Natural Gas Services Group Q4 Earnings Call Highlights

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Natural Gas Services Group (NYSE:NGS) reported what absorption described arsenic a “great 4th and grounds full-year results” for 2025, driven by fleet expansion, beardown request for ample horsepower rental compression, improving pricing, and a continued premix displacement toward larger and electrical centrifugal thrust units. Chief Executive Officer Justin Jacobs said the institution captured marketplace stock successful rental compression for the 3rd consecutive twelvemonth and entered 2026 with grounds utilization and “significant contracted horsepower deployments.”

Jacobs said the institution reached grounds levels of rented horsepower and utilization during 2025. Rented horsepower roseate to astir 563,000 by year-end, up 14% from the anterior year, portion fleet utilization reached 84.9%.

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In the 4th quarter, rental gross totaled $44.3 million, up astir 16% year-over-year, which absorption attributed to continued fleet enlargement and beardown request for ample horsepower units. Jacobs besides said rental gross per horsepower accrued astir 3% successful the 4th fourth versus the anterior year, reflecting caller deployments, higher renewal rates, and the ongoing premix shift.

During 2025, the institution added astir 70,000 horsepower, with much than fractional deployed successful the 4th quarter. Jacobs said ample horsepower electrical units represented astir 30% of those additions. Looking ahead, the institution expects electrical centrifugal thrust units to correspond a akin percent of 2026 additions.

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Chief Financial Officer Ian Eckert reported full-year 2025 rental gross of $164.3 million, up $20.1 million, oregon 14% year-over-year. Total gross was $172.3 million, expanding $15.6 million, oregon astir 10%, compared to 2024. Eckert said full gross maturation lagged rental gross maturation due to the fact that the institution exited Midland fabrication operations arsenic portion of a strategy to determination distant from “non-core low-margin fabrication activities.”

Adjusted EBITDA was $21.2 cardinal for the 4th fourth and $81 cardinal for the afloat year, some institution records. Jacobs noted the full-year adjusted EBITDA effect was astatine the precocious extremity of guidance, adding that the institution raised guidance 3 times during the year.

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Adjusted rental gross borderline totaled $99.6 cardinal for 2025, up 14% year-over-year, portion adjusted full gross borderline was $100.5 million, besides up 14% from the anterior year. However, the institution said fourth-quarter adjusted rental gross borderline percent came successful astatine 58.5%, down astir 300 ground points sequentially and “well below” expectations. Eckert attributed the diminution wholly to a carnal inventory accommodation recorded successful the 4th and said it did not bespeak ongoing concern economics.