Stonegate Updates Coverage on NCS Multistage Holdings, Inc. (NASDAQ: NCSM) 2025 Q3October 30, 2025 4:43 PM EDT | Source: Reportable, Inc.Dallas, Texas--(Newsfile Corp. - October 30, 2025) - NCS Multistage Holdings, Inc. (NASDAQ: NCSM): Stonegate Capital Partners updates their coverage on NCS Multistage Holdings, Inc. (NASDAQ: NCSM). In 3Q25, NCSM reported total revenues of $46.5M, a 6.0% year-over-year increase, outperforming broader industry activity levels. Growth reflected higher U.S. and i ...

NCS Multistage (NasdaqCM:NCSM) Q3 2025 Earnings Call October 30, 2025 08:30 AM ET Speaker4Thank you for standing by. Welcome to the NCS Multistage Q3 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please pr ...

Summary of NCS Multistage Holdings Conference Call Company Overview - NCS Multistage Holdings is a technology-focused oilfield services and equipment company, selling directly to oil and natural gas producers such as Chevron, Conoco, and BP [4][5] - Competes with larger companies like Schlumberger and Halliburton, focusing on areas where it can achieve leadership and attractive margins [5] - Operates a capital-light business model, outsourcing manufacturing to minimize capital investment and generate free cash flow [6] Financial Highlights - Recent market capitalization and enterprise value are just below $90 million, with trailing twelve-month EBITDA of $26 million and free cash flow of $10 million [7] - Revenue grew by 14% or $20 million in 2024, with expectations for continued growth in 2025 despite a challenging market [23] - Gross margin approximately 40%, with an improvement of 200 basis points in 2024 compared to 2023 [24] - Free cash flow generation expected to be between $7 million and $11 million for the year [49] Product Lines - **Fracturing Systems**: Represents about 60% of revenue, helping customers maximize resource recovery [8][10] - **Repeat Precision**: Second-largest product line, expanding its offerings to capture additional market share [11][12] - **Tracer Diagnostics**: Acquired in 2017, provides cost-effective services to improve well designs and field development strategies [13][14] - **Well Construction**: Focuses on technologies that assist in drilling longer laterals, enhancing economic returns [15][16] Strategic Initiatives - Three core business strategies introduced in late 2022: 1. Build on leading market positions in fracturing systems and tracer diagnostics [17] 2. Capitalize on offshore and international opportunities, with international revenue doubling from 5% to 10% of total revenue [20] 3. Commercialize innovative solutions to complex customer challenges [19][21] - Recent acquisition of ResMetrix enhances tracer diagnostics capabilities and expands market presence in the Middle East [28][30] Market Dynamics - North American market for unconventional development is maturing, with customers focusing on value over volume [40] - International markets, particularly in the North Sea and Middle East, are seen as growth opportunities [41][42] - Tracer diagnostics is a discretionary service, but its use is expected to grow as operators seek to optimize production profiles [44][46] Cash Management and Future Outlook - The company maintains a strong balance sheet with approximately $25 million in cash and $17 million available through a revolving credit facility [35] - Limited capital expenditure (CapEx) of about 1-2% of revenue, allowing for operational leverage and free cash flow generation [52][54] - The management is open to strategic acquisitions but also considers stock buybacks if suitable opportunities do not arise [56][59] Conclusion - NCS Multistage Holdings presents a compelling investment opportunity with a strong growth track record, innovative technology, and a capital-light business model that supports free cash flow generation [33][34]

Core Insights - NCS Multistage Holdings, Inc. (NCSM) reported total revenues of $36.5 million in Q2 2025, reflecting a 22.8% year-over-year increase, driven by strong fracturing systems activity and frac plug sales in the U.S. and Canada [1][5] - The company experienced a 52% sequential revenue decline in Canada due to spring break-up, while international revenues decreased year-over-year but increased 67.2% sequentially, supported by higher equipment sales in the North Sea [1][5] - U.S. revenues rose 45% sequentially as previously delayed projects resumed, with adjusted gross margins at 35.7%, down from 40.3% in Q2 2024 [1][5] Financial Performance - Adjusted EBITDA improved to $2.2 million, and earnings per share (EPS) was reported at $0.34, which includes a $1.4 million tax benefit [5] - The acquisition of ResMetrics was completed in Q2 2025, expected to contribute $4-5 million in revenue and $1-1.5 million in EBITDA for FY25 [5] Future Outlook - The company anticipates modest revenue and margin growth through FY25, supported by resilience in core product lines and contributions from the recent acquisition of ResMetrics [1]

Financial Data and Key Metrics Changes - The company's second quarter revenue for 2025 was $36,500,000, representing a year-over-year improvement of 23% [18] - Adjusted EBITDA for the second quarter was $2,200,000, an improvement compared to $900,000 for the same period in 2024 [21] - Net income for the second quarter was $900,000, or diluted earnings per share of $0.34, compared to a net loss of $3,100,000 or a loss per share of $1.21 in the prior year [20] Business Line Data and Key Metrics Changes - Revenue in Canada for 2025 was $56,000,000, increasing 27% compared to the same period in 2024, driven by strong performance in fracturing systems [7] - U.S. revenues improved by 15%, reflecting an increase in fracturing system sales and higher frac plug sales at Repeat Precision [18] - International revenues decreased by 17%, primarily due to the timing of tracer diagnostic projects in the Middle East [18] Market Data and Key Metrics Changes - The Canadian rig count was approximately 10% to 15% below the previous year, impacting the company's performance [34] - The company expects continued success in the North Sea, with an increase in customers from two in 2022 to seven in 2025 [10] Company Strategy and Development Direction - The company aims to build upon its leading market positions, particularly in Canada, and capitalize on international and offshore opportunities [8][9] - The acquisition of ResMetrics is expected to enhance the company's tracer diagnostics capabilities and expand its market presence in the Middle East [15][16] - The company is focused on commercializing innovative solutions to complex customer challenges, with ongoing field trials for new products [11] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the second half of 2025 due to deteriorating market conditions, including a decline in U.S. rig counts and potential oversupply in the oil market [24] - The company maintains a strong balance sheet and liquidity position, expecting to generate positive free cash flow in 2025 [27] Other Important Information - The total purchase price for ResMetrics is up to $7,150,000, with an earn-out component of up to $1,250,000 to be paid in 2026 [21] - The company expects third quarter total revenue in the range of $42,000,000 to $46,000,000 [22] Q&A Session Summary Question: Opportunities for cross-selling post-acquisition - Management indicated that there are distinct customer bases for ResMetrics and the existing tracer diagnostics business, suggesting potential revenue synergy opportunities as they integrate offerings [30] Question: Targeting new geographies - Management expressed excitement about expanding in the North Sea and the Middle East, while also considering other offshore markets [32] Question: Factors to tighten guidance range - Management noted that the Canadian rig count is a key factor, with a need for it to recover to provide more confidence in tightening guidance [34] Question: Margin improvement opportunities - Management highlighted that operational synergies could lead to cost reductions, but refrained from specifying margin percentages [40] Question: Customer mindset in volatile market conditions - Management observed a cautiously optimistic tone among customers, with a wait-and-see approach regarding oil prices and market conditions [44]