Natural Gas Services Group, Inc. reported a total revenue of $41.4 million for the second quarter of 2025, marking a 7.4% increase from $38.5 million in the same period of 2024. The company's rental revenue, which constitutes the majority of its income, rose to $39.6 million, up from $34.9 million year-over-year. For the first half of 2025, total revenue reached $82.8 million, compared to $75.4 million in the first half of 2024. The net income for the second quarter was $5.2 million, or $0.41 per diluted share, an increase from $4.3 million, or $0.34 per diluted share, in the prior year.
The company experienced notable changes in its financial performance, with rental revenue increasing by 13.3% for the quarter and 14.3% for the six-month period. This growth was attributed to an increase in rented horsepower, despite a decrease in the number of units rented and total customers. The average rented horsepower rose to 495,665, reflecting a strategic focus on higher horsepower units, which command higher rental rates. However, the total number of customers under contract decreased by 13.7%, primarily due to consolidation in the exploration and production industry.
Operationally, Natural Gas Services Group has streamlined its operations by closing its fabrication facility in Midland, Texas, and transferring equipment to other service centers. This closure, part of a broader strategy to outsource assembly operations, resulted in the reclassification of $2.2 million in assets as held for sale. The company also reported a significant reduction in its inventory allowance, which decreased from $5.9 million at the end of 2024 to $2.5 million by June 30, 2025, reflecting the disposal of obsolete inventory.
Looking ahead, the company remains optimistic about its growth prospects, particularly in the context of the oil and gas industry's cyclical nature. Management anticipates continued demand for its compressor fleet, contingent on stable crude oil prices. The company has also amended its credit facility to increase borrowing capacity to $400 million, providing additional financial flexibility to support future capital expenditures and operational needs. As of June 30, 2025, Natural Gas Services Group had $182 million in long-term debt and $266.2 million in total stockholders' equity, indicating a solid financial foundation for future growth initiatives.
About NATURAL GAS SERVICES GROUP INC
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