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FAQ: Stonegate Capital Partners' Coverage Update on NCS Multistage Holdings (NCSM) Q3 2025 Performance
TL;DR
NCS Multistage's strong international growth and ResMetrics acquisition provide competitive advantage through expanded market capture and diagnostic capabilities.
NCS Multistage achieved 6% revenue growth to $46.5M through international expansion and ResMetrics integration, maintaining 41.7% gross margins with $44.7M liquidity.
NCS Multistage's global expansion and advanced diagnostic technologies improve energy efficiency and environmental monitoring for sustainable resource development worldwide.
NCS Multistage's chemical tracer technology and international growth transformed their diagnostics platform into an industry leader across multiple continents.
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This update provides an analysis of NCS Multistage Holdings' Q3 2025 financial performance, including revenue growth, margin trends, balance sheet position, and the integration progress of the ResMetrics acquisition.
NCSM reported total revenues of $46.5M (a 6.0% year-over-year increase), gross profit of $19.4M, adjusted EBITDA of $7.0M, and EPS of $1.47, with growth primarily driven by outperformance in the services segment.
Revenue growth was driven by higher U.S. and international product sales in fracturing systems (including the North Sea) and wellbore construction in the Middle East, along with ~$2M from the ResMetrics acquisition in tracer diagnostics.
International revenue increased approximately 38.0% year-over-year, while U.S. revenue grew by approximately 36.0%, demonstrating strong international market capture and growth momentum.
NCSM ended Q3 2025 with net working capital of $63.0M, $25.3M in cash, $19.4M available under its undrawn revolving credit facility, total liquidity of $44.7M, and minimal total debt of only $7.4M consisting of finance lease obligations.
The ResMetrics integration is progressing ahead of plan, combining ResMetrics' chemical tracer lab capabilities and PetroXY web portal with NCS's tracer portfolio and international footprint, with early results showing ~$2.0M benefit in U.S. diagnostics services.
For Q4 2025, management guides revenue of $41-45M, adjusted gross margin of 40-42%, and Adjusted EBITDA of $5.0-6.5M, with FY25 revenue guidance of $174-178M and Adjusted EBITDA of $22.5-24.0M.
Stonegate's DCF analysis produces a valuation range of $48.26 to $56.97 (mid-point $52.05), while their EV/EBITDA valuation results in a range of $46.61 to $56.91 (mid-point $51.76).
Stonegate expects NCSM to maintain reasonably strong margins due to increasing market capture in international markets, with adjusted gross margins at 41.7% in Q3 2025 and guidance of 40-42% for Q4 2025.
Free cash flow less distributions to non-controlling interest was a source of $6.8M as of Q3 2025, significantly improved from just $0.35M in the prior year period, reflecting improved operating cash generation and disciplined investments.
Curated from Reportable
