Note 3 - Segment and Geographic Information

6 Months Ended

Jun. 30, 2026

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 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 selling, general and administrative (“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 condensed consolidated statements of operations (in thousands):

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
	*2026*		*2025*		*2026*		*2025*
Payroll and employee benefits	$	8,897	$	8,231	$	18,529	$	18,183
Share-based compensation		1,324		1,392		2,551		2,837
Professional services (1)		4,761		1,322		6,926		3,524
Insurance		631		523		1,213		1,014
Software and hardware		613		578		1,200		1,153
Other		1,732		1,580		3,267		3,110
Total SG&A	$	17,958	$	13,626	$	33,686	$	29,821

(1)

Includes $2.7 million and $2.8 million of professional services related to strategic acquisition activities, including the Weatherford transaction, for the three and six months ended June 30, 2026, respectively. See “Note 1. Basis of Presentation, Weatherford Transaction” for additional information.

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

	*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

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

	*June 30,*		*December 31,*
	*2026*		*2025*
United States	$	12,533	$	11,789
Canada		8,570		9,448
Other Countries		3,322		3,429
Total	$	24,425	$	24,666

- Definition

The entire disclosure for segment reporting.

+ References

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+ Details

NCS Multistage Holdings, Inc. 10-Q