Kodiak Gas Services (KGS) risk factors, FY2025 10-K

Kodiak Gas Services's FY2025 10-K, filed Feb 26, 2026, lists 43 risk factors in 6 groups. Against the prior year's 50: 4 new, 11 dropped, 18 substantially reworded.

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Risk factors listed
436 groups
New this year
4vs 50 last year
Dropped
11since the prior 10-K
Substantially reworded
18of those kept
Section length
13k wordsItem 1A

What the changes say

  • Acquisition risks introduced for Distributed Power Solutions LLC and $1.54B in new senior notes added to long-term debt.

What changed since the prior 10-K

New

  • NewRisks Related to Our Business and Our Industry

    Kodiak may have difficulty in completing the acquisition of Distributed Power Solutions, LLC, in successfully integrating it and/or in achieving the expected growth, cost savings and/or synergies from such acquisition

    Kodiak faces integration, synergy, and liability risks related to its pending acquisition of Distributed Power Solutions, LLC.

  • NewRisks Related to Regulatory Matters

    administrative, civil and criminal penalties and the issuance of injunctions delaying or prohibiting operations, which could in turn have an adverse impact on Kodiak’s customers and its business

    Customer noncompliance with environmental permits could lead to operational delays and penalties impacting Kodiak's business.

  • NewRisks Related to Regulatory Matters

    GHGs or that otherwise promote the use of renewable energy over fossil fuel energy sources could increase the cost of Kodiak’s services and, thereby, further reduce demand and adversely affect Kodiak’s sales volumes, revenues and margins

    Trade policy uncertainty and tariffs announced by the Trump administration could increase costs and reduce service demand.

  • NewRisks Related to Intellectual Property, Information Technology and Cybersecurity

    misappropriation or infringement by a third-party, it cannot assure you that it will be able to enforce its rights at a reasonable cost, or at all

    Third-party intellectual property claims could force Kodiak to pay damages, obtain costly licenses, or redesign its technology.

Dropped

  • DroppedRisks Related to Our Business and Our Industry

    have a materially adverse effect on Kodiak’s operating results or limit its operational flexibility. Further, our response to any union organizing efforts could negatively impact how our brand is perceived by our employees and customers and have material adverse effects on our business and future results

  • DroppedRisks Related to Regulatory Matters

    financial markets, whether impacting Kodiak’s customers and/or Kodiak’s business, may further adversely affect the demand for and price of Kodiak’s securities

  • DroppedRisks Related to Kodiak’s Relationship with EQT

    EQT controls a significant percentage of Kodiak’s voting power, and it is subject to contractual restrictions that may affect Kodiak Holdings’ exercise of its rights to approve corporate actions under the Kodiak Stockholders’ Agreement

  • DroppedRisks Related to Kodiak’s Relationship with EQT

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

  • DroppedRisks Related to Kodiak’s Relationship with EQT

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

  • DroppedRisks Related to Kodiak’s Relationship with EQT

    Kodiak, it may have less incentive to assist in Kodiak’s success and its affiliates serving as members of Kodiak’s Board may resign

  • DroppedRisks Related to Kodiak’s Indebtedness

    Kodiak has a significant amount of indebtedness. As of December 31, 2024, Kodiak’s total long-term debt was approximately $2.6 billion in aggregate principal amount, including $750 million principal amount of senior notes due 2029 which were issued February 2, 2024

  • DroppedRisks Related to Owning Kodiak Common Stock

    If securities or industry analysts do not publish research reports or publish unfavorable research about Kodiak’s business, the trading volume of Kodiak Common Stock could be negatively impacted and the price could decline resulting in decreased demand for Kodiak Common Stock by investors

  • DroppedRisks Related to Owning Kodiak Common Stock

    Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make Kodiak Common Stock less attractive to investors

  • DroppedRisks Related to Owning Kodiak Common Stock

    Kodiak is no longer an emerging growth company. If Kodiak 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

  • DroppedGeneral Risks

    Events outside of Kodiak’s control, including an epidemic or outbreak of an infectious disease or the threat thereof, could have a material adverse effect on Kodiak’s business, liquidity, financial condition, results of operations, cash flows and ability to pay dividends on Kodiak Common Stock

Reworded

  • 100% rewrittenRisks Related to Kodiak’s Indebtedness

    Kodiak’s substantial indebtedness could adversely affect its financial condition and impair Kodiak’s ability to operate its business

    Updated long-term debt figures to include $770 million of senior notes due 2033 and $630 million due 2035 issued in September 2025.

  • 88% rewrittenRisks Related to Our Business and Our Industry

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

    Clarified that no Kodiak employees are currently represented by a union while retaining risks of potential unionization and brand impact.

  • 80% rewrittenRisks Related to Regulatory Matters

    An unfavorable ruling in any such case could significantly impact Kodiak’s operations and could have an adverse impact on its financial condition

    Removed trailing text regarding trade policy uncertainty from the climate change risk factor.

  • 80% rewrittenRisks Related to Regulatory Matters

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

    Retained the endangered species act risk factor text with minor formatting adjustments.

  • 79% rewrittenRisks Related to Regulatory Matters

    New regulations or proposed modifications to existing regulations under the CAA may lead to adverse impacts on Kodiak’s business, financial condition and results of operations

    Updated EPA methane regulations to note the July 2025 proposal extending Subpart OOOO compliance deadlines to January 2027.

  • 74% rewrittenRisks Related to Intellectual Property, Information Technology and Cybersecurity

    Kodiak may be sued by third parties for infringement, misappropriation, dilution or other violation of their intellectual property or proprietary rights, any of which could adversely affect Kodiak’s business and results of operations

    Retained intellectual property infringement risk text with minor structural refinements.

  • 70% rewrittenRisks Related to Regulatory Matters

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

    Retained climate-related transitional risks text with minor stylistic changes.

  • 69% rewrittenRisks Related to Regulatory Matters

    Kodiak’s operations are subject to stringent environmental, health and safety regulations and changing expectations of other stakeholders with respect to sustainability practices, and changes in these regulations and/or expectations could increase Kodiak’s costs or liabilities

    Removed third-party contamination causation clause from CERCLA strict liability disclosures.

  • 53% rewrittenRisks Related to Intellectual Property, Information Technology and Cybersecurity

    Kodiak is subject to risks associated with disruptive technologies, including artificial intelligence

  • 51% rewrittenRisks Related to Our Business and Our Industry

    Kodiak has in the past been, and may in the future be, subject to sales tax audits in jurisdictions where Kodiak operates. As a result, Kodiak may incur material unanticipated sales tax liabilities

  • 45% rewrittenRisks 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 Kodiak’s business and services or the prices Kodiak charges for Kodiak’s business and services, which could result in a decrease in Kodiak’s revenues

  • 34% rewrittenRisks Related to Regulatory Matters

    A climate-related decrease in demand for natural gas and oil could negatively affect Kodiak’s business

  • 31% rewrittenGeneral Risks

    Inflation may adversely affect Kodiak by increasing costs beyond what it can recover through price increases and limit its ability to enter into future traditional debt financing

  • 29% rewrittenRisks Related to Kodiak’s Indebtedness

    Despite Kodiak’s current level of indebtedness, Kodiak and its subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to Kodiak’s financial condition described above

  • 28% rewrittenGeneral Risks

    Tax legislation and administrative initiatives or challenges to Kodiak’s tax positions could adversely affect its results of operations and financial condition

  • 26% rewrittenRisks Related to Intellectual Property, Information Technology and Cybersecurity

    Kodiak is subject to significant legal and reputational risks and expenses relating to the privacy, use and security of employee and customer information, which could negatively affect Kodiak's business, financial condition and results of operations

  • 21% rewrittenRisks Related to Kodiak’s Indebtedness

    Kodiak’s variable rate indebtedness subjects it to interest rate risk, which could cause its debt service obligations to increase significantly

  • 20% rewrittenGeneral Risks

    A financial crisis or deterioration in general economic, business or industry conditions could materially adversely affect Kodiak’s results of operations, financial condition and ability to pay dividends on Kodiak Common Stock

All 43 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Our Industry

  1. 01A long-term reduction in the demand for, or production of, natural gas or oil could adversely affect the demand for Kodiak’s business and services or the prices Kodiak charges for Kodiak’s business and services, which could result in a decrease in Kodiak’s revenues45% rewritten
  2. 02The loss of one or more of Kodiak’s key customers and/or the deterioration of the financial condition of any of its customers would result in a decrease in Kodiak’s revenues and could adversely affect its financial results and may have a material adverse effect on Kodiak’s financial condition
  3. 03Kodiak may have difficulty in completing the acquisition of Distributed Power Solutions, LLC, in successfully integrating it and/or in achieving the expected growth, cost savings and/or synergies from such acquisitionNew
  4. 04Kodiak faces significant competition that may cause it to lose market share and have a material adverse effect on its financial condition
  5. 05Kodiak’s 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, which may have a material adverse effect on Kodiak’s business
  6. 06The majority of Kodiak’s operations are located in the Permian Basin and Eagle Ford Shale, making Kodiak vulnerable to risks associated with operating in limited geographic areas, which could have an impact on its revenues
  7. 07Kodiak may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that Kodiak may require, which could have a material adverse effect on its business, results of operations and financial conditions
  8. 08Kodiak’s fleet may require additional operating or capital expenses to maintain over time, which could adversely impact its financial results
  9. 09Impairment in the carrying value of long-lived assets, including impairment of goodwill and other intangible assets, could reduce Kodiak’s earnings
  10. 10Kodiak has in the past been, and may in the future be, subject to sales tax audits in jurisdictions where Kodiak operates. As a result, Kodiak may incur material unanticipated sales tax liabilities51% rewritten
  11. 11Kodiak might be unable to employ or retain qualified technical personnel, which could hamper its present operations, limit its ability to grow or increase its costs
  12. 12Any unionization efforts or labor regulation changes in certain jurisdictions in which Kodiak operates could divert management’s attention and could have a materially adverse effect on Kodiak’s operating results or limit Kodiak’s operational flexibility88% rewritten
  13. 13Kodiak’s operations entail inherent risks that may result in interruption of Kodiak’s operations and/or substantial liability. Kodiak does not insure against all potential losses and could be seriously harmed by unexpected liabilities
  14. 14If Kodiak does not satisfy its mechanical availability guarantee, a customer has the ability to terminate its contracts
  15. 15Acts or threats of terrorism, acts of war, social unrest, cyber or physical security attacks, and other malicious acts of individuals or groups seeking to disrupt Kodiak’s operations could adversely impact Kodiak’s business, financial condition, and results of operations

Risks Related to Regulatory Matters

  1. 16Kodiak’s operations are subject to stringent environmental, health and safety regulations and changing expectations of other stakeholders with respect to sustainability practices, and changes in these regulations and/or expectations could increase Kodiak’s costs or liabilities69% rewritten
  2. 17administrative, civil and criminal penalties and the issuance of injunctions delaying or prohibiting operations, which could in turn have an adverse impact on Kodiak’s customers and its businessNew
  3. 18New regulations or proposed modifications to existing regulations under the CAA may lead to adverse impacts on Kodiak’s business, financial condition and results of operations79% rewritten
  4. 19A climate-related decrease in demand for natural gas and oil could negatively affect Kodiak’s business34% rewritten
  5. 20Kodiak’s business is subject to climate-related transitional risks, including evolving climate change legislation, regulatory initiatives and stakeholder pressures, which could result in increased operating expenses and capital costs, financial risks and potential reduction in demand for Kodiak’s services70% rewritten
  6. 21An unfavorable ruling in any such case could significantly impact Kodiak’s operations and could have an adverse impact on its financial condition80% rewritten
  7. 22GHGs or that otherwise promote the use of renewable energy over fossil fuel energy sources could increase the cost of Kodiak’s services and, thereby, further reduce demand and adversely affect Kodiak’s sales volumes, revenues and marginsNew
  8. 23Regulatory initiatives relating to the protection of endangered or threatened species in the United States could have an adverse impact on Kodiak’s and its customers’ ability to expand operations80% rewritten
  9. 24Kodiak may be involved in legal proceedings that could result in substantial liabilities

Risks Related to Intellectual Property, Information Technology and Cybersecurity

  1. 25Kodiak may be sued by third parties for infringement, misappropriation, dilution or other violation of their intellectual property or proprietary rights, any of which could adversely affect Kodiak’s business and results of operations74% rewritten
  2. 26misappropriation or infringement by a third-party, it cannot assure you that it will be able to enforce its rights at a reasonable cost, or at allNew
  3. 27Kodiak’s reliance on third-party components for use in its IT systems could result in delays in service or disrupt its business
  4. 28Kodiak is subject to significant legal and reputational risks and expenses relating to the privacy, use and security of employee and customer information, which could negatively affect Kodiak's business, financial condition and results of operations26% rewritten
  5. 29Kodiak has experienced cybersecurity incidents or IT system disruptions in the past, and cybersecurity breaches or IT system disruptions may adversely affect Kodiak’s business in the future
  6. 30Kodiak is subject to risks associated with disruptive technologies, including artificial intelligence53% rewritten

Risks Related to Kodiak’s Indebtedness

  1. 31Kodiak’s substantial indebtedness could adversely affect its financial condition and impair Kodiak’s ability to operate its business100% rewritten
  2. 32Kodiak may not be able to generate sufficient cash to service all of its indebtedness and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful. Kodiak’s ability to generate cash depends on many factors beyond Kodiak’s control
  3. 33The terms of the ABL Credit Agreement and the indentures governing Kodiak’s senior notes restrict Kodiak’s current and future operations, particularly Kodiak's ability to respond to changes or to take certain actions
  4. 34Kodiak’s variable rate indebtedness subjects it to interest rate risk, which could cause its debt service obligations to increase significantly21% rewritten
  5. 35Despite Kodiak’s current level of indebtedness, Kodiak and its subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to Kodiak’s financial condition described above29% rewritten

Risks Related to Owning Kodiak Common Stock

  1. 36The Kodiak Charter and Kodiak Bylaws contain provisions that could delay, discourage or prevent a takeover attempt even if a takeover might be beneficial to Kodiak’s stockholders, and such provisions may adversely affect the market price of Kodiak Common Stock
  2. 37Kodiak cannot assure you that it will be able to pay dividends on the Kodiak Common Stock
  3. 38Due to the foregoing, Kodiak cannot assure you that it will be able to pay a dividend in the future or continue to pay a dividend after it commences paying dividends
  4. 39Terms of subsequent financings may adversely impact stockholder equity

General Risks

  1. 40A financial crisis or deterioration in general economic, business or industry conditions could materially adversely affect Kodiak’s results of operations, financial condition and ability to pay dividends on Kodiak Common Stock20% rewritten
  2. 41Inflation may adversely affect Kodiak by increasing costs beyond what it can recover through price increases and limit its ability to enter into future traditional debt financing31% rewritten
  3. 42Kodiak’s ability to use net operating losses (“NOLs”) to offset future income may be limited
  4. 43Tax legislation and administrative initiatives or challenges to Kodiak’s tax positions could adversely affect its results of operations and financial condition28% rewritten

Other Kodiak Gas Services 10-Ks

  • FY2024 10-K risk factors
    50 risks

    Natural gas compression demand and commodity price cycles heavily drive business success and revenue.

    Filed Mar 07, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.