NATURAL GAS SERVICES GROUP INC

2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and include the accounts of the Company and its subsidiaries, all of which are wholly owned, and the Rabbi Trust associated with our deferred compensation plan. All significant intercompany accounts and transactions for the periods presented have been eliminated in consolidation.

These financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for the fair presentation of our financial position as of September 30, 2026, and the results of our operations for the three and nine months ended September 30, 2026, and 2025, respectively. As permitted by the rules and regulations of the SEC, the accompanying unaudited Condensed Consolidated Financial Statements do not include all disclosures normally required by GAAP. These financial statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC, from which the Condensed Consolidated Balance Sheet as of December 31, 2025 included herein was derived. In our opinion, the unaudited Condensed Consolidated Financial Statements provide a fair representation of our financial position, results of operations, changes in stockholders’ equity and cash flows for the periods presented.

We operate inone reporting segment through which we provide our service and product offerings (rentals, sales, and aftermarket services) to our customers in the energy industry exclusively in the continental U.S. Our chief executive officer (“CEO”) serves as the chief operating decision maker and makes resource allocation decisions and assesses the performance of the business based on the entire entity in the aggregate. Accordingly, the measures of profit and loss, including net income as well as the non-GAAP financial measures for Adjusted net income, Adjusted EBITDA and Adjusted gross margin and total assets are effectively those of the Company as a whole as reflected in these unaudited Condensed Consolidated Financial Statements.

The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2026.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-03 “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense” (“ASU 2024-03”), which expands annual and interim disclosures for certain types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses, and research and development). ASU 2024-03 is effective for our annual periods beginning January 1, 2027, and for interim periods beginning January 1, 2028, with early adoption permitted. The adoption of ASU 2024-03 is not expected to have a material impact on our Condensed Consolidated Financial Statements or disclosures.