Stonegate Capital Partners Updates Coverage on NCS Multistage Holdings, Inc. Highlighting Strong Q2 Performance

Stonegate Capital Partners has updated its coverage on NCS Multistage Holdings, Inc. (NASDAQ: NCSM), showcasing a robust second quarter in 2025 with total revenues reaching $36.5M, marking a 22.8% increase year-over-year. This performance notably surpasses broader industry activity levels, driven by heightened fracturing systems activity and frac plug sales across Canada and the U.S., despite a seasonal revenue dip in Canada due to spring break-up.

Internationally, while there was a year-over-year decline in revenues attributed to reduced tracer diagnostics work in the Middle East, sequential growth was observed with a 67.2% increase, bolstered by higher equipment sales in the North Sea. The U.S. market saw a 45% sequential revenue rise as delayed projects resumed. Adjusted Gross margins stood at 35.7%, a decrease from 40.3% in the second quarter of 2024, yet the company anticipates modest revenue and margin growth throughout FY25, supported by its core product lines and the recent acquisition of ResMetrics.

The acquisition of ResMetrics LLC, finalized on July 31, 2025, for $5.9M plus potential earn-outs, marks a strategic expansion into high-margin diagnostics markets. ResMetrics, with over $10M in trailing 12-month revenue and an EBITDA margin exceeding 30%, is expected to contribute $4–5M in revenue and $1–1.5M in EBITDA for the remainder of FY25. This move not only enhances NCSM's diagnostics portfolio but also extends its customer base and introduces advanced analytical capabilities through the PetroXY platform.

Financially, NCSM ended the quarter with a strong liquidity position of $42.6M, including $25.4M in cash and $17.2M available under its undrawn revolving credit facility, against a modest total debt of $7.7M. The company's updated guidance for FY25 projects combined revenues between $172.0M to $181.0M and adjusted EBITDA of $22.0M to $25.5M, reflecting confidence in its growth trajectory and operational resilience.

Stonegate's valuation analysis, utilizing both DCF and EV/EBITDA methodologies, suggests a fair value range for NCSM shares, underscoring the company's potential for investors. For more detailed insights, visit https://www.stonegateinc.com.