Natural Gas Services Group (NGS) Q1 2026 earnings summary

Executive summary

• Achieved record rental revenue, adjusted gross margin, adjusted EBITDA, and horsepower utilization in Q1 2026, reflecting strong operational execution and market demand.

• Revenue for Q1 2026 rose 17.1% year-over-year to $48.5 million, driven by strong rental demand and higher horsepower utilization.

• Increased quarterly dividend by 36% to $0.15 per share, effective Q2 2026, signaling confidence in cash generation and long-term outlook.

• Raised full-year 2026 adjusted EBITDA guidance, citing high utilization and contracted fleet additions.

• Added approximately 17,000 horsepower to the fleet in Q1, focusing on large horsepower and electric motor drive units.

Financial highlights

• Rental revenue reached $47.1 million, up 21.1% year-over-year, setting a new quarterly record.

• Total revenue was $48.5 million, up 17.1% from Q1 2025.

• Adjusted EBITDA was $24.3 million, up 25.8% year-over-year.

• Net income was $6.8 million ($0.53 per diluted share), up from $4.9 million ($0.38) in Q1 2025.

• Rental adjusted gross margin was $30 million (63.7%), up 24.7% year-over-year.

Outlook and guidance

• Increased full-year 2026 adjusted EBITDA guidance to $92.5–$97.5 million (previously $90.5–$95.5 million).

• Growth CapEx guidance maintained at $55–$70 million; maintenance CapEx at $15–$18 million.

• Committed to deploying at least 50,000 horsepower during 2026.

• Demand for compression equipment expected to remain strong, especially in the Permian and shale basins.

• Expect inflationary pressures, especially in lube oil and labor, to impact margins in coming quarters.