Ncs Multistage Holdings ((NCSM)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for NCS Multistage Holdings conveyed a generally positive sentiment, highlighting strong revenue and EBITDA performance, particularly in Canada, and the successful strategic acquisition of ResMetrics. However, the company also faced challenges, including a decline in international revenue and market uncertainties that could impact future guidance.
Strong Revenue Performance
The company reported second-quarter revenue of $36 million, which exceeded the high end of their guided range by more than $7 million. For the first half of 2025, revenue reached over $86 million, marking an 18% increase compared to the first half of 2024. This strong performance underscores the company’s ability to surpass expectations and drive growth.
Significant Growth in Canada
NCS Multistage Holdings experienced significant growth in Canada, with revenue for the first half of 2025 reaching $56 million, a 27% increase compared to the same period in 2024. This growth highlights the company’s successful operations and market presence in the Canadian region.
Adjusted EBITDA Improvement
The company reported an adjusted EBITDA of $2.2 million for Q2 2025, which exceeded the guided range of negative $2 million to breakeven. This represents a year-over-year improvement of $1.3 million, showcasing the company’s enhanced operational efficiency and financial health.
Strategic Acquisition of ResMetrics
NCS Multistage Holdings announced the acquisition of ResMetrics, a provider of tracer diagnostics. This strategic move is expected to bolster the company’s offerings, with ResMetrics contributing over $10 million in trailing 12-month unaudited revenue and an EBITDA margin of over 30%.
Positive Earnings Growth
The company reported a net income of $0.9 million for Q2 2025, translating to diluted earnings per share of $0.34. This is a significant improvement compared to a net loss of $3.1 million or a loss per share of $1.21 in the prior year, indicating a positive trajectory in earnings growth.
International Revenue Decline
Despite the overall positive performance, international revenues decreased by 17%, primarily due to the timing of tracer diagnostic projects in the Middle East. This decline highlights the challenges the company faces in maintaining consistent international revenue streams.
Adjusted Gross Margin Decrease
The adjusted gross margin for Q2 2025 was reported at 36%, down from 40% a year ago. This decrease was primarily due to the mix of products sold and services provided, indicating a need for strategic adjustments to improve margins.
Market and Industry Conditions
The company expressed a cautious outlook for the second half of 2025, citing deteriorating market and industry conditions. These include a decline in the U.S. rig count and the potential for an oversupplied oil market, which could impact future performance.
Forward-Looking Guidance
Looking ahead, NCS Multistage Holdings provided guidance indicating strong performance for the first half of 2025, with revenues exceeding expectations. The full-year 2025 revenue guidance was adjusted to a range of $168 million to $176 million, with expected adjusted EBITDA ranging from $21 million to $24 million. The acquisition of ResMetrics is anticipated to contribute an additional $4 million to $5 million in revenue and $1 million to $1.5 million in adjusted EBITDA for the last five months of 2025, bringing the combined full-year revenue guidance to between $172 million and $181 million.
In summary, the earnings call for NCS Multistage Holdings highlighted a positive outlook with strong revenue and EBITDA performance, particularly in Canada, and the strategic acquisition of ResMetrics. However, challenges such as international revenue decline and market uncertainties remain. The company’s forward-looking guidance suggests continued growth, with expectations for increased revenue and EBITDA in the coming months.