Natural Gas Services Group Raises Full-Year EBITDA Guidance
The company increased its 2026 adjusted EBITDA forecast to a range of $103 million to $108 million.
Natural Gas Services Group (NGS), the compression services provider, raised its full-year earnings outlook after reporting record equipment utilization for the second quarter.
The company shifted its growth strategy through the June 12 acquisition of Flatrock Compression Holdings, which added 87,233 rented horsepower and 270 utilized units to the fleet. This expansion contributed to a 34.3% year-over-year increase in total utilized horsepower, which reached 669,919 in the second quarter compared to 498,651 in the prior-year period.
Rental revenue rose 24.9% year-over-year to $49.4 million, marking a 4.9% increase from the first quarter. Adjusted EBITDA grew 27.4% year-over-year to $25.1 million, up from $24.3 million in the previous quarter. However, total adjusted gross margin compressed to 59.9% from 62.4% in the first quarter.
Net income declined to $3.8 million from $5.2 million in the second quarter of 2024 and $6.8 million in the first quarter of 2025. The decline was due to $3.3 million in strategic transaction costs associated with the Flatrock acquisition.
Horsepower utilization reached a record 88.3% as of June 30, rising from 86.9% in the first quarter and 83.6% in the second quarter of 2024. To support this trajectory, the company increased its 2025 organic deployment target to at least 55,000 horsepower from a previous target of 50,000 horsepower.
Full-year 2025 growth capital expenditures guidance was increased to a range of $60 million to $80 million from $55 million to $70 million. Maintenance capital expenditures guidance was slightly raised to $15 million to $19 million from $15 million to $18 million.
In conjunction with the Flatrock acquisition, the company increased its existing credit facility from $400 million to $500 million.