[NCS Multistage Holdings, Inc. Second Quarter 2025 Results](index=1&type=section&id=NCS%20MULTISTAGE%20HOLDINGS%2C%20INC.%20ANNOUNCES%20SECOND%20QUARTER%202025%20RESULTS) NCS Multistage Holdings reports strong Q2 2025 results with significant revenue and Adjusted EBITDA growth, alongside a strategic acquisition, while maintaining a cautious outlook for the second half of the year [Review and Outlook](index=1&type=section&id=Review%20and%20Outlook) In Q2 2025, NCS Multistage Holdings exceeded expectations with a 23% year-over-year revenue increase, outperforming industry activity levels, and announced a strategic acquisition | Metric | Q2 2025 (in millions) | YoY Change | | :--- | :--- | :--- | | Total Revenues | $36.5 | +23% | | Net Income | $0.9 | N/A (from loss) | | Diluted EPS | $0.34 | N/A (from loss) | | Adjusted EBITDA | $2.2 | +$1.3 | | Metric | H1 2025 vs H1 2024 | Change Amount (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | Improvement | +$12.9 | +18% | | Adjusted EBITDA | Improvement | +$3.4 | +49% | - Announced the acquisition of Reservoir Metrics, LLC ("ResMetrics"), a leader in reservoir analysis, which had unaudited revenue over **$10 million** with an EBITDA margin over **30%** for the trailing twelve months ended June 30, 2025[6](index=6&type=chunk) - The company maintains a strong balance sheet with over **$25 million** in cash, over **$17 million** in credit facility availability, and only **$8 million** in debt (capital leases) as of the end of Q2[5](index=5&type=chunk) - Management expressed caution for the second half of the year due to deteriorating market conditions, including U.S. rig count declines, a slow Canadian rig count recovery, potential oil oversupply from OPEC+, and trade uncertainties[7](index=7&type=chunk) [Financial Review](index=2&type=section&id=Financial%20Review) Total revenues for Q2 2025 grew to $36.5 million, a 23% increase year-over-year, driven by strong activity in Canada and the U.S., which offset a decline in international revenues | Period | Revenue (in millions) | Change | | :--- | :--- | :--- | | Q2 2025 vs Q2 2024 | $36.5 vs $29.7 | +23% | | Q2 2025 vs Q1 2025 | $36.5 | -27% | | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | | Gross Profit | $12.3 | $11.3 | | Gross Margin | 34% | 38% | | Adjusted Gross Profit | $13.0 | $12.0 | | Adjusted Gross Margin | 36% | 40% | - SG&A expenses decreased by **$1.2 million** compared to Q2 2024, primarily due to lower professional fees and payroll expenses[13](index=13&type=chunk) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | | Net Income (Loss) | $0.9 | $(3.1) | | Diluted EPS | $0.34 | $(1.21) | - A deferred income tax benefit of **$1.4 million** was recorded due to the reversal of a valuation allowance against Canadian deferred tax assets, reflecting sustained improvements in operating results[15](index=15&type=chunk) [Liquidity and Capital Expenditures](index=3&type=section&id=Liquidity%20and%20Capital%20Expenditures) As of June 30, 2025, NCS maintained a strong liquidity position with $25.4 million in cash and $17.2 million available under its undrawn credit facility | Liquidity Metric (as of June 30, 2025) | Amount (in millions) | | :--- | :--- | | Cash | $25.4 | | Total Indebtedness | $7.7 | | ABL Facility Availability | $17.2 | | Working Capital | $87.2 | - Net working capital increased to **$64.0 million** as of June 30, 2025, up from **$56.4 million** at December 31, 2024, mainly due to higher accounts receivable and inventory[20](index=20&type=chunk) - Capital expenditures, net of proceeds from sales, were **$0.5 million** for the six months ended June 30, 2025[21](index=21&type=chunk) [Strategic Acquisition of Reservoir Metrics, LLC](index=3&type=section&id=Strategic%20Acquisition%20of%20Reservoir%20Metrics%2C%20LLC) On July 31, 2025, NCS acquired 100% of Reservoir Metrics, LLC (ResMetrics), a provider of tracer diagnostics services, for $5.9 million in cash - NCS acquired ResMetrics for **$5.9 million** in cash, with a potential earn-out of up to **$1.3 million** based on international trade tariff rates[23](index=23&type=chunk) - The acquisition is a strategic move to enhance the company's tracer diagnostics service offerings[23](index=23&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated statements of operations, balance sheets, cash flows, and revenues by geographic area for the reported periods [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the second quarter of 2025, NCS reported total revenues of $36.5 million and net income of $0.9 million, a significant improvement from a net loss in the prior-year period Q2 Performance (Three Months Ended June 30) | Metric (in thousands, except EPS) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $36,454 | $29,690 | | Gross Profit (Calculated) | $12,998 | $11,971 | | (Loss) Income from Operations | $(2,030) | $(4,150) | | Net Income (Loss) Attributable to NCS | $924 | $(3,095) | | Diluted EPS | $0.34 | $(1.21) | H1 Performance (Six Months Ended June 30) | Metric (in thousands, except EPS) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $86,459 | $73,548 | | Income from Operations | $2,259 | $(1,649) | | Net Income (Loss) Attributable to NCS | $4,980 | $(1,025) | | Diluted EPS | $1.84 | $(0.41) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, the company's balance sheet showed total assets of $158.0 million, an increase from year-end 2024, with total liabilities decreasing and total equity increasing | Balance Sheet Item (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $25,372 | $25,880 | | Total current assets | $110,970 | $105,570 | | Total assets | $157,977 | $152,812 | | Total current liabilities | $23,806 | $25,419 | | Total liabilities | $33,998 | $36,703 | | Total equity | $123,979 | $116,109 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities was $1.9 million, a decrease from the prior year, with net cash used in investing and financing activities Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,876 | $4,099 | | Net cash used in investing activities | $(474) | $(393) | | Net cash used in financing activities | $(2,240) | $(1,669) | | **Net change in cash and cash equivalents** | **$(508)** | **$1,894** | | **Cash and cash equivalents end of period** | **$25,372** | **$18,614** | [Revenues by Geographic Area](index=8&type=section&id=REVENUES%20BY%20GEOGRAPHIC%20AREA) In Q2 2025, Canada was the largest market with $18.0 million in revenue, while U.S. revenue also grew, offsetting a decline in other international countries Q2 Revenues by Geography (in thousands) | Region | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | United States | $13,612 | $11,791 | | Canada | $17,969 | $12,058 | | Other Countries | $4,873 | $5,841 | | **Total Revenues** | **$36,454** | **$29,690** | H1 Revenues by Geography (in thousands) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | United States | $22,984 | $21,802 | | Canada | $55,687 | $43,727 | | Other Countries | $7,788 | $8,019 | | **Total Revenues** | **$86,459** | **$73,548** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20INFORMATION) This section provides reconciliations of key non-GAAP financial measures including net working capital, adjusted gross profit, EBITDA, and free cash flow [Net Working Capital](index=9&type=section&id=NET%20WORKING%20CAPITAL) The company calculates Net Working Capital by excluding cash and current debt maturities from the standard working capital definition, showing an increase to $64.0 million as of June 30, 2025 Net Working Capital Reconciliation (in thousands) | Component (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Working capital | $87,164 | $80,151 | | Less: Cash and cash equivalents | $(25,372) | $(25,880) | | Plus: Current maturities of long term debt | $2,200 | $2,141 | | **Net working capital** | **$63,992** | **$56,412** | [Adjusted Gross Profit and Adjusted Gross Margin](index=10&type=section&id=ADJUSTED%20GROSS%20PROFIT%20AND%20ADJUSTED%20GROSS%20MARGIN) Adjusted Gross Profit, which excludes depreciation and amortization from cost of sales, was $13.0 million in Q2 2025, though the Adjusted Gross Margin declined to 36% Adjusted Gross Profit Reconciliation (in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Profit (GAAP) | $12,269 | $11,318 | $33,409 | $28,273 | | Gross Margin (GAAP) | 34% | 38% | 39% | 38% | | **Adjusted Gross Profit** | **$12,998** | **$11,971** | **$34,853** | **$29,542** | | **Adjusted Gross Margin** | **36%** | **40%** | **40%** | **40%** | [EBITDA and Adjusted EBITDA](index=11&type=section&id=EBITDA%2C%20ADJUSTED%20EBITDA%2C%20ADJUSTED%20EBITDA%20MARGIN%2C%20AND%20ADJUSTED%20EBITDA%20LESS%20SHARE-BASED%20COMPENSATION) For Q2 2025, Adjusted EBITDA more than doubled to $2.2 million from $0.9 million in Q2 2024, with the margin improving from 3% to 6% Adjusted EBITDA Reconciliation (in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $1,698 | $(2,839) | $6,152 | $(286) | | EBITDA | $2,136 | $(1,153) | $8,676 | $3,227 | | **Adjusted EBITDA** | **$2,223** | **$916** | **$10,437** | **$6,993** | | **Adjusted EBITDA Margin** | **6%** | **3%** | **12%** | **10%** | [Free Cash Flow](index=12&type=section&id=FREE%20CASH%20FLOW%20AND%20FREE%20CASH%20FLOW%20LESS%20DISTRIBUTIONS%20TO%20NON-CONTROLLING%20INTEREST) For the first six months of 2025, Free Cash Flow was $1.4 million, a decrease from the prior year, with Free Cash Flow less distributions to non-controlling interests at $0.5 million Free Cash Flow Reconciliation (Six Months Ended June 30, in thousands) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,876 | $4,099 | | Less: Capital Expenditures | $(745) | $(686) | | Plus: Proceeds from sales of property | $271 | $293 | | **Free cash flow** | **$1,402** | **$3,706** | | Less: Distributions to non-controlling interest | $(900) | $(500) | | **Free cash flow less distributions** | **$502** | **$3,206** |

Core Viewpoint - NCS Multistage Holdings, Inc. reported strong operational and financial performance in Q2 2025, with revenues and Adjusted EBITDA exceeding expectations and demonstrating a year-over-year revenue growth of 23% [2][3]. Financial Performance - Total revenues for Q2 2025 were $36.5 million, a 23% increase from $29.7 million in Q2 2024, driven by increased fracturing systems activity and frac plug sales in North America [8][9]. - Net income for Q2 2025 was $0.9 million, or $0.34 per diluted share, compared to a net loss of $(3.1) million, or $(1.21) per share, in Q2 2024 [15][9]. - Adjusted EBITDA for Q2 2025 was $2.2 million, reflecting a $1.3 million improvement year-over-year, with an Adjusted EBITDA margin of 6% compared to 3% in the same period last year [16][9]. Operational Highlights - The company maintained a strong balance sheet with over $25 million in cash and only $8 million in debt as of June 30, 2025 [4][9]. - The acquisition of Reservoir Metrics, LLC for $5.9 million is expected to enhance NCS's tracer diagnostics service line, with ResMetrics generating over $10 million in revenue and an EBITDA margin exceeding 30% [5][22]. Market Conditions - The company remains cautiously optimistic about the second half of 2025, despite deteriorating market conditions, including declining U.S. rig counts and potential oversupply in the oil market [6][2]. Geographic Revenue Breakdown - In Q2 2025, U.S. revenues totaled $13.6 million, while Canadian revenues reached $18 million, reflecting strong product sales despite a decline in Canadian rig counts [36][37]. - International revenues decreased primarily due to reduced tracer diagnostics activity in the Middle East, although there was an increase in sales of well construction products in other regions [8][10]. Cash Flow and Capital Expenditures - Cash flow from operating activities for the first half of 2025 was a source of cash of $1.9 million, a decrease from $4.1 million in the same period of 2024 [17]. - Capital expenditures for the first half of 2025 were $0.5 million, slightly up from $0.4 million in the same period of 2024 [20]. Liquidity and Working Capital - As of June 30, 2025, NCS had a working capital of $87.2 million, an increase from $80.2 million at the end of 2024, with net working capital at $64.0 million [18][19].

NCS Multistage Holdings, Inc. is a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies. NCS provides products and services primarily to exploration and production companies for use in onshore and offshore wells, predominantly wells that have been drilled with horizontal laterals in both unconventional and conventional oil and natural gas formations. NCS's products and ...

Core Viewpoint - NCS Multistage Holdings, Inc. will discuss its second quarter 2025 results in a conference call scheduled for August 1, 2025, at 7:30 a.m. Central Time [1] Company Overview - NCS Multistage Holdings, Inc. is a leading provider of engineered products and support services for optimizing oil and natural gas well construction, completions, and field development strategies [3] - The company primarily serves exploration and production companies for both onshore and offshore wells, focusing on those drilled with horizontal laterals in unconventional and conventional formations [3] - NCS's products and services are utilized across various oil and natural gas basins in North America and selected international markets, including the North Sea, Middle East, Argentina, and China [3] - The company's common stock is traded on the Nasdaq Capital Market under the symbol "NCSM" [3]

Summary of NCS Multistage (NCSM) Conference Call - May 21, 2025 Company Overview - NCS Multistage is a technology-focused oil field services and equipment company, primarily selling to exploration and production (E&P) companies such as Chevron, Conoco, Oxy, BP, and others [3][4] - The company competes with larger, established firms like Schlumberger, Halbern, and Core Lab [4] Core Business Strategies - NCS Multistage has three core business strategies: 1. **Build on Leading Market Positions**: Focus on fracturing systems, Canadian completions, and tracer diagnostics [8] 2. **Capitalize on Offshore and International Opportunities**: International markets are growing faster than North America, allowing for stronger customer relationships based on technical characteristics [9] 3. **Commercialize Innovative Solutions**: Understanding customer needs and delivering solutions that provide tangible value [9] Financial Performance - Revenue grew by approximately 14% or $20 million in 2024, with expectations for continued growth in 2025 despite a challenging market [10] - Gross margin is around 40%, with an improvement of approximately 250 basis points in 2024 compared to the previous year [11] - The company operates with a capital-light model, expecting to convert about 50% to 60% of adjusted EBITDA to free cash flow [11] Market Environment and Challenges - The market is expected to be flat or slightly declining in the U.S., with slight growth in Canada and opportunities outside North America [15] - Spot oil prices are about $10 per barrel lower, leading to reduced drilling and completion spending by customers [16] - Customer consolidation in Canada may lead to fewer wells being drilled, reducing market opportunities [16] Cash Management and Future Plans - As of March 31, the company had approximately $23 million in cash and $27 million available through a revolving credit facility [13] - Priorities for cash usage include investing in internal R&D for organic growth and exploring strategic acquisitions [20][21] - If no suitable M&A opportunities arise, the company may consider returning capital to shareholders [21] Conclusion - NCS Multistage presents a compelling investment opportunity with a strong organic growth track record, innovative technology, and a robust balance sheet [12] - The company is focused on navigating market uncertainties while pursuing attractive commercial opportunities [19]

Core Insights - NCS Multistage Holdings, Inc. (NCSM) reported total revenues of $50.0 million in Q1 2025, marking a 14% year-over-year increase and the highest quarterly revenue since Q1 2020 [1][5] - The growth was primarily driven by increased product sales in Canada and services revenue across all geographies, despite a decline in U.S. product sales due to project delays [1] - The company expects modest revenue growth through FY25, despite potential threats from increasing tariffs [1] Revenue Breakdown - Canadian sales saw a 26% sequential increase, while international revenue experienced a 34% decline due to timing of tracer work and a 13% drop in U.S. revenue compared to Q4 2024 [1] - International revenue was supported by tracer diagnostics work in the Middle East and product and service sales in the North Sea [1] Financial Metrics - Consolidated gross margins improved from 40.1% in Q1 2024 to 43.7% in Q1 2025 [1] - NCSM reported a liquidity position of $49.8 million, up from $34.4 million in Q1 2024 [5] - Adjusted EBITDA reached $8.2 million, reflecting a $2.1 million year-over-year improvement [5]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements for Q1 2025 show increased revenue and net income, driven by strong Canadian and international market performance [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $155.1 million, liabilities decreased, and equity rose to $120.8 million as of March 31, 2025 Condensed Consolidated Balance Sheet Highlights (In thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $109,041 | $105,570 | | **Total Assets** | $155,118 | $152,812 | | **Total Current Liabilities** | $23,865 | $25,419 | | **Total Liabilities** | $34,282 | $36,703 | | **Total Equity** | $120,836 | $116,109 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 total revenues rose 14.0% to $50.0 million, with net income significantly increasing to $4.1 million, or $1.51 diluted EPS Statements of Operations Highlights (In thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $50,005 | $43,858 | | **Income from Operations** | $4,289 | $2,501 | | **Net Income** | $4,454 | $2,553 | | **Net Income attributable to NCS** | $4,056 | $2,070 | | **Diluted EPS** | $1.51 | $0.82 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income attributable to the company for Q1 2025 significantly increased to $4.0 million, primarily due to higher net income Comprehensive Income (In thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $4,454 | $2,553 | | Comprehensive Income | $4,443 | $2,057 | | **Comprehensive Income attributable to NCS** | **$4,045** | **$1,574** | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $120.8 million by March 31, 2025, primarily due to net income and share-based compensation - Key changes in stockholders' equity for Q1 2025 include a **$4.5 million** increase from net income and a **$0.6 million** increase from share-based compensation[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved slightly in Q1 2025, with overall cash and equivalents decreasing by $2.9 million to $23.0 million Summary of Cash Flows (In thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,645) | $(1,880) | | Net cash used in investing activities | $(451) | $(136) | | Net cash used in financing activities | $(790) | $(630) | | **Net change in cash and cash equivalents** | **$(2,883)** | **$(2,716)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue by geography, debt facilities, and ongoing patent litigation, supporting the unaudited financial statements Revenue by Geographic Area (In thousands) | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $9,372 | $10,011 | | Canada | $37,718 | $31,669 | | Other Countries | $2,915 | $2,178 | | **Total Revenues** | **$50,005** | **$43,858** | - The company has a **$35.0 million** ABL Facility with an available borrowing base of **$26.8 million** as of March 31, 2025, with no outstanding indebtedness under the facility[47](index=47&type=chunk) - The company is involved in ongoing patent litigation. A Canadian court ruled against NCS, a decision which is under appeal. Separately, NCS received favorable jury verdicts against Nine Energy Services and TCO AS in the U.S., which are also under appeal[57](index=57&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting 14.0% revenue growth, strong liquidity, and market outlook with key risks [Overview and Outlook](index=18&type=section&id=Overview%20and%20Outlook) The 2025 outlook anticipates stable Canadian activity, modest U.S. decline, and international growth, with risks from commodity prices and competition - The 2025 market outlook anticipates stable activity in Canada, a modest decline in the U.S., and increased activity in international markets like the North Sea, Middle East, and Argentina[74](index=74&type=chunk) - The company faces risks from competitive pressures, which constrain pricing, and potential cost increases from tariffs on steel and chemicals from China[77](index=77&type=chunk)[78](index=78&type=chunk) - Geopolitical conflicts in the Middle East and the Russia-Ukraine war, along with global economic concerns, contribute to oil price volatility[76](index=76&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q1 2025 revenues increased 14.0% to $50.0 million, and net income grew 74.5% to $4.5 million, driven by Canadian and international growth Q1 2025 vs. Q1 2024 Operational Results (In thousands) | Metric | Q1 2025 | Q1 2024 | Variance ($) | Variance (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $50,005 | $43,858 | $6,147 | 14.0% | | **Total Gross Profit** | $21,140 | $16,955 | $4,185 | 24.7% | | **Income from Operations** | $4,289 | $2,501 | $1,788 | 71.5% | | **Net Income** | $4,454 | $2,553 | $1,901 | 74.5% | - Revenue growth was driven by a **$6.0 million (19.1%)** increase in Canada and a **$0.7 million (33.8%)** increase in other countries, while U.S. revenue declined by **$0.6 million (6.4%)**[98](index=98&type=chunk) - Gross margin as a percentage of revenue improved from **61.3%** to **57.7%** due to higher-margin international work and supply chain efficiencies[99](index=99&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, liquidity includes $23.0 million cash and $26.8 million available ABL facility, sufficient for future operations - The company's liquidity position as of March 31, 2025 includes **$23.0 million** in cash and **$26.8 million** available under its ABL Facility, with no outstanding borrowings[104](index=104&type=chunk) - Total planned capital expenditures for 2025 are estimated to be between **$1.5 million** and **$1.8 million**[107](index=107&type=chunk) Cash Flow Summary (In thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,645) | $(1,880) | | Net cash used in investing activities | $(451) | $(136) | | Net cash used in financing activities | $(790) | $(630) | [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure has not materially changed since the disclosures in its 2024 Annual Report - There have been no material changes in the company's market risk exposure since December 31, 2024[121](index=121&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025[122](index=122&type=chunk) - No material changes to internal control over financial reporting occurred during the first quarter of 2025[123](index=123&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) For information regarding legal proceedings, refer to Note 10 of the unaudited condensed consolidated financial statements - For information regarding legal proceedings, refer to Note 10 of the unaudited condensed consolidated financial statements[126](index=126&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the 2024 Annual Report[127](index=127&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[128](index=128&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data - The exhibits filed with this report include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and Inline XBRL documents[129](index=129&type=chunk) Signatures [Signatures](index=32&type=section&id=Signatures) The report was formally signed and submitted by the Chief Financial Officer and Treasurer on May 1, 2025 - The Form 10-Q was signed on May 1, 2025, by Mike Morrison, Chief Financial Officer and Treasurer[133](index=133&type=chunk)

Financial Data and Key Metrics Changes - The first quarter revenue was $50 million, exceeding the high end of the guided range by $4 million, marking the highest quarterly revenue since Q1 2020 [4][12] - Adjusted gross margin was 44%, up from 40% year-over-year, reflecting strong operating leverage [5][12] - Adjusted EBITDA was $8.2 million, an increase from $6.1 million in Q1 2024 [12] Business Line Data and Key Metrics Changes - Canadian revenue reached $38 million, a 19% increase compared to Q1 2024, driven by the fracturing systems product line [6][12] - International revenue increased by 34%, primarily from activities in the Middle East and North Sea [12] - U.S. revenue declined by 6%, indicating challenges in that market [12] Market Data and Key Metrics Changes - The average rig count in Canada increased by 3%, but NCS's revenue growth outpaced this, indicating strong market performance [6] - International revenue accounted for 10% of total revenue in 2024, with expectations for continued growth in the North Sea and Middle East [7][8] Company Strategy and Development Direction - The company aims to build on its leading market positions, capitalize on international opportunities, and commercialize innovative solutions [6][9] - NCS is focusing on technology development and expanding its addressable market through new product introductions [10][21] - The company is evaluating M&A opportunities while maintaining a strong balance sheet for strategic investments [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the second half of 2025 due to geopolitical uncertainties and potential impacts from tariffs [17][19] - The company maintains a revenue guidance of $165 million to $175 million for 2025, reflecting a 5% year-over-year growth at the midpoint [18] - There is an expectation for free cash flow of $7 million to $11 million, which will strengthen the balance sheet [18][21] Other Important Information - Selling, general, and administrative costs increased by $2.4 million due to higher incentive bonuses and stock-based compensation [13] - The company had a cash balance of $23 million and total liquidity of approximately $50 million at the end of Q1 [14][21] Q&A Session Summary Question: Are there any capacity constraints on the horizon? - Management indicated no significant breakpoints in capacity, with sufficient supply chain capacity to support growth [26][28] Question: What is the current sales pipeline like? - The company noted ongoing scenario planning among customers, with expectations for decisions impacting market activity in the near term [30][32] Question: How do you see product sales in the U.S. playing out for the remainder of 2025? - Management highlighted deferred opportunities in frac systems and successful customer trials converting into regular activity [34][35] Question: Will the company pursue M&A opportunities given the strong balance sheet? - Management confirmed active evaluation of M&A opportunities while also considering internal investment options [40][41] Question: How is the pricing environment affected by tariffs and commodity prices? - Management acknowledged challenges in passing through costs due to low commodity prices but emphasized the differentiation of their products [54][58]

Financial Data and Key Metrics Changes - The company's Q1 2025 revenue was $50 million, exceeding the high end of the guided range by $4 million, marking the highest quarterly revenue since Q1 2020 [4][12] - Adjusted gross margin improved to 44%, up from 40% year-over-year, benefiting from operating leverage and higher margin international activity [5][12] - Adjusted EBITDA for Q1 2025 was $8.2 million, surpassing the estimated range of $4.5 million to $6.5 million, and representing a year-over-year increase of $2.1 million [5][12] Business Line Data and Key Metrics Changes - Revenue in Canada for Q1 2025 was $38 million, a 19% increase compared to Q1 2024, driven by the adoption of fracturing systems [6][12] - International revenue increased by 34%, primarily due to activity in the Middle East and North Sea, while U.S. revenue declined by 6% [12] Market Data and Key Metrics Changes - The average rig count in Canada increased by 3%, but the company's revenue growth outpaced this, indicating strong market performance [6] - The company anticipates a seasonal decline in Canadian revenue for Q2 2025 due to spring breakup, projecting total revenue in the range of $26 million to $29 million [15] Company Strategy and Development Direction - The company aims to build on its leading market positions, capitalize on international opportunities, and commercialize innovative solutions to customer challenges [6][8] - The company is focusing on expanding its presence in international markets, particularly in the North Sea and the Middle East, and plans to establish a local entity in the UK [6][29] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the second half of 2025 due to geopolitical uncertainties and potential impacts from tariffs, while maintaining a revenue guidance of $165 million to $175 million for the year [17][19] - The company expects to generate positive free cash flow in 2025, strengthening its balance sheet and providing opportunities for strategic investments [19][22] Other Important Information - The company reported a net income of $4.1 million for Q1 2025, with diluted earnings per share of $1.51, an improvement from $2.1 million and $0.82 per share in Q1 2024 [12] - The company maintains a strong liquidity position with $23 million in cash and total liquidity of approximately $50 million [22] Q&A Session Summary Question: Are there any capacity constraints to be aware of? - Management indicated no significant breakpoints in capacity, citing a robust supply chain and infrastructure to support growth [27][29] Question: What is the current sales pipeline like? - Management noted ongoing scenario planning among customers and anticipated decisions that could affect market activity, particularly in North America [30][32] Question: How does the company view M&A opportunities? - Management is open to evaluating M&A opportunities but also sees strong internal investment potential if suitable external opportunities do not arise [39][40] Question: How is the pricing environment affected by tariffs and commodity prices? - Management acknowledged challenges in passing through increased costs due to low commodity prices but emphasized the differentiation of their products [54][56]

[NCS Multistage Holdings, Inc. First Quarter 2025 Results](index=1&type=section&id=NCS%20Multistage%20Holdings%2C%20Inc.%20First%20Quarter%202025%20Results) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) NCS reported strong Q1 2025 results, with revenue reaching **$50.0 million**, net income **$4.1 million**, and Adjusted EBITDA **$8.2 million** Q1 2025 Key Financial Metrics (YoY, in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $50.0 | $43.9 | +14% | | Net Income | $4.1 | $2.1 | +95% | | Diluted EPS | $1.51 | $0.82 | +84% | | Adjusted EBITDA | $8.2 | $6.1 | +35% | | Adjusted Gross Margin | 44% | 40% | +400 bps | - The CEO noted that Q1 2025 total revenues and Adjusted EBITDA surpassed prior guidance, primarily led by strong performance in Canada[3](index=3&type=chunk) - The company's cash balance was **$23.0 million** with a total liquidity of **$49.8 million** as of March 31, 2025, an increase of **$15.4 million** from the previous year[8](index=8&type=chunk) - NCS has not experienced a significant impact from global trade tensions but acknowledges potential risks to commodity prices and activity levels for the second half of 2025 if tensions escalate[9](index=9&type=chunk) [Detailed Financial Review](index=2&type=section&id=Financial%20Review) Q1 2025 revenues increased 14% to **$50.0 million**, driven by Canadian and international sales, improving gross margin to 42% and net income to **$4.1 million** - YoY revenue growth was driven by increased Canadian product sales and higher services revenue across all geographic regions, partially offset by a decline in U.S. product sales due to project delays[12](index=12&type=chunk) - Sequentially, total revenues increased by 11% from Q4 2024, with a 26% rise in Canada offset by declines of 34% in international revenue and 13% in U.S. revenue[13](index=13&type=chunk) - Gross margin improved to **42%** (Adjusted Gross Margin to **44%**) due to higher-margin international work in the Middle East and North Sea, increased Canadian sales, and supply chain efficiencies[14](index=14&type=chunk) - SG&A expenses increased by **$2.4 million** YoY to **$16.2 million**, reflecting higher annual incentive bonus accruals, professional fees, and share-based compensation expense[15](index=15&type=chunk) [Liquidity and Capital Position](index=2&type=section&id=Liquidity%20and%20Capital%20Position) NCS maintained a strong balance sheet as of March 31, 2025, with **$23.0 million** cash, **$49.8 million** total liquidity, and **$64.4 million** net working capital Liquidity and Debt Profile (as of March 31, 2025, in millions) | Metric | Value | | :--- | :--- | | Cash | $23.0 | | Total Indebtedness | $7.6 | | ABL Facility Availability | $26.8 | | Total Liquidity | $49.8 | | Working Capital | $85.2 | - Net working capital increased to **$64.4 million** at the end of Q1 2025 from **$56.4 million** at year-end 2024, mainly due to higher accounts receivable and lower accrued expenses after paying 2024 incentive bonuses[21](index=21&type=chunk) - Cash flow from operating activities was a use of **$(1.6) million**, a **$0.2 million** improvement from Q1 2024 Free cash flow was a use of **$(2.1) million**[19](index=19&type=chunk) - Net capital expenditures were **$0.5 million** for the first quarter of 2025, compared to **$0.1 million** in the same period of 2024[22](index=22&type=chunk) [Geographic Performance](index=8&type=section&id=Geographic%20Performance) Canada led Q1 2025 performance with 19% revenue growth to **$37.7 million**, comprising 75% of total revenue, while U.S. revenue declined and international grew 34% Revenues by Geographic Area (in thousands) | Region | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | United States | $9,372 | $10,011 | -6.4% | | Canada | $37,718 | $31,669 | +19.1% | | Other Countries | $2,915 | $2,178 | +33.8% | | **Total Revenues** | **$50,005** | **$43,858** | **+14.0%** | - Canada's contribution to total revenue increased to **75.4%** in Q1 2025 from **72.2%** in Q1 2024[36](index=36&type=chunk) - The increase in international service revenues was driven by Middle East tracer diagnostics projects and North Sea fracturing systems sales and services[12](index=12&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Q1 2025 financial statements detail 14% revenue growth to **$50.0 million**, net income of **$4.5 million**, total assets of **$155.1 million**, and total equity of **$120.8 million** [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $50,005 | $43,858 | | Gross Profit | $21,140 | $16,955 | | Income from Operations | $4,289 | $2,501 | | Net Income | $4,454 | $2,553 | | Net Income Attributable to NCS | $4,056 | $2,070 | | Diluted EPS | $1.51 | $0.82 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,997 | $25,880 | | Total Current Assets | $109,041 | $105,570 | | Total Assets | $155,118 | $152,812 | | Total Current Liabilities | $23,865 | $25,419 | | Total Liabilities | $34,282 | $36,703 | | Total Equity | $120,836 | $116,109 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,645) | $(1,880) | | Net cash used in investing activities | $(451) | $(136) | | Net cash used in financing activities | $(790) | $(630) | | Net change in cash | $(2,883) | $(2,716) | | Cash at end of period | $22,997 | $14,004 | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) NCS provides non-GAAP measures including Adjusted Gross Profit, Adjusted EBITDA, Free Cash Flow, and Net Working Capital to assess core business performance [Reconciliation of Adjusted Gross Profit](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Gross%20Profit) Adjusted Gross Profit Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit (GAAP) | $21,140 | $16,955 | | Gross Margin (GAAP) | 42% | 39% | | Add: D&A in cost of sales | $715 | $616 | | **Adjusted Gross Profit** | **$21,855** | **$17,571** | | **Adjusted Gross Margin** | **44%** | **40%** | [Reconciliation of Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income (GAAP) | $4,454 | $2,553 | | D&A, Interest, Taxes | $1,884 | $1,827 | | EBITDA | $6,540 | $4,380 | | Adjustments (Share-based comp, etc.) | $1,674 | $1,697 | | **Adjusted EBITDA** | **$8,214** | **$6,077** | | **Adjusted EBITDA Margin** | **16%** | **14%** | [Reconciliation of Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Free Cash Flow Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,645) | $(1,880) | | Less: Purchases of property & equipment | $(464) | $(312) | | Plus: Proceeds from sales of property & equipment | $13 | $176 | | **Free Cash Flow** | **$(2,096)** | **$(2,016)** | [Reconciliation of Net Working Capital](index=9&type=section&id=Reconciliation%20of%20Net%20Working%20Capital) Net Working Capital Reconciliation (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Working capital (GAAP) | $85,176 | $80,151 | | Less: Cash and cash equivalents | $(22,997) | $(25,880) | | Add: Current maturities of long term debt | $2,250 | $2,141 | | **Net working capital** | **$64,429** | **$56,412** |