NCS Multistage Holdings, Inc. Segments Disclosure

Note 4. Segment and Geographic Information 

 

We sell the following complementary products and services largely to exploration and production customers in the oil and gas industry: fracturing systems and enhanced recovery systems products and the provision of related services, casing buoyancy systems, liner hanger systems and toe initiation sleeves products as well as sales of our tracer diagnostics services. In addition, we sell composite and dissolvable frac plugs, setting tools, perforating guns and related products through Repeat Precision, our 50% owned entity. Our complementary products and services are typically used by our customers to facilitate the construction and completion of horizontal wellbores and to provide diagnostic information that customers can utilize to improve upon their completion techniques in subsequent wells.

 

We have one reportable segment as we manage our activities on a consolidated basis applying qualitative factors including the nature of the products and services, the nature and commonality of production processes, a shared customer base primarily in North America, the scope of geographic operations and a common industry and regulatory environment. The accounting policies of our one reportable segment are the same as those described in the summary of significant accounting policies. Our CODM is the Chief Executive Officer.

 

We evaluate our performance on a consolidated basis by reviewing key income statement items such as revenue, gross margin, and net income, as well as other specific balance sheet and cash flow items; comparing certain key financial figures to financial guidance; and evaluating our share price performance and estimated trading multiple relative to selected peers.

 

Our CODM utilizes the GAAP measures of net income and cash flow from operations as primary measures of profitability and cash flow, respectively, as well as secondary non-GAAP measures of Adjusted EBITDA and free cash flow (cash flow from operations less capital expenditures). The CODM assesses performance using these measures, and he decides how to allocate resources (including capital expenditures, financial resources and employees) through an integrated annual budget and more frequent forecasting processes, with the annual budget subject to approval by our Board of Directors (“Board”). The CODM allocates resources in a manner that he believes will maximize value for the consolidated corporate entity and its stockholders. The CODM considers variances from actual to budget, our most recent estimate and the prior year on a monthly basis when making decisions about the allocation of operating and capital resources. The CODM also regularly reviews consolidated cash flow, as well as the non-GAAP measure of free cash flow. The CODM assesses business performance consistent with the presentation on our consolidated financial statements supplemented with a review of certain significant SG&A expense categories. Such expenses are reviewed on a with and without basis for business combinations, until fully integrated into actual results for all periods presented. 

 

The following table summarizes significant SG&A expenses that are reviewed by the CODM but are not separately presented on our consolidated statements of operations (in thousands):

 

		Year Ended December 31,
		2025				2024
Payroll and employee benefits		$	35,179			$	34,610
Share-based compensation			6,205				5,213
Professional services			6,356				6,848
Insurance			2,132				2,135
Software and hardware			2,421				2,089
Other			6,552				6,925
Total SG&A		$	58,845			$	57,820

 

The following table summarizes revenue by geographic area attributed based on the current billing address of the customer (in thousands): 

 

		Year Ended December 31,
		2025				2024
United States
Product sales		$	40,302			$	34,082
Services			17,971				9,570
Total United States			58,273				43,652
Canada
Product sales			77,819				74,654
Services			29,412				27,781
Total Canada			107,231				102,435
Other Countries
Product sales			9,745				4,310
Services			8,378				12,160
Total other countries			18,123				16,470
Total
Product sales			127,866				113,046
Services			55,761				49,511
Total revenues		$	183,627			$	162,557

 

The following table summarizes long-lived assets (defined as property and equipment, net and operating lease assets) by geographic area (in thousands):

 

		December 31,				December 31,
		2025				2024
United States		$	11,789			$	13,455
Canada			9,448				10,240
Other Countries			3,429				3,499
		$	24,666			$	27,194