NYSE: NGS
NATURAL GAS SERVICES GROUP INCCIK 0001084991 · SIC 1389 · Oil & Gas Field Services, NEC
Unless the context otherwise requires, references in this Annual Report on Form 10-K to “Natural Gas Services Group,” the “Company,” “NGS,” “we,” “us,” or “our” refer to Natural Gas Services Group, Inc. and its consolidated subsidiary, NGSG Properties, LLC. Certain specialized terms used in… About this business →
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NGS reports record Q2 results, completes $120M Flatrock acquisition, raises 2026 EBITDA guidance to $103–108M
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NGS Q2 revenue +24% to $51.4M, net income -26% to $3.8M on Flatrock deal costs
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Natural Gas Services completes redomestication from Colorado to Texas
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NGS changes auditors to CohnReznick following asset acquisition, no disagreements
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NGS completes redomestication from Colorado to Texas, eliminates staggered board
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NGS closes $120M Flatrock Compression acquisition, adds 86,000 horsepower and cuts customer concentration
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NGS acquires Flatrock Compression for $120M, expands credit facility to $500M
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NGS shareholders approve redomestication from Colorado to Texas with 98.8% support
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NGS: revenue $48.5M, net income $6.8M. NGS Q1 revenue +17%, operating income +38%; dividend reinstated at /share
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Latest financial statements
From 10-Q filed Aug 10, 2026 (period ending Jun 30, 2026). As printed on the EDGAR/iXBRL face — not generated by the model.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except earnings per share)
| Description | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|---|---|
| Revenue: | ||||
| Rental | 49,433 | 39,580 | 96,548 | 78,490 |
| Sales | 980 | 750 | 1,471 | 2,677 |
| Aftermarket services | 988 | 1,052 | 1,849 | 1,598 |
| Total revenue | 51,401 | 41,382 | 99,868 | 82,765 |
| Cost of revenue (excluding depreciation and amortization): | ||||
| Rental | 19,217 | 15,528 | 36,307 | 30,368 |
| Sales | 664 | 911 | 1,288 | 2,927 |
| Aftermarket services | 709 | 720 | 1,214 | 991 |
| Total cost of revenues (excluding depreciation and amortization) | 20,590 | 17,159 | 38,809 | 34,286 |
| Selling, general and administrative expense | 9,911 | 5,454 | 16,419 | 10,832 |
| Depreciation and amortization | 10,979 | 8,969 | 21,304 | 17,605 |
| Inventory allowance | — | — | — | 61 |
| Retirement of rental equipment | — | — | 412 | 728 |
| Gain on disposition of assets, net | (1) | (124) | (71) | (178) |
| Total operating costs and expenses | 41,479 | 31,458 | 76,873 | 63,334 |
| Operating income | 9,922 | 9,924 | 22,995 | 19,431 |
| Other income (expense): | ||||
| Interest expense | (4,442) | (3,243) | (8,470) | (6,413) |
| Interest income | 36 | — | 36 | — |
| Other income (expense) | 29 | 104 | (97) | 103 |
| Total other income (expense), net | (4,377) | (3,139) | (8,531) | (6,310) |
| Income before income taxes | 5,545 | 6,785 | 14,464 | 13,121 |
| Provision for income taxes | (1,715) | (1,597) | (3,871) | (3,079) |
| Net income | 3,830 | 5,188 | 10,593 | 10,042 |
| Earnings per share: | ||||
| Basic | 0.30 | 0.42 | 0.84 | 0.81 |
| Diluted | 0.30 | 0.41 | 0.83 | 0.80 |
| Weighted average shares outstanding: | ||||
| Basic | 12,664 | 12,483 | 12,624 | 12,473 |
| Diluted | 12,842 | 12,625 | 12,799 | 12,629 |
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except par value)
| Description | June 30, 2026 | December 31, 2025 |
|---|---|---|
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | 84 | — |
| Trade accounts receivable, net of provision for credit losses | 22,025 | 18,497 |
| Inventory, net of allowance for obsolescence | 29,110 | 20,647 |
| Income taxes receivable and prepayments | 445 | 14,056 |
| Prepaid expenses and other | 3,000 | 1,696 |
| Assets held for sale | 10,986 | 2,227 |
| Total current assets | 65,650 | 57,123 |
| Long-term inventory, net of allowance for obsolescence | — | — |
| Rental equipment, net of accumulated depreciation | 613,771 | 498,525 |
| Property and equipment, net of accumulated depreciation | 22,047 | 20,519 |
| Goodwill | 824 | — |
| Intangible assets, net of accumulated amortization | 1,139 | — |
| Other assets | 14,912 | 10,619 |
| Total assets | 718,343 | 586,786 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current Liabilities: | ||
| Accounts payable | 16,653 | 14,048 |
| Accrued liabilities | 15,980 | 10,462 |
| Total current liabilities | 32,633 | 24,510 |
| Long-term debt | 328,000 | 230,000 |
| Deferred income taxes | 56,777 | 52,530 |
| Other long-term liabilities | 6,447 | 5,030 |
| Total liabilities | 423,857 | 312,070 |
| Commitments and contingencies (Note 12) | ||
| Stockholders’ Equity: | ||
| Preferred stock, 5,000 shares authorized, no shares issued or outstanding | — | — |
| Common stock, 30,000 shares authorized, par value $0.01; 14,207 and 13,883 shares issued, respectively | 142 | 138 |
| Additional paid-in capital | 133,289 | 120,811 |
| Retained earnings | 176,059 | 168,771 |
| Treasury shares, at cost, 1,310 shares for each of the dates presented, respectively | (15,004) | (15,004) |
| Total stockholders’ equity | 294,486 | 274,716 |
| Total liabilities and stockholders’ equity | 718,343 | 586,786 |
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Description | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income | 10,593 | 10,042 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 21,304 | 17,605 |
| Inventory allowance | — | 61 |
| Retirement of rental equipment | 412 | 728 |
| Gain on disposition of assets, net | (71) | (178) |
| Amortization of debt issuance costs | 695 | 506 |
| Deferred income taxes | 3,932 | 3,011 |
| Stock-based compensation | 1,430 | 938 |
| Provision for credit losses | 88 | 208 |
| Loss (gain) on company owned life insurance | 103 | (17) |
| Changes in operating assets and liabilities: | ||
| Trade accounts receivables | (863) | 1,676 |
| Inventory | (1,570) | (344) |
| Prepaid expenses, income taxes receivable and prepayments | 12,488 | (1,897) |
| Accounts payable and accrued liabilities | 2,271 | 513 |
| Other | (2,345) | (589) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 48,467 | 32,263 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of rental equipment, property and other equipment | (34,033) | (45,065) |
| Acquisition, net of cash acquired | (108,680) | — |
| Proceeds received from insurance for damages to equipment | — | 99 |
| Proceeds from disposition of assets, net | 37 | 4 |
| NET CASH USED IN INVESTING ACTIVITIES | (142,676) | (44,962) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from credit facility borrowings | 134,500 | 23,122 |
| Repayments of credit facility borrowings | (36,500) | (11,122) |
| Payments of debt issuance costs | (1,068) | (1,187) |
| Proceeds from exercise of stock options | 1,028 | 75 |
| Payment of dividends | (3,279) | — |
| Taxes paid related to net share settlement of equity awards | (388) | (6) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 94,293 | 10,882 |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 84 | (1,817) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | — | 2,142 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 84 | 325 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
| Interest paid, net of amounts capitalized | 7,356 | 7,037 |
| Income taxes paid, net of (refunds) received | (11,641) | 16 |
| NON-CASH TRANSACTIONS: | ||
| Transfer of property and equipment to assets held for sale | 8,759 | 2,227 |
| Accrued purchases of property and equipment | 2,967 | 7,254 |
| Right of use assets acquired through an operating lease | 1,632 | — |
| Common stock issued in connection with acquisition | 9,999 | — |
| Common stock issued to settle liability-classified awards | 413 | — |
Amounts as printed on the EDGAR/iXBRL face — (in thousands, except earnings per share); (in thousands, except par value); (in thousands). Labels, columns, and figures are the filing face, not a GAAP stencil. Interactive statements & notes on EDGAR ↗
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About NATURAL GAS SERVICES GROUP INC
Source: Item 1 (Business) from the 10-K filed March 16, 2026. Description as filed by the company with the SEC.
ITEM 1. BUSINESS
Unless the context otherwise requires, references in this Annual Report on Form 10-K to “Natural Gas Services Group,” the “Company,” “NGS,” “we,” “us,” or “our” refer to Natural Gas Services Group, Inc. and its consolidated subsidiary, NGSG Properties, LLC. Certain specialized terms used in describing our natural gas compressor business are defined in “Glossary of Industry Terms” on page ii.
Description of Business
We were incorporated in December 1998 and initially operated as a holding company of a group of subsidiaries that were engaged in the manufacturing, operation and leasing of natural gas compression equipment, flares and related assets to the natural gas industry with a focus on unconventional natural gas production plays in the U.S. (such as coalbed methane, gas shales and tight gas). We completed our initial public offering in October 2002 and our common stock began trading on the American Stock Exchange under the symbol “NGS.” In October 2008, our common stock began trading on the New York Stock Exchange.
Today, we are a premier provider of natural gas and electric compression equipment, technology and services to the energy industry. We rent, design, install, service and maintain natural gas engine and electric motor drive compressors for oil and gas production and processing facilities. We also provide aftermarket services in the form of call-out services on customer-owned equipment as well as commissioning of new units for customers. We are headquartered in Southlake, Texas, with administrative offices in Midland, Texas, an engineering facility located in Tulsa, Oklahoma and service facilities located in several major oil and gas producing basins in the U.S.
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Our primary business and source of revenue and gross profit is derived from the rental of natural gas engine and electric motor drive compressor units for applications associated with oil and gas production with a focus on large and medium horsepower applications. Our customers, specifically for large and medium horsepower units, are exploration and production (“E&P”) companies that utilize our compressor units for artificial lift, or “gas lift,” applications (i.e., production enhancement enabled with high-pressure gas compression equipment) in unconventional oil wells on single and multi-well pads. In addition, our customer base includes oil and gas E&P companies that focus primarily on natural gas production (with typically smaller horsepower applications). Our largest rental area is the Permian Basin (78 percent of rental revenues in 2025), with the majority of our remaining rental revenue generated in other oil and gas producing regions and basins in Texas, New Mexico and Ohio, including the San Juan Basin, the Utica and Marcellus Shales in Ohio, the Texas Panhandle, the Barnett Shale, and the Eagle Ford Shale. Other regions and plays in which we provide services include central and western Oklahoma and the Antrim Shale in Michigan.
Recent Developments
In April 2025, we secured an amendment to our senior secured revolving credit agreement, as amended (the “Credit Facility”) to (i) increase our total commitment to $400.0 million, (ii) expand the accordion feature to $100.0 million, (iii) reduce interest rates at comparable leverage levels and (iv) provide for a more flexible leverage covenant. See Note 10 (“Long-Term Debt”) to our Consolidated Financial Statements.
Throughout 2025, we expanded our fleet horsepower by approximately 11 percent to approximately 663,000 horsepower primarily from the addition of 70 new large (over 400 horsepower) compressor units. This increase in fleet horsepower contributed substantially to a 14 percent increase in rental revenues to approximately $164 million.
We initiated a common stock dividend during the third quarter of 2025 for $0.10 per share and increased it to $0.11 per share for the fourth quarter of 2025 and first quarter of 2026. See Note 14 (“Stockholders’ Equity”) and Note 19 (“Subsequent Events”) to our Consolidated Financial Statements.
We initiated efforts to market certain non-essential real estate properties including our former assembly facility in Midland, Texas (the “Midland Facility”) in the second quarter of 2025 and our former corporate headquarters facility, also in Midland, Texas (the “Former Headquarters Property”), in February 2026. See Note 5 (“Assets Held for Sale and Restructuring Activities”), Note 7 (“Property and Equipment”) and Note 19 (“Subsequent Events”) to our Consolidated Financial Statements.
In January 2026, we received over $12 million, including interest, representing a substantial portion of federal income tax refunds that were due to us since 2020. See Note 11 (“Income Taxes”) to our Consolidated Financial Statements.
Please see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information regarding our operations.
1
Our Operating Units
We identify our operating units based upon major revenue sources as (i) Rental, (ii) Sales and (iii) Aftermarket Services.
Rental. Our rental compression units provide large, medium and small horsepower applications for conventional and unconventional oil and gas production. Our rental contracts generally provide for initial terms ranging from 12 to 60 months and generally extend on a month-to-month basis thereafter. We believe that by outsourcing their compression needs, our customers are able to increase their revenues by producing higher volumes of oil and gas due to higher equipment run time, decrease their operating and maintenance cost of operating compression, lower their capital investment needs and more efficiently meet their changing compression needs. We maintain and service all of the compression equipment that we rent to our customers.
The size, type and geographic dispersion of our rental fleet enables us to provide our customers with a range of compression units that can serve a wide variety of applications, and to select the correct equipment for the job, rather than the customer trying to fit the job to its own equipment. We base our compressor rental rates on several factors, including the cost and size of the equipment, the type and complexity of service desired by the customer, the length of contract and the inclusion of any other services desired, such as installation, transportation and daily operation. In addition, certain of our contracts include surcharges for oil and filters as well as insurance where applicable.
As of December 31, 2025, we had 1,914 compressors in our rental fleet totaling 662,542 horsepower. Of this total, we had 1,245 compressors totaling 562,676 horsepower rented to customers. Approximately three percent of our compressor fleet, representing approximately four percent of our available horsepower is electric powered. The unit utilization rate of our rental fleet as of December 31, 2025, was 65.0 percent, while our horsepower utilization for the same period was 84.9 percent. During 2025, we placed into service 434 unit sets, including 364 from our existing fleet and 70 new units, with a total of 172,428 horsepower. A total of 126 of those units, including 70 new units, were 400 horsepower or larger, representing approximately 68.7 percent of the total horsepower set. This activity resulted in a 280 basis point increase in our horsepower utilization from 82.1 percent at the end of 2024 to 84.9 percent at the end of 2025.
Sales. We design and engineer compressor components manufactured by OEM suppliers. In order to provide customer support, we also stock varying levels of replacement parts at our Tulsa, Oklahoma facility and our field service locations.
Aftermarket Services. We service and maintain compressors owned by our customers on an “as needed” and contract basis, as well as providing services related to the installation and start-up of new compressor units. We perform engine and compressor overhauls on a condition-based interval or a time-based schedule or at our customers’ request.
Business Strategy
Our long-term intentions to grow our revenue and profitability are based on the following business strategies:
•Optimize existing utilized fleet. We believe there are opportunities to modestly improve the profitability of our existing utilized rental fleet through targeted price increases, particularly in geographic areas that have experienced high rates of cost inflation, along with operational efficiencies by using improved data collection and analysis to optimize our labor, parts, and maintenance costs.
•Improve asset utilization. We believe we can improve the overall cash flow of the business by increasing utilization of the existing fleet as well as monetizing non-cash assets. We have unutilized units—we will review these assets to determine where relatively low-cost capital expenditures can improve the marketability and cash flow potential of the units. We also have a significant amount of capital tied up in non-cash assets (including inventory and other fixed assets, primarily real property) that we believe can be monetized and invested back in the fleet at or above target levels of return on invested capital.
•Expand rental fleet. We intend to prudently increase the size of our rental fleet mainly through pre-contracted agreements with our customers. We believe our future growth in this part of our strategy will be primarily driven through our placement of larger horsepower, centralized wellhead natural gas compressors for unconventional oil production, with select increases in medium horsepower units to meet customer demand beyond our inventory.
•Execute accretive mergers and acquisitions. We believe there are opportunities in mergers and acquisitions. While there is no certainty as to the probability of any particular deal, we will continue to evaluate potential acquisitions, joint ventures and other opportunities that could enhance value for our shareholders.
All of the above strategies are subject to revisions and adjustments as a result of several factors discussed in