DALLAS, TX -- May 1st 2026 -- NCS Multistage Holdings, Inc. (NASDAQ: NCSM): Stonegate Capital Partners Updates Coverage on NCS Multistage Holdings, Inc. (NASDAQ: NCSM). NCSM’s 1Q26 came in below expectations as Canada and select international projects weighed on results, while continued U.S. momentum helped offset the shortfall. In our view, the quarter does not change the core thesis around U.S. product momentum, ResMetrics integration, and the Company’s capital-light model, but it does highlight the timing risk embedded in Canada seasonality and project-based international work. The key change is cadence, with 2Q26 guidance implying a softer near-term trough and maintained FY26 Adjusted EBITDA guidance pointing to a more back-half-weighted recovery tied to deferred Canadian work, recurring Repeat Precision activity, and ResMetrics synergies. Separately, management noted that 2026 guidance excludes potential sliding sleeve deliveries for its first deepwater Gulf of Mexico opportunity, which could materialize in late 2026 or early 2027.
Quarterly Results: In 1Q26, NCSM reported revenue, gross profit, and adj EBITDA of $45.6M, $18.2M, and $5.6M, respectively. This compares to our estimates of $51.0M, $20.4M, and $7.5M, respectively. The shortfall was concentrated in Canada and select international timing, while U.S. revenue increased 104% y/y to $19.1M and rose 6% sequentially on higher Repeat Precision product sales, tracer diagnostics activity, and a $1.8M ResMetrics contribution. Canada declined 38% y/y to $23.2M, reflecting lower rig activity, an early than normal spring breakup, and deferred customer work, with management expecting the majority of activity to return later in the year. International revenue increased 13% y/y to $3.3M, supported by Middle East product sales, though tracer diagnostics service revenue declined on project timing. Adjusted gross margin of 40% met the midpoint of guidance, though EBITDA was pressured by lower revenue absorption and mix.
Balance Sheet, Liquidity, and Cash Flows: NCSM ended 1Q26 with $34.5M of cash, $7.2M of finance lease debt, and $18.5M of ABL availability, for total liquidity of $53M and a net cash position above $27M. Operating cash flow was $1.3M and FCF after NCI was $0.7M, a $2.8M y/y improvement in a quarter that has historically consumed cash.
ResMetrics Integration: ResMetrics integration appears to be transitioning from execution work to synergy capture, with manufacturing and lab assets relocated from Houston to Tulsa and operational synergies expected to accelerate in 2H26. Management continues to target $1-$2M of run-rate cost synergies by mid-2026, with additional revenue synergy opportunities across Canada, SmartProp, enhanced recovery, and international tracer markets.
Updated Guidance: For 2Q26, management guided revenue of $36-$39M, including U.S. revenue of $18-$19M, international revenue of $5–$6M, and Canada revenue of $13-$14M. Management also guided adjusted gross margin of 35.5%-37.5% and Adjusted EBITDA of $0-$2M. For FY26, management raised revenue guidance to $186-$194M, maintained Adjusted EBITDA guidance of $26-$29M, and updated FCF after NCI to $11-$15M, reflecting higher capex, working capital timing, and a greater mix of Repeat Precision earnings.
Valuation: We use both a DCF and EV/EBITDA comp analysis to guide our valuation. Our DCF analysis produces a valuation range of $59.33 to $70.91 with a mid-point of $64.32. Our EV/EBITDA valuation results in a range of $62.55 to $74.26 with a mid-point of $68.41.
SOURCE: Stonegate, Inc.
