NCS Multistage Q4 Earnings Call Highlights

Key Points

• 2025 results beat guidance: Total revenue rose 13% year-over-year to about $183.6 million, adjusted EBITDA increased 20% to $26.7 million with ~15% margin, and free cash flow was $18.9 million (≈70% conversion from adjusted EBITDA).
• ResMetrics acquisition progressing: The July 2025 buy added roughly $5.2 million of revenue, is being integrated operationally (U.S. lab and manufacturing consolidation planned in Tulsa), and is driving North American cross-selling while international ramp and synergies are expected but will take more time.
• 2026 outlook: Management guided full-year revenue of $184–$194 million, adjusted EBITDA of $26–$29 million, and free cash flow of $12–$16 million, noting a challenging market, seasonal back-half weighting, weaker Canadian activity, and potential geopolitical/trade risks.

NCS Multistage NASDAQ: NCSM reported strong fourth-quarter and full-year 2025 results, with management emphasizing revenue growth across geographies, margin expansion at the EBITDA level, and solid free cash flow generation despite what it described as a challenging industry backdrop. On the company’s earnings call, CEO Ryan Hummer and CFO Mike Morrison said results exceeded the high end of guidance ranges for revenue, adjusted EBITDA, and free cash flow, and outlined expectations for a seasonally weighted 2026 as the company integrates the ResMetrics acquisition and pursues new international and technology-driven opportunities.

2025 results topped guidance as revenue and adjusted EBITDA increased

Hummer said 2025 “was a very important and successful year” and that the company exceeded the high end of its guidance ranges for the quarter and full year. Total revenue grew 13% year-over-year versus 2024, and management said growth was 10% excluding ResMetrics, which was acquired at the end of July 2025.

Adjusted EBITDA increased 20% year-over-year to $26.7 million, with an adjusted EBITDA margin of about 15% for the year. Free cash flow after distributions to non-controlling interest totaled $18.9 million, which management highlighted as over 70% conversion from adjusted EBITDA to free cash flow, reflecting what it called an “asset-light model.”

For the fourth quarter, Morrison reported revenue of $50.6 million, up 13% from the prior-year quarter and above the high end of guidance. He said growth was driven by “healthy double-digit percentage improvements” in both product and services revenue.

Regional performance mixed in Q4, led by the U.S.

Morrison said the U.S. led geographic growth in the fourth quarter, with revenue up 69% year-over-year. International revenue rose 5%, while Canada declined 7%. He attributed the U.S. increase to improved NCS fracturing system sales, higher plug revenue from Repeat Precision, and a $2.9 million contribution from ResMetrics. The Canadian decline was attributed to “moderately lower activity levels” due to general market headwinds.

Sequentially, fourth-quarter revenue rose 9% from the prior quarter, with increases in Canada and the U.S. partially offset by a decline in international revenue, according to Morrison.

Margins, expenses, and special items

Adjusted gross profit in the fourth quarter was $21.2 million, representing an adjusted gross margin of 42%, compared with 43% a year earlier. Morrison said the slight decline came despite a favorable contribution from ResMetrics and was driven by the mix of international tracer diagnostic jobs and fracturing system service activity, partly offset by an expansion in gross margin for product sales.

Selling, general and administrative expenses were $14.2 million in the fourth quarter, down 5% year-over-year. Morrison cited the timing of incentive bonus accruals recorded in the prior-year quarter, lower professional fees, and lower share-based compensation expense tied to cash-settled awards that fluctuate with the stock price. ResMetrics contributed $600,000 to fourth-quarter SG&A, he added.

The company recorded a $900,000 benefit related to litigation net of recoveries. Morrison said an October 2025 ruling by the Federal Court of Appeal of Canada remanded a prior judgment against NCS in a patent dispute to the trial court and reduced the cost award, leading to $900,000 being returned to NCS in November 2025.

Net income for the fourth quarter was $15.0 million, or diluted EPS of $5.34. Morrison said results included a $9.8 million positive impact from releasing a deferred tax valuation allowance, which he said demonstrated confidence in continued profitability and the ability to utilize deferred tax assets. Adjusted EBITDA for the quarter was $9.2 million, representing an adjusted EBITDA margin of over 18%.

For full-year 2025, Morrison reported revenue of $183.6 million, up 13% year-over-year. ResMetrics contributed $5.2 million of revenue in the five months following the acquisition, slightly above expectations. Full-year adjusted gross margin was 41%, about 40 basis points lower than 2024. SG&A totaled $58.8 million, up $1.0 million, with ResMetrics adding $1.1 million and higher share-based compensation partly offset by lower professional service fees, R&D expense, and other reductions.

Full-year net income rose to $23.7 million, or diluted EPS of $8.65, including a $11.5 million net positive impact related to releasing U.S. and Canadian deferred tax valuation allowances. Adjusted EBITDA for the year was $26.7 million, up from $22.3 million in 2024, and adjusted EBITDA margin expanded to 14.5% from 13.7%.

ResMetrics integration progresses; focus on tracer diagnostics and new applications

Hummer said the ResMetrics acquisition strengthened NCS’s tracer diagnostics platform and increased exposure to new Middle East markets while aligning with its “capital-light business model.” He said the company is operating under the ResMetrics commercial brand in the U.S. and has integrated sales and business development teams. NCS also upgraded its laboratory information management systems to incorporate certain ResMetrics processes, with operational and manufacturing integration expected to follow.

Manufacturing and U.S. lab operations are expected to be centralized in Tulsa by mid-year, according to Hummer, who said the company has a “clear line of sight” to identified cost savings and is progressing toward revenue synergy opportunities that were previously characterized as upside.

On the Q&A, Hummer said cross-selling benefits have been more apparent within North America so far, citing deployment of ResMetrics’ SmartProp particulate tracer with customers in Canada. For international markets, he highlighted RapidTrace, an on-site tracer detection capability designed to provide quicker decision support in remote locations. He noted ResMetrics’ international work is under multi-year contracts in the Emirates and Kuwait and said expanding scope is possible, though revenue cross-selling outside North America “will take a little bit more to develop.”

2026 outlook: challenging market, seasonality, and guidance ranges

Looking ahead, Hummer said the company expects the market environment to be challenging again in 2026, with flat to lower customer activity in North America compared to 2025 and increased activity in the primary international markets it serves, likely weighted to the back half of the year, “especially in the Middle East.”

The company’s 2026 guidance includes:

• Full-year revenue: $184 million to $194 million
• Full-year adjusted EBITDA: $26 million to $29 million
• Gross capital expenditures: $1.5 million to $2.0 million
• Free cash flow after distributions to JV partner: $12 million to $16 million

Hummer said revenue growth is expected to come primarily from the U.S. and international markets, supported by market share gains—particularly at Repeat Precision—new product adoption, and continued international expansion. He said Canadian revenue is expected to be lower year-over-year due to headwinds from a lower total rig count (especially in the first quarter) and customer consolidation that could reduce pro forma activity levels.

He also said 2026 guidance does not incorporate “meaningful additional impacts” from the volatile trade environment, including potential new or retaliatory tariffs involving the U.S., Canada, and Mexico, and does not reflect potential impacts from the Middle East conflict on regional operations or from sustained commodity price increases.

For the first quarter of 2026, Morrison guided to total revenue of $49 million to $53 million, with U.S. revenue of $19.5 million to $20.5 million, international revenue of $3 million to $4 million, and Canadian revenue of $26.5 million to $28.5 million. Adjusted gross margin is expected to be 39% to 41%, and adjusted EBITDA is expected to be $6.5 million to $8.5 million, with depreciation and amortization of approximately $1.6 million.

Management reiterated that seasonality and project timing are expected to result in performance weighted toward the second half of the year. In response to analyst questions, Hummer said the company expects a similar seasonal profile in 2026, driven in part by Canadian activity patterns and project development timelines.

About NCS Multistage NASDAQ: NCSM

NCS Multistage Holdings, Inc is an oilfield services company that designs, engineers and manufactures downhole completion systems for use in hydraulic fracturing operations across North America. Specializing in multi‐stage stimulation technologies, the company's product portfolio includes composite frac plugs, open‐hole frac systems and mechanical isolation tools that enable producers to optimize well performance in unconventional reservoirs. Its tools are employed in plug-and-perf operations, horizontal completions and re-entry applications, providing zonal isolation and pressure integrity throughout the fracturing process.

In addition to its core frac plug offerings, NCS Multistage provides a range of complementary services including on-site rig support, tool installation supervision and pressure testing.

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