Kodiak Gas Services, Inc. (KGS)

Net profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	49,895	20,066	106,265	180,963	-2,185
Revenue	US$ in thousands	1,159,310	850,381	707,913	606,375	532,420
Net profit margin		4.30%	2.36%	15.01%	29.84%	-0.41%

December 31, 2024 calculation

Net profit margin = Net income ÷ Revenue
= $49,895K ÷ $1,159,310K
= 4.30%

The net profit margin of Kodiak Gas Services, Inc. demonstrates significant fluctuations over the observed period from December 31, 2020, to December 31, 2024. In 2020, the company reported a negative net profit margin of -0.41%, indicating a slight loss relative to its revenue during that fiscal year. This negative figure suggests that the company was not profitable at that point, potentially due to operational losses, high expenses, or other factors impacting profitability.

By 2021, the net profit margin experienced a substantial turnaround, rising sharply to 29.84%. This significant improvement signifies a notable increase in profitability, which may be attributable to enhanced operational efficiencies, increased revenue, cost reductions, or a combination thereof. Such a positive margin indicates robust profit generation capability within that fiscal year.

In 2022, the net profit margin declined to 15.01%, reflecting a reduction from the peak observed in 2021. This decrease suggests some pressures on profitability, possibly stemming from rising costs, changes in market conditions, or other operational challenges. Nonetheless, maintaining a double-digit profit margin still indicates a healthy profit relative to revenue.

The subsequent year, 2023, saw the margin drop further to 2.36%, approaching near break-even levels. This significant decline warrants attention as it signifies that the company’s profitability considerably diminished, potentially due to increased expenses, lower revenue, or external market factors impacting margins.

In 2024, the net profit margin experienced a modest recovery to 4.30%. Although an improvement from the previous year, this margin remains relatively low, indicating ongoing challenges in maintaining high profitability levels. The slight upward trend suggests some stabilization or operational adjustments, but overall, profitability remains subdued compared to the peak in 2021.

Overall, the trend in Kodiak Gas Services, Inc.'s net profit margin reveals a cycle of sharp growth followed by notable declines and slight recoveries. The initial profitability boost in 2021 was substantial but was subsequently followed by significant reductions. This pattern underscores the importance of investigating underlying factors such as market dynamics, operational efficiencies, and cost management to better understand the factors influencing the company's profit margins across this period.