NCS Multistage Holdings, Inc.

Thank you for standing by. My name is Janice and I will be your conference operator today. At this time, I would like to welcome everyone to Q1 2025 NCS Multistage Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn over the call to Mike Morrison, Chief Financial Officer. Please go ahead.

Thank you, Janice, and thank you for joining the NCS Multistage First Quarter 2025 Conference Call. Our call today will be led by our CEO, Ryan Hummer, and I will also provide comments. I want to remind listeners that some of today's comments include forward-looking statements, such as our financial guidance and comments regarding our future expectations for financial results and business operations. These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectation expressed herein. Please refer to our most recent annual report on Form 10-K and our latest SEC filings for risk factors and cautions regarding forward-looking statements. Our comments today, as well as the results of operations, including in our earnings release, contain the following non-GAAP financial measures. Adjusted EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit, adjusted gross margin, and free cash flow less distributions to non-controlling interest. These non-GAAP measures and reconciliations to the most comparable GAAP financial measures are provided in our first quarter earnings release, which can be found on our website, ncsmultistage.com. I will now turn the call over to Ryan.

Thank you, Mike, and welcome to our investors, analysts, and employees who are joining our first quarter 2025 earnings conference call. Mike will cover our quarterly financial results in more detail, and I'll speak to a few highlights. NCS is off to a strong start in 2025. Our first quarter revenue of $50 million exceeded the high end of our guided range provided on our last call by $4 million. This represents the highest quarterly revenue for NCS since the first quarter of 2020. While we exceeded the midpoint of the guided range in each geography, our performance in Canada was the standout for the quarter. Our adjusted gross margin of 44%, which excludes depreciation and amortization expense, exceeded the high end of our guided range for the quarter as well. We benefited from the operating leverage associated with the revenue outperformance with a robust contribution from our higher margin international activity. Our adjusted EBITDA of $8.2 million exceeded our estimated range for the quarter of $4.5 to $6.5 million, and represents a year-over-year improvement of $2.1 million. To reiterate, NCS is off to a strong start. In prior calls, I've referenced NCS's core strategies for creating value for our stakeholders. Slide 13 of our investor presentation helps to illustrate our strategy with examples of our progress. The first core strategy is to build upon our leading market positions. Our progress toward this goal continues to be reflected in our year-to-date results in Canada. Our Q1 revenue in Canada of $38 million increased by 19% as compared to the first quarter of 2024, outpacing a 3% increase in the average rig count. This favorable performance was most prevalent for our fracturing systems product line, as more operators in the Montane have adopted our single-point entry frac technology and have experienced strong production results and increased operational flexibility. Our second core strategy is to capitalize on international and offshore opportunities. We're seeking to build on the success we achieved in 2024, a year in which international revenue reached 10% of total revenue, an important milestone for NCS. We expect continued success with customers in the North Sea, as our growing customer base and operational track record have positioned us well for long-term growth in that market. In 2024, we signed commercial purchase agreements with a customer in the Middle East and were encouraged by the pace of adoption of our well construction products in unconventional wells in the region. We recently installed an enhanced recovery system for a customer in Argentina, our first in that market, with another installation plan for later this year. We believe that this product line will provide an attractive additional market for us in the Latin American region, building on our existing tracer diagnostics business. The third core strategy for NCS is to commercialize innovative solutions to complex customer challenges. We have internal objectives this year that are tied to field trials for new products and for successfully entering new markets and regions. Some of these exciting products and projects include the first application of our 7-inch sliding sleeve and service tools for a remedial cementing application in Alaska, which is scheduled for later this month. Qualification of our fracturing system sleeves and service tools at higher temperature ratings to enable us to participate in certain offshore, SAGD, and geothermal applications. The deployment of our Luminate multi-day automated sampler for tracer diagnostics customers, which reduces on-site service requirements. We're expecting field trials for our new rapid trace tracer diagnostics flow assurance solution. will provide our customers with immediate tracer results at the well site this data will provide value for our customers by allowing them to make cost-saving decisions without without having to wait for production sample analysis from our labs we're expecting the commercialization of a broader portfolio of dissolvable frac plugs and our stage saver composite plug at repeat precision the stage saver is designed to de-risk certain issues that can arise during simulfrac operations finally We expect to broaden our enhanced recovery portfolio to include solutions for preferential production control, complementing our injection conformance offerings. In addition to these projects, we have several other technology developments underway across our various product lines, which I'm looking forward to discussing as they roll out throughout the year and into the future. Mike will now review our results for the first quarter and our guidance for the second quarter.