Financial Data and Key Metrics Changes - The company's Q3 2025 revenue was $46.5 million, a 6% year-over-year improvement, exceeding the midpoint of guidance, including contributions from ResMetrix since acquisition [16][4] - Adjusted EBITDA for Q3 was $7 million, exceeding guidance and including ResMetrix's contribution [18] - Free cash flow for the first nine months of 2025 improved by $6.8 million compared to the prior year, reaching $6.8 million after distributions to non-controlling interest [6][19] - The company reported a net income of $3.8 million for Q3, with diluted earnings per share of $1.37, compared to $4.1 million and $1.60 in the same quarter last year [18] Business Line Data and Key Metrics Changes - U.S. revenue increased by 26% sequentially and 54% year-over-year, with a 37% increase excluding ResMetrix [5][6] - Canadian revenue increased by 9% year-to-date despite a 6% decline in average rig count, indicating strong customer value [8] - International revenue reached 10% of total revenue, marking a significant milestone for the company [8] Market Data and Key Metrics Changes - The North Sea market continues to show strong collaboration with customers, supporting technical papers and hosting workshops [9] - The Canadian market has seen a pullback in activity, with a 15% year-over-year decline in rig count, but the company remains optimistic about future growth [46][48] Company Strategy and Development Direction - The company is focused on organic growth initiatives and new product development, aiming to maximize financial flexibility and free cash flow [7] - Core strategies include building on leading market positions, capitalizing on high-margin growth opportunities, and commercializing innovative solutions [7][10] - The integration of ResMetrix is progressing well, with early successes in operational and financial performance [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed caution moving into Q4 due to challenging market conditions, including stagnating U.S. rig counts and declines in Canada [21] - The company expects annual revenue for 2025 to be between $174 million and $178 million, representing 8% year-over-year growth [22] - Free cash flow expectations for the year have been increased to $11 million to $13 million, reflecting favorable working capital balances [23][24] Other Important Information - The company has a strong liquidity position with total liquidity of approximately $45 million [24] - A recent legal matter in Canada was resolved favorably for the company, overturning a prior judgment against it [14] Q&A Session Summary Question: What does the opportunity set look like for ResMetrix in the Middle East going forward? - Management highlighted that ResMetrix brought long-term contracts and expanded the company's portfolio in the Middle East, particularly in Oman and Saudi Arabia [26][27] Question: Would free cash flow expectations remain similar in a flat growth environment for 2026? - Management indicated that they typically convert 50% to 60% of adjusted EBITDA to free cash flow, suggesting a stable profile in a flat growth scenario [28][29] Question: How is the integration of ResMetrix progressing and what are the synergy expectations? - Integration is on track, with potential synergies of $1 million to $2 million expected from improved efficiencies in operations [35][36] Question: What does the pipeline look like for the North Sea going into 2026? - Management expects robust activity in the North Sea next year, with several orders already in hand for sliding sleeves [38][39] Question: Given the weakness in Canadian rigs, how will the company defend its margins? - Management noted that while there has been a pullback in activity, they have historically gained market share and will adapt their cost structure if necessary [45][48] Question: What is the competitive environment for tracer diagnostics in international markets? - Management described the competitive landscape as manageable, with a few global competitors in tracer diagnostics, allowing for a focus on value delivery [54][55]

Summary of NCS Multistage (NCSM) Conference Call - August 21, 2025 Company Overview - NCS Multistage is an oilfield-focused technology company serving the oilfield services and equipment market, selling directly to major oil and natural gas producers such as Chevron, Conoco, and BP [2][4] - The company competes with larger established firms like Schlumberger and Halliburton, focusing on areas where it can achieve leadership and attractive margins [2] Business Model and Financials - NCS operates with a capital-light business model, outsourcing manufacturing to minimize capital investment and convert EBITDA into free cash flow [3][4] - The company reported a market capitalization and enterprise value just below $85 million, with trailing twelve-month EBITDA of $26 million and free cash flow of $10 million, indicating a low trading multiple and robust free cash flow yield [4] - Revenue grew by 14% or $20 million in 2024, with expectations for continued growth in 2025 despite a challenging market environment [8] Strategic Focus - NCS has three core business strategies: 1. Build on leading market positions, particularly in fracturing systems and Canadian completions [6] 2. Capitalize on offshore and international opportunities, as these markets are growing faster than North America [6] 3. Commercialize innovative solutions to complex customer challenges, enhancing customer value [7] Acquisition of ResMetrix - The strategic acquisition of ResMetrix, a provider of tracer diagnostics technologies, was announced in July 2025 [9][10] - ResMetrix has trailing twelve-month unaudited revenue of over $10 million and an EBITDA margin exceeding 30% [13] - The acquisition aims to create a leading global tracer diagnostics business, enhancing NCS's service offerings and expanding its geographic footprint, particularly in the Middle East [12][10] - NCS plans to integrate ResMetrix carefully, focusing on optimizing chemical usage and realizing economies of scale [12] Market Position and Future Outlook - NCS believes that as the North American exploration and production business matures, oilfield service providers will need to engage in strategic combinations to remain competitive [14] - The company is positioned well for organic growth and complementary acquisitions, with a strong balance sheet and approximately $25 million in cash available for strategic transactions [16] - NCS aims to continue delivering revenue, gross profit, and EBITDA growth with strong incremental margins, focusing on innovative technology for technically demanding applications [15][14] Conclusion - NCS Multistage presents a compelling investment opportunity with a solid growth track record and a focus on expanding its presence in growth markets for unconventional resource development [14]

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]