Natural Gas Services Group Q2 Earnings Call Transcript: August 12, 2025

Natural Gas Services Group reported Q2 2025 earnings, with forward-looking statements made during the call. Investors are cautioned that actual results may differ from projected statements. No assurance can be given that the forward-looking statements will be correct, and the company disclaims any intention or obligation to update or revise them.

Natural Gas Services Group, Inc. (NGS) reported its financial results for the second quarter of 2025, showcasing robust performance and raising its full-year Adjusted EBITDA guidance. The company's rental revenue increased by 13.3% year-over-year to $39.6 million, while net income grew to $5.2 million, or $0.41 per diluted share. Adjusted EBITDA for the quarter reached $19.7 million, representing a 19.5% year-over-year increase [1].

NGS also initiated a quarterly cash dividend of $0.10 per share and authorized a $6 million share repurchase program, reflecting confidence in future cash flows and a commitment to returning value to shareholders. The company raised its full-year 2025 Adjusted EBITDA guidance to between $76 and $80 million, up from the previous estimate of $74 - $79 million [1].

CEO Justin Jacobs emphasized the company's operational strength and disciplined capital allocation strategy, while acknowledging ongoing market uncertainties. Jacobs noted that the company expects continued momentum through 2025 and into 2026, driven by new large horsepower unit sets [1].

However, there are some potential concerns. Net income growth was modest at only 6.9% sequentially, indicating potential vulnerabilities in profit expansion. Significant cash flow used in investing activities at $25.7 million compared to $16.9 million in the prior year raises questions about the sustainability of operational cash generation. Additionally, the transition of Brian Tucker out of the President and Chief Operating Officer role due to personal circumstances could lead to instability in leadership and strategic direction [1].

NGS anticipates 2025 growth capital expenditures between $95 million and $115 million, focusing primarily on new units under contract. The company also expects 2025 maintenance expenditures of $11 - $14 million and maintains a target return on invested capital of 20% [1].

Investors are cautioned that actual results may differ from projected statements. No assurance can be given that the forward-looking statements will be correct, and the company disclaims any intention or obligation to update or revise them [1].

References:
[1] https://www.quiverquant.com/news/Natural+Gas+Services+Group%2C+Inc.+Reports+Strong+Second+Quarter+2025+Results+and+Raises+Full-Year+Adjusted+EBITDA+Guidance