NCS Multistage Holdings, Inc. Q1 FY2026 earnings call

Ryan Hummer discussed first quarter results and outlook. US revenue improved, Canada rig count expected to reverse after spring breakup. Repeat Precision had recurring work, investing in machining assets. International had consistent outlook with potential orders in North Sea and Middle East. Commercial and operational highlights included US customer using NCS sleeves for zipper frac, installing convertible sleeves for EOR, developing 6-inch frac sleeve in Rockies, Oman award of second fracturing systems job, Resmetrics integration underway.

Revenue for the first quarter was $45.6 million, slightly below prior guidance midpoint. Shortfall concentrated in Canada and international. US revenue improved over 100% y-o-y and 6% q-o-q. Geographically, US led with revenue doubling y-o-y, international up 13%, Canada down 38%. Adjusted gross profit was $18.2 million, adjusted gross margin 40%.

Modestly increased full-year revenue midpoint, maintained adjusted EBITDA guidance. Second quarter revenue expected $36-39 million. Adjusted gross margin 35.5%-37.5%. Adjusted EBITDA expected breakeven to $2 million. Full-year capital expenditures increased to $2.2-$2.8 million. Free cash flow expected $11-$15 million.

Challenging weather and early spring breakup in Canada affecting rig count. Customers deferring activity or having drilling issues. International tracer diagnostics activity in Saudi Arabia possibly lower. Uncertainty in deepwater project timing. Supply chain costs increase due to Middle East conflict.

Q: Dave Storms asked about factors affecting Canada revenue.

A: Weather, early spring breakup, customer delays.

Q: John Daniel asked about growth constraints.

A: People constraint for hiring to support growth.

Q: Kaoshi Shree asked about Canada customer reconfirmation.

A: Combination of customer-by-customer and market level expectations.

Q: Kaoshi Shree asked about repeat precision pricing.

A: Stage Saver mainly volume growth, Purple Rain dissolvable plug higher price.

Q: Kaoshi Shree asked about multi-well US project.

A: ~2-3% of annual revenue, potential for value-added services.

Q: Kaoshi Shree asked about international synergy.

A: Still opportunity ahead as sales teams gain exposure.

Q: Kaoshi Shree asked about Q2 EBITDA.

A: Primarily gross margin issue from lower revenue mix, break even around $35 million revenue