NCS Multistage at Emerging Growth Conference 85: Strategic Expansion and Growth

On Thursday, 21 August 2025, NCS Multistage (NASDAQ:NCSM) presented at the Emerging Growth Conference 85, unveiling its strategic vision amid a challenging oil and gas market. The company underscored its recent acquisition of ResMetrix, aiming to solidify its position in tracer diagnostics. While NCS Multistage highlighted robust financial performance, it also acknowledged the industry’s hurdles.

Key Takeaways

• NCS Multistage acquired ResMetrix to enhance its tracer diagnostics capabilities.
• The company reported a 14% revenue growth in 2024, anticipating further growth in 2025.
• Gross margins improved by 250 basis points, reaching approximately 40%.
• Market capitalization and enterprise value are both just below $85 million.
• Future focus includes organic growth, strategic acquisitions, and potential capital returns to shareholders.

Financial Results

• Revenue increased by $20 million or 14% in 2024, with continued growth expected in 2025.
• Gross margin stands at approximately 40%, reflecting product and service value.
• Improved gross margins by 250 basis points from 2023 to 2024.
• Trailing twelve-month EBITDA and free cash flow are $26 million and $10 million, respectively.
• Cash reserves of $25 million and an additional $17 million available through a credit facility.

Operational Updates

• NCS Multistage focuses on capital-efficient, unconventional resource development, with an increasing global presence.
• The acquisition of ResMetrix is aimed at creating a leading global tracer diagnostics business.
• ResMetrix’s revenue exceeded $10 million with an EBITDA margin of over 30%.
• Expansion into the Middle East, including the UAE and Kuwait, broadens their market reach.

Future Outlook

• NCS Multistage plans to grow through organic means and strategic acquisitions.
• The company is positioned for further strategic transactions due to a strong balance sheet.
• If acquisition opportunities are limited, the company may consider returning capital to shareholders.

For a detailed discussion, readers are encouraged to refer to the full transcript below.

Full transcript - Emerging Growth Conference 85:

Unidentified speaker, Presenter, NCS Multistage: Thank you. I hope everyone’s having a great day. I want to thank the Emerging Growth Conference for inviting us and want to thank everyone that’s taking the time to watch. We gave a full presentation at an earlier Emerging Growth Conference in March and an update in May, so I’ll give a very brief update today and spend most of the time discussing our recently announced acquisition of ResMetrics. I’ll pause on this slide for a quick reminder of who we are and where we’re focused.

We’re an oilfield focused technology company, and we serve the oilfield services and equipment market. We sell directly to oil and natural gas producers, companies like Chevron, Conoco, Oxy, BP, Equinor, CNRL, Termal, Whitecap, and similar other customers. And we compete with Schlumberger, Halliburton, NOV, Innovex, Core Lab, and others. We’re typically taking on larger and more established competitors. And within that market, we focus on certain areas where we can obtain a leadership position and earn attractive margins.

Over time, this has led us to four product lines with a common theme. We provide products and services that enable capital efficient, unconventional resource development. Historically, this has taken place in North America, and it’s increasingly taking place in other global regions. We focus on innovation and partnering with our customers to bring new solutions to market, solutions that save our customers time, save them money or both, and help them make better and more productive wells. We paired this focus on R and D and innovation with a capital light business model that includes outsourced manufacturing.

This enables us to minimize our capital investment requirements and convert EBITDA into free cash flow through the business cycles. The charts at the bottom of the slide provide our revenue by geography, our product and service mix, and our revenue by product line. And before I leave this page, I’ll note that we’re traded on NASDAQ with the ticker NCSM. Our recent market capitalization and enterprise value are both currently just below $85,000,000 with a trailing twelve month EBITDA and free cash flow of $26,000,000 and $10,000,000 respectively, implying a relatively low trading multiple and a robust free cash flow yield. As I said, we operate through four product lines, and this slide provides just a few highlights about our technology and the value that we bring to our customers.

As I referenced in the introduction, the key connection across our product and service portfolio is that we help our customers to maximize their return on investment from unconventional resource development. In North America, this is typically focused on enabling operational efficiencies, though in some instances, we do enable better production results as compared to competing technologies. In international markets, we’re helping to accelerate our customers’ learning curves in unconventional resource development and to maximize the value of their mature assets. I’d encourage anyone that’s learning more about NCS for the first time today to review our presentation from March where I review these products and services and their value proposition we bring to our customers in more detail. This slide outlines our three core business strategies.

This was introduced in late twenty twenty two, and we’re benefiting from the results. The first strategy is to build on our leading market positions. For us, these leading market positions include our position in fracturing systems on a global basis, our presence in the Canadian completions market and the strong resulting customer relationships we have there, and our global capabilities and presence in tracer diagnostics, now including ResMedrix. The second strategy is to capitalize on offshore and international opportunities that we’ve been pursuing and investing in. We do this because international markets are growing faster than North America, international and offshore customers tend to buy based on technical characteristics rather than just price, and there’s an ability to build stickier customer relationships.

And as a result, we can be compensated for the value that we bring to our customers in these markets. The third strategic component is to commercialize innovative solutions to complex customer challenges. We obtain and understand the voice of the customer and emerging market needs and deliver a solution that brings tangible value to our customers as a result. We believe this strategy will allow us to continue to create value for our stakeholders over time. Delivering on our strategy has produced favorable financial results.

We grew revenue by 14% or $20,000,000 in 2024 and expect that we’ll grow revenue again in 2025 despite what I generally characterize as a challenging market environment for the oil and gas industry. Our gross margin of approximately 40% reflects the value of the products and services that we bring to our customers. With our outsourced manufacturing model, our cost of sales is highly variable in nature, though we were able to improve gross margins by approximately two fifty basis points in 2024 as compared to 2023, and we continue that momentum into the 2025. In addition, our capital light business model positions us to generate free cash flow through industry cycles, and over time, we expect we can convert approximately 50% to 60% of our adjusted EBITDA to free cash flow. I’ll now spend a few minutes on the primary topic for this update, which is the strategic acquisition of ResMetrix, we announced at the July.

ResMetrix is a provider of tracer diagnostics technologies and services, and they’ve built an excellent business that we believe is highly complementary with our current tracer diagnostics product line. Resmetric’s success has resulted from its end to end scientific approach to enable more quantitative results from cost effective tracer diagnostic studies. Through precise chemical manufacturing, tracer injection and sampling programs, and robust chemical portfolio and performance testing, ResMedics’ business has been very successful in, again, migrating customers to higher performance tracer applications. Their business complements our existing tracer diagnostics product line in many ways. Together, we’ll have a broadest broader service offering, enhancing our ability to serve our customers in all of their diagnostics needs.

In addition, the ResMedrix team has expertise in designing and executing tracer diagnostics projects for enhanced oil recovery applications, such as water floods, and for high temperature applications, which we believe will be growing markets over time. Both NCS and Resimetrics have some unique tracers that are utilized, and in time, we believe our customers will be better served by a larger combined, high performance chemical tracer portfolio which can enhance the value of the diagnostics projects that we bring to our clients. Although NCS and ResMedics have historically competed head to head for tracer work in The U. S, our customer bases have relatively limited overlap and we believe that each of our respective current customer bases will benefit from that broader service offering of the combined portfolio that I just mentioned. In addition, with the larger combined customer base and the geographic footprint that’s expanded, our new service and product developments in the tracer diagnostics product line will be more scalable and impactful to NCS.

Internationally, the addition of ResMetrix expands our presence in The Middle East into The UAE and Kuwait through strategic partnerships with service companies operating in the region. We’ve been very impressed with the team at ResMedrix while evaluating the transaction and planning the upcoming integration. The focus of the transaction is to create the leading global tracer diagnostics business and to establish a strong platform for product and service development around reservoir diagnostics going forward. We’ll take a measured approach in our integration, and it’ll take some time and it’ll entail extensive laboratory analysis. And while this transaction is really not predicated on cost synergies, we do believe that in time, we’ll benefit from the implementation of best practices across the two businesses as we seek to optimize chemical usage, realize economies of scale, and better utilize the skill sets of our employees.

This slide provides some of the specifics on the acquisition. So ResMetrix has built a growing and profitable business, with trailing twelve month unaudited revenue through June 2025 of over $10,000,000 generating an EBITDA margin of over 30%. I’ve referred to our balance sheet as a strategic asset in the past, and this transaction is a great example of that. Our strong balance sheet and capital light business model generates free cash flow through industry cycles, so we’re utilizing the cash on hand to fund this acquisition while maintaining a net cash balance and robust liquidity. By deploying cash on hand for the strategic acquisition of a growing and profitable business, we can improve our return on capital, and we believe that this will position us to create additional value for our shareholders over time.

As the North American E and P business continues to mature and our customers consolidate to take the benefit from economies of scale, we believe that oilfield services providers in the industry like ourselves will need to do the same, engaging in strategic horizontal combinations like this one. At NCS, we believe that the capabilities of our people, our infrastructure, the breadth of our product lines, which are operating in the right geographies, together with our strong balance sheet position us very well to supplement our ongoing organic growth strategy with complementary transactions like ResMetrix over time. So in short, I think NCS is a compelling investment opportunity. We’ve got an attractive organic growth track record, and we’re focused on increasing our presence in growth markets for unconventional resource development around the world. We’re delivering revenue, gross profit, and EBITDA growth with strong incremental margins.

We continue to bring innovative technology to our customers, especially for technically demanding applications that leverage our engineering capabilities and provide an opportunity for higher margins over time. Our capital light business model minimizes capital investment and again allows us to generate free cash flow through industry cycles. That provides us with a strong balance sheet, and we expect to continue to further strengthen that balance sheet with free cash flow this year. At June 30, we had approximately $25,000,000 in cash and approximately $17,000,000 available through our revolving credit facility, positioning us for making strategic transactions similar to ResMetrix. And we’ve demonstrated with the acquisition of ResMetrix that we can put that capital to work and grow the business and pair our organic growth strategy with those strategic acquisitions.

To the extent that cash continues to build and we don’t find that next acquisition opportunity, we then evaluate the framework to return capital to shareholders in the future, and we look forward to doing that. So that concludes the update. I just want to thank everyone again for your interest in NCS Multistage. Thanks.

Anna Berry, Host, Emerging Growth Conference: Alright. Thank you all so much for watching. In just a second, you’ll be redirected to registration page for our next conference. Please reserve your spot early. On behalf of all of us at the Emerging Growth Conference, we’d to thank all of our presenters and attendees for making this such a great success.

Remember, a replay of this conference separated by company will be on our YouTube channel, youtube.com/emerginggrowthconference, and follow us on x at emerginggrowthc. I’m Anna Berry. Thanks, for watching. We’ll see you next

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