NCS Multistage Holdings, Inc. Announces Fourth Quarter and Full Year 2025 Results
Rhea-AI Summary
NCS Multistage Holdings (Nasdaq: NCSM) reported strong fourth quarter and full year 2025 results, with FY revenue $183.6M (+13% YoY), Adjusted EBITDA $26.7M (+20% YoY), and net income $23.7M aided by a deferred tax valuation allowance reversal.
Q4 revenue was $50.6M (+13% YoY), Q4 net income was $15.0M, and year-end cash totaled $36.7M versus $7.6M of debt.
Positive
- Revenue +13% year-over-year to $183.6 million
- Adjusted EBITDA +20% year-over-year to $26.7 million
- Free cash flow after NCI distributions +91% to $18.9 million
- Year-end cash position of $36.7 million, low debt of $7.6 million
- Acquisition of ResMetrics added ~$5.2 million in 2025 revenue
Negative
- Canadian revenues down 7% year-over-year
- International service revenue decline due to timing of tracer projects
- Management expects lower U.S. customer activity in 2026
Key Figures
Market Reality Check
Peers on Argus
Sector peers showed mixed moves, with names like DTI down 10% and RCON down 6.51%, while LSE gained 5.24%. This pattern points to stock-specific rather than broad sector-driven trading in the group.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Oct 29 | Q3 2025 earnings | Positive | -7.0% | Reported higher Q3 2025 revenue, net income and Adjusted EBITDA with ResMetrics boost. |
| Jul 31 | Q2 2025 earnings | Positive | +3.2% | Strong Q2 2025 growth, tax benefit and ResMetrics acquisition expanding tracer diagnostics. |
| Apr 30 | Q1 2025 earnings | Positive | +15.3% | Double-digit revenue growth, margin expansion and higher net income with strong liquidity. |
| Mar 10 | FY 2024 results | Positive | +7.3% | Q4 and 2024 full-year revenue growth, improved gross margin and higher operating cash flow. |
| Oct 30 | Q3 2024 earnings | Positive | +2.4% | Q3 2024 revenue and net income growth with solid Adjusted EBITDA and cash balance. |
Earnings releases have generally been received positively, with four prior events showing share price gains and one notable negative reaction despite favorable metrics.
Over the past several quarters, NCS Multistage has reported consistent revenue growth and profitability improvements. Events from Q3 2024 through Q3 2025 feature rising revenues, solid net income and expanding liquidity, with international and North American markets both contributing. The 2024 full-year report highlighted margin gains and stronger cash flow, while 2025 quarterly updates added the ResMetrics acquisition and tax valuation allowance benefits. This latest Q4 and FY 2025 announcement continues that narrative of revenue growth, higher Adjusted EBITDA and robust cash generation.
Historical Comparison
Across the last five earnings-related releases, NCSM saw an average share move of 4.24%, with most reports of revenue and margin growth drawing positive price reactions.
Earnings updates since late 2024 show a progression from strong Q3 2024 results to robust full-year 2024 performance, followed by rising quarterly revenues in 2025, tax valuation allowance benefits and the ResMetrics acquisition. This Q4 and full-year 2025 release extends that sequence with higher revenues, expanded Adjusted EBITDA and stronger free cash flow.
Market Pulse Summary
This announcement details solid Q4 2025 and full-year 2025 performance, with 13% revenue growth, higher operating income, a larger Adjusted EBITDA base and free cash flow of $18.9M. Management highlights the contribution from the ResMetrics acquisition, improved liquidity with $36.7M in cash and modest capital spending. Investors may compare these results to prior earnings, note the sizable tax valuation allowance benefit, and track 2026 activity trends across U.S., Canadian and international markets against the company’s outlook.
Key Terms
adjusted ebitda financial
free cash flow financial
asset-based revolving credit facility financial
valuation allowance financial
non-gaap financial measures financial
performance stock units financial
AI-generated analysis. Not financial advice.
Fourth Quarter Results
- Total revenues of
$50.6 million , a13% year-over-year improvement and exceeding the high end of prior guidance - Operating income of
$5.2 million increased78% year-over-year, outpacing revenue growth - Net income of
$15.0 million ($5.34 per diluted share), including a net positive impact of$9.8 million related to the release of our deferred tax valuation allowance - Adjusted EBITDA of
$9.2 million , compared to$8.2 million in the fourth quarter of 2024 and exceeding the high end of prior guidance $36.7 million in cash and$7.6 million in debt as of December 31, 2025
Full Year Results
- Total revenues of
$183.6 million , a13% improvement over 2024 - Operating income more than doubled to
$10.5 million from$4.3 million in 2024 - Net income of
$23.7 million ($8.65 per diluted share), including a net positive impact of$11.5 million related to the release of our deferred tax valuation allowance - Adjusted EBITDA of
$26.7 million , compared to$22.3 million in 2024 - Cash flows from operating activities of
$22.2 million and free cash flow after distributions to non-controlling interest of$18.9 million , an increase of$9.5 million and$9.0 million , respectively, compared to 2024, with free cash flow after distributions to non-controlling interest exceeding the high end of prior guidance
HOUSTON, March 04, 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 and year ended December 31, 2025.
Review and Outlook
NCS’s Chief Executive Officer, Ryan Hummer commented, “Our performance in the fourth quarter concluded an important year for NCS, in which we grew revenue in each of our geographic markets, expanded our Adjusted EBITDA margin and improved our free cash flow generation. We also welcomed Reservoir Metrics, LLC, and its related entities (“ResMetrics”) to NCS, further strengthening our global capabilities in tracer diagnostics.
Revenue for the year increased by
Adjusted EBITDA of
NCS’ tracer diagnostics product line had a strong finish to 2025, supported by the addition of ResMetrics, which enhances our tracer diagnostics offering, expands our service revenue mix, positions us in new markets in the Middle East, and aligns well with our capital-light philosophy. Our teams are working together to identify and implement best practices, with several early wins and clear timelines for further integration milestones in 2026.
We expect the challenging market environment to continue in 2026 given commodity price levels, trade uncertainty and customer budget discipline. Specifically, we believe customer activity is likely to be lower year-over-year in the U.S. and relatively flat in Canada. We currently expect customer activity to increase in the primary international markets we serve, though the improvements are likely to be weighted to the back half of the year, especially in the Middle East. NCS is well positioned to outperform underlying market trends through continued market share gains, particularly at Repeat Precision, new product adoption, and international expansion, though we will face some headwinds from customer consolidation that has resulted in a reduction in pro forma activity levels, primarily in Canada.
In closing, I want to thank our employees for their dedication and commitment, our customers for their trust, and our shareholders for their continued support. We enter 2026 in a position of strength, with a clear strategic direction, a differentiated portfolio of products and services, a resilient and proven business model, and a clear focus on long-term value creation.”
Financial Review
Fourth Quarter 2025 Financial Results
Total revenues were
Sequentially, total revenues increased by
Gross profit was
Selling, general and administrative (“SG&A”) expenses totaled
Provision for litigation, net of recoveries, was a credit of
Other income was
Income tax benefit was
Net income was
Adjusted EBITDA was
Full Year 2025 Financial Results
For the year ended December 31, 2025, total revenues were
Gross profit was
SG&A expenses totaled
Other income was
Income tax benefit was
Net income was
Adjusted EBITDA was
Cash flows from operating activities for the year ended December 31, 2025 was
Liquidity and Capital Expenditures
As of December 31, 2025, NCS had
Working capital, defined as current assets less current liabilities, 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 Net Income, Adjusted Earnings per Diluted Share, 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 fourth quarter and full year 2025 results and latest earnings guidance on Thursday, March 5, 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 completion 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; 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) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenues | |||||||||||||||
| Product sales | $ | 33,804 | $ | 30,591 | $ | 127,866 | $ | 113,046 | |||||||
| Services | 16,826 | 14,412 | 55,761 | 49,511 | |||||||||||
| Total revenues | 50,630 | 45,003 | 183,627 | 162,557 | |||||||||||
| Cost of sales | |||||||||||||||
| Cost of product sales, exclusive of depreciation and amortization expense shown below | 20,632 | 19,137 | 78,459 | 70,446 | |||||||||||
| Cost of services, exclusive of depreciation and amortization expense shown below | 8,838 | 6,479 | 29,742 | 24,650 | |||||||||||
| Total cost of sales, exclusive of depreciation and amortization expense shown below | 29,470 | 25,616 | 108,201 | 95,096 | |||||||||||
| Selling, general and administrative expenses | 14,209 | 15,031 | 58,845 | 57,820 | |||||||||||
| Depreciation | 1,275 | 1,205 | 4,991 | 4,600 | |||||||||||
| Amortization | 302 | 214 | 894 | 716 | |||||||||||
| Change in fair value of contingent consideration | 156 | — | 156 | — | |||||||||||
| Income from operations | 5,218 | 2,937 | 10,540 | 4,325 | |||||||||||
| Other income (expense) | |||||||||||||||
| Interest expense, net | (42 | ) | (91 | ) | (251 | ) | (414 | ) | |||||||
| Provision for litigation, net of recoveries | 881 | — | 881 | — | |||||||||||
| Other income, net | 1,137 | 2,443 | 4,759 | 7,306 | |||||||||||
| Foreign currency exchange gain (loss) | 140 | (2,175 | ) | 891 | (2,963 | ) | |||||||||
| Total other income | 2,116 | 177 | 6,280 | 3,929 | |||||||||||
| Income before income tax | 7,334 | 3,114 | 16,820 | 8,254 | |||||||||||
| Income tax (benefit) expense | (8,309 | ) | (606 | ) | (9,217 | ) | 116 | ||||||||
| Net income | 15,643 | 3,720 | 26,037 | 8,138 | |||||||||||
| Net income attributable to non-controlling interest | 683 | 249 | 2,289 | 1,545 | |||||||||||
| Net income attributable to NCS Multistage Holdings, Inc. | $ | 14,960 | $ | 3,471 | $ | 23,748 | $ | 6,593 | |||||||
| Earnings per common share | |||||||||||||||
| Basic earnings per common share attributable to NCS Multistage Holdings, Inc. | $ | 5.76 | $ | 1.36 | $ | 9.17 | $ | 2.60 | |||||||
| Diluted earnings per common share attributable to NCS Multistage Holdings, Inc. | $ | 5.34 | $ | 1.32 | $ | 8.65 | $ | 2.55 | |||||||
| Weighted average common shares outstanding | |||||||||||||||
| Basic | 2,597 | 2,551 | 2,589 | 2,539 | |||||||||||
| Diluted | 2,801 | 2,628 | 2,746 | 2,590 | |||||||||||
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) | |||||||
| December 31, | December 31, | ||||||
| 2025 | 2024 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 36,725 | $ | 25,880 | |||
| Accounts receivable—trade, net | 40,507 | 31,513 | |||||
| Inventories, net | 39,011 | 40,971 | |||||
| Prepaid expenses and other current assets | 2,031 | 2,063 | |||||
| Other current receivables | 3,644 | 5,143 | |||||
| Total current assets | 121,918 | 105,570 | |||||
| Noncurrent assets | |||||||
| Property and equipment, net | 19,849 | 21,283 | |||||
| Goodwill | 16,387 | 15,222 | |||||
| Identifiable intangibles, net | 5,989 | 3,690 | |||||
| Operating lease assets | 4,817 | 5,911 | |||||
| Deposits and other assets | 586 | 712 | |||||
| Deferred income taxes, net | 11,653 | 424 | |||||
| Total noncurrent assets | 59,281 | 47,242 | |||||
| Total assets | $ | 181,199 | $ | 152,812 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts payable—trade | $ | 8,517 | $ | 8,970 | |||
| Accrued expenses | 9,461 | 8,351 | |||||
| Income taxes payable | 1,151 | 683 | |||||
| Operating lease liabilities | 1,587 | 1,602 | |||||
| Contingent purchase consideration | 1,250 | — | |||||
| Current maturities of long-term debt | 2,385 | 2,141 | |||||
| Other current liabilities | 4,175 | 3,672 | |||||
| Total current liabilities | 28,526 | 25,419 | |||||
| Noncurrent liabilities | |||||||
| Long-term debt, less current maturities | 5,259 | 6,001 | |||||
| Operating lease liabilities, long-term | 3,716 | 4,891 | |||||
| Other long-term liabilities | 202 | 206 | |||||
| Deferred income taxes, net | 398 | 186 | |||||
| Total noncurrent liabilities | 9,575 | 11,284 | |||||
| Total liabilities | 38,101 | 36,703 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 26 | 26 | |||||
| Additional paid-in capital | 449,890 | 447,384 | |||||
| Accumulated other comprehensive loss | (86,132 | ) | (87,604 | ) | |||
| Retained deficit | (235,276 | ) | (259,024 | ) | |||
| Treasury stock, at cost; 68,068 shares at December 31, 2025 and 56,549 shares at December 31, 2024 | (2,269 | ) | (1,943 | ) | |||
| Total stockholders’ equity | 126,239 | 98,839 | |||||
| Non-controlling interest | 16,859 | 17,270 | |||||
| Total equity | 143,098 | 116,109 | |||||
| Total liabilities and stockholders' equity | $ | 181,199 | $ | 152,812 | |||
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||
| Year Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| (Unaudited) | |||||||
| Cash flows from operating activities | |||||||
| Net income | $ | 26,037 | $ | 8,138 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 5,885 | 5,316 | |||||
| Amortization of deferred loan cost | 215 | 208 | |||||
| Share-based compensation | 6,205 | 5,213 | |||||
| Provision for inventory obsolescence | 857 | 1,136 | |||||
| Deferred income tax benefit | (10,965 | ) | (380 | ) | |||
| Gain on sale of property and equipment | (496 | ) | (506 | ) | |||
| Change in fair value of contingent consideration | 156 | — | |||||
| (Recovery of) provision for credit losses | (28 | ) | 41 | ||||
| Net foreign currency unrealized (gain) loss | (1,693 | ) | 2,365 | ||||
| Proceeds from note receivable | — | 61 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable—trade | (5,499 | ) | (9,154 | ) | |||
| Inventories, net | 2,209 | (2,806 | ) | ||||
| Prepaid expenses and other assets | 3,987 | (1,087 | ) | ||||
| Accounts payable—trade | 427 | 2,706 | |||||
| Accrued expenses | 719 | 4,841 | |||||
| Other liabilities | (5,975 | ) | (3,401 | ) | |||
| Income taxes receivable/payable | 134 | 34 | |||||
| Net cash provided by operating activities | 22,175 | 12,725 | |||||
| Cash flows from investing activities | |||||||
| Purchases of property and equipment | (1,201 | ) | (1,309 | ) | |||
| Purchase and development of software and technology | (106 | ) | (70 | ) | |||
| Proceeds from sales of property and equipment | 772 | 592 | |||||
| Acquisition of business, net of cash acquired | (5,758 | ) | — | ||||
| Proceeds from company-owned life insurance policy | — | 1,266 | |||||
| Net cash (used in) provided by investing activities | (6,293 | ) | 479 | ||||
| Cash flows from financing activities | |||||||
| Payments on finance leases | (2,222 | ) | (1,952 | ) | |||
| Line of credit borrowings | 2,338 | 3,062 | |||||
| Payments of line of credit borrowings | (2,338 | ) | (3,062 | ) | |||
| Treasury shares withheld | (326 | ) | (267 | ) | |||
| Distribution to non-controlling interest | (2,700 | ) | (2,050 | ) | |||
| Payment of deferred loan cost related to ABL Facility | (55 | ) | — | ||||
| Net cash used in financing activities | (5,303 | ) | (4,269 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 266 | 225 | |||||
| Net change in cash and cash equivalents | 10,845 | 9,160 | |||||
| Cash and cash equivalents beginning of period | 25,880 | 16,720 | |||||
| Cash and cash equivalents end of period | $ | 36,725 | $ | 25,880 | |||
| Supplemental cash flow information | |||||||
| Cash paid for interest (net of interest received and amounts capitalized) | $ | 75 | $ | 173 | |||
| Cash paid for income taxes (net of refunds) | 1,612 | 431 | |||||
| Noncash investing and financing activities | |||||||
| Assets obtained in exchange for new finance lease liabilities | 1,621 | 2,263 | |||||
| Assets obtained in exchange for new operating lease liabilities | 405 | 3,056 | |||||
| Debt assumed in acquisition of business | 324 | — | |||||
| NCS MULTISTAGE HOLDINGS, INC. REVENUES BY GEOGRAPHIC AREA (In thousands) (Unaudited) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| United States | |||||||||||||||
| Product sales | $ | 10,716 | $ | 8,276 | $ | 40,302 | $ | 34,082 | |||||||
| Services | 7,427 | 2,440 | 17,971 | 9,570 | |||||||||||
| Total United States | 18,143 | 10,716 | 58,273 | 43,652 | |||||||||||
| Canada | |||||||||||||||
| Product sales | 20,391 | 21,576 | 77,819 | 74,654 | |||||||||||
| Services | 7,424 | 8,267 | 29,412 | 27,781 | |||||||||||
| Total Canada | 27,815 | 29,843 | 107,231 | 102,435 | |||||||||||
| Other Countries | |||||||||||||||
| Product sales | 2,697 | 739 | 9,745 | 4,310 | |||||||||||
| Services | 1,975 | 3,705 | 8,378 | 12,160 | |||||||||||
| Total other countries | 4,672 | 4,444 | 18,123 | 16,470 | |||||||||||
| Total | |||||||||||||||
| Product sales | 33,804 | 30,591 | 127,866 | 113,046 | |||||||||||
| Services | 16,826 | 14,412 | 55,761 | 49,511 | |||||||||||
| Total revenues | $ | 50,630 | $ | 45,003 | $ | 183,627 | $ | 162,557 | |||||||
| 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 Net Income, Adjusted Earnings per Diluted Share, 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, income from operations, gross profit and gross margin (inclusive of DD&A), cash provided by 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, income from operations, gross profit, gross margin, cash provided by 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 Net Income, Adjusted Earnings per Diluted Share, 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.
| December 31, | December 31, | ||||||
| 2025 | 2024 | ||||||
| Working capital | $ | 93,392 | $ | 80,151 | |||
| Cash and cash equivalents | (36,725 | ) | (25,880 | ) | |||
| Current maturities of long-term debt | 2,385 | 2,141 | |||||
| Net working capital | $ | 59,052 | $ | 56,412 | |||
| 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 operating activities less purchases of property and equipment (inclusive of the purchase and development of software and technology and excluding assets acquired through business combinations) 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.
| Year Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Net cash provided by operating activities | $ | 22,175 | $ | 12,725 | |||
| Purchases of property and equipment | (1,201 | ) | (1,309 | ) | |||
| Purchase and development of software and technology | (106 | ) | (70 | ) | |||
| Proceeds from sales of property and equipment | 772 | 592 | |||||
| Free cash flow | $ | 21,640 | $ | 11,938 | |||
| Distributions to non-controlling interest | (2,700 | ) | (2,050 | ) | |||
| Free cash flow less distributions to non-controlling interest | $ | 18,940 | $ | 9,888 | |||
| 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 | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Total revenues | $ | 50,630 | $ | 45,003 | $ | 183,627 | $ | 162,557 | |||||||
| Total cost of sales, exclusive of depreciation and amortization expense | 29,470 | 25,616 | 108,201 | 95,096 | |||||||||||
| Total depreciation and amortization associated with cost of sales | 785 | 709 | 3,013 | 2,677 | |||||||||||
| Gross Profit | $ | 20,375 | $ | 18,678 | $ | 72,413 | $ | 64,784 | |||||||
| Gross Margin | 40 | % | 42 | % | 39 | % | 40 | % | |||||||
| Exclude total depreciation and amortization associated with cost of sales | (785 | ) | (709 | ) | (3,013 | ) | (2,677 | ) | |||||||
| Adjusted Gross Profit | $ | 21,160 | $ | 19,387 | $ | 75,426 | $ | 67,461 | |||||||
| Adjusted Gross Margin | 42 | % | 43 | % | 41 | % | 41 | % | |||||||
| 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 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 | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net income | $ | 15,643 | $ | 3,720 | $ | 26,037 | $ | 8,138 | |||||||
| Income tax (benefit) expense | (8,309 | ) | (606 | ) | (9,217 | ) | 116 | ||||||||
| Interest expense, net | 42 | 91 | 251 | 414 | |||||||||||
| Depreciation | 1,275 | 1,205 | 4,991 | 4,600 | |||||||||||
| Amortization | 302 | 214 | 894 | 716 | |||||||||||
| EBITDA | 8,953 | 4,624 | 22,956 | 13,984 | |||||||||||
| Provision for litigation, net of recoveries (a) | (881 | ) | — | (881 | ) | — | |||||||||
| Share-based compensation (b) | 645 | 663 | 2,506 | 2,747 | |||||||||||
| Professional fees (c) | 272 | 574 | 2,020 | 1,837 | |||||||||||
| Change in fair value of contingent consideration (d) | 156 | — | 156 | — | |||||||||||
| Foreign currency (gain) loss (e) | (140 | ) | 2,175 | (891 | ) | 2,963 | |||||||||
| Other (f) | 176 | 175 | 793 | 748 | |||||||||||
| Adjusted EBITDA | $ | 9,181 | $ | 8,211 | $ | 26,659 | $ | 22,279 | |||||||
| Adjusted EBITDA Margin | 18 | % | 18 | % | 15 | % | 14 | % | |||||||
| Adjusted EBITDA Less Share-Based Compensation | $ | 8,536 | $ | 7,548 | $ | 24,153 | $ | 19,532 | |||||||
________________________________
| (a) | Represents litigation provision associated with legal matters in Canada. In 2023, we paid |
| (b) | Represents non-cash compensation charges related to share-based compensation granted to our officers, employees and directors. |
| (c) | 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. |
| (d) | Represents the impact of remeasuring our initial estimate of the contingent consideration associated with the ResMetrics acquisition as of December 31, 2025. |
| (e) | Represents realized and unrealized foreign currency exchange gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods. |
| (f) | 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. |
| NCS MULTISTAGE HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands, except per share data) (Unaudited) |
| ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER DILUTED SHARE |
Adjusted net income is defined as net income attributable to NCS Multistage Holdings, Inc. adjusted to exclude certain items which we believe are not reflective of ongoing performance. Adjusted earnings per diluted share is defined as adjusted net income divided by our diluted weighted average common shares outstanding during the relevant period.
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
| Effect on Net Income | Impact on Diluted Earnings Per Share | Effect on Net Income | Impact on Diluted Earnings Per Share | Effect on Net Income | Impact on Diluted Earnings Per Share | Effect on Net Income | Impact on Diluted Earnings Per Share | ||||||||||||||||||||||||
| Net income attributable to NCS Multistage Holdings, Inc. | $ | 14,960 | $ | 5.34 | $ | 3,471 | $ | 1.32 | $ | 23,748 | $ | 8.65 | $ | 6,593 | $ | 2.55 | |||||||||||||||
| Adjustments | |||||||||||||||||||||||||||||||
| Provision for litigation, net of recoveries (a) | (881 | ) | (0.31 | ) | — | — | (881 | ) | (0.32 | ) | — | — | |||||||||||||||||||
| Change in fair value of contingent consideration (b) | 156 | 0.05 | — | — | 156 | 0.06 | — | — | |||||||||||||||||||||||
| Realized and unrealized foreign currency (gain) loss (c) | (116 | ) | (0.04 | ) | 2,095 | 0.80 | (698 | ) | (0.25 | ) | 2,774 | 1.07 | |||||||||||||||||||
| Valuation allowance adjustments (d) | (9,791 | ) | (3.50 | ) | — | — | (11,524 | ) | (4.20 | ) | — | — | |||||||||||||||||||
| Income tax impact from adjustments (e) | 166 | 0.06 | 408 | 0.15 | 195 | 0.07 | (39 | ) | (0.02 | ) | |||||||||||||||||||||
| Adjusted net income attributable to NCS Multistage Holdings, Inc. | $ | 4,494 | $ | 1.60 | $ | 5,974 | $ | 2.27 | $ | 10,996 | $ | 4.01 | $ | 9,328 | $ | 3.60 | |||||||||||||||
________________________________
| (a) | Represents litigation provision associated with legal matters in Canada. See footnote (a) in the “EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EBITDA Less Share-Based Compensation” table above for more information. |
| (b) | Represents the impact of remeasuring our initial estimate of the contingent consideration associated with the ResMetrics acquisition as of December 31, 2025. |
| (c) | Represents realized and unrealized foreign currency exchange gains and losses attributable to NCS Multistage Holdings, Inc. primarily due to movement in the foreign currency exchange rates during the applicable periods. |
| (d) | Represents the impact of the reversal of a significant portion of the valuation allowance previously recorded against the deferred tax assets of our Canadian and U.S. operating subsidiaries, driven by sustained improvements in operating results, including a return to profitability and forecasts of future taxable income sufficient to realize the remaining deferred tax assets. |
| (e) | Represents income tax impacts based on applicable effective tax rates. |
FAQ
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