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Natural Gas Services raises 2025 guidance after 14.6% increase in adjusted EBITDA

Natural Gas Services Group reported a strong third quarter, supported by fleet expansion and rising demand, leading to an upward revision of its full-year earnings outlook.

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Natural Gas Services Group Inc., a U.S.-based provider of natural gas compression solutions, reported improved financial results for the third quarter of 2025, driven by continued growth in rental revenue and increased installed horsepower. The company raised its full-year adjusted EBITDA forecast to between $78mn and $81mn, up from the previous range of $76mn to $80mn.

Momentum driven by large horsepower deployments

Total revenue for the period reached $43.4mn, a 6.7% increase year-over-year, mainly due to an 11.1% rise in rental revenue, which totalled $41.5mn. This growth was attributed to the addition of higher horsepower compression units and improved pricing. Rented horsepower rose to 526,015 compared to 475,534 a year earlier, marking a 10.6% increase.

Adjusted EBITDA stood at $20.8mn for the third quarter, up 14.6% year-over-year and 6% sequentially. The performance reflects rental fleet expansion and disciplined margin management, with adjusted gross margin reaching 59.5%. Net income totalled $5.8mn, or $0.46 per diluted share.

Increased capex and 2026 targets in progress

The company plans to invest between $95mn and $110mn in growth capital in 2025, all tied to multi-year contracts. An additional $11mn to $14mn will be allocated to maintenance. Its targeted return on invested capital remains at 20%.

For 2026, Natural Gas Services Group aims to deploy approximately 90,000 additional horsepower, including electric motor drive units. These projects are designed to meet rising demand in data centres, liquefied natural gas (LNG) infrastructure and power consumption.

The company stated that Devon Energy now contributes over 10% of its revenue, highlighting the strength of long-term customer relationships. Equipment utilisation reached 84.1%, up from 82.0% a year earlier.

Dividend increase and stable debt profile

The quarterly dividend was increased to $0.11 per share, up from $0.10, reflecting confidence in the company’s cash generation and financial stability.

Net debt totalled $208mn with a leverage ratio of 2.50x. Operating cash flow for the quarter was $16.8mn, while capital expenditures amounted to $41.9mn.

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