Revenue: As of FY2026 Q2, the actual value is USD 51.3 M, beating the estimate of USD 50.45 M.

EPS: As of FY2026 Q2, the actual value is USD 0.3, missing the estimate of USD 0.4.

Operational Metrics

Natural Gas Services Group, Inc. reported record second-quarter financial performance for 2026, driven by increased scale, higher utilization, and improved fleet mix.

Rental Revenue

Rental revenue for Q2 2026 was $49.4 million, a record, marking a $9.9 million or approximately 25% increase year-over-year, and a $2.3 million or approximately 5% sequential increase. Flatrock contributed $1.9 million to Q2 rental revenue. Pro Forma Rental Revenue per Horsepower per Month for Q2 2026 was approximately $28.06, an increase of more than 5% year-over-year compared to $21.56 in Q2 2023, representing an improvement of almost $7.00 per horsepower per month or more than 30%, and a compound annual growth rate of nearly 10%.

Profitability

Rental Adjusted Gross Margin for Q2 2026 was $30.2 million, an increase of $6.2 million or 25.6% year-over-year. The Rental Adjusted Gross Margin Percentage for Q2 2026 was 61.1%, up approximately 36 basis points from the prior year quarter. Reported SG&A for Q2 2026 was $9.9 million, including approximately $3.3 million in transaction costs related to the Flatrock acquisition. Underlying SG&A for Q2 2026 was approximately $5.8 million or 11.3% of revenue, compared to 11.6% in Q2 2025. Adjusted EBITDA for Q2 2026 was a record $25.1 million, increasing $5.4 million or 27.4% year-over-year and 3.3% sequentially. Reported Net Income for Q2 2026 was $3.8 million or $0.30 per diluted share, compared to $5.2 million or $0.41 per diluted share in the prior year quarter. Adjusted Net Income for Q2 2026 was $6.1 million or $0.47 per diluted share, excluding transaction costs. The Effective Tax Rate for Q2 2026 was 30.9%, primarily due to a discrete state tax item, with the full-year expectation remaining at 25% to 26%.

Cash Flow

Cash Provided by Operating Activities was approximately $25.4 million for Q2 2026 and $48.5 million for H1 2026, marking an increase of roughly 50% compared to the first half of 2025. Accounts Receivable for Q2 2026 was approximately $22 million. Reported DSO for Q2 2026 was approximately 39 days, an improvement of approximately four days sequentially, while Pro Forma DSO was approximately 33 days. Regarding Income Tax Receivable Conversion, $13.8 million of principal and interest from an $11.5 million tax receivable at year-end 2023 was collected by June 30, 2026, with an additional $300,000 interest collected in July, totaling approximately $14.1 million converted to cash.

Capital Expenditures

Total Capital Expenditures for Q2 2026 were approximately $18.8 million, including $15.3 million of growth capital and $3.4 million of maintenance capital. Growth Capital Expenditures for H1 2026 were approximately $27.6 million.

Balance Sheet & Acquisitions

The Flatrock Acquisition Cost was approximately $120 million, acquired at approximately 6.2 times last quarter annualized adjusted EBITDA before synergies. The Flatrock Purchase Consideration included approximately $108.9 million in cash and $10 million in Natural Gas Services Group, Inc. common stock. The Credit Facility increased from $400 million to $500 million, retaining a $100 million accordion. The Outstanding Credit Facility at quarter-end was approximately $328 million, with Available Borrowing Capacity of approximately $135 million under the borrowing base, leaving over $170 million in unused facility. Bank Covenant Leverage at quarter-end was approximately 2.77 times, providing substantial headroom relative to the 3.5 times leverage covenant. The Flatrock Purchase Price Allocation assigned approximately $100.6 million (85%) to the rental fleet, with less than $1 million recorded as goodwill.

Operational Metrics (Non-Financial)

Available Horsepower for Q2 2026 was approximately 759,000 HP, with Rented Horsepower at approximately 670,000 HP, representing a 34.3% increase year-over-year. The Rented Large Horsepower Fleet for Q2 2026 was 501,000 HP, 99% utilized, accounting for 75% of total rented horsepower, compared to 228,000 HP (61% of total) in Q2 2023. Organic Horsepower Additions were approximately 5,000 HP for Q2 2026 and approximately 22,000 HP for H1 2026, with electric motor drive equipment representing well over half. Horsepower Utilization reached a record 88.3% in Q2 2026, up from 78.6% three years prior. Electric Motor Drive Equipment now represents nearly 10% of the rented fleet, with Flatrock’s horsepower being approximately 20% electric compared to 7% for legacy Natural Gas Services Group, Inc. prior to acquisition.

Shareholder Returns

Natural Gas Services Group, Inc. declared a Quarterly Dividend of $0.15 per share for Q2 and Q3 2026, representing a 50% increase from the initial $0.10 per share one year ago.

Outlook / Guidance

Natural Gas Services Group, Inc. increased its full-year 2026 adjusted EBITDA guidance to $103 million to $108 million, up from the previous range of $92.5 million to $97.5 million. This increase reflects the contribution from the Flatrock acquisition and effectively maintains existing guidance for legacy operations. Full-year growth capital expenditures guidance was also raised to $60 million to $80 million, from $55 million to $70 million, with maintenance capital expenditure guidance now at $15 million to $19 million.