Stonegate Updates Coverage on NCS Multistage Holdings, Inc. (NCSM) 2025 Q4

On March 6, 2026, Stonegate Capital Partners released an updated coverage report on NCS Multistage Holdings, Inc. (NASDAQ: NCSM), highlighting the company’s robust performance in FY25, where it achieved a revenue growth of 13%, reaching $183.6 million. This growth occurred amidst an ongoing challenging market environment, driven largely by the company’s strong product offerings across different regions, particularly in the U.S. for fracturing systems and Repeat Precision. Notably, NCSM also benefited from the acquisition of ResMetrics, contributing $5.2 million to the revenue.

The report emphasized the solid quality of growth, with organic revenue, excluding ResMetrics, increasing by 10%. Adjusted EBITDA surged by 20%, amounting to $26.7 million, while the EBITDA margin improved by approximately 80 basis points to 15%. The adjusted gross margin remained stable at 41%, despite some pressures from service mix changes. Furthermore, free cash flow after non-controlling interests nearly doubled to $18.9 million, underscoring the advantages of NCSM's asset-light operational model.

Stonegate's key takeaways indicated that NCSM's outperformance was a result of effective execution strategies rather than merely benefiting from an improved underlying market. The fourth quarter of FY25 particularly exceeded expectations due to heightened demand for U.S. fracturing services and a favorable international market scenario. As NCSM closed FY25, it boasted a strong balance sheet, promising future reinvestment, seamless integration operations, and flexibility for potential tuck-in mergers and acquisitions.

Overall, Stonegate Capital Partners affirmed NCSM's strategic positioning and growth prospects moving forward.

NCS Multistage Holdings, Inc. (NASDAQ: NCSM) presents a compelling investment opportunity following the recent Stonegate Capital Partners update. The company’s FY25 performance showcased impressive revenue growth of 13% to $183.6 million, demonstrating resilience in a difficult market. This growth was underpinned by multiple factors, including strong product execution in the U.S. and international markets like the North Sea and Middle East, alongside the contribution from the July acquisition of ResMetrics.

Notably, NCSM's adjusted EBITDA surged by 20% to $26.7 million, with an EBITDA margin expansion of approximately 80 basis points to 15%. These metrics are crucial as they indicate not only solid operational performance but also efficiency improvements. The strong adjusted gross margin of 41%, maintained despite service-mix pressures, further illustrates the company's ability to navigate challenging conditions effectively.

Moreover, the doubling of free cash flow to $18.9 million affirms the robustness of NCSM's asset-light model, emphasizing its capacity for reinvestment and potential for future growth. This asset-light approach, paired with a strong balance sheet, positions NCSM favorably for further integration and potential tuck-in acquisitions.

Key to NCSM’s future is its ongoing product traction and share gains, particularly in fracturing systems. The significant outperformance in Q4, where U.S. fracturing demand accelerated and international markets remained supportive, bodes well for continued growth heading into FY26.

Investors should consider NCSM not just as a recovery play but as a company poised for sustained growth bolstered by its strategic acquisitions and innovation in service offerings. The favorable financial metrics, alongside a robust strategic outlook, make NCSM an attractive long-term investment opportunity in the energy services sector.