Factors—Risks Relating to this Offering and Owning Our Common Stock—We cannot assure you that we will be able to pay dividends on our common stock” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness.”

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CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2023:

• on an actual basis; and

• on an as adjusted basis giving effect to the sale by us of 16,000,000 shares of our common stock in this offering at an assumed initial offering price of $20.50 per share (which is the midpoint of the range set forth on the cover of this prospectus) and the use of proceeds therefrom as set forth under “Use of Proceeds”.

The as adjusted information set forth in the table below is illustrative only and the as adjusted information will be adjusted based on the actual initial public offering price and other final terms of this offering. You should read the following table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and related notes thereto appearing elsewhere in this prospectus.

	As of March 31, 2023
	Actual			As Adjusted
	(in thousands)
Cash and Cash Equivalents	$	14,000	(1)	$	14,713	(2)(3)
Long-Term Debt
ABL Facility		1,804,955			1,836,255	(2)(3)(4)
Term Loan		1,000,000			—	(3)(5)
Total Long-Term Debt	$	2,804,955			1,836,255	(6)
Stockholder’s Equity:
Common Stock, $0.01 par value per share; 1,000 shares of Common Stock authorized, 100 shares of Common Stock issued and outstanding, actual; 750,000,000 shares of Common Stock authorized, 75,000,000 shares of Common Stock issued and outstanding, as adjusted		1			750
Additional Paid-in Capital		33,585			997,371	(2)(5)
Retained Earnings		183,850			145,316	(5)
Total Equity:		217,436			1,143,437
Total Capitalization	$	3,022,391		$	2,979,692

(1) Reflects $2.8 million of offering expenses previously paid.

(2) Reflects the distribution of $42.3 million of cash to a parent entity of Kodiak Holdings prior to the consummation of the initial public offering, which we expect to fund with $11.0 million of cash on hand and $31.3 million of borrowings under the ABL Facility. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Parent Entity Distribution” for additional information.

(3) Prior to and in connection with the Term Loan Transaction, the Company intends to complete the Term Loan Derivative Settlement for expected proceeds of between $22 million and $26 million. As of March 31, 2023, the value of such interest rate swaps and collars was $24.8 million. Prior to the offering, the Company may borrow the amount of the expected proceeds of the Term Loan Derivative Settlement on the ABL Facility and use the proceeds to partially fund the repayment of the Term Loan. The ABL Facility borrowings, if any, related to the Term Loan Derivative Settlement will be repaid upon the settlement of the termination of the applicable interest rate swaps and collars.

(4) After the completion of this offering, we expect to have approximately $386 million of total availability under the ABL Facility and $166 million of availability taking into account the RP Availability Requirement (as defined herein). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Description of Indebtedness.”

(5) Reflects the elimination of $1 billion of borrowings under the Term Loan as described in the section entitled “Use of Proceeds” and in connection with the Term Loan Transaction. Pursuant to the Term Loan Transaction, all of the Company’s and its subsidiaries’ remaining obligations under the Term Loan will be assumed by a parent entity of Kodiak Holdings, and the Company’s obligations thereunder will be terminated. Following the consummation of the Term Loan Transaction, the Company will no longer be a borrower or guarantor under, nor otherwise be obligated with respect to the debt outstanding under the Term Loan.

(6) Total long-term debt excludes unamortized debt issuance costs.

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DILUTION

Purchasers of the common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of the common stock for accounting purposes. Our pro forma net tangible book value as of March 31, 2023 was approximately $402.6 million, or $6.82 per share of common stock. Pro forma net tangible book value per share is determined by dividing our tangible net worth (tangible assets less total liabilities) by the total number of outstanding shares of common stock that will be outstanding immediately prior to the closing of this offering. After giving effect to the sale of 16,000,000 shares in this offering at an assumed initial public offering price of $20.50 per share (the midpoint of the price range set forth on the cover page of this prospectus), and after deducting estimated discounts and commissions and offering expenses, our adjusted pro forma net tangible book value as of March 31, 2023 would have been approximately $700.7 million, or $9.34 per share. This represents an immediate increase in the net tangible book value of $2.52 per share to our existing stockholders and an immediate dilution (i.e., the difference between the offering price and the adjusted pro forma net tangible book value after this offering) to new investors purchasing shares in this offering of $11.16 per share. The following table illustrates the per share dilution to new investors purchasing shares in this offering:

Assumed initial public offering price per share			$	20.50
Pro forma net tangible book value per share as of March 31, 2023	$	6.82
Increase per share attributable to new investors in this offering		2.52
Adjusted pro forma net tangible book value per share				9.34
Dilution in adjusted pro forma net tangible book value per share to new investors in this offering			$	11.16

The following table summarizes, on an adjusted pro forma basis as of March 31, 2023, the total number of shares of common stock owned by existing stockholders and to be owned by the new investors in this offering, the total consideration paid, and the average price per share paid by our existing stockholders and to be paid by the new investors in this offering at $20.50, the midpoint of the price range set forth on the cover page of this prospectus, calculated before deducting of estimated discounts and commissions and offering expenses:

	Shares acquired					Total consideration					Average price per share
	Number		Percent			Amount		Percent
Existing stockholders		59,000,000		79	%	$	880,961,780		73	%	$	14.93
New investors in this offering		16,000,000		21	%	$	328,000,000		27	%	$	20.50
Total		75,000,000		100	%	$	1,208,961,780		100	%	$	16.12

Assuming the underwriters’ option to purchase additional shares is exercised in full, the number of shares held by new investors will be increased to 18,400,000, or 24% on an adjusted pro forma basis as of March 31, 2023.

A $1.00 increase or decrease in the assumed initial public offering price of $20.50 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease our adjusted pro forma net tangible book value as of March 31, 2023 by approximately $15.0 million, the adjusted pro forma net tangible book value per share after this offering by $0.20 per share and the dilution in adjusted pro forma net tangible book value per share to new investors in this offering by $0.80 per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and offering expenses.

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma consolidated financial information reflects (i) the sale by us of 16,000,000 shares pursuant to this offering and the application of the proceeds from this offering as described in the section entitled “Use of Proceeds,” at an initial public offering price of $20.50 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting estimated expenses and underwriting discounts and commissions payable by us and (ii) the termination, pursuant to an assumption of the obligations under the Term Loans by a parent entity of Kodiak Holdings, as further described below, of our and our subsidiaries’ remaining obligations under the Term Loan (the “Term Loan Transaction” and collectively with the transactions described under the foregoing clause (i), the “Offering Transactions”).

Pursuant to the Term Loan Transaction, all of the Company’s and its subsidiaries’ obligations under the Term Loan will be assumed by a parent entity of Kodiak Holdings, and the Company’s obligations thereunder will be terminated. All of the Company’s interest rate swaps and collars attributable to the Term Loan will also be terminated in connection with the Term Loan transaction (the “Term Loan Derivative Settlement”). Following the consummation of the Term Loan Transaction, the Company will no longer be a borrower or guarantor under, nor otherwise be obligated with respect to the debt outstanding under the Term Loan.

The unaudited pro forma consolidated balance sheet as of March 31, 2023 gives effect to the Offering Transactions as if they had occurred as of March 31, 2023. The unaudited pro forma consolidated statement of operations for the three months ended March 31, 2023 and the unaudited pro forma consolidated statement of operations for the year ended December 31, 2022 give effect to the Offering Transactions as if they had occurred on January 1, 2022.

We have derived the unaudited pro forma consolidated balance sheet and the unaudited pro forma consolidated statements of operations from our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023 and our consolidated audited financial statements as of and for the year ended December 31, 2022, which are included elsewhere in this prospectus. The unaudited pro forma consolidated financial information was prepared in accordance with Article 11 of Regulation S-X.

The pro forma adjustments are based on available information and upon assumptions that management believes are reasonable in order to reflect, on a pro forma basis, the effect of the Offering Transactions on the historical financial information of Kodiak Gas Services, Inc. The adjustments are described in the notes to the unaudited pro forma consolidated balance sheet and the unaudited pro forma consolidated statement of operations.

Except as otherwise indicated, the unaudited pro forma consolidated financial information presented assumes no exercise by the underwriters of their over-allotment option.

As a public company, we will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to these additional procedures and processes and, among other things, additional directors’ and officers’ liability insurance, director fees, additional expenses associated with complying with the reporting requirements of the SEC, transfer agent fees, costs relating to additional accounting, legal, and administrative personnel, increased auditing, tax, and legal fees, stock exchange listing fees, and other public company expenses. We have not included any pro forma adjustments relating to these costs in the information below.

The unaudited pro forma consolidated financial information is included for informational purposes only. The unaudited pro forma consolidated financial information should not be relied upon as being indicative of our results of operations or financial condition had the Offering Transactions occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations or financial position for any future period or date. The unaudited pro forma consolidated statement of operations and balance sheet should be read in conjunction with the “Risk Factors,” “Prospectus Summary—Summary Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and our consolidated financial statements and related notes included elsewhere in this prospectus.

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Unaudited Pro Forma Consolidated Balance Sheet

As of March 31, 2023

(in thousands)

	Kodiak Gas Services, Inc. (as reported)		Transaction Accounting Adjustments – IPO			Transaction Accounting Adjustments – Financing			Kodiak Gas Services, Inc. Pro Forma
Assets
Current assets
Cash and cash equivalents	$	14,000	$	328,000	(A)	$	(314,000)	(D)	$	14,713
				(27,053)	(B)		24,766	(E)
							(11,000)	(F)
Accounts receivable, net		118,483								118,483
Inventories, net		75,024								75,024
Fair value of derivative instruments		522								522
Contract assets		1,051								1,051
Prepaid expenses and other current assets		17,041		(7,166)	(B)					9,875
Total current assets		226,121		293,781			(300,234)			219,668
Property, plant, and equipment, net		2,486,721								2,486,721
Operating lease right-of-use assets		17,886								17,886
Goodwill		305,553								305,553
Identifiable intangible assets, net		129,994								129,994
Fair value of derivative instruments		46,884					(24,766)	(E)		22,118
Other assets		589								589
Total assets	$	3,213,748	$	293,781		$	(325,000)		$	3,182,529
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	35,260							$	35,260
Accrued liabilities		81,589		(4,339)	(B)					77,250
Contract liabilities		64,717								64,717
Fair value of derivative instruments		—								—
Total current liabilities		181,566		(4,339)			—			177,227
Long-term debt, net of unamortized debt issuance cost		2,744,317					(984,181)	(D)		1,791,436
							31,300	(F)
Operating lease liabilities		13,853								13,853
Fair value of derivative instruments		—								—
Deferred tax liabilities		54,826								54,826
Other liabilities		1,750								1,750
Total liabilities		2,996,312		(4,339)			(952,881)			2,039,092
Stockholders’ equity:
Common shares		1		749	(C)
Additional paid-in capital		33,585		328,000	(A)		700,000	(D)		750
				(29,880)	(B)		(33,585)	(F)		997,371
				(749)	(C)
Retained earnings		183,850					(29,819)	(D)		145,316
							(8,715)	(F)
Total stockholders’ equity		217,436		298,120			627,881			1,143,437
Total liabilities and stockholders’ equity	$	3,213,748	$	293,781		$	(325,000)		$	3,182,529

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Unaudited Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2023

(in thousands, except share and per share amounts)

	Kodiak Gas Services, Inc. (as reported)		Transaction Accounting Adjustments – Financing			Kodiak Gas Services, Inc. Pro Forma
Revenues:
Compression Operations	$	177,697	$	—		$	177,697
Other Services		12,415		—			12,415
Total revenues		190,112		—			190,112
Operating expenses:
Cost of operations (exclusive of depreciation and amortization shown below):
Compression Operations		62,770		—			62,770
Other Services		8,988		—			8,988
Depreciation and amortization		44,897		—			44,897
Selling, general and administrative expenses		13,085		1,623	(EE)		14,708
Long-lived asset impairment		—		—			—
Loss (gain) on sale of fixed assets		17		—			17
Total operating expenses		129,757		1,623			131,380
Income from operations		60,355		(1,623)			58,732
Other income (expenses):
Interest expense, net		(58,723)		25,586	(AA)		(33,137)
Unrealized (loss) gain on derivatives		(17,934)		5,966	(CC)		(11,968)
Other (expense) income		(31)					(31)
Total other expenses		(76,688)		31,552			(45,136)
Income before income taxes		(16,333)		29,929			13,596
Income tax (benefit) expense		(3,990)		6,285	(BB)		2,295
Net (loss) income	$	(12,343)	$	23,644		$	11,301
(Loss) Earnings per share:
Basic and diluted	$	(123,430.00)				$	0.15
Weighted average shares outstanding
Basic and diluted		100					75,000,000

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Unaudited Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2022

(in thousands, except share and per share amounts)

	Kodiak Gas Services, Inc. (as reported)		Transaction Accounting Adjustments – Financing			Kodiak Gas Services, Inc. Pro Forma
Revenues:
Compression Operations	$	654,957	$	—		$	654,957
Other Services		52,956		—			52,956
Total revenues		707,913		—			707,913
Operating expenses:
Cost of operations (exclusive of depreciation and amortization shown below):				—
Compression Operations		225,715		—			225,715
Other Services		41,636		—			41,636
Depreciation and amortization		174,463		—			174,463
Selling, general and administrative expenses		44,882		7,392	(EE)		52,274
Long-lived asset impairment		—		—			—
(Gain) loss on sale of fixed assets		(874)		—			(874)
Total operating expenses		485,822		7,392			493,214
Income from operations		222,091		(7,392)			214,699
Other income (expenses):
Interest expense, net		(170,114)		76,234	(AA)		(93,880)
Unrealized gain on derivatives		87,363		(45,149)	(CC)		42,214
Other income (expense)		17		(29,819)	(DD)		(29,802)
Total other expenses		(82,734)		1,266			(81,468)
Income before income taxes		139,357		(6,126)			133,231
Income tax expense (benefit)		33,092		(1,286)	(BB)		31,806
Net income	$	106,265	$	(4,839)		$	101,426
Earnings per share:
Basic and diluted	$	1,062,650.00				$	1.35
Weighted average shares outstanding
Basic and diluted		100					75,000,000

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NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

1. Basis of Presentation

The unaudited pro forma consolidated financial information was prepared in accordance with Article 11 of Regulation S-X, and presents the pro forma financial condition and results of operations of the Company based upon the historical financial information after giving effect to the Offering Transactions and related adjustments set forth in the notes to the unaudited pro forma consolidated financial information.

The unaudited pro forma consolidated financial information does not reflect any management adjustments for expected effects of the Offering Transactions.

The unaudited pro forma consolidated balance sheet as of March 31, 2023, gives effect to the Offering Transactions as if they had occurred on March 31, 2023. The unaudited pro forma consolidated statement of operations for the three months ended March 31, 2023 and the unaudited pro forma consolidated statement of operations for the year ended December 31, 2022, give effect to the transactions as if they had occurred on January 1, 2022.

Offering Transactions

The Company is offering 16,000,000 shares of common stock in this offering at an assumed initial public offering price of $20.50 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus. The Company intends to use the estimated net proceeds from this offering of $298.1 million (net of underwriting discounts and commissions and estimated expenses and assuming the underwriters do not exercise their option to purchase additional shares of common stock), together with a portion of the proceeds resulting from the Term Loan Derivative Settlement, to repay $314 million of borrowings outstanding under the Term Loan and fees relating to the Term Loan Transaction. Any net proceeds from this offering together with proceeds resulting from the Term Loan Derivative Settlement in excess of $314 million will be used for general corporate purposes, as further described in the section entitled “Use of Proceeds”. Pursuant to the Term Loan Transaction, all of the Company’s and its subsidiaries’ obligations under the Term Loan will be assumed by a parent entity of Kodiak Holdings, and the Company’s obligations thereunder will be terminated. Following the consummation of the Term Loan Transaction, the Company will no longer be a borrower or guarantor under, nor otherwise be obligated with respect to the debt outstanding under the Term Loan.

2. Notes to Unaudited Pro Forma Consolidated Balance Sheet

The following adjustments were made related to the unaudited pro forma consolidated balance sheet as of March 31, 2023.

A. Reflects the effect on cash of gross offering proceeds to us of $328 million, based on the sale by the Company of 16,000,000 shares of common stock at an assumed initial public offering price of $20.50 per share of common stock (the midpoint of the price range set forth on the cover of this prospectus).

B. Reflects underwriting discounts and commissions of $19.7 million and estimated offering expenses of $10.2 million, which includes certain legal, accounting, and other related costs. The Company has incurred $7.2 million of offering expenses, of which $4.3 million is accrued on the balance sheet as of March 31, 2023.

C. Reflects the pro forma net adjustments of $0.7 million to common stock and additional paid-in capital.

D. Reflects the elimination of $1.0 billion of borrowings under the Term Loan (with a carrying value of $984.2 million) as described in the section entitled “Use of Proceeds” and in connection with the Term Loan Transaction. Of this amount, $300 million will be repaid in cash, and $700 million will be novated to a parent entity of Kodiak Holdings. Remaining unamortized debt issuance costs of $15.8

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million were written off and an extinguishment fee of up to $14 million was paid, as discussed in adjustment (DD).

E. Reflects the settlement of derivative assets of $24.8 million, which represents the value as of March 31, 2023 of the interest rate swaps and interest rate collars related to the borrowings being repaid, as discussed in adjustment (D).

F. Reflects a cash distribution of $42.3 million to a parent entity of Kodiak Holdings prior to the consummation of the initial public offering, of which $11.0 million will be funded with cash on hand and $31.3 million will be funded with borrowings under the ABL Facility. The distribution is a return of capital, with $33 million recorded in Additional paid-in capital and the remaining amount recorded in retained earnings.

3. Notes to Unaudited Pro Forma Consolidated Statement of Operations

The following adjustments were made related to the unaudited pro forma consolidated statement of operations for the three months ended March 31, 2023 and year ended December 31, 2022, respectively:

AA. Reflects the elimination of historical interest expense associated with the elimination of $1.0 billion of borrowings under the Term Loan, as discussed in adjustment (D).

BB. Represents the pro forma adjustment to taxes as a result of adjustments to the income statement, which was calculated using the statutory income tax rate of 21%.

CC. Reflects the elimination of historical change in value of derivative assets in the form of a loss of $6.0 million and a gain of $45.1 million for the three months ended March 31, 2023 and for the year ended December 31, 2022, respectively. This represents the change in fair value related to the interest rate swaps and interest rate collars held related to the borrowings being eliminated, as discussed in adjustment D.

DD. Reflects debt issuance costs that are written off and the extinguishment fee associated with the elimination of borrowings under the Term Loan, as discussed in adjustment (D). These charges are not expected to recur in the 12 months following Closing.

EE. Reflects share-based compensation expense in connection with the awards granted under the Omnibus Plan (as defined below). Some awards under this plan vest pursuant to service conditions while others vest pursuant to both service and performance conditions. For the purpose of this adjustment, we have assumed the performance conditions are probable of being met.

4. Unaudited Pro Forma Net Income Per Share

Unaudited basic pro forma net income per share is computed by dividing pro forma net income attributable to common shares by the pro forma weighted average number of common shares outstanding during the period. Unaudited diluted pro forma net income per share is computed by dividing pro forma net income attributable to common shares by the weighted average number of common shares outstanding during the period after adjusting for the impact of securities that would have a dilutive effect on net income per share.

Pro forma net income per share—basic and diluted (in thousands except share and per share amounts)	For the Three Months Ended March 31, 2023		For the Year Ended December 31, 2022
Numerator:
Pro forma net income—basic and diluted		11,301		101,426
Denominator:
Weighted average number of shares outstanding—basic and diluted (1)		75,000,000		75,000,000
Net income per share—basic and diluted	$	0.15	$	1.35

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For further information on items that could impact our future operating performance or financial condition, see the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” elsewhere in this prospectus. We assume no obligation to update any of these forward-looking statements, except as required by law. Unless otherwise indicated or the context otherwise requires, the historical financial information in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects only the historical financial results of Kodiak Gas Services, Inc. and references to “we,” “our,” or “us” are to Kodiak Gas Services, Inc. and its consolidated subsidiaries.

Overview

We are a leading operator of contract compression infrastructure in the U.S. Our compression operations are critical to our customers’ ability to reliably produce natural gas and oil to support growing global energy demand. We are a market leader in the Permian Basin, which is the largest producing natural gas and oil basin in the U.S. We operate our large horsepower compression units under stable, fixed-revenue contracts with blue-chip upstream and midstream customers. Our compression assets have long useful lives consistent with the expected production lives of the key regions where we operate. We believe our partnership-focused business model positions us as the preferred contract compression operator for our customers and creates long-standing relationships. We strategically invest in the training, development, and retention of our highly skilled and dedicated employees and believe their expertise and commitment to excellence enhances and differentiates our business model. Furthermore, we maintain an intense focus on being one of the most sustainable and responsible operators of contract compression infrastructure.

We manage our business through two operating segments: Compression Operations and Other Services. Compression Operations consists of operating company-owned and customer-owned compression infrastructure for our customers, pursuant to fixed-revenue contracts to enable the production, gathering and transportation of natural gas and oil. Other Services consists of a full range of contract services to support the needs of our customers, including station construction, maintenance and overhaul and other ancillary time and material based offerings. Our Other Services offerings are often cross-sold, bolstering cash flow generation with no associated capital expenditures.

Trends and Outlook

We provide contract compression infrastructure for customers in the oil and gas industry. Our assets are specifically utilized in natural gas compression applications in the Permian Basin, Eagle Ford Shale and other U.S. regions. Our customers are dependent on these applications to produce natural gas and oil and transport it to end markets. Our assets are central to meeting the growing global natural gas and oil demand. Furthermore, the long-life nature of our assets and our fixed-revenue contracts help to protect our business from the impact of industry and broader macroeconomic cycles.

Unconventional resources, large-scale centralized gathering and multi-well pad operations, require more horsepower than conventional resources, driving demand for our large horsepower compression units. Upstream and midstream companies have increasingly prioritized capital discipline and return of capital to stockholders. We believe that our customers will increasingly continue to outsource their compression infrastructure needs, to reduce capital expenditures outside of their core business and benefit from our technical skill and expertise.

We believe that the industry is facing uncertainties and continued pressures from regulators and shifting sentiments from investors and other stakeholders, primarily related to broader adoption of emission reduction

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targets and other sustainability initiatives. Many energy companies, including some of our customers, have announced significant GHG emission reduction initiatives. We expect to benefit from this trend as 96% of our current fleet is capable of operating in the most stringent existing emissions regulatory environments in the U.S., which require emissions of 0.5g NOx or less. A growing number of our customers are evaluating potential opportunities in electric compression infrastructure and we are well positioned to support them in these strategic initiatives.

Eighty-four percent of our compression assets are strategically deployed in the Permian Basin and Eagle Ford Shale, which the EIA expects to maintain significant production volumes through at least 2050. We believe these two regions have the largest and lowest-cost unconventional resources in the U.S. exhibited by strong recent growth with natural gas and crude oil production from the two regions growing 13% and 12%, respectively, on average annual basis from 2017 to 2022. Additionally, there are significant U.S. liquefied natural gas (“LNG”) export projects in development, and overall LNG export capacity is expected to meaningfully grow over the next decade, in particular along the U.S. Gulf Coast with liquefaction capacity expected grow 41% from 14.5 in 2022 to 20.5 MTPA in 2025 from FID projects alone. We expect this to translate into Permian Basin and Eagle Ford Shale natural gas production growth, requiring substantial additional compression horsepower. We believe these regions will play an increasingly important role in global energy security as the world continues to require reliable and growing natural gas and oil production to support increasing global energy demand.

See “Business—Compression Industry” for more information regarding natural gas compression industry trends. Ultimately, the extent to which our business will be impacted by the factors described above, as well as future developments beyond our control, cannot be predicted with reasonable certainty. However, we continue to believe in the long-term demand for our compression operations given the necessity of compression in gathering, processing and transportation of natural gas and centralized gas lift of oil.

How We Evaluate Our Operations

Revenue-Generating Horsepower

Revenue-generating horsepower growth is the primary driver for our revenue growth, and it is the base measure for evaluating our efficiency of capital deployed. Revenue-generating horsepower includes compression units that are operating under contract and generating revenue and compression units which are available to be deployed and for which we have a signed contract or are subject to a firm commitment from our customer.

Horsepower Utilization

We calculate horsepower utilization as (i) revenue-generating horsepower divided by (ii) fleet horsepower. The primary reason for tracking and analyzing our horsepower utilization is to determine the percentage of our fleet that is currently generating revenue for future cash flow generation and the efficiency of our capital deployed.

Revenue-Generating Horsepower per Revenue-Generating Compression Units

We calculate revenue-generating horsepower per revenue-generating compression units as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units. The primary reason for tracking and analyzing our revenue-generating horsepower per revenue-generating compression units is to determine the expected operational and financial performance of the Company.

Revenue

One of our measures of financial performance is the amount of revenue generated quarterly and annually as revenue is an indicator of overall business growth for the Company.

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Adjusted Gross Margin

We track Adjusted Gross Margin on an absolute dollar basis and as a percentage of revenue. We define Adjusted Gross Margin as revenue less cost of operations, exclusive of depreciation and amortization expense. We believe that Adjusted Gross Margin is useful as a supplemental measure to investors of our operating profitability. Adjusted Gross Margin is impacted primarily by the pricing trends for service operations and cost of operations, including labor rates for service technicians, volume and per compression unit costs for lubricant oils, quantity and pricing of routine preventative maintenance on compression units and property tax rates on compression units.

Adjusted Gross Margin should not be considered an alternative to, or more meaningful than, gross margin or any other measure of financial performance presented in accordance with GAAP. Moreover, Adjusted Gross Margin as presented may not be comparable to similarly titled measures of other companies. To compensate for the limitations of Adjusted Gross Margin as a measure of our performance, we believe that it is important to consider gross margin determined under GAAP, as well as Adjusted Gross Margin, to evaluate our operating profitability. See “—Non-GAAP Financial Measures.”

Adjusted EBITDA

We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue. We define Adjusted EBITDA as net income before interest expense, net; tax expense (benefit); depreciation and amortization; unrealized loss (gain) on derivatives; equity compensation expense; transaction expenses; loss (gain) on sale of assets; and impairment of compression equipment. Adjusted EBITDA is used as a supplemental financial measure by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess:

• the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;

• the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;

• the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and

• our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure.

We believe that Adjusted EBITDA provides useful information to investors because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business.

Adjusted EBITDA should not be considered an alternative to, or more meaningful than, revenues, net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance and liquidity. Moreover, our Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. See “—Non-GAAP Financial Measures.”

Sources of Our Revenues

Compression Operations

Compression Operations revenue consists of operating company-owned and customer-owned compression infrastructure for our customers, pursuant to fixed-revenue contracts to enable the production, gathering and

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transportation of natural gas and oil. Additionally, revenue from these fixed-revenue contracts can include mobilization and demobilization charges that are directly reimbursable by our customers.

Other Services

Other Services revenue consists of a full range of contract services to support the needs of our customers including station construction, maintenance and overhaul, and other ancillary time and material based offerings.

Principal Components of our Cost Structure

Compression Operations

Compression Operations expenses consist of direct and indirect expenses related to operating compression infrastructure assets, such as labor, supplies, machinery, freight, and crane expenses.

Other Services

Other Services expenses consist of compressor station construction and other ancillary expenses to support the needs of customers, including parts, labor, and materials.

Depreciation and Amortization

Depreciation expense consists primarily of depreciation on property, plant and equipment purchased and leasehold improvements. Amortization expense consists primarily of amortization on intangible assets related to trade name and customer relationships.

Selling, General and Administrative Expense

Selling, General, and Administrative expenses primarily consists of compensation and benefits related costs associated with our finance, legal, human resources, information technology, administrative functions, and sales and marketing. Selling, General, and Administrative costs also consist of third-party professional service fees for external legal, accounting and other consulting services, rent and lease charges, insurance costs, and software expense.

In addition, we expect to incur incremental, non-recurring costs related to our transition to a publicly traded corporation, including the costs of this offering. We also expect to incur additional recurring expenses as a publicly traded corporation, including costs associated with compliance under the Exchange Act, annual and quarterly reports to common stockholders, registrar and transfer agent fees, national stock exchange fees, audit fees, incremental director and officer liability insurance costs and director and officer compensation.

Long-lived Asset Impairment

Long-lived assets, including property, plant, and equipment, and other finite-lived identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances, including the removal of compression units from active fleet, indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the asset. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value. There were no indicators that the carrying amount may not be recoverable for the three months ended March 31, 2023 and 2022.

Interest Expense, Net

Interest expense, net relates to interest incurred on outstanding borrowings under our ABL Facility and the Term Loan, net of interest income earned on cash balances.

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Unrealized Gain (Loss) on Derivatives

Unrealized gain (loss) on derivatives is from changes in the mark-to-market valuation of derivative instruments related to interest rate swaps whereby we have exchanged variable interest rates for fixed interest rates and entered into interest rate collars which represent a simultaneous purchase of a cap rate with the sale of a floor rate. Derivative instruments are used to manage our exposure to fluctuations in the variable interest rate of the ABL Facility and the Term Loan and thereby mitigate the risks and costs associated with financing activities. We have not designated any derivative instruments as hedge for accounting purposes and we do not enter into such instruments for speculative trading purposes. Gains and losses on derivatives are presented in the other income and expense section of the consolidated statements of operations as unrealized gain or loss on derivatives.

2023 Operational Highlights

The following table summarizes certain horsepower and horsepower utilization percentages for our fleet for the periods presented.

	Three Months Ended March 31,						Percentage Change
	2023			2022
Operating Data (at period end):
Fleet horsepower(1)		3,175,006			3,037,061			4.5	%
Revenue-generating horsepower(2)		3,169,301			3,032,511			4.5	%
Fleet compression units		3,041			2,956			2.9	%
Revenue-generating compression units		3,033			2,952			2.7	%
Revenue-generating horsepower per revenue-generating compression unit(3)		1,045			1,027			1.7	%
Horsepower utilization(4)		99.8	%		99.9	%		—	%

(1) Fleet horsepower includes revenue-generating horsepower and idle horsepower, which is compression units that do not have a signed contract or is not subject to a firm commitment from our customer and is not yet generating revenue. Fleet horsepower excludes 58,645 and 63,575 of non-marketable or obsolete horsepower during the three months ended March 31, 2023 and 2022.

(2) Revenue-generating horsepower includes compression units that are operating under contract and generating revenue and compression units which are available to be deployed and for which we have a signed contract or are subject to a firm commitment from our customer.

(3) Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end.

(4) Horsepower utilization is calculated as (i) revenue-generating horsepower divided by (ii) fleet horsepower.

Horsepower

The 4.5% and 4.5% increase in fleet horsepower and revenue-generating horsepower, respectively, were primarily attributable to an increase in the purchase and deployment of new compression units through organic growth with our existing customer base as well as select new customers in the key regions in which we operate.

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2022 Operational Highlights

The following table summarizes certain horsepower and horsepower utilization percentages for our fleet for the periods presented.

	As of December 31,						Percentage Change
	2022			2021
Operating Data (at period end):
Fleet horsepower(1)		3,134,306			2,935,826			6.8	%
Revenue-generating horsepower(2)		3,131,631			2,933,203			6.8	%
Fleet compression units		3,024			2,904			4.1	%
Revenue-generating compression units		3,021			2,900			4.2	%
Revenue-generating horsepower per revenue-generating compression unit(3)		1,037			1,011			2.6	%
Horsepower utilization(4)		99.9	%		99.9	%		—

(1) Fleet horsepower includes revenue-generating horsepower and idle horsepower, which is compression units that do not have a signed contract or is not subject to a firm commitment from our customer and is not yet generating revenue. Fleet horsepower excludes 58,645 and 65,355 of non-marketable or obsolete horsepower as of December 31, 2022 and December 31, 2021, respectively.

(2) Revenue-generating horsepower includes compression units that are operating under contract and generating revenue, which are available to be deployed and for which we have a signed contract or is subject to a firm commitment from our customer.

(3) Calculated as (i) revenue-generating horsepower divided by (ii) revenue-generating compression units at period end.

(4) Horsepower utilization is calculated as (i) revenue-generating horsepower divided by (ii) fleet horsepower.

Horsepower

The 6.8% and 6.8% increase in fleet horsepower and revenue-generating horsepower, respectively, were primarily attributable to an increase in the purchase and deployment of new compression units through organic growth with our existing customer base as well as select new customers in the key regions in which we operate.

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Financial Results of Operations

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

The following table presents selected financial and operating information for the periods presented:

	For Three Months Ended March 31,
	2023			2022			% Change
Revenues:
Compression operations	$	177,697		$	157,495			12.8%
Other services		12,415			10,846			14.5%
Total revenues		190,112			168,341			12.9%
Operating expenses:
Cost of operations (exclusive of depreciation and amortization shown below)
Compression operations		62,770			52,937			18.6%
Other services		8,988			8,827			1.8%
Depreciation and amortization		44,897			42,405			5.9%
Selling, general and administrative expenses		13,085			9,830			33.1%
Loss (gain) on sale of fixed assets		17			(7	)		(342.9)%
Total operating expenses		129,757			113,992			13.8%
Income from operations		60,355			54,349			11.1%
Other income (expenses):
Interest expense, net		(58,723)			(25,640)			129.0%
Unrealized (loss) gain on derivatives		(17,934	)		7,838			(328.8)%
Other (expense) income		(31	)		16			(293.8)%
Total other expense		(76,688)			(17,786)			331.2%
(Loss) income before income taxes		(16,333	)		36,563			(144.7)%
Income tax (benefit) expense		(3,990	)		8,624			(146.3)%
Net (loss) income	$	(12,343	)	$	27,939			(144.2)%

Revenues and Sources of Income

Compression Operations

Compression Operations revenue increased $20.2 million (12.8%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The increase was the result of a $19.9 million increase in average revenue-generating horsepower as a result of increased demand for our compression operations (consistent with increased operating activity in the oil and gas industry) and due to an increase in average revenue per revenue-generating horsepower per month as well as a $0.9 million increase in freight and crane charges that are directly reimbursable by our customers; partially offset by a $0.6 million decrease in revenue attributable to services related to customer-owned horsepower.

Other Services

Other Services revenue increased $1.6 million (14.5%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This increase was primarily due to a $1.0 million increase in revenue from parts and service, driven by increased customer demand and a $0.6 million increase in revenue from station construction services.

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Operating Costs and Other Expenses

Compression Operations

Compression Operations expenses increased $9.8 million (18.6%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This was primarily due to a $4.3 million increase in direct expenses, driven by increases in pricing and volume of fluids and parts to support increased activity, a $3.0 million increase in direct labor expenses related to increased headcount and salaries, a $1.8 million increase in indirect expenses and a $0.8 million in freight and crane charges that are directly reimbursable by our customers.

Other Services

Other Services expense increased $0.2 million (1.8%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This was primarily due to a $0.7 million increase in parts and service costs, driven by increased customer demand; partially offset by a $0.5 million decrease in expenses from station construction services.

Depreciation and Amortization

Depreciation and Amortization increased $2.5 million (5.9%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This was primarily due to an increase in compression equipment purchased, which resulted in increased depreciation associated with that equipment.

Selling, General and Administrative Expense

Selling, General and Administrative expenses increased $3.3 million (33.1%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This was primarily due to a $2.2 million increase in labor and benefit expenses (including $0.3 million of equity compensation), and a $1.2 million increase in other overhead expenses, primarily as a result of increased travel, advertising, entertainment and office expenses.

Interest Expense, Net

Interest expense increased $33.1 million (129.0%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This is primarily due (i) to an increase in borrowings under the ABL Facility and Term Loan, of which $825 million was related to the May 2022 Recapitalization (as discussed in Note 9 (“Debt and Credit Facilities”) to our Quarterly Financial Statements) and (ii) increased effective interest rates on the ABL Facility and Term Loan.

Unrealized (Loss) Gain on Derivatives

Unrealized loss on derivatives increased $25.8 million (-328.8%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This is primarily related to a $17.9 million unrealized loss on the change in market value of our interest rate swaps and collars during the three months ended March 31, 2023 due to a decrease in the long-term treasury yield curve, as compared to a $7.8 million unrealized gain during the three months ended March 31, 2022 due to overall interest rate increases.

Income tax (benefit) expense

Income tax benefit increased by $12.6 million (146.3%) for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. This was primarily due to the pre-tax loss of $(4.0) million for the three months ended March 31, 2023 compared to pre-tax income of $8.6 million for the three months ended March 31, 2022.

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Year ended December 31, 2022 compared to the year ended December 31, 2021

The following table presents selected financial and operating information for the periods presented:

	For Years Ended December 31,
	2022		2021		% Change
Revenues:
Compression operations	$	654,957	$	583,070		12.3
Other services		52,956		23,305		127.2
Total revenues		707,913		606,375		16.7
Operating expenses:
Cost of operations (exclusive of depreciation and amortization shown below)
Compression operations		225,715		192,813		17.1
Other services		41,636		17,364		139.8
Depreciation and amortization		174,463		160,045		9.0
Selling, general and administrative expenses		44,882		37,665		19.2
Long-lived asset impairment		—		9,107		*
(Gain) loss on sale of fixed assets		(874)		426		(305.2)
Total operating expenses		485,822		417,420		16.4
Income from operations		222,091		188,955		17.5
Other income (expenses):
Interest expense, net		(170,114)		(107,293)		58.6
Unrealized gain on derivatives		87,363		40,827		114.0
Other income (expense)		17		(99)		(117.2)
Total other expense		(82,734)		(66,565)		24.3
Income before income taxes		139,357		122,390		13.9
Income tax expense (benefit)		33,092		(58,573)		(156.5)
Net income	$	106,265	$	180,963		(41.3)

* Not applicable

Revenues and Sources of Income

Compression Operations

Compression Operations revenue increased $71.9 million (12.3%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. $81.9 million of the revenue increase was due to an increase in average revenue-generating horsepower as a result of increased demand for our compression operations (consistent with increased operating activity in the oil and gas industry) and due to an increase in average revenue per revenue-generating horsepower per month; partially offset by a $8.7 million decrease in revenues attributable to services related to customer-owned horsepower and a $1.3 million decrease in freight and crane charges that are directly reimbursable by our customers.

Other Services

Other Services revenue increased $29.7 million (127.2%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This increase was primarily due to a $28.5 million in station construction services, driven by an increase in the number of stations and average revenue per compressor station to support customer capacity demands, and a $1.2 million increase in parts and service, driven by increased customer demand.

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Operating Costs and Other Expenses

Compression Operations

Compression Operations expenses increased $32.9 million (17.1%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This was primarily due to a $18.5 million increase in direct expenses, driven by increases in pricing and volume of fluids and parts to support increased activity, a $8.6 million increase in direct labor expenses related to increased headcount and salaries, and a $6.9 million increase in indirect expenses; partially offset by a $1.1 million decrease in freight and crane charges that are directly reimbursable by our customers.

Other Services

Other Services expense increased $24.3 million (139.8%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This was primarily due to a $24.0 million increase in construction service expenses related to increased scale in compressor stations to meet customer capacity demands.

Depreciation and Amortization

Depreciation and Amortization increased $14.4 million (9.0%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This was primarily due to an increase in compression equipment purchased in 2022, which resulted in increased depreciation associated with that equipment.

Selling, General and Administrative Expense

Selling, General and Administrative expenses increased $7.2 million (19.2%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This was primarily due to a $2.6 million increase in labor and benefits, a $0.6 million increase in bad debt expense related to prior year recoveries, and a $4.1 million increase in other overhead expenses, primarily as a result of increased travel, recruiting, advertising and entertainment expenses.

Long-lived Asset Impairment

No long-lived asset impairment was recorded for the year ended December 31, 2022 as compared to the $9.1 million impairment recognized during the year ended December 31, 2021, which was primarily as the result of compression equipment that was identified as not being part of our ongoing operations under the contract Compression Operations segment.

Loss (Gain) on Sale of Fixed Assets

The loss on the sale of fixed assets decreased $1.3 million (305.2%) for the year ended December 31, 2022 compared to December 31, 2021. This is primarily due to a gain on the sale of compression equipment to a customer.

Interest Expense, Net

Interest expense increased $62.8 million (58.6%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This is primarily due to (i) an increase in borrowings under the ABL Facility and Term Loan of $825 million, which was related to the May 2022 Recapitalization (as discussed in Note 7 (“Debt and Credit Facilities”) to our Annual Financial Statements) and (ii) increased effective interest rates on the ABL Facility and Term Loan.

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Unrealized Gain (Loss) on Derivatives

Unrealized gain on derivatives increased $46.5 million (114.0%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This is primarily due to an increase in the market interest rates which impacted the fair value of the derivatives and their classification on the balance sheet from a liability classification for the year ended December 31, 2021 to an asset classification for the year ended December 31, 2022.

Income Tax Expense (Benefit)

Income tax expense increased by $91.7 million (156.5%) for the year ended December 31, 2022 compared to the year ended December 31, 2021. This was primarily due to the full release in 2021 of the $83.6 million valuation allowance associated with federal and state deferred tax assets. The remaining $7 million increase is primarily related to an increase in pre-tax book income in 2022 and a deferred tax benefit in 2021, created by a lower state tax effective rate.

Liquidity and Capital Resources

Overview

Our ability to fund operations, finance capital expenditures, service our debt, and pay dividends depends on the levels of our operating cash flows and access to the capital and credit markets. Our primary sources of liquidity are cash flows generated from our operations and our borrowing availability under the ABL Facility. Our cash flow is affected by numerous factors including prices and demand for our infrastructure compression assets, conditions in the financial markets and other factors. We believe cash generated by operating activities will be sufficient to service our debt, fund working capital, fund our estimated capital expenditures and, as our board of directors may determine from time to time in its discretion, pay dividends.

Cash Requirements

Capital Expenditures

The compression infrastructure business is capital intensive, requiring significant investment to maintain, expand and upgrade existing operations. Our capital requirements have consisted primarily of, and we anticipate that our capital requirements will continue to consist primarily of, the following:

• Maintenance Capital Expenditures: periodic capital expenditures incurred at predetermined operating intervals to maintain consistent and reliable operating capacity of our assets over the near term. Such maintenance capital expenditures typically involve overhauls of significant components of our compression units, such as the engine and compressor, pistons, rings, heads, and bearings. These maintenance capital expenditures are predictable and the majority of these expenditures are tied to a detailed, unit-by-unit schedule based on hours of operation or age. We utilize a disciplined and systematic asset management program whereby we perform major unit overhauls and engine replacements on a defined schedule based on hours of operation. As a result, our maintenance capital expenditures may vary considerably from year to year based on when such assets were added to the fleet. Maintenance Capital Expenditures along with regularly scheduled preventive maintenance expenses are typically sufficient to sustain operating capacity of our assets over the full expected useful life of the compression units. Maintenance Capital Expenditures do not include expenditures to replace compression units when they reach the end of their useful lives.

• Growth Capital Expenditures: (1) capital expenditures made to expand the operating capacity or operating income capacity of assets by acquisition of additional compression units, (2) capital expenditures made to maintain the operating capacity or operating income capacity of assets by acquisition of replacement compression units and (3) capital expenditures not related to our compression units—such as trucks; wash trailers; crane trucks; leasehold improvements; technology

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hardware and software and related implementation expenditures; furniture and fixtures; and other general items that are typically capitalized to operate the business that have useful life beyond one year. We use a systematic approach to deploying new compression units only when it will meet or exceed our return threshold. We make capital expenditures not related to our compression units (as described in clause (3) above) if and when necessary to support the operations of our revenue generating horsepower.

The majority of our growth capital expenditures are related to the acquisition cost of new compression units. Maintenance capital expenditures are related to overhauls of significant components of our compression equipment, such as the engine and compressor, which return the components to a like-new condition, but do not modify the application for which the compression equipment was designed.

Our aggregate capital expenditures for the three months ended March 31, 2023 were $4.8 million of maintenance capital expenditures and $43.8 million of growth capital expenditures. For the three months ended March 31, 2022, maintenance capital expenditures were $8.1 million and growth capital expenditures were $63.7 million, respectively. The decrease in maintenance capital expenditures was primarily a result of a decrease in scheduled unit overhauls that occurred based on the age and operating hours of such units. The decrease in growth capital expenditures was primarily related to the timing of new compressor equipment purchases to support organic growth.

Our aggregate capital expenditures for the year ended December 31, 2022 were $48.3 million of maintenance capital expenditures and $211.0 million of growth capital expenditures. For the year ended December 31, 2021, maintenance capital expenditures were $38.1 million and growth capital expenditures were $163.8 million, respectively. The increase in maintenance capital expenditures was primarily a result of a large number of scheduled unit overhauls that occurred in 2022 based on the age and operating hours of such units. The increase in growth capital expenditures was primarily related to an increase in the purchase of new compressor equipment to support organic growth.

Dividends

Following the completion of this offering, our board of directors may elect to declare cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements, and restrictions in the agreements governing our indebtedness (as further discussed herein). If and to the extent our board of directors were to declare a cash dividend to our stockholders, we expect the dividend to be paid from our Discretionary Cash Flow. The timing, amount and financing of dividends, if any, will be subject to the discretion of our board of directors from time to time following this offering. See “Dividend Policy.”

Over the long-term, we expect to fund any dividends and our budgeted growth capital expenditures using our Discretionary Cash Flow. In the event our Discretionary Cash Flow is insufficient for the purpose of funding any such dividends and our budgeted growth capital expenditures for such period, we may fund such shortfall (i) with additional borrowings under our ABL Facility, which as of the completion of this offering is expected to have $386 million available (subject to the RP Availability Requirement) or (ii) reduce our growth capital expenditures for such period. Any such additional borrowings under our ABL Facility will result in an increase in our interest expense for such period. Any such reduction in our growth capital expenditures may result in lower growth in our revenue-generating horsepower in future periods.

Contractual Obligations

Our material contractual obligations as of March 31, 2023 consisted of the following:

• Long-term debt of $2.8 billion, which is due in 2028;

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• Purchase commitments of $172.1 million are due within 12 months, that primarily consist of commitments to purchase compression units. See Note 13 (“Commitments and Contingencies”) to our Quarterly Financial Statements.

Our material contractual obligations as of December 31, 2022 consisted of the following:

• Long-term debt of $2.7 billion. Of such amount, $1.8 billion was outstanding under our ABL Facility and was, as of December 31, 2022, due in 2024. In March 2023, the maturity of the ABL Facility was extended to March 2028. The remainder of such amount was outstanding under our Term Loan, which was, as of December 31, 2022, due in 2027. In March 2023, the maturity of the Term Loan was extended to September 2028; and

• Purchase commitments of $166.9 million due within 12 months, that primarily consist of commitments to purchase compression units. See Note 10 (“Commitments and Contingencies”) to our Annual Financial Statements.

Other Commitments

As of March 31, 2023, other commitments include operating lease payments totaling $22.0 million.

As of December 31, 2022, other commitments include operating lease payments totaling $9.8 million.

Sources of Cash

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2023, and 2022 (in thousands):

	Three Months Ended March 31,
	2023			2022			$ Variance
Net cash provided by operating activities	$	23,290		$	54,796		$	(31,506	)
Net cash used in investing activities		(48,574	)		(71,829	)		23,255
Net cash provided by financing activities		18,853			13,629			5,224
Net decrease in cash and cash equivalents	$	(6,431	)	$	(3,404	)	$	(3,027	)

Operating Activities

The $31.5 million decrease in net cash provided by operating activities for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to a $40.3 million decrease in net income, adjusted for non-cash items which is mainly related to a $25.8 million increase in unrealized loss on derivative instruments, and a $13.9 million decrease in working capital primarily consisting of an increase in accounts receivable due to increase in revenue from compression operations, an increase in prepaid expenses and other current assets due to increase in deferred IPO costs, a decrease in accounts payable and accrued liabilities due to payment made to vendors during the year; partially offset by an increase in contract liabilities.

Investing Activities

The $23.3 million decrease in net cash used in investing activities for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to a $23.2 million decrease in cash paid for capital assets.

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Financing Activities

The $5.2 million increase in net cash provided by financing activities for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to an increase in borrowings on debt instruments of $69.6 million. This was offset by an increase in payments on debt instruments of $32.5 million, and an increase of $31.8 million payment of debt issuance cost.

Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2022, and 2021 (in thousands):

	Year Ended December 31,
	2022			2021			$ Variance
Net cash provided by operating activities	$	219,846		$	249,978		$	(30,132	)
Net cash used in investing activities		(251,382	)		(202,034	)		(49,348	)
Net cash provided by (used in) financing activities		23,172			(43,254	)		66,426
Net (decrease) increase in cash and cash equivalents	$	(8,364	)	$	4,690		$	(13,054	)

Operating Activities

The $30.1 million decrease in net cash provided by operating activities for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to an $18.5 million decrease in net income, adjusted for non-cash items which is mainly related to a $62.8 million increase in interest expense on additional borrowings; partially offset by an increase in income from operations, and an $11.7 million decrease in working capital primarily consisting of an increase in inventory related to higher spare parts and component purchases in support of our operations; partially offset by an increase in accruals related to interest and other accrued expenditures.

Investing Activities

The $49.3 million increase in net cash used in investing activities for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to a $57.4 million increase in cash paid for capital assets, mainly related to additional purchases of units and maintenance expenditures for compression equipment. This was offset by an $8.1 million increase in proceeds from the sale of assets.

Financing Activities

The $66.4 million change in net cash provided by financing activities for the year ended December 31, 2022 compared to the year December 31, 2021 was primarily due to an increase in borrowings on debt instruments of $1,050.0 million, a decrease in contributions by Kodiak Holdings of $24.0 million, and a decrease of $1.1 million in equity instrument distributions. This was offset by an $838.0 million increase in distributions to Kodiak Holdings (as discussed in Note 7 (“Debt and Credit Facilities”) to our Annual Financial Statements), an increase in payments on debt instruments of $95.5 million, and an increase of $26.9 million payment of debt issuance cost.

Description of Indebtedness

Asset Based Lending Facility

On March 22, 2023, we entered into the Fourth Amended and Restated ABL Credit Agreement, whereby we (among other things) upsized the aggregate revolving commitments to $2.2 billion and made certain changes to our financial covenants and maturity date. The maturity date of the ABL Facility is March 22, 2028. See Note 9 (“Debt and Credit Facilities”) to our Quarterly Financial Statements. The ABL Credit Agreement requires

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that we meet certain financial ratios and contains various additional covenants including, but not limited to, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens and repurchase equity.

Commencing with the first fiscal quarter ending after the completion of this offering, our interest coverage ratio may not be less than 2.50 to 1.00, determined as of the last day of each fiscal quarter.

Commencing with the first fiscal quarter ending after the completion of this offering but prior to the occurrence of certain issuances of unsecured debt (for purposes of this description, an “unsecured debt issuance”), our Leverage Ratio (as defined in the ABL Credit Agreement), determined quarterly as of the last day of each fiscal quarter, may not exceed (i) 5.50 to 1.00 for the fiscal quarters ending March 31, 2023 and June 30, 2023, (ii) 5.25 to 1.00 for the fiscal quarters ending September 30, 2023 and December 31, 2023, (iii) 5.00 to 1.00 for the fiscal quarter ending March 31, 2024, (iv) 4.75 to 1.00 for the fiscal quarter ending June 30, 2024 and (v) 4.50 to 1.00 for each fiscal quarter ending on or after September 30, 2024.

Commencing with the first fiscal quarter ending after both the completion of this offering and the occurrence of an unsecured debt issuance, (a) our Leverage Ratio, determined quarterly as of the last day of each fiscal quarter, may not exceed (x) 5.75 to 1.00 for the first four fiscal quarters ending after the occurrence of the unsecured debt issuance and (y) 5.25 to 1.00 for each fiscal quarter ending thereafter; and (b) our Secured Leverage Ratio (as defined in the ABL Credit Agreement), determined quarterly as of the last day of each fiscal quarter, may not exceed (x) 3.50 to 1.00 for the first four fiscal quarters ending after the occurrence of the unsecured debt issuance and (y) 3.00 to 1.00 for each fiscal quarter ending thereafter.

All loan amounts under the ABL Facility are collateralized by the assets of the Company. We are in compliance with all covenants as of March 31, 2023 and December 31, 2022.

The applicable interest rate under the ABL Facility is (i) in the case of SOFR-based borrowings, the Term SOFR or Daily Simple SOFR rate then in effect plus 0.10% plus a spread that depends on our leverage ratio as of the most recent determination date ranging from 2.00% if our leverage ratio is less than or equal to 3.00:1.00 to 3.00% if our leverage ratio is greater than 5.50:1.00 and (ii) in the case of prime rate-based borrowings, the prime rate (subject to a floor of 2.5%) plus a spread that depends on our leverage ratio as of the most recent determination date ranging from 1.00% if our leverage ratio is less than or equal to 3.00:1.00 to 2.00% if our leverage ratio is greater than 5.50:1.00.

The applicable interest rates as of March 31, 2023 were 10.00% (prime rate) and 8.21% (Term SOFR rate plus 0.10% plus 3.00%). The applicable interest rates as of December 31, 2022 were 9.50% (prime rate) and 7.60% (Term SOFR rate plus 0.10% plus 3.00%).

After the completion of this offering, we expect to have approximately $386 million of total availability under the ABL Facility and $166 million of availability taking into account the RP Availability Requirement.

Term Loan

On May 19, 2022, we entered into the Term Loan Credit Agreement whereby we increased the aggregate commitments under the Term Loan from $400 million to $1 billion and made certain changes to our financial covenants, including (i) the covenant restrictions were waived for the second quarter of 2022 and (ii) the maximum leverage ratio (calculated based on the ratio of Consolidated Total Debt to Consolidated EBITDA, each as defined in the Term Loan Credit Agreement) was increased to 7.50x through the first quarter of 2023; 7.25x thereafter through the third quarter of 2023; 7.00x thereafter through the first quarter of 2024; 6.75x thereafter through the first quarter of 2025; 6.50x thereafter through the first quarter of 2026; 6.25x thereafter through the fourth quarter of 2026; and 6.00x in the first quarter of 2027 and thereafter.

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Borrowings under the Term Loan bear the following applicable rates: interest rates are based on 6.00% plus an alternate base rate and 7.00% plus an adjusted eurocurrency rate for alternate base rate ABR loans and eurocurrency loans, respectively. The interest rates were 11.73% and 10.67% as of March 31, 2023 and December 31, 2022, respectively.

Commencing with the fiscal year ending December 31, 2023, an excess cash flow payment that would reduce the principal balance of the Term Loan is potentially due 120 days following each preceding fiscal year end. This excess cash flow payment is based on the leverage ratio (calculated based on the ratio of Consolidated Total Debt to Consolidated EBITDA, each as defined in the Term Loan Credit Agreement) at year end. Based on the calculated ratio, a payment percentage is applied to the excess cash flow to determine the amount, if any, due. Historically, we have been granted a waiver and have not been liable for the potential payment percentage. We were in compliance with all financial covenants as of March 31, 2023 and December 31, 2022. On March 31, 2023, we entered into the First Amendment to the Term Loan, which extended the maturity of the Term Loan to September 22, 2028. We expect to repay a portion of the Term Loan with proceeds from this offering. See “Use of Proceeds.” Additionally, pursuant to the Term Loan Transaction, all of the Company’s and its subsidiaries’ remaining obligations under the Term Loan will be assumed by a parent entity of Kodiak Holdings, and the Company’s obligations thereunder will be terminated. All of the Company’s interest rate swaps and collars attributable to the Term Loan will also be terminated in connection with the Term Loan transaction for expected proceeds of between $22 million and $26 million. Following the consummation of the Term Loan Transaction in connection with the completion of this offering, the Company will no longer be a borrower or guarantor under, nor otherwise be obligated with respect to the debt outstanding under the Term Loan.

Parent Entity Distribution

The Parent Entity Distribution reflects a cash distribution of $42.3 million to a parent entity of Kodiak Holdings prior to the consummation of the initial public offering, of which $11.0 million will be funded with cash on hand and $31.3 million will be funded with borrowings under the ABL Facility.

Derivatives and Hedging Activities

To mitigate a portion of the exposure to fluctuations in the variable interest rate of the ABL Facility and the Term Loan, and to minimize the risks and costs associated with financial activities, we have entered into various derivative instruments.

Our interest rate swaps exchange variable interest rate with fixed interest rates. We have not designated any derivative instruments as hedge for accounting purposes and do not enter into such instruments for speculative or trading purposes. See Note 10 (“Derivative Instruments”) to our Quarterly Financial Statements and Note 8 (“Derivative Instruments”) to our Annual Financial Statements.

Off-balance Sheet Arrangements

We have not entered into any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities.

Non-GAAP Financial Measures

Management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include the non-GAAP financial measures of Adjusted Gross Margin, Adjusted Gross Margin Percentage, Adjusted EBITDA, Adjusted EBITDA Percentage, Discretionary Cash Flow and Free Cash Flow.

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Adjusted Gross Margin and Adjusted Gross Margin Percentage

Adjusted Gross Margin is a non-GAAP financial measure. We define Adjusted Gross Margin as revenue less cost of operations, exclusive of depreciation and amortization expense. We believe that Adjusted Gross Margin is useful as a supplemental measure to investors of our operating profitability. Adjusted Gross Margin is impacted primarily by the pricing trends for service operations and cost of operations, including labor rates for service technicians, volume and per compression unit costs for lubricant oils, quantity and pricing of routine preventative maintenance on compression units and property tax rates on compression units. Adjusted Gross Margin should not be considered an alternative to, or more meaningful than, gross margin or any other measure of financial performance presented in accordance with GAAP. Moreover, Adjusted Gross Margin as presented may not be comparable to similarly titled measures of other companies. Because we capitalize assets, depreciation and amortization of equipment is a necessary element of our costs. To compensate for the limitations of Adjusted Gross Margin as a measure of our performance, we believe that it is important to consider gross margin determined under GAAP, as well as Adjusted Gross Margin, to evaluate our operating profitability.

Adjusted Gross Margin for Compression Operations

	Three Months Ended March 31,						Year Ended December 31,
	2023			2022			2022			2021
	(in thousands)						(in thousands)
Total revenues	$	177,697		$	157,495		$	654,957		$	583,070
Cost of operations (excluding depreciation and amortization)		(62,770	)		(52,937	)		(225,715	)		(192,813	)
Depreciation and amortization		(44,897	)		(42,405	)		(174,463	)		(160,045	)
Gross margin	$	70,030		$	62,153		$	254,779		$	230,212
Gross Margin Percentage		39.4%			39.5%			38.9%			39.5%
Depreciation and amortization		44,897			42,405			174,463			160,045
Adjusted Gross Margin	$	114,927		$	104,558		$	429,242		$	390,257
Adjusted Gross Margin Percentage(1)		64.7%			66.4%			65.5%			66.9%

(1) Calculated using Adjusted Gross Margin for Compression Operations as a percentage of total Compression Operations revenues.

Adjusted Gross Margin for Other Services

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
	(in thousands)				(in thousands)
Total revenues	$	12,415	$	10,846	$	52,956	$	23,305
Cost of operations (excluding depreciation and amortization)		(8,988)		(8,827)		(41,636)		(17,364)
Depreciation and amortization		—		—		—		—
Gross margin	$	3,427	$	2,019	$	11,320	$	5,941
Gross Margin Percentage		27.6%		18.6%		21.4%		25.5%
Depreciation and amortization		—		—		—		—
Adjusted Gross Margin	$	3,427	$	2,019	$	11,320	$	5,941
Adjusted Gross Margin Percentage(1)		27.6%		18.6%		21.4%		25.5%

(1) Calculated using Adjusted Gross Margin for Other Services as a percentage of total Other Services revenues.

Adjusted EBITDA and Adjusted EBITDA Percentage

We define Adjusted EBITDA as net income before interest expense, net; tax expense (benefit); depreciation and amortization; unrealized loss (gain) on derivatives; equity compensation expense; transaction expenses; loss

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(gain) on sale of assets; and impairment of compression equipment. We define Adjusted EBITDA Percentage as Adjusted EBITDA divided by total revenues. Adjusted EBITDA and Adjusted EBITDA Percentage are used as supplemental financial measures by our management and external users of our financial statements, such as investors, commercial banks and other financial institutions, to assess:

• the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;

• the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;

• the ability of our assets to generate cash sufficient to make debt payments and pay dividends; and

• our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods and capital structure.

We believe that Adjusted EBITDA and Adjusted EBITDA Percentage provide useful information to investors because, when viewed with our GAAP results and the accompanying reconciliation, they provide a more complete understanding of our performance than GAAP results alone. We also believe that external users of our financial statements benefit from having access to the same financial measures that management uses in evaluating the results of our business.

Adjusted EBITDA and Adjusted EBITDA Percentage should not be considered as alternatives to, or more meaningful than, revenues, net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance and liquidity. Moreover, our Adjusted EBITDA and Adjusted EBITDA Percentage as presented may not be comparable to similarly titled measures of other companies.

Given we are a capital intensive business, depreciation, impairment of compression equipment and the interest cost of acquiring compression equipment are necessary elements of our costs. To compensate for these limitations, we believe that it is important to consider both net income and net cash provided by operating activities determined under GAAP, as well as Adjusted EBITDA and Adjusted EBITDA Percentage, to evaluate our financial performance and our liquidity. Our Adjusted EBITDA and Adjusted EBITDA Percentage exclude some, but not all, items that affect net income and net cash provided by operating activities, and these measures may vary among companies. Management compensates for the limitations of Adjusted EBITDA and Adjusted EBITDA Percentage as an analytical tool by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating this knowledge into management’s decision-making processes.

The following table reconciles net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA, its most directly comparable Non-GAAP financial measure, for each of the periods presented (in thousands):

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
Net (loss) income	$	(12,343)	$	27,939	$	106,265	$	180,963
Interest expense, net		58,723		25,640		170,114		107,293
Tax (benefit) expense		(3,990)		8,624		33,092		(58,573)
Depreciation and amortization		44,897		42,405		174,463		160,045
Unrealized loss (gain) on derivatives		17,934		(7,838)		(87,363)		(40,827)
Equity compensation expense(1)		879		619		971		1,224
Transaction expenses(2)		201		—		2,370		1,351
Loss (gain) on sale of assets		17		(7)		(874)		426
Impairment of compression equipment(3)		—		—		—		9,107
Adjusted EBITDA	$	106,318	$	97,382	$	399,038	$	361,009
Adjusted EBITDA Percentage		55.9%		57.8%		56.4%		59.5%

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(1) For the three months ended March 31, 2023 and 2022, respectively, there were $0.9 million and $0.6 million of non-cash adjustments for equity compensation expense related to our time-based vested shares. For the years ended December 31, 2022 and 2021 there were $1.0 million and $1.2 million, respectively, of non-cash adjustments for equity compensation expense related to the time-based vested shares.

(2) Represents certain costs associated with non-recurring professional services, our equity owners’ expenses and other costs. We believe it is useful to investors to exclude these expenses.

(3) Represents non-cash charges incurred to write down long-lived assets with recorded values that are not expected to be recovered through future cash flows.

The following table reconciles net cash provided by operating activities to Adjusted EBITDA for each of the periods presented (in thousands):

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
Net cash provided by operating activities	$	23,290	$	54,796	$	219,846	$	249,978
Interest expense, net		58,723		25,640		170,114		107,293
Tax (benefit) expense		(3,990)		8,624		33,092		(58,573)
Deferred tax provision (benefit)		2,521		(7,104)		(27,301)		60,972
Transaction expenses(1)		201		—		2,370		1,351
Other(2)		(6,346)		(2,597)		(17,130)		(6,406)
Change in operating assets and liabilities		31,919		18,023		18,047		6,394
Adjusted EBITDA	$	106,318	$	97,382	$	399,038	$	361,009

(1) Represents certain costs associated with non-recurring professional services, our equity owners’ expenses and other costs. We believe it is useful to investors to exclude these expenses.

(2) Includes amortization of debt issuance costs, non-cash lease expense, provision for bad debt and inventory

reserve.

Discretionary Cash Flow

We define Discretionary Cash Flow as net cash provided by operating activities less maintenance capital expenditures, transaction expenses, certain changes in operating assets and liabilities and certain other expenses. We believe Discretionary Cash Flow is a useful liquidity and performance measure and supplemental financial measure for us and our investors in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. Our ability to pay dividends is subject to limitations due to restrictions contained in our ABL Credit Agreement as further described elsewhere herein. Discretionary Cash Flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, such as revenues, net income, operating income (loss) or cash flows from operating activities. Discretionary Cash Flow as presented may not be comparable to similarly titled measures of other companies.

The following table reconciles Net cash provided by operating activities, to Discretionary Cash Flow and Free Cash Flow, for each of the periods presented (in thousands):

	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
Net cash provided by operating activities	$	23,290	$	54,796	$	219,846	$	249,978
Maintenance capital expenditures(1)		(4,803)		(8,111)		(48,313)		(38,088)
Transaction expenses(2)		201		—		2,370		1,351
Change in operating assets and liabilities		31,919		18,023		18,047		6,394
Other(3)		(918)		(795)		(2,529)		112

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	Three Months Ended March 31,				Year Ended December 31,
	2023		2022		2022		2021
Discretionary Cash Flow	$	49,689	$	63,913	$	189,421	$	219,747
Growth capital expenditures(4)		(43,777)		(63,713)		(211,035)		(163,845)
Proceeds from sale of assets		32		12