NCS Multistage Holdings, Inc. (NASDAQ: NCSM) reported third quarter 2025 financial results showing continued growth momentum despite challenging market conditions. The company's strategic focus on international expansion and recent acquisition integration appears to be yielding positive results, with total revenues reaching $46.5 million, representing a 6.0% year-over-year increase. This performance notably outpaced broader industry activity levels, indicating the company's ability to capture market share even in a competitive environment.
The revenue growth was primarily driven by strong performance in international markets, where revenue increased approximately 38.0% year-over-year, and U.S. revenue grew by approximately 36.0% during the same period. The international expansion was particularly evident in fracturing systems deployments in the North Sea and wellbore construction projects in the Middle East. Meanwhile, U.S. growth benefited from the ramp-up of tracer diagnostics services, including approximately $2 million in contributions from the recently acquired ResMetrics business. Canadian operations showed sequential improvement with 32% growth as seasonal spring break-up effects eased, though overall Canadian product sales remained softer due to lower rig counts.
Financial metrics demonstrated the company's operational strength, with adjusted gross margins of 41.7%, only slightly below the 42.1% reported in the third quarter of 2024. The company reported gross profit of $19.4 million and adjusted EBITDA of $7.0 million, both closely aligning with analyst expectations. Earnings per share for the quarter came in at $1.47, compared to $1.67 in the same quarter last year, reflecting the company's continued investment in growth initiatives.
The balance sheet and liquidity position remained robust, with net working capital increasing to $63.0 million, up 12.6% from year-end 2024. This improvement was driven by higher accounts receivable and inventory levels, partially offset by decreases in other current receivables. The company maintained a strong liquidity position with $25.3 million in cash and an additional $19.4 million available under its undrawn revolving credit facility, resulting in total liquidity of $44.7 million. This substantial liquidity compares favorably to minimal total debt of only $7.4 million, consisting entirely of finance lease obligations.
Free cash flow generation showed significant improvement, with free cash flow less distributions to non-controlling interest reaching $6.8 million as of the third quarter, up substantially from just $0.35 million in the prior year period. This improvement reflects enhanced operating cash generation and disciplined capital investment strategies. The company's financial discipline is further evidenced by its capital expenditure guidance of $1.3-$1.5 million for full-year 2025.
The integration of ResMetrics, acquired in late July 2025, is progressing ahead of schedule and already contributing to performance. The acquisition combines ResMetrics' chemical tracer lab capabilities and PetroXY web portal with NCS's existing tracer portfolio and international footprint. Management expects the combined diagnostics platform to emerge as a category leader, with medium-term synergy potential from best-practice adoption and scaled product and service development. The strategic combination enhances NCS's position in the growing diagnostics market while leveraging its established international presence.
Looking forward, management provided guidance for the fourth quarter of 2025, projecting revenue of $41-$45 million, adjusted gross margin of 40-42%, and adjusted EBITDA of $5.0-$6.5 million. For the full fiscal year 2025, the company forecasts revenue of $174-$178 million and adjusted EBITDA of $22.5-$24.0 million. Free cash flow less distributions to non-controlling interest is expected to reach $11-$13 million for the full year. These projections suggest continued modest growth through the remainder of the fiscal year, supported by resilience in core product lines and contributions from the ResMetrics acquisition.
Analyst valuations reflect confidence in the company's strategic direction and financial performance. Discounted cash flow analysis produces a valuation range of $48.26 to $56.97 with a midpoint of $52.05, while EV/EBITDA valuation results in a range of $46.61 to $56.91 with a midpoint of $51.76. These valuations indicate potential upside from current trading levels and reflect the market's assessment of the company's growth prospects and strategic positioning within the oilfield services sector.
