McCoy Global (MCB) Q1 2025 earnings summary

Executive summary

• Revenue rose 17% year-over-year to $19.3 million, driven by strong demand for newly commercialized smartProducts, which made up 59% of total revenue, up from 31% last year.

• Net earnings decreased 3% to $0.9 million, impacted by higher share-based compensation due to share price appreciation, despite improved Adjusted EBITDA.

• Backlog increased 9% to $27.5 million, with an additional $11.0 million in contract awards for smarTR hardware and SaaS revenue post-quarter.

• Significant progress on the Technology Roadmap, including successful field trials and commercialization of smarTR and smartCRT systems, with new contracts in the US, Middle East, and Latin America.

• Returned over $1.5 million to shareholders through share repurchases and dividends.

Financial highlights

• Gross profit margin improved to 34% from 32% year-over-year, reflecting favorable product mix and cost containment.

• Adjusted EBITDA increased 53% to $3.5 million (18% of revenue), up from $2.3 million (14% of revenue) in Q1 2024.

• Book-to-bill ratio rose to 1.21 from 1.13, indicating strong order intake.

• Net cash position at quarter-end was $10.6 million, with $7.9 million in undrawn credit facilities.

Outlook and guidance

• International oil & gas market fundamentals expected to remain stable, especially in MENA, with increased drilling activity and new contract opportunities anticipated.

• North America land market remains subdued, but smartProduct adoption is expected to drive growth due to efficiency and safety benefits.

• Management expects future revenues to be less cyclical and more driven by technology adoption and market share gains.

• Continued focus on accelerating smartProduct adoption and returning excess cash to shareholders.