NCS Multistage Holdings, Inc. Announces First Quarter 2026 Results
Rhea-AI Summary
NCS Multistage (Nasdaq: NCSM) reported first quarter 2026 results: revenues $45.6M, net loss $(0.4)M or $(0.14) per share, and Adjusted EBITDA $5.6M (12% margin). Cash was $34.5M with $7.2M total debt and $18.5M undrawn ABL availability as of March 31, 2026.
Revenue declined versus Q1 2025 primarily due to lower Canada activity and timing in international projects; U.S. growth and ResMetrics contributed partially. Operating cash flow and free cash flow improved year-over-year.
Positive
- Adjusted EBITDA of $5.6M (12% margin)
- Operating cash flow improved to $1.3M versus $(1.6)M a year ago
- Free cash flow positive $0.7M versus $(2.1)M a year ago
- Net cash position over $27M and $18.5M undrawn ABL availability
Negative
- Total revenues declined to $45.6M from $50.0M year-over-year
- Net loss of $(0.4)M versus net income $4.1M in prior-year quarter
- Gross margin declined to 38% from 42% year-over-year
News Market Reaction – NCSM
In the Apr 30 session, NCSM declined 28.07%, reflecting a significant negative market reaction. Argus tracked a trough of -35.2% from its starting point during tracking. Our momentum scanner triggered 10 alerts that day, indicating notable trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Mar 04 | Q4/FY 2025 results | Positive | +12.1% | Strong Q4 and FY25 growth in revenue, EBITDA and net income with higher cash. |
| Oct 29 | Q3 2025 results | Positive | -7.0% | Q3 2025 revenue and earnings growth with solid liquidity and ResMetrics impact. |
| Jul 31 | Q2 2025 results | Positive | +3.2% | Q2 2025 revenue up 23% YoY with improved EBITDA and ResMetrics acquisition. |
| Apr 30 | Q1 2025 results | Positive | +15.3% | Q1 2025 revenue and margin expansion with higher net income and EBITDA. |
| Mar 10 | Q4/FY 2024 results | Positive | +7.3% | Strong Q4 and FY24 revenue growth, better margins and higher cash generation. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings releases have often been followed by positive price reactions, even when later quarters showed some softness.
Over the past several earnings cycles, NCS Multistage has generally reported growing revenues, expanding Adjusted EBITDA and strengthening liquidity. Events on Mar 10, 2025, Apr 30, 2025, and Mar 4, 2026 all highlighted double‑digit revenue growth, higher margins, and rising cash balances, with mostly positive share price reactions. The current Q1 2026 release contrasts with those trends, showing lower revenue and a net loss versus prior-year Q1, while still emphasizing liquidity and contributions from the ResMetrics acquisition.
Key Terms
adjusted EBITDA financial
free cash flow financial
asset-based revolving credit facility financial
working capital financial
non-GAAP financial measures financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
First Quarter Results
- Total revenues of
$45.6 million , compared to$50.0 million in the same quarter of 2025 - Net loss of
$(0.4) million and loss per share of$(0.14) , compared to net income of$4.1 million and diluted earnings per share of$1.51 in the same quarter of 2025 - Adjusted EBITDA of
$5.6 million , compared to$8.2 million in the same quarter of 2025 - Cash flows from operating activities of
$1.3 million and free cash flow of$0.7 million , increases compared to$(1.6) million and$(2.1) million , respectively, in the first quarter of 2025. $34.5 million in cash and$7.2 million of total debt as of March 31, 2026
HOUSTON, April 29, 2026 (GLOBE NEWSWIRE) -- NCS Multistage Holdings, Inc. (Nasdaq: NCSM) (the “Company,” “NCS,” “we” or “us”), a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies, today announced its results for the quarter ended March 31, 2026.
Review and Outlook
NCS’s Chief Executive Officer, Ryan Hummer, commented, “Solid execution and momentum in the United States in the first quarter, including the contribution from ResMetrics, partially offset the impact of lower year-over-year industry activity levels in North America, customer-specific job deferrals in Canada in March, and other timing-related delays in certain international projects.
While our revenue for the quarter declined compared to the year ago period, coming in below the guided range, our adjusted gross margin for the quarter met the midpoint of the guided range. We reduced our selling, general and administrative (“SG&A”) expenses in the first quarter of 2026, which included ResMetrics, as compared to the first quarter of 2025, validating our financial discipline. We generated Adjusted EBITDA of
With our asset-light business model, relatively fixed SG&A, and disciplined capital allocation, we generated free cash flow after distributions in the first quarter of the year, which is typically a period of cash consumption. This
Our team continued to advance key strategic initiatives during the quarter, reaching additional ResMetrics integration milestones and benefitting from growing adoption of Repeat Precision solutions, driven by positive field trial results and the effectiveness of new products, including our differentiated StageSaver composite and PurpleReign dissolvable frac plugs.
Looking ahead, we remain confident in our full year 2026 outlook and believe we are well positioned to execute our long-term growth strategy. We are seeing increased customer engagement across our U.S. completions offerings, with an expected continuation of the operational success at Repeat Precision and a large multi-well, multi-basin fracturing systems project in the United States, for which we expect to begin delivering sliding sleeves in the second half of the year. We expect a modest year-over-year increase in customer activity in Canada in the second half of 2026, including work deferred from the first quarter, and we expect continued opportunities for growth in international and offshore markets.
In closing, I want to thank our employees, our customers, and our shareholders for their dedication and trust. Our customer commitment is unwavering, and our strategic priorities are anchored by the delivery of long-term value for shareholders.”
Financial Review
Total revenues were
Compared to the fourth quarter of 2025, total revenues decreased by
Gross profit was
SG&A expenses totaled
Other income was
Income tax expense for the first quarter of 2026 increased
Net loss was
Adjusted EBITDA was
Cash flow from operating activities for the three months ended March 31, 2026 was a source of cash of
Liquidity and Capital Expenditures
As of March 31, 2026, NCS had
Net working capital, calculated as working capital, less cash and excluding the current maturities of long-term debt, was
NCS incurred capital expenditures, net of proceeds from the sale of property and equipment, of
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital are non-GAAP financial measures. For an explanation of these measures and a reconciliation, refer to “Non-GAAP Financial Measures” below.
Conference Call
The Company will host a conference call to discuss its first quarter 2026 results and latest earnings guidance on Thursday, April 30, 2026 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). The conference call will be available via a live audio webcast. Participants who wish to ask questions may register for the call here to receive the dial-in numbers and unique PIN. If you wish to join the conference call but do not plan to ask questions, you may join the listen-only webcast here. The live webcast can also be accessed by visiting the Investors section of the Company’s website at ir.ncsmultistage.com. It is recommended that participants join at least 10 minutes prior to the event start.
The replay will be available in the Investors section of the Company’s website shortly after the conclusion of the call and will remain available for approximately seven days.
About NCS Multistage Holdings, Inc.
NCS Multistage Holdings, Inc. is a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies. NCS provides products and services primarily to exploration and production companies for use in onshore and offshore wells, predominantly those that have been drilled with horizontal laterals in both unconventional and conventional oil and natural gas formations. NCS’s products and services are utilized in oil and natural gas basins throughout North America and in selected international markets, including the North Sea, the Middle East and Argentina. NCS’s common stock is traded on the Nasdaq Capital Market under the symbol “NCSM.” Additional information is available on the website, www.ncsmultistage.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: declines in the level of oil and natural gas exploration and production activity in Canada, the United States and internationally; oil and natural gas price fluctuations; significant competition for our products and services that results in pricing pressures, reduced sales, or reduced market share; inability to successfully implement our strategy of increasing sales of products and services into the U.S. and international markets; loss of significant customers; losses and liabilities from uninsured or underinsured business activities and litigation; additional income tax liabilities and reassessments; change in trade policy, including the impact of tariffs; our failure to identify and consummate potential acquisitions; the financial health of our customers including their ability to pay for products or services provided; our inability to integrate or realize the expected benefits from acquisitions; our inability to achieve suitable price increases to offset the impacts of cost inflation; loss of any of our key suppliers or significant disruptions negatively impacting our supply chain; risks in attracting and retaining qualified employees and key personnel; risks resulting from the operations of our joint venture arrangement; currency exchange rate fluctuations; impact of severe weather conditions; our inability to accurately predict customer demand, which may result in excess or obsolete inventory; failure to comply with or changes to federal, state and local and non-U.S. laws and other regulations, including tax policies, anti-corruption and environmental regulations, guidelines and regulations for the use of explosives; impairment in the carrying value of long-lived assets including goodwill; system interruptions or failures, including complications with our enterprise resource planning system, cybersecurity breaches, identity theft or other disruptions that could compromise our information; our inability to successfully develop and implement new technologies, products and services that align with the needs of our customers, including addressing the shift to more non-traditional energy markets as part of the energy transition and the adoption of artificial intelligence and machine learning; our inability to protect and maintain critical intellectual property assets, the inability to protect our current royalty income, or the losses and liabilities from adverse decisions in intellectual property disputes; loss of, or interruption to, our information and computer systems; our failure to establish and maintain effective internal control over financial reporting; restrictions on the availability of our customers to obtain water essential to the drilling and hydraulic fracturing processes; changes in legislation or regulation governing the oil and natural gas industry, including restrictions on emissions of greenhouse gases; our inability to meet regulatory requirements for use of certain chemicals by our tracer diagnostics business; the reduction in our ABL Facility borrowing base or our inability to comply with the covenants in our debt agreements; and our inability to obtain sufficient liquidity on reasonable terms, or at all and other factors discussed or referenced in our filings made from time to time with the Securities and Exchange Commission. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Contact
Mike Morrison
Chief Financial Officer and Treasurer
(281) 453-2222
IR@ncsmultistage.com
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| Product sales | $ | 32,583 | $ | 35,066 | ||||
| Services | 13,054 | 14,939 | ||||||
| Total revenues | 45,637 | 50,005 | ||||||
| Cost of sales | ||||||||
| Cost of product sales, exclusive of depreciation and amortization expense shown below | 19,729 | 20,352 | ||||||
| Cost of services, exclusive of depreciation and amortization expense shown below | 7,737 | 7,798 | ||||||
| Total cost of sales, exclusive of depreciation and amortization expense shown below | 27,466 | 28,150 | ||||||
| Selling, general and administrative expenses | 15,728 | 16,195 | ||||||
| Depreciation | 1,293 | 1,204 | ||||||
| Amortization | 302 | 167 | ||||||
| Income from operations | 848 | 4,289 | ||||||
| Other income (expense) | ||||||||
| Interest expense, net | (26 | ) | (42 | ) | ||||
| Other income, net | 1,863 | 883 | ||||||
| Foreign currency exchange loss, net | (110 | ) | (3 | ) | ||||
| Total other income | 1,727 | 838 | ||||||
| Income before income tax | 2,575 | 5,127 | ||||||
| Income tax expense | 834 | 673 | ||||||
| Net income | 1,741 | 4,454 | ||||||
| Net income attributable to non-controlling interest | 2,112 | 398 | ||||||
| Net (loss) income attributable to NCS Multistage Holdings, Inc. | $ | (371 | ) | $ | 4,056 | |||
| (Loss) earnings per common share | ||||||||
| Basic (loss) earnings per common share attributable to NCS Multistage Holdings, Inc. | $ | (0.14 | ) | $ | 1.58 | |||
| Diluted (loss) earnings per common share attributable to NCS Multistage Holdings, Inc. | $ | (0.14 | ) | $ | 1.51 | |||
| Weighted average common shares outstanding | ||||||||
| Basic | 2,629 | 2,568 | ||||||
| Diluted | 2,629 | 2,686 | ||||||
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 34,458 | $ | 36,725 | ||||
| Accounts receivable—trade, net | 35,798 | 40,507 | ||||||
| Inventories, net | 40,780 | 39,011 | ||||||
| Prepaid expenses and other current assets | 1,698 | 2,031 | ||||||
| Other current receivables | 4,258 | 3,644 | ||||||
| Total current assets | 116,992 | 121,918 | ||||||
| Noncurrent assets | ||||||||
| Property and equipment, net | 19,266 | 19,849 | ||||||
| Goodwill | 16,387 | 16,387 | ||||||
| Identifiable intangibles, net | 5,686 | 5,989 | ||||||
| Operating lease assets | 4,472 | 4,817 | ||||||
| Deposits and other assets | 524 | 586 | ||||||
| Deferred income taxes, net | 11,256 | 11,653 | ||||||
| Total noncurrent assets | 57,591 | 59,281 | ||||||
| Total assets | $ | 174,583 | $ | 181,199 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable—trade | $ | 10,567 | $ | 8,517 | ||||
| Accrued expenses | 4,882 | 9,461 | ||||||
| Income taxes payable | 969 | 1,151 | ||||||
| Operating lease liabilities | 1,534 | 1,587 | ||||||
| Contingent purchase consideration | — | 1,250 | ||||||
| Current maturities of long-term debt | 2,291 | 2,385 | ||||||
| Other current liabilities | 1,635 | 4,175 | ||||||
| Total current liabilities | 21,878 | 28,526 | ||||||
| Noncurrent liabilities | ||||||||
| Long-term debt, less current maturities | 4,909 | 5,259 | ||||||
| Operating lease liabilities, long-term | 3,385 | 3,716 | ||||||
| Other long-term liabilities | 200 | 202 | ||||||
| Deferred income taxes, net | 407 | 398 | ||||||
| Total noncurrent liabilities | 8,901 | 9,575 | ||||||
| Total liabilities | 30,779 | 38,101 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 27 | 26 | ||||||
| Additional paid-in capital | 450,379 | 449,890 | ||||||
| Accumulated other comprehensive loss | (86,583 | ) | (86,132 | ) | ||||
| Retained deficit | (235,647 | ) | (235,276 | ) | ||||
| Treasury stock, at cost, 95,210 shares at March 31, 2026 and 68,068 shares at December 31, 2025 | (3,343 | ) | (2,269 | ) | ||||
| Total stockholders' equity | 124,833 | 126,239 | ||||||
| Non-controlling interest | 18,971 | 16,859 | ||||||
| Total equity | 143,804 | 143,098 | ||||||
| Total liabilities and stockholders' equity | $ | 174,583 | $ | 181,199 | ||||
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 1,741 | $ | 4,454 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 1,595 | 1,371 | ||||||
| Amortization of deferred loan costs | 62 | 52 | ||||||
| Share-based compensation | 1,227 | 1,445 | ||||||
| Provision for inventory obsolescence | (22 | ) | (35 | ) | ||||
| Deferred income tax expense | 377 | 1 | ||||||
| Gain on sale of property and equipment | (47 | ) | (36 | ) | ||||
| Provision for credit losses | — | 42 | ||||||
| Net foreign currency unrealized loss (gain) | 183 | (849 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable—trade | 4,524 | (6,978 | ) | |||||
| Inventories, net | (1,999 | ) | 200 | |||||
| Prepaid expenses and other assets | 238 | 890 | ||||||
| Accounts payable—trade | 1,963 | 3,742 | ||||||
| Accrued expenses | (4,560 | ) | (3,003 | ) | ||||
| Other liabilities | (3,727 | ) | (3,273 | ) | ||||
| Income taxes receivable/payable | (275 | ) | 332 | |||||
| Net cash provided by (used in) operating activities | 1,280 | (1,645 | ) | |||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (591 | ) | (464 | ) | ||||
| Purchase and development of software and technology | (48 | ) | — | |||||
| Proceeds from sales of property and equipment | 80 | 13 | ||||||
| Net cash used in investing activities | (559 | ) | (451 | ) | ||||
| Cash flows from financing activities | ||||||||
| Payments on finance leases | (613 | ) | (522 | ) | ||||
| Line of credit borrowings | 1,970 | 1,963 | ||||||
| Payments of line of credit borrowings | (1,970 | ) | (1,963 | ) | ||||
| Payment of contingent consideration | (1,250 | ) | — | |||||
| Treasury shares withheld | (1,074 | ) | (268 | ) | ||||
| Net cash used in financing activities | (2,937 | ) | (790 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (51 | ) | 3 | |||||
| Net change in cash and cash equivalents | (2,267 | ) | (2,883 | ) | ||||
| Cash and cash equivalents beginning of period | 36,725 | 25,880 | ||||||
| Cash and cash equivalents end of period | $ | 34,458 | $ | 22,997 | ||||
| Noncash investing and financing activities | ||||||||
| Assets obtained in exchange for new finance lease liabilities | $ | 215 | $ | — | ||||
| Assets obtained in exchange for new operating lease liabilities | $ | 67 | $ | 244 | ||||
| NCS MULTISTAGE HOLDINGS, INC. REVENUES BY GEOGRAPHIC AREA (In thousands) (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| United States | ||||||||
| Product sales | $ | 14,209 | $ | 6,867 | ||||
| Services | 4,931 | 2,505 | ||||||
| Total United States | 19,140 | 9,372 | ||||||
| Canada | ||||||||
| Product sales | 16,164 | 26,843 | ||||||
| Services | 7,047 | 10,875 | ||||||
| Total Canada | 23,211 | 37,718 | ||||||
| Other Countries | ||||||||
| Product sales | 2,210 | 1,356 | ||||||
| Services | 1,076 | 1,559 | ||||||
| Total other countries | 3,286 | 2,915 | ||||||
| Total | ||||||||
| Product sales | 32,583 | 35,066 | ||||||
| Services | 13,054 | 14,939 | ||||||
| Total revenues | $ | 45,637 | $ | 50,005 | ||||
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital (our “non-GAAP financial measures”) are not defined under generally accepted accounting principles (“GAAP”), are not measures of net income (loss), income from operations, gross profit and gross margin (inclusive of DD&A), cash provided by (used in) operating activities, working capital or any other performance measure derived in accordance with GAAP, and are subject to important limitations. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with GAAP. Our non-GAAP financial measures have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our financial performance as reported under GAAP, and they should not be considered as alternatives to net income (loss), income from operations, gross profit, gross margin, cash provided by (used in) operating activities, working capital or any other performance measures derived in accordance with GAAP as measures of operating performance or as alternatives to cash flow from operating activities as measures of our liquidity.
However, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital are key metrics that management uses to assess the period-to-period performance of our core business operations or metrics that enable investors to assess our performance from period to period relative to the performance of other companies that are not subject to such factors, or who may provide similar non-GAAP measures in their public disclosures.
The tables below set forth reconciliations of our non-GAAP financial measures to the most directly comparable measures of financial performance calculated under GAAP:
NET WORKING CAPITAL
Net working capital is defined as total current assets, excluding cash and cash equivalents, minus total current liabilities, excluding current maturities of long-term debt. Net working capital excludes cash and cash equivalents and current maturities of long-term debt in order to evaluate the investments in working capital that we believe are required to support our business. We believe that net working capital is useful in analyzing the cash flow and working capital needs of the Company, including determining the efficiencies of our operations and our ability to readily convert assets into cash.
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Working capital | $ | 95,114 | $ | 93,392 | ||||
| Cash and cash equivalents | (34,458 | ) | (36,725 | ) | ||||
| Current maturities of long term debt | 2,291 | 2,385 | ||||||
| Net working capital | $ | 62,947 | $ | 59,052 | ||||
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
FREE CASH FLOW AND FREE CASH FLOW LESS DISTRIBUTIONS TO NON-CONTROLLING INTEREST
Free cash flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment (inclusive of the purchase and development of software and technology) plus proceeds from sales of property and equipment, as presented in our consolidated statement of cash flows. We define free cash flow less distributions to non-controlling interest as free cash flow less amounts reported in the financing activities section of the statement of cash flows as distributions to non-controlling interest. We believe free cash flow is useful because it provides information to investors regarding the cash that was available in the period that was in excess of our needs to fund our capital expenditures and other investment needs. We believe that free cash flow less distributions to non-controlling interest is useful because it provides information to investors regarding the cash that was available in the period that was in excess of our needs to fund our capital expenditures, other investment needs, and cash distributions to our joint venture partner.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash provided by (used in) operating activities | $ | 1,280 | $ | (1,645 | ) | |||
| Purchases of property and equipment | (591 | ) | (464 | ) | ||||
| Purchase and development of software and technology | (48 | ) | — | |||||
| Proceeds from sales of property and equipment | 80 | 13 | ||||||
| Free cash flow | $ | 721 | $ | (2,096 | ) | |||
| Distributions to non-controlling interest | — | — | ||||||
| Free cash flow less distributions to non-controlling interest | $ | 721 | $ | (2,096 | ) | |||
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN
Adjusted gross profit is defined as total revenues minus cost of sales, exclusive of depreciation and amortization expense, which we present as a separate line item in our statement of operations. Adjusted gross margin represents adjusted gross profit as a percentage of total revenues.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Total revenues | $ | 45,637 | $ | 50,005 | ||||
| Total cost of sales, exclusive of depreciation and amortization expense | 27,466 | 28,150 | ||||||
| Total depreciation and amortization associated with cost of sales | 800 | 715 | ||||||
| Gross Profit | $ | 17,371 | $ | 21,140 | ||||
| Gross Margin | 38 | % | 42 | % | ||||
| Exclude total depreciation and amortization associated with cost of sales | (800 | ) | (715 | ) | ||||
| Adjusted Gross Profit | $ | 18,171 | $ | 21,855 | ||||
| Adjusted Gross Margin | 40 | % | 44 | % | ||||
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ADJUSTED EBITDA LESS SHARE-BASED COMPENSATION
EBITDA is defined as net income (loss) before interest expense, net, income tax expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain items which we believe are not reflective of ongoing operating performance or which, in the case of share-based compensation, is non-cash in nature. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of total revenues. Adjusted EBITDA Less Share-Based Compensation is defined as Adjusted EBITDA minus share-based compensation expense. We believe that Adjusted EBITDA is an important measure that excludes costs that do not reflect the Company's ongoing operating performance, legal proceedings for intellectual property as further described below, and certain costs associated with our capital structure. We believe that Adjusted EBITDA Less Share-Based Compensation presents our financial performance in a manner that is comparable to the presentation provided by many of our peers.
We periodically incur legal costs associated with the assertion of, or defense of, intellectual property, which we exclude from our definition of Adjusted EBITDA and Adjusted EBITDA Less Share-Based Compensation, unless we believe that settlement will occur prior to any material legal spend (included in the table below as “Professional Fees”). Although these costs may recur between periods, depending on legal matters then outstanding or in process, we believe the timing of when these costs are incurred does not typically match the settlement or recoveries associated with such matters, and therefore, can distort our operating results. Similarly, we exclude from Adjusted EBITDA and Adjusted EBITDA Less Share-Based Compensation the one-time settlement or recovery payment associated with these excluded legal matters when realized but would not exclude any go forward royalties or payments, if applicable. We expect to continue to incur these legal costs for current matters under appeal and for any future cases that may go to trial, provided that the amount will vary by period.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net income | $ | 1,741 | $ | 4,454 | ||||
| Income tax expense | 834 | 673 | ||||||
| Interest expense, net | 26 | 42 | ||||||
| Depreciation | 1,293 | 1,204 | ||||||
| Amortization | 302 | 167 | ||||||
| EBITDA | 4,196 | 6,540 | ||||||
| Share-based compensation (a) | 490 | 552 | ||||||
| Professional fees (b) | 560 | 989 | ||||||
| Foreign currency exchange loss (c) | 110 | 3 | ||||||
| Other (d) | 233 | 130 | ||||||
| Adjusted EBITDA | $ | 5,589 | $ | 8,214 | ||||
| Adjusted EBITDA Margin | 12 | % | 16 | % | ||||
| Adjusted EBITDA Less Share-Based Compensation | $ | 5,099 | $ | 7,662 | ||||
___________________
| (a) | Represents non-cash compensation charges related to share-based compensation granted to our officers, employees and directors. |
| (b) | Represents non-capitalizable costs of professional services primarily incurred or reversed in connection with our legal proceedings associated with the assertion of, or defense of, intellectual property as further described above as well as the cost incurred for the evaluation of actual and potential strategic transactions. |
| (c) | Represents realized and unrealized foreign currency exchange gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods. |
| (d) | Represents the impact of a research and development subsidy that is included in income tax expense in accordance with GAAP along with other charges and credits. |
