Natural Gas Services Group, Inc. (NYSE: NGS) reported second-quarter 2026 revenue of $51.4 million, up 24.2% from $41.4 million a year earlier, and net income of $3.8 million, or $0.30 per diluted share, for the three months ended June 30, 2026. The Southlake, Texas-based compression equipment provider closed its acquisition of Flatrock Compression Holdings, LLC on June 12, adding 87,233 rented horsepower to its fleet.

Second-quarter results:

  • Total revenue: $51.4 million, up 24.2% year over year
  • Rental revenue: $49.4 million, up 24.9% year over year and 4.9% sequentially
  • Net income: $3.8 million, or $0.30 per diluted share
  • Adjusted net income: $6.1 million, or $0.47 per diluted share
  • Adjusted EBITDA: $25.1 million, up 27.4% year over year
  • Operating income: $9.9 million

Net income fell from $5.2 million, or $0.41 per diluted share, in the second quarter of 2025, and from $6.8 million, or $0.53 per diluted share, in the first quarter of 2026. The company attributed the decline to $3.3 million in strategic transaction costs tied to the Flatrock acquisition, booked in selling, general and administrative expenses, which offset gains in rental revenue and gross margin. Adjusted net income, which excludes those costs, rose to $6.1 million from $5.3 million a year earlier. Flatrock contributed $2.2 million of revenue during its partial month in the quarter.

As of June 30, 2026, the company had 669,919 rented horsepower across 1,521 utilized units, up from 498,651 horsepower and 1,198 units a year earlier, a 34.3% increase in total utilized horsepower. Flatrock accounted for 87,233 of the rented horsepower from 270 utilized units. Horsepower utilization reached 88.3% in the quarter, which Chief Executive Officer Justin Jacobs called "a record second quarter and a milestone first half of 2026."

Flatrock deal and organic growth

Jacobs said the Flatrock acquisition added approximately 92,600 total horsepower, improved unit density in the company's growth basins, and accelerated its electric motor drive strategy. He said integration is progressing and that only a partial month of Flatrock's results were included in the quarter.

Outside the acquisition, the company added 22,200 total horsepower organically in the first half of 2026, with large horsepower electric motor drive equipment making up more than half of those additions. Jacobs said the company now expects to deploy at least 55,000 horsepower organically this year, citing high utilization, constrained equipment supply, and compression demand tied to oil and gas production, LNG exports and power demand.

Guidance raised, dividend continues

The company raised its full-year 2026 Adjusted EBITDA guidance to a range of $103 million to $108 million, up from its prior guidance of $92.5 million to $97.5 million. It also updated its 2026 capital expenditure outlook to $60 million to $80 million for growth capital, excluding acquisition consideration, and $15 million to $19 million for maintenance capital, to reflect the larger combined fleet following the Flatrock deal.

The company returned $1.9 million to shareholders in the second quarter through its quarterly dividend of $0.15 per share, and announced a third-quarter dividend of the same amount, payable September 2, 2026, to stockholders of record as of August 19, 2026.

On the balance sheet, outstanding debt on the company's revolving credit facility was $328.0 million as of June 30, with $134.8 million of availability under its borrowing base and more than $170 million of facility capacity. The leverage ratio was 2.77x and the fixed charge coverage ratio was 4.18x. Cash flows from operating activities were $25.4 million for the quarter, up from $11.0 million a year earlier, while cash used in investing activities was $127.5 million, including $108.7 million for the cash portion of the Flatrock acquisition net of cash acquired and $18.8 million of capital expenditures.

The results land against a backdrop of broader energy markets: WTI crude was $84.65 a barrel and Henry Hub gas was $3.06 per MMBtu as of June 15, according to the EIA, while the US rig count stood at 562, according to Baker Hughes.