In This Article:
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Total Revenue: $41.4 million, a 12% increase over Q1 2024.
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Rental Revenue: $38.9 million, up 15% year-over-year and 2% sequentially.
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Adjusted Gross Margin: $24.3 million, with a margin percentage of 58.6%.
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Rented Adjusted Gross Margin: 61.9%, up 80 basis points year-over-year.
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Net Income: $4.9 million or $0.38 per diluted share.
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SG&A Expense: $5.4 million, flat at 13% of revenue.
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Adjusted EBITDA: $19.3 million, a 14% increase year-over-year.
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Rented Horsepower: Approximately 493,000, an 11% year-over-year increase.
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Utilization Rate: 81.7%, unchanged from the previous year.
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Cash from Operations: $21.3 million, nearly quadrupling from the previous year.
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Capital Expenditures: $19.3 million, including $16.7 million for growth and $2.6 million for maintenance.
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Leverage Ratio: 2.18 times, down from 2.36 times at year-end 2024.
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Available Credit: $132 million, excluding a $100 million expansion secured in April.
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Natural Gas Services Group Inc (NYSE:NGS) reported a record rental revenue of $38.9 million for the quarter, marking a 15% increase year-over-year.
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The company achieved an adjusted rental gross margin of 61.9%, one of the highest levels in the past decade.
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Adjusted EBITDA reached a record $19.3 million for the quarter, reflecting strong financial performance.
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NGS has a strong balance sheet with a leverage ratio of 2.18 times, providing financial flexibility for growth.
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The company expanded its revolving credit facility from $300 million to $400 million, enhancing its financial capacity for organic growth and potential M&A opportunities.
Negative Points
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Natural Gas Services Group Inc (NYSE:NGS) faces macroeconomic volatility, with fluctuating commodity prices impacting market conditions.
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The company has a high customer concentration, with its largest customer accounting for 46% of revenue in the quarter.
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SG&A expenses increased by $0.7 million year-over-year, maintaining a flat percentage of revenue at 13%.
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The company is still in the process of monetizing non-cash assets, such as real estate and inventory, which may take time.
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There is uncertainty regarding the impact of tariffs and potential indirect effects on the business, requiring ongoing monitoring.
Q & A Highlights
Q: Can you provide insights on the current demand environment and any potential pricing pressures? A: Justin Jacobs, CEO: We haven't seen much change in demand over the past 60 to 90 days. 2025 is locked in, and we're discussing 2026 growth with customers. No significant pricing pressure has been observed, and the environment remains consistent with previous periods.