DALLAS, TX -- October 30th, 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 international product sales primarily with fracturing systems (including the North Sea) and wellbore construction in the Middle East. This was partially offset by softer Canadian product sales on lower rig counts. International revenue increased ~38.0% y/y while U.S. revenue grew by ~36.0% during the same period as tracer diagnostics ramped (including ~$2M from ResMetrics). Canada grew 32% sequentially as spring break-up effects eased. Adjusted Gross margins came in at 41.7%, down slightly from 42.1% in 3Q24. Going forward, we continue to expect modest revenue and margin growth through the remainer of FY25, supported by resilience in core product lines and contributions from the recent ResMetrics acquisition.  

Company Updates:

Quarterly Results: NCSM reported revenue, gross profit, and adj EBITDA of $46.5M, $19.4M, and $7.0M, respectively. This compares to our estimates of $46.1M, $18.9M, and $7.3M, respectively. This growth was primarily driven by an outperformance in the services segment. The EPS for this quarter was $1.47, compared to $1.67 in the same quarter last year. We expect NCSM to maintain reasonably strong margins due to increasing market capture in the international markets through FY25.

Balance Sheet, Liquidity, and Cash Flows: NCSM ended 3Q25 with net working capital of $63.0M, an increase of 12.6% from $56.4M at year-end 2024, driven by higher accounts receivable and inventory, partially offset by a decrease in other current receivables. The Company reported $25.3M in cash and had an additional $19.4M available under its undrawn revolving credit facility, resulting in a total liquidity position of $44.7M. This liquidity compares favorably to total debt of only $7.4M, consisting entirely of finance lease obligations. Free cash flow and less distributions to non-controlling interest was a source of $6.8M as of 3Q25, up from just $0.35M in the prior year period. improved operating cash generation and disciplined investments.

ResMetrics Integration: NCSM closed the ResMetrics acquisition in late July 2025, and early results were visible in 3Q25. Thus far, diagnostics services in the U.S. benefited by ~$2.0M from ResMetrics, supporting sequential growth and mix. Integration is progressing ahead of plan, combining ResMetrics’ chemical tracer lab capabilities and PetroXY web portal with NCS’s tracer portfolio and international footprint (notably the Middle East and North Sea). Management expects the combined diagnostics platform to be a category leader, with medium-term synergy potential from best-practice adoption and scaled product/service development.

Updated Guidance: For 4Q25, management guides revenue of $41–45M, adjusted gross margin of 40–42%, and Adjusted EBITDA of $5.0–6.5M. This is coupled with FY25 revenue guidance of $174–178M and Adjusted EBITDA of $22.5–24.0M; management also forecasts FY25 free cash flow less distributions to NCI of $11–13M and gross Capex of $1.3–1.5M. We have made modest adjustments to our model.

Valuation: We use both a DCF and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $48.26 to $56.97 with a mid-point of $52.05. Our EV/EBITDA valuation results in a range of $46.61 to $56.91 with a mid-point of $51.76.

About StonegateStonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking, equity research and capital raising for public and private companies.

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