NCS Multistage Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $45.6 million, down 9% year-over-year and below guidance by $5 million, primarily due to challenges in Canada.

U.S. Revenue: Increased over 100% year-over-year, contributing significantly to overall revenue growth.

Adjusted Gross Profit: $18.2 million with a gross margin of 40%, down from 44% in Q1 2025.

Net Loss: $0.4 million or a loss per share of $0.14, compared to a net income of $4.1 million in the previous year.

Adjusted EBITDA: $5.6 million, representing a margin of over 12%, below the low end of guidance and down from $8.2 million in Q1 2025.

Cash Flow: Positive operating cash flow of $1.3 million and free cash flow of $0.7 million, both improved from Q1 2025.

Liquidity: $53 million total liquidity, including $34.5 million in cash and $18.5 million available under an undrawn ABL Facility.

2Strategic Updates and Business Highlights

U.S. Growth: Significant growth driven by Repeat Precision product sales and tracer diagnostics, including contributions from the ResMetrics acquisition.

New Projects: Successful conversion of field trials into recurring work, particularly with Repeat Precision products.

Technology Development: Introduction of the StageSaver frac plug and ongoing trials for new products like the PurpleReign dissolvable plug.

Operational Integration: Progress in integrating ResMetrics, with expected operational synergies to accelerate in the second half of the year.

International Outlook: Continued growth anticipated in the North Sea and Middle East, with new projects and tenders being pursued.

3Forward Guidance and Outlook

Full Year Revenue Guidance: Increased to a range of $186 million to $194 million, with a modest increase in the midpoint.

Adjusted EBITDA Guidance: Maintained at $26 million to $29 million, reflecting higher revenue but increased cash-settled share-based compensation expenses.

Q2 2026 Revenue Guidance: Expected between $36 million and $39 million, with U.S. revenue projected at $18 million to $19 million and Canadian revenue at $13 million to $14 million.

Capital Expenditures: Increased guidance to $2.2 million to $2.8 million to support manufacturing capacity expansion.

4Bad News, Challenges, or Points of Concern

Revenue Shortfall: The decline in Canadian revenue by 38% due to adverse weather, early spring breakup, and customer deferrals.

Lower Adjusted EBITDA: Below guidance due to reduced gross margins and lower revenue mix.

Market Risks: Future customer activity could be impacted by fluctuating oil prices and potential budget adjustments.

Operational Challenges: Need for hiring to support increased activity levels if market conditions improve.

5Notable Q&A Insights

Canada's Challenges: The CEO detailed that weather and customer deferrals were significant factors in the revenue miss, with expectations for recovery in the second half of the year.

Deepwater Projects: Discussions around deepwater projects indicated that while progress is being made, timelines could shift based on customer and regulatory factors.

Market Sentiment: Operators are cautiously optimistic, with increased inquiries about rig counts, but commitments are still pending.

Capacity Constraints: Management indicated that while manufacturing capacity is sufficient, hiring skilled personnel could be a limiting factor if demand accelerates.

Pricing Dynamics: New products like the PurpleReign frac plug command a premium, while the StageSaver is more focused on volume growth. This summary encapsulates the key points from NCS Multistage's Q1 2026 earnings call, providing a balanced view of the company's performance, strategic direction, and challenges ahead.