Financial Analysis

Note 11. Commitments and Contingencies Litigation In the ordinary course of our business, from time to time, we have various claims, lawsuits and administrative proceedings that are pending or threatened with respect to commercial, intellectual property and employee matters. Canada Patent Matters In July 2018, we filed a patent infringement lawsuit seeking unspecified damages against Kobold Corporation, Kobold Completions Inc. and 2039974 Alberta Ltd. (Kobold) in the Federal Court of Canada (Canada Court), alleging that Kobolds fracturing tools and methods infringe several of our Canadian patents. In July 2019, Kobold filed a counterclaim seeking unspecified damages alleging that our fracturing tools and methods infringe their patent. The patent infringement litigation was heard in early 2022. In October 2023, the trial judge rendered a decision against us holding that our asserted patents are invalid and that we were infringing the Kobold asserted patent. The Canada Court ordered us to pay Kobold approximately $1.8 million in costs and disbursements, including taxes payable thereon, and granted an injunction prohibiting us from any further infringement of their patent. This amount was paid to Kobold in November 2023. We filed an appeal with the Court of Appeal of Canada (Court of Appeal), which was heard in April 2025. In July 2024, Kobold filed a motion with the Canada Court regarding whether the injunction allowed us to modify our product or, as Kobold contends, we needed …

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Note 10 . Debt Our long-term debt consists of the following as of June 30, 2026 and December 31, 2025 (in thousands): June 30, December 31, 2026 2025 ABL Facility $ $ Repeat Precision Promissory Note Finance leases 7,521 7,644 Total debt 7,521 7,644 Less: current portion (2,326 ) (2,385 ) Long-term debt $ 5,195 $ 5,259 The estimated fair value of total debt as of June 30, 2026 and December 31, 2025 was $6.9 million at each date. The fair value of the finance leases was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments at our incremental borrowing rate through the date of maturity. Below is a description of our financing arrangements. ABL Facility In May 2022, we entered into a secured asset-based revolving credit facility (the ABL Facility), where credit availability is subject to a borrowing base calculation. The ABL Facility is governed by the Credit Agreement between NCS Multistage Holdings, Inc. (NCSH), Pioneer Investment, Inc., NCS Multistage, LLC, NCS Multistage Inc., the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and as a lender under the facility provided therein (the Credit Agreement). In Apri l 2024, we amended the Credit Agreement to modify the benchmark that may be used for loans in Canadian dollars in connection with the cessation of the CDOR Rate and transition to the CORRA Rate. The ABL Facility is scheduled to mature in May 2027. If t …

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Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 United States Product sales $ 15,220 $ 11,930 $ 29,429 $ 18,797 Services 5,244 1,682 10,175 4,187 Total United States 20,464 13,612 39,604 22,984 Canada Product sales 9,737 13,021 25,901 39,864 Services 3,677 4,948 10,724 15,823 Total Canada 13,414 17,969 36,625 55,687 Other Countries Product sales 2,721 2,825 4,931 4,181 Services 1,765 2,048 2,841 3,607 Total other countries 4,486 4,873 7,772 7,788 Total Product sales 27,678 27,776 60,261 62,842 Services 10,686 8,678 23,740 23,617 Total revenues $ 38,364 $ 36,454 $ 84,001 $ 86,459

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Note 12. Share-Based Compensation During the six months ended June 30, 2026 , we granted 53,948 equity-classified restricted stock units (RSUs) with a weighted average grant date fair value of $40.06. We account for RSUs granted to employees at fair value, which we measure as the closing price of our common stock on the date of grant, and we recognize the compensation expense in the financial statements over the requisite service period. The RSUs granted to our employees generally vest over a period of three equal annual installments beginning on or around the anniversary of the date of grant. The RSUs granted to the nonemployee members of our Board generally vest on or around the one -year anniversary of the grant date and either settle at vesting or, if the director has elected to defer the RSUs, within thirty days following the earlier of the termination of the directors service for any reason or a change of control. During the six months ended June 30, 2026 , we granted 34,622 equivalent stock units, or cash-settled, liability-classified RSUs (ESUs), with a weighted average grant date fair value of $40.06. When ESUs are granted to employees, they are valued at fair value, which we measure at the closing price of our common stock on the date of grant. Since ESUs are settled in cash, we record a liability, which is remeasured each reporting period at fair value based upon the closing price of our common stock until the awards are settled. The ESUs granted to our employees g …

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Note 8. Goodwill and Identifiable Intangibles The carrying amount of goodwill is summarized as follows (in thousands): June 30, December 31, 2026 2025 Gross value $ 178,327 $ 177,162 Acquisition 1,165 Accumulated impairment (161,940 ) (161,940 ) Net $ 16,387 $ 16,387 We perform an annual impairment analysis of goodwill as of December 31, or whenever there is a triggering event that indicates an impairment loss may have been incurred. We perform our impairment analysis at a reportable unit level, evaluated separately for Repeat Precision and for the remaining NCS business. During 2025, we recorded goodwill totaling $1.2 million associated with the ResMetrics acquisition, allocated to our tracer diagnostics services group within the NCS reportable unit. See Note 2. Acquisition of ResMetrics. As of June 30, 2026, the only reporting units with remaining goodwill are the tracer diagnostics services group within the NCS reportable unit and Repeat Precision. We did not identify any triggering events that would indicate potential impairment for either of these units. No goodwill impairment has been recorded for the three and six months ended June 30, 2026 and 2025 . Identifiable intangibles by major asset class consist of the following (in thousands): June 30, 2026 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 1 - 20 $ 4,063 $ (1,522 ) $ 2,541 Customer relationships 6 - 10 6,800 (4,273 ) 2,527 Trademarks 5 190 (35 ) 155 Non-compe …

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Note 13. Income Taxes The computation of the annual estimated effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, or additional information is obtained. The computation of the annual estimated effective tax rate includes applicable modifications, which were projected for the year, such as certain book expenses not deductible for tax, tax credits and foreign deemed dividends. Our effective tax rate (ETR) from continuing operations was 31.0% and (155.0%) for the three months ended June 30, 2026 and 2025 , respectively, and 29.1% and (6.2%) for the six months ended June 30, 2026 and 2025, respectively. The income tax benefit for the three and six months ended June 30, 2026 and 2025 relates to results generated by our businesses in the United States, Canada, and certain other foreign jurisdictions. During the second and fourth quarters of 2025, respectively, we reversed substantially all of the valuation allowance previously recorded against the deferred tax assets of our Canadian and U.S operating subsidiaries due to sustained improvements in operating …

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Note 4. Revenues Disaggregation of Revenue We sell our products and services primarily in North America and in selected international markets. See above Note 3. Segment and Geographic Information for our disaggregated revenue by geographic area. Contract Balances If the timing of the delivery of products and provision of services is different from the timing of the customer payments, we recognize either a contract asset (performance precedes contractual due date in connection with estimates of variable consideration) or a contract liability (customer payment precedes performance) on our condensed consolidated balance sheet. The following table presents the current contract liabilities as of June 30, 2026 and December 31, 2025 (in thousands): Balance at December 31, 2025 $ 60 Additions 709 Revenue recognized Balance at June 30, 2026 $ 769 We currently do not have any contract assets or non-current contract liabilities. Our contract liability, as of June 30, 2026 and December 31, 2025 , is included in other current liabilities on the applicable condensed consolidated balance sheets. Our performance obligations for our product sales and services revenue are typically satisfied before the customers payment; however, prepayments may occasionally be required. No revenue was recognized from the contract liability balance for the three and six months ended June 30, 2026. There was $0.4 million in revenue recognized from the contract liability balance for the three and six months ende …

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Note 3. Segment and Geographic Information We sell complementary products and services largely to E&P customers in the oil and gas industry, through one reportable segment, as more fully described in our Annual Report, Note 4. Segment and Geographic Information. 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. Our chief operating decision maker (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 an …

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