Stonegate Updates Coverage on NCS Multistage Holdings, Inc. (NCSM) 2025 Q1

On May 2, 2025, Stonegate Capital Partners released an updated coverage report on NCS Multistage Holdings, Inc. (NASDAQ: NCSM), highlighting significant growth in the company's financial performance for the first quarter of 2025. NCSM reported total revenues of $50 million, marking a 14% increase year-over-year and the strongest quarterly revenue performance since the first quarter of 2020. This surge in revenue was primarily driven by robust product sales in Canada and a notable uptick in service revenue worldwide. However, the company did experience a decline in U.S. product sales, attributed to project delays.

The report emphasized that Canadian operations remained a key strength, particularly in the area of fracturing system completions, while international revenue support stemmed from tracer diagnostics work in the Middle East and product/service sales in the North Sea. Compared to the previous quarter (4Q24), total revenues rose by 11%. The significant growth in Canadian sales, which were up 26% sequentially, helped to offset a 34% decline in international revenue due to the timing of tracer projects and a 13% decrease in U.S. revenue.

Looking ahead, Stonegate anticipates continued modest revenue growth for NCSM throughout fiscal year 2025, despite potential challenges from increasing tariffs. Furthermore, consolidated gross margins improved substantially, rising from 40.1% in 1Q24 to 43.7% in 1Q25. Notably, NCSM's liquidity position strengthened to $49.8 million, an increase from $34.4 million in the prior year, and adjusted EBITDA reached $8.2 million, reflecting a $2.1 million year-over-year improvement.

NCS Multistage Holdings, Inc. (NASDAQ: NCSM) has recently shown positive momentum in its financial performance, as highlighted in the latest update from Stonegate Capital Partners. For Q1 2025, NCSM reported total revenues of $50 million, marking a robust 14% year-over-year increase and its highest quarterly revenue since 1Q20. The growth was fueled primarily by increased product sales in Canada and a solid performance in services revenue across various geographies, despite facing challenges in U.S. product sales due to project delays.

An important aspect of NCSM's recent performance is the significant rise in Canadian sales, which surged 26% sequentially. This suggests that the company's strategic focus on the Canadian market, particularly in fracturing system completions, is yielding results. However, the notable 34% drop in international revenue and a 13% decline in U.S. sales warrant caution, as these declines could signal potential volatility in future quarters.

The company's consolidated gross margins also expanded from 40.1% to 43.7%, reflecting improved operational efficiency and profitability. With a liquidity position that strengthened from $34.4 million in 1Q24 to $49.8 million in 1Q25, NCSM has a solid cash base to navigate potential headwinds, including increasing tariffs that could impact its costs.

Looking forward, it is reasonable to expect modest revenue growth through FY25, driven mainly by sustained performance in Canada and international markets. Investors should monitor U.S. sales closely, as any further declines could affect overall growth prospects. For those considering an investment in NCSM, the current financial indicators suggest a cautiously optimistic outlook, supported by improvements in both revenues and profitability metrics. Long-term investors might view this as an opportune moment to buy, given the company’s operational improvements and potential for growth in a recovering market.