NGS Reports Third Quarter 2026 Financial and Operating Results; Increases Quarterly Dividend and Provides Updated Guidance
Rental revenue rose 41.9% year over year, while net income declined and operating cash flow fell slightly.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Natural Gas Services Group (NYSE: NGS) reported third-quarter 2026 revenue of $61.3 million, supported by Flatrock operations and rental growth. Revenue rose 41.1% year over year; rental revenue increased 41.9% to $58.9 million. Net income was $5.6 million, or $0.43 per diluted share, versus $5.8 million, or $0.46, a year earlier. Adjusted EBITDA, a non-GAAP earnings measure, rose 42.2% to $29.6 million.
The company raised its 2026 adjusted EBITDA outlook to $105 million–$108 million from $103 million–$108 million. Its quarterly dividend increased 6.7% to $0.16 per share, payable December 2 to holders of record November 19, 2026. Growth capital spending is expected at $60 million–$75 million, excluding acquisition consideration. Operating cash flow was $16.7 million against $25.9 million in capital expenditures. An agreement to sell the Tulsa fabrication facility for $4.75 million is expected to close by November's end.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.2026 adjusted EBITDA guidance increased to $105 million–$108 million from $103 million–$108 million.
- Moderate pointThird-quarter revenue rose 41.1% year over year to $61.3 million.
- Moderate pointRental revenue increased 41.9% year over year and 19.1% sequentially to $58.9 million.
- Moderate pointAdjusted EBITDA increased 42.2% year over year and 18.2% sequentially to $29.6 million.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Quarterly dividend increased 6.7% to $0.16, up 60% since initiation; payment is December 2, 2026.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Tulsa facility sale agreement provides for $4.75 million; closing is expected by the end of November 2026. 1.3% of market cap
- Moderate pointUtilized horsepower increased 30.0% year over year to 683,952 at September 30, 2026.
- Moderate point. Forward-looking: it has not happened yet and may not happen.2026 growth capital spending is planned at $60 million–$75 million, excluding acquisition consideration, for large-horsepower units.
8 minor points
- Minor pointDividends returned $5.2 million to shareholders year to date.
- Minor pointGross margin increased to $23.3 million from $16.7 million in third-quarter 2025.
- Minor pointAdjusted gross margin, excluding depreciation, increased to $36.9 million from $25.8 million a year earlier.
- Minor pointOperating income increased to $13.7 million from $10.8 million in third-quarter 2025.
- Minor pointAdjusted net income rose to $6.2 million, or $0.48 diluted, versus $5.8 million, or $0.46, a year earlier.
- Minor pointOrganic fleet additions exceeded 20,000 horsepower in the quarter, reaching approximately 43,000 year to date.
- Minor pointAftermarket services revenue increased to $1.459 million from $1.428 million in third-quarter 2025.
- Minor pointCredit availability was $139.8 million at September 30, 2026; all credit-agreement covenants were met.
Negative
- Moderate pointRevolving credit debt totaled $340.0 million at September 30, 2026, with leverage of 2.80x.
- Minor pointNet income fell year over year to $5.6 million from $5.8 million, but rose sequentially from $3.8 million.
- Minor pointDiluted earnings per share fell to $0.43 from $0.46 a year earlier, but rose sequentially from $0.30.
- Minor pointOperating cash flow slipped to $16.7 million from $16.8 million in third-quarter 2025.
- Minor pointThird-quarter capital expenditures totaled $25.9 million: $20.6 million for growth and $5.3 million for maintenance.
5 minor points
- Minor pointFlatrock transaction and integration expenses totaled $819,000 in third-quarter 2026.
- Minor pointHorsepower utilization declined sequentially to 87.8% from 88.3%, while exceeding 84.1% a year earlier.
- Minor pointUnit utilization declined sequentially to 71.9% from 72.2%, while exceeding 65.3% a year earlier.
- Minor pointSales adjusted gross margin turned negative at $89,000, versus positive $23,000 in third-quarter 2025.
- Minor point. Forward-looking: it has not happened yet and may not happen.Inflationary pressures are expected during the remainder of 2026.
News Explained
As of
Key Figures
- Total revenue
- $61.3 million
- Q3 2026; up 41.1% year over year
- Net income
- $5.6 million
- Q3 2026; compared with $5.8 million in Q3 2025
- Adjusted EBITDA
- $29.6 million
- Q3 2026; up 42.2% year over year
- 2026 Adjusted EBITDA guidance
- $105 million to $108 million
- Raised from prior guidance of $103 million to $108 million
- Quarterly dividend
- $0.16 per share
- Q4 2026; increased from $0.15 per share
- Tulsa facility sale
- $4.75 million
- Sale expected to be completed by the end of November 2026
- Growth capital expenditure guidance
- $60 million to $75 million
- FY 2026; guidance narrowed
- Maintenance capital expenditure guidance
- $15 million to $19 million
- FY 2026; guidance unchanged
Previous Dividends,earnings Reports
-
Raised 2026 Adjusted EBITDA guidance and declared a $0.15 quarterly dividend.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
non-gaap financial measure financial
revolving credit facility financial
fixed charge coverage ratio financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
SOUTHLAKE, Texas, Nov. 09, 2026 (GLOBE NEWSWIRE) -- Natural Gas Services Group, Inc. (“NGS” or the “Company”) (NYSE: NGS), a leading provider of natural gas compression equipment, technology, and services to the energy industry, today announced financial results for the three months ended September 30, 2026.
Third Quarter 2026 Highlights
- Rental revenue of
$58.9 million for the third quarter of 2026, representing a41.9% year-over-year increase and a19.1% sequential increase compared to the second quarter of 2026. - Net income of
$5.6 million , or$0.43 per diluted share, for the third quarter of 2026, compared to$5.8 million , or$0.46 per diluted share, for the third quarter of 2025 and$3.8 million , or$0.30 per diluted share, for the second quarter of 2026. - Adjusted Net Income(1) of
$6.2 million , or$0.48 per diluted share, for the third quarter of 2026, compared to$5.8 million , or$0.46 per diluted share, for the third quarter of 2025. - Adjusted EBITDA(1) of
$29.6 million for the third quarter of 2026, representing a42.2% year-over-year increase and an18.2% sequential increase, driven by the first full quarter of Flatrock operations and continued organic growth. - Returned
$5.2 million to shareholders through dividends year to date, including the third-quarter dividend of$0.15 per share, and increased the fourth-quarter dividend to$0.16 per share.
Management Commentary and Outlook
“NGS delivered another record quarter, marking the first full quarter of financial contribution from Flatrock,” said Justin Jacobs, Chief Executive Officer. “During the third quarter, rental revenue increased
“Integration of Flatrock continues to advance, with significant operational progress made to date. The addition of Flatrock is accelerating several of our strategic initiatives, particularly efforts to improve operating efficiency and leverage the capabilities of our combined organization. With a full quarter of Flatrock contribution, rental adjusted gross margin remained strong at
“We continue to execute against our four strategic growth and value drivers. During the third quarter, we added more than 20,000 horsepower organically, bringing our year-to-date additions to approximately 43,000 horsepower. More recently, we entered into an agreement for the sale of our Tulsa fabrication facility for
“Our strong operating performance supports the increase in our full-year 2026 Adjusted EBITDA guidance to
Corporate Guidance — 2026 Outlook
The Company now expects 2026 Adjusted EBITDA of
| Outlook | |
| FY 2026 Adjusted EBITDA | |
| FY 2026 Growth Capital Expenditures | |
| FY 2026 Maintenance Capital Expenditures | |
The Company has narrowed its 2026 growth capital expenditure guidance to
The Company remains committed to disciplined capital allocation and investing in assets that generate attractive long-term returns. The Company's operating cash flow,
Shareholder Returns
Quarterly Dividend: Our Board of Directors recently declared a quarterly cash dividend of
Share Repurchase Program: The Company also has a
2026 Third Quarter Financial Results
Revenue: Total revenue for the three months ended September 30, 2026, increased
Gross Margins and Adjusted Gross Margins(1): Total gross margins, including depreciation expense, increased to
Operating Income: Operating income for the three months ended September 30, 2026, was
Net Income and Adjusted Net Income(1): Net income for the three months ended September 30, 2026, was
Cash Flows: For the three months ended September 30, 2026, cash flows provided by operating activities were
Adjusted EBITDA(1): Adjusted EBITDA increased
Debt: Outstanding debt on our revolving credit facility as of September 30, 2026, was
| (1) | For a definition of Adjusted Gross Margin, Adjusted Net Income and Adjusted EBITDA and reconciliation to their most directly comparable financial measures calculated and presented in accordance with GAAP, please see “Non-GAAP Financial Measures - Adjusted Gross Margin,” “Non-GAAP Financial Measures - Adjusted Net Income” and “Non-GAAP Financial Measures - Adjusted EBITDA” below. |
Selected data (unaudited): The tables below show revenue by product line, gross margin and adjusted gross margin for the trailing five quarters. Adjusted gross margin is the difference between revenue and cost of sales, exclusive of depreciation.
| Revenues | ||||||||||||||
| Three months ended | ||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||
| (in thousands) | ||||||||||||||
| Rental | $ | 41,502 | $ | 44,334 | $ | 47,115 | $ | 49,433 | $ | 58,886 | ||||
| Sales | 471 | 844 | 491 | 980 | 911 | |||||||||
| Aftermarket services | 1,428 | 971 | 861 | 988 | 1,459 | |||||||||
| Total | $ | 43,401 | $ | 46,149 | $ | 48,467 | $ | 51,401 | $ | 61,256 | ||||
| Gross Margin | ||||||||||||||||||
| Three months ended | ||||||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||||||
| (in thousands) | ||||||||||||||||||
| Rental | $ | 16,508 | $ | 16,346 | $ | 19,991 | $ | 19,597 | $ | 23,185 | ||||||||
| Sales | (75 | ) | (134 | ) | (250 | ) | 200 | (183 | ) | |||||||||
| Aftermarket services | 244 | 283 | 342 | 264 | 325 | |||||||||||||
| Total | $ | 16,677 | $ | 16,495 | $ | 20,083 | $ | 20,061 | $ | 23,327 | ||||||||
| Adjusted Gross Margin (1) | |||||||||||||||||
| Three months ended | |||||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | |||||||||||||
| (in thousands) | |||||||||||||||||
| Rental | $ | 25,532 | $ | 25,940 | $ | 30,025 | $ | 30,216 | $ | 36,603 | |||||||
| Sales | 23 | (14 | ) | (133 | ) | 316 | (89 | ) | |||||||||
| Aftermarket services | 273 | 304 | 356 | 279 | 338 | ||||||||||||
| Total | $ | 25,828 | $ | 26,230 | $ | 30,248 | $ | 30,811 | $ | 36,852 | |||||||
| Adjusted Gross Margin % | ||||||||||||||
| Three months ended | ||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||
| Rental | 61.5 | % | 58.5 | % | 63.7 | % | 61.1 | % | 62.2 | % | ||||
| Sales | 4.9 | % | (1.7 | )% | (27.1 | )% | 32.2 | % | (9.8 | )% | ||||
| Aftermarket services | 19.1 | % | 31.3 | % | 41.3 | % | 28.2 | % | 23.2 | % | ||||
| Total | 59.5 | % | 56.8 | % | 62.4 | % | 59.9 | % | 60.2 | % | ||||
| Operating Statistics (at end of period): | ||||||||||||||
| Three months ended | ||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||
| Horsepower Utilized | 526,015 | 562,676 | 574,969 | 669,919 | 683,952 | |||||||||
| Total Horsepower | 625,686 | 662,542 | 661,872 | 758,526 | 779,093 | |||||||||
| Horsepower Utilization | 84.1 | % | 84.9 | % | 86.9 | % | 88.3 | % | 87.8 | % | ||||
| Units Utilized | 1,235 | 1,245 | 1,243 | 1,521 | 1,529 | |||||||||
| Total Units | 1,891 | 1,914 | 1,801 | 2,108 | 2,127 | |||||||||
| Unit Utilization | 65.3 | % | 65.0 | % | 69.0 | % | 72.2 | % | 71.9 | % | ||||
Non-GAAP Financial Measure - Adjusted Net Income: “Adjusted Net Income” is a non-GAAP financial measure that we define as net income adjusted for nonrecurring interest income attributable to income tax refunds, impairments, nonrecurring restructuring charges, including severance, and costs directly attributable to strategic transactions and integration expenses, including for the Flatrock Acquisition, and income tax effects of these adjustments. We believe that Adjusted Net Income and Adjusted Net Income per share amounts provide meaningful supplemental information regarding our operational performance on a recurring basis.
The following tables reconcile our net income and diluted earnings per share, the most directly comparable GAAP financial measure, to Adjusted Net Income and Adjusted Net Income per diluted share:
| Three months ended | |||||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | |||||||||||||
| (in thousands) | |||||||||||||||||
| Net income | $ | 5,784 | $ | 4,102 | $ | 6,763 | $ | 3,830 | $ | 5,610 | |||||||
| Interest income | — | (2,444 | ) | — | (36 | ) | — | ||||||||||
| Impairments | — | 2,600 | — | — | — | ||||||||||||
| Strategic transaction costs and integration expenses | — | — | — | 3,271 | 819 | ||||||||||||
| Income tax effects of adjustments | — | (47 | ) | — | (1,001 | ) | (221 | ) | |||||||||
| Adjusted Net Income | $ | 5,784 | $ | 4,211 | $ | 6,763 | $ | 6,064 | $ | 6,208 | |||||||
| Net income per diluted share | $ | 0.46 | $ | 0.32 | $ | 0.53 | $ | 0.30 | $ | 0.43 | |||||||
| Adjusted Net Income per diluted share | $ | 0.46 | $ | 0.33 | $ | 0.53 | $ | 0.47 | $ | 0.48 | |||||||
Non-GAAP Financial Measure - Adjusted Gross Margin: “Adjusted Gross Margin” as defined by us is total revenue less costs of revenues (excluding depreciation and amortization expense). Adjusted Gross Margin is included as a supplemental disclosure because it is a primary measure used by our management as it represents the results of revenue and costs (excluding depreciation and amortization expense), which are key components of our operations. Adjusted Gross Margin differs from gross margin, in that gross margin includes depreciation and amortization expense. We believe Adjusted Gross Margin is important because it focuses on the current operating performance of our operations and excludes the impact of the prior historical costs of the assets acquired or constructed that are utilized in those operations. Depreciation and amortization expense does not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs from current operating activity. Rather, depreciation and amortization expense reflects the systematic allocation of historical property and equipment costs over their estimated useful lives.
Adjusted Gross Margin has certain material limitations associated with its use as compared to gross margin. These limitations are primarily due to the exclusion of depreciation and amortization expense, which is material to our results of operations. Because we use capital assets, depreciation and amortization expense is a necessary element of our costs and our ability to generate revenue. In order to compensate for these limitations, management uses this non-GAAP measure as a supplemental measure to other GAAP results to provide a more complete understanding of our performance. As an indicator of our operating performance, Adjusted Gross Margin should not be considered an alternative to, or more meaningful than, gross margin as determined in accordance with GAAP. Our Adjusted Gross Margin may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted Gross Margin in the same manner.
The following table calculates our gross margin, the most directly comparable GAAP financial measure, and reconciles it to Adjusted Gross Margin:
| Three months ended | |||||||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | |||||||||||||||
| (in thousands) | |||||||||||||||||||
| Total revenue | $ | 43,401 | $ | 46,149 | $ | 48,467 | $ | 51,401 | $ | 61,256 | |||||||||
| Costs of revenue, exclusive of depreciation | (17,573 | ) | (19,919 | ) | (18,219 | ) | (20,590 | ) | (24,404 | ) | |||||||||
| Depreciation allocable to costs of revenue | (9,151 | ) | (9,735 | ) | (10,165 | ) | (10,750 | ) | (13,525 | ) | |||||||||
| Gross margin | 16,677 | 16,495 | 20,083 | 20,061 | 23,327 | ||||||||||||||
| Depreciation allocable to costs of revenue | 9,151 | 9,735 | 10,165 | 10,750 | 13,525 | ||||||||||||||
| Adjusted Gross Margin | $ | 25,828 | $ | 26,230 | $ | 30,248 | $ | 30,811 | $ | 36,852 | |||||||||
Non-GAAP Financial Measures - Adjusted EBITDA: “Adjusted EBITDA” is a non-GAAP financial measure that we define as net income (loss) before interest, taxes, depreciation and amortization, amortization of capitalized technology implementation costs reported in selling, general and administrative expense, as well as an increase in inventory allowance, impairments, retirement of rental equipment, nonrecurring restructuring charges including severance, costs directly attributable to strategic transactions and integration, including the Flatrock Acquisition and non-cash equity-classified stock-based compensation expenses. This term, as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. However, management believes Adjusted EBITDA is useful to an investor in evaluating our operating performance because: (i) it is widely used by investors in the energy industry to measure a company’s operating performance without regard to items excluded from the calculation of Adjusted EBITDA, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors; (ii) it helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure and asset base from our operating structure; and (iii) it is used by our management for various purposes, including as a measure of operating performance, in presentations to our Board of Directors, and as a basis for strategic planning and forecasting.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows: (i) Adjusted EBITDA does not reflect all our cash expenditures, future requirements for capital expenditures, or contractual commitments; (ii) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (iii) Adjusted EBITDA does not reflect the cash requirements necessary to service interest or principal payments on our debt and finance leases; and (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any capital expenditures for such replacements.
The following table reconciles our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:
| Three months ended | ||||||||||||||||
| September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||||
| (in thousands) | ||||||||||||||||
| Net income | $ | 5,784 | $ | 4,102 | $ | 6,763 | $ | 3,830 | $ | 5,610 | ||||||
| Interest expense | 3,414 | 3,738 | 4,028 | 4,442 | 6,080 | |||||||||||
| Interest income | — | (2,444 | ) | — | (36 | ) | — | |||||||||
| Income tax expense | 1,779 | 1,745 | 2,156 | 1,715 | 2,067 | |||||||||||
| Depreciation and amortization | 9,249 | 9,802 | 10,325 | 10,979 | 13,763 | |||||||||||
| Amortization of technology implementation costs | — | — | — | — | 274 | |||||||||||
| Impairments | — | 2,600 | — | — | — | |||||||||||
| Inventory allowance | — | 1,053 | — | — | — | |||||||||||
| Retirement of rental equipment | — | — | 412 | — | — | |||||||||||
| Strategic transaction costs and integration expenses | — | — | — | 3,271 | 819 | |||||||||||
| Stock-based compensation | 612 | 576 | 579 | 851 | 1,009 | |||||||||||
| Adjusted EBITDA | $ | 20,838 | $ | 21,172 | $ | 24,263 | $ | 25,052 | $ | 29,622 | ||||||
Conference Call Details: The Company will host a conference call to review its third-quarter results on Tuesday, November 10, 2026, at 8:30 a.m. ET (7:30 a.m. CT). To join the conference call, please visit the Investor Relations section of the Company’s website at www.ngsgi.com or dial in at (800) 550-9745 and enter conference ID 167298 at least five minutes prior to the scheduled start time. Callers wishing to participate in the question-and-answer session must use the dial-in number provided. A replay of the conference call will be available on the Company’s website following its conclusion.
About Natural Gas Services Group, Inc. (NGS): Natural Gas Services Group is a leading provider of natural gas and electric compression equipment, technology, and services to the energy industry. The Company rents, designs, installs, services, and maintains natural gas and electric compressors for oil and natural gas production and processing facilities, using equipment from OEM suppliers with fabrication and assembly completed by third-party contractors. The Company is headquartered in Southlake, Texas, with administrative offices in Midland, Texas, and service facilities located in major oil and natural gas producing basins in the U.S. Additional information can be found at www.ngsgi.com.
For More Information, Contact:
Greg Wright, Investor Relations
(432) 262-2700
IR@ngsgi.com
www.ngsgi.com
Forward-Looking Statements
This Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and information pertaining to us, our industry and the oil and gas industry that is based on the beliefs of our management, as well as assumptions made by and information currently available to our management. All statements, other than statements of historical facts contained in this Release, including statements regarding our future financial position, growth strategy, budgets, projected costs, plans and objectives of management for future operations, are forward-looking statements. We use the words “may,” “will,” “expect,” “anticipate,” “estimate,” “guidance,” “forecast,” “believe,” “might,” “continue,” “intend,” “plan,” “project,” “budget” and other similar words to identify forward-looking statements.
These forward–looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors that could cause actual results to differ materially from such statements, many of which are outside the control of the Company. Forward–looking information includes, but is not limited to statements regarding: guidance or estimates related to Adjusted EBITDA growth, projected capital expenditures, returns on invested capital, fundamentals of the compression industry and related oil and gas industry, valuations, compressor demand assumptions and overall industry outlook, the anticipated benefits of the Flatrock Acquisition, expected synergies from the acquisition, the expectation that the acquisition will be immediately and meaningfully accretive, and the ability of the Company to capitalize on any potential opportunities.
While the Company believes that the assumptions concerning future events are reasonable, investors are cautioned that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Some of these factors that could cause results to differ materially from those indicated by such forward-looking statements include, but are not limited to:
- conditions in the oil and gas industry, including the supply and demand for oil and gas and volatility in the prices of oil and gas;
- changes in general economic and financial conditions, inflationary pressures, the potential for economic recession in the U.S., tariffs and trade restrictions, including the imposition of new and higher tariffs on imported goods and retaliatory tariffs implemented by other countries on U.S. goods, and the potential effects on our financial condition, results of operations and cash flows;
- our reliance on major customers;
- failure of projected organic growth due to adverse changes in the oil and gas industry, including depressed oil and gas prices, oppressive environmental regulations and competition;
- integration of the Flatrock Acquisition with our business;
- our inability to achieve increased utilization of assets, including rental fleet utilization and monetizing other non-cash balance sheet assets;
- failure of our customers to continue to rent equipment after expiration of the primary rental term;
- our ability to economically develop and deploy new technologies and services, including technology to comply with health and environmental laws and regulations;
- failure to achieve accretive financial results in connection with any acquisitions we may make;
- fluctuations in interest rates;
- our ability to make dividends, distributions and share repurchases;
- changes in regulation or prohibition of new or current well completion techniques;
- competition among the various providers of compression services and products;
- changes in safety, health and environmental regulations;
- changes in economic or political conditions in the markets in which we operate;
- the inherent risks associated with our operations, such as equipment defects, malfunctions, natural disasters and adverse changes in customer, employee and supplier relationships;
- our inability to comply with covenants in our debt agreements and the decreased financial flexibility associated with our debt;
- inability to finance our future capital requirements and availability of financing;
- cybersecurity threats, including increased use of artificial intelligence and other emerging technologies;
- capacity availability, costs and performance of our outsourced compressor fabrication providers and overall inflationary pressures;
- impacts of world events, such as acts of terrorism, the conflicts in Iran, Ukraine, Venezuela and in the greater Middle East, and significant economic disruptions and adverse consequences resulting from possible long-term effects of potential pandemics and other public health crises; and
- general economic conditions.
In addition, these forward-looking statements are subject to other various risks and uncertainties, including without limitation those set forth in the Company’s filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2026. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.
| NATURAL GAS SERVICES GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value) (unaudited) | |||||||
| September 30, 2026 | December 31, 2025 | ||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 708 | $ | — | |||
| Trade accounts receivable, net of provision for credit losses | 24,600 | 18,497 | |||||
| Inventory, net of allowance for obsolescence | 30,533 | 20,647 | |||||
| Income taxes receivable and prepayments | 173 | 14,056 | |||||
| Prepaid expenses and other | 2,258 | 1,696 | |||||
| Assets held for sale | 12,506 | 2,227 | |||||
| Total current assets | 70,778 | 57,123 | |||||
| Long-term inventory, net of allowance for obsolescence | — | — | |||||
| Rental equipment, net of accumulated depreciation | 634,472 | 498,525 | |||||
| Property and equipment, net of accumulated depreciation | 11,759 | 20,519 | |||||
| Goodwill | 825 | — | |||||
| Intangible assets, net of accumulated amortization | 1,082 | — | |||||
| Other assets | 14,098 | 10,619 | |||||
| Total assets | $ | 733,014 | $ | 586,786 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ | 10,592 | $ | 14,048 | |||
| Accrued liabilities | 18,303 | 10,462 | |||||
| Total current liabilities | 28,895 | 24,510 | |||||
| Long-term debt | 340,000 | 230,000 | |||||
| Deferred income taxes | 58,875 | 52,530 | |||||
| Other long-term liabilities | 6,027 | 5,030 | |||||
| Total liabilities | 433,797 | 312,070 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ Equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock, 30,000 shares authorized, par value | 142 | 138 | |||||
| Additional paid-in capital | 134,346 | 120,811 | |||||
| Retained earnings | 179,733 | 168,771 | |||||
| Treasury shares, at cost, 1,310 shares for each of the periods presented, respectively | (15,004 | ) | (15,004 | ) | |||
| Total stockholders’ equity | 299,217 | 274,716 | |||||
| Total liabilities and stockholders’ equity | $ | 733,014 | $ | 586,786 | |||
| NATURAL GAS SERVICES GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except earnings per share) (unaudited) | |||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue: | |||||||||||||||
| Rental | $ | 58,886 | $ | 41,502 | $ | 155,434 | $ | 119,992 | |||||||
| Sales | 911 | 471 | 2,382 | 3,148 | |||||||||||
| Aftermarket services | 1,459 | 1,428 | 3,308 | 3,026 | |||||||||||
| Total revenue | 61,256 | 43,401 | 161,124 | 126,166 | |||||||||||
| Cost of revenues (excluding depreciation and amortization): | |||||||||||||||
| Rental | 22,283 | 15,970 | 58,590 | 46,338 | |||||||||||
| Sales | 1,000 | 448 | 2,288 | 3,375 | |||||||||||
| Aftermarket services | 1,121 | 1,155 | 2,335 | 2,146 | |||||||||||
| Total cost of revenues (excluding depreciation and amortization) | 24,404 | 17,573 | 63,213 | 51,859 | |||||||||||
| Selling, general and administrative expenses | 9,370 | 5,870 | 25,789 | 16,702 | |||||||||||
| Depreciation and amortization | 13,763 | 9,249 | 35,067 | 26,854 | |||||||||||
| Inventory allowance | — | — | — | 61 | |||||||||||
| Retirement of rental equipment | — | — | 412 | 728 | |||||||||||
| Gain on disposition of assets, net | (27 | ) | (46 | ) | (98 | ) | (224 | ) | |||||||
| Total operating costs and expenses | 47,510 | 32,646 | 124,383 | 95,980 | |||||||||||
| Operating income | 13,746 | 10,755 | 36,741 | 30,186 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense | (6,080 | ) | (3,414 | ) | (14,550 | ) | (9,827 | ) | |||||||
| Interest income | — | — | 36 | — | |||||||||||
| Other income (expense), net | 11 | 222 | (86 | ) | 325 | ||||||||||
| Total other expense, net | (6,069 | ) | (3,192 | ) | (14,600 | ) | (9,502 | ) | |||||||
| Income before income taxes | 7,677 | 7,563 | 22,141 | 20,684 | |||||||||||
| Provision for income taxes | (2,067 | ) | (1,779 | ) | (5,938 | ) | (4,858 | ) | |||||||
| Net income | $ | 5,610 | $ | 5,784 | $ | 16,203 | $ | 15,826 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.43 | $ | 0.46 | $ | 1.27 | $ | 1.26 | |||||||
| Diluted | $ | 0.43 | $ | 0.46 | $ | 1.26 | $ | 1.25 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 12,902 | 12,544 | 12,718 | 12,529 | |||||||||||
| Diluted | 13,043 | 12,685 | 12,872 | 12,679 | |||||||||||
| NATURAL GAS SERVICES GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
| Net income | $ | 5,610 | $ | 5,784 | $ | 16,203 | $ | 15,826 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 13,763 | 9,249 | 35,067 | 26,854 | |||||||||||
| Inventory allowance | — | — | — | 61 | |||||||||||
| Retirement of rental equipment | — | — | 412 | 728 | |||||||||||
| Gain on the disposition of assets, net | (27 | ) | (46 | ) | (98 | ) | (224 | ) | |||||||
| Amortization of technology implementation costs | 274 | — | 274 | — | |||||||||||
| Amortization of debt issuance costs | 502 | 332 | 1,197 | 838 | |||||||||||
| Deferred income taxes | 2,096 | 1,789 | 6,028 | 4,800 | |||||||||||
| Stock-based compensation | 1,009 | 612 | 2,439 | 1,550 | |||||||||||
| Provision for credit losses | 21 | 33 | 109 | 241 | |||||||||||
| (Gain) loss on company owned life insurance | 31 | (40 | ) | 134 | (57 | ) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||||||
| Trade accounts receivable | (2,596 | ) | 99 | (3,459 | ) | 1,775 | |||||||||
| Inventory | (1,423 | ) | (3,174 | ) | (2,993 | ) | (3,518 | ) | |||||||
| Prepaid expenses, income taxes receivable and prepayments | 1,015 | 600 | 13,503 | (1,297 | ) | ||||||||||
| Accounts payable and accrued liabilities | (3,813 | ) | 3,374 | (1,542 | ) | 3,887 | |||||||||
| Other | 287 | (1,813 | ) | (2,058 | ) | (2,402 | ) | ||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 16,749 | 16,799 | 65,216 | 49,062 | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
| Purchases of rental equipment, property and other equipment | (25,920 | ) | (41,861 | ) | (59,953 | ) | (86,926 | ) | |||||||
| Acquisition, net of cash acquired | — | — | (108,680 | ) | — | ||||||||||
| Proceeds received from insurance for damages to equipment | — | (3 | ) | — | 96 | ||||||||||
| Proceeds from disposition of assets, net | 1 | 5 | 38 | 9 | |||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (25,919 | ) | (41,859 | ) | (168,595 | ) | (86,821 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
| Proceeds from credit facility borrowings | 34,500 | 27,000 | 169,000 | 48,122 | |||||||||||
| Repayments of credit facility borrowings | (22,500 | ) | (1,000 | ) | (59,000 | ) | (10,122 | ) | |||||||
| Payments of other long-term liabilities | (183 | ) | — | (183 | ) | — | |||||||||
| Payments of debt issuance costs | (136 | ) | (91 | ) | (1,204 | ) | (1,278 | ) | |||||||
| Proceeds from exercise of stock options | 58 | 80 | 1,086 | 155 | |||||||||||
| Payment of dividends | (1,935 | ) | (1,254 | ) | (5,214 | ) | (1,254 | ) | |||||||
| Taxes paid related to net share settlement of equity awards | (10 | ) | — | (398 | ) | (6 | ) | ||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 9,794 | 24,735 | 104,087 | 35,617 | |||||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 624 | (325 | ) | 708 | (2,142 | ) | |||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 84 | 325 | — | 2,142 | |||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 708 | $ | — | $ | 708 | $ | — | |||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||||||
| Interest paid | $ | 5,662 | $ | 3,685 | $ | 13,018 | $ | 10,722 | |||||||
| Income taxes paid, net of (refunds) received | $ | 20 | $ | 188 | $ | (11,621 | ) | $ | 204 | ||||||
| SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS: | |||||||||||||||
| Transfer of property and equipment to assets held for sale | $ | 1,520 | $ | — | $ | 10,279 | $ | 2,227 | |||||||
| Accrued purchases of property and equipment | $ | (555 | ) | $ | (314 | ) | $ | 2,412 | $ | 6,940 | |||||
| Right of use assets acquired through an operating lease | $ | — | $ | 1,053 | $ | 1,632 | $ | 1,053 | |||||||
| Common stock issued in connection with acquisition | $ | — | $ | — | $ | 9,999 | $ | — | |||||||
| Common stock issued to settle liability-classified awards | $ | — | $ | — | $ | 413 | $ | — | |||||||
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much is NGS's increased dividend, and when will it be paid?
NGS declared a quarterly cash dividend of $0.16 per common share, payable December 2, 2026, to shareholders of record at the close of business November 19, 2026. The dividend is 6.7% above the third-quarter payment of $0.15 per share.
What is Natural Gas Services Group's updated 2026 earnings guidance?
Natural Gas Services Group expects 2026 adjusted EBITDA of $105 million to $108 million, compared with prior guidance of $103 million to $108 million. Adjusted EBITDA is a non-GAAP earnings measure.
How much borrowing capacity did NGS have after third-quarter 2026?
NGS had $139.8 million of availability under its revolving credit facility at September 30, 2026, reflecting the applicable borrowing base calculation. Outstanding debt was $340.0 million, leverage was 2.80x, and fixed charge coverage was 3.84x. The company complied with all credit-agreement terms, conditions and covenants.
What maintenance capital spending does NGS expect for 2026?
NGS expects $15 million to $19 million in maintenance capital expenditures for 2026. That guidance is unchanged.