McCoy Global (MCB) investor relations material

Executive summary

• Revenue for Q1 2026 fell 52% year-over-year to $9.4 million, primarily due to geopolitical instability in the Middle East and shipping disruptions through the Strait of Hormuz, which delayed shipments and deferred revenue recognition.

• Net loss was $3.2 million, compared to net earnings of $0.9 million in Q1 2025, driven by lower revenue, reduced absorption of fixed costs, and severance/retirement charges.

• Adjusted EBITDA loss was $1.3 million (14% of revenue), down from a $3.5 million gain (18% of revenue) in Q1 2025, reflecting lower shipment volumes and reduced operating leverage.

• Order intake dropped 72% year-over-year to $6.5 million, impacted by a $6.5 million backlog cancellation from a Middle Eastern customer; excluding this, order intake would have been $13.0 million.

• Cost reduction initiatives, including workforce reductions and deferred capital expenditures, were implemented late in the quarter to realign the cost structure and preserve liquidity.

Financial highlights

• Gross profit margin declined to 6% from 34% in Q1 2025, reflecting lower revenue and reduced absorption of fixed costs.

• General and administrative expenses decreased by $1.9 million to $1.4 million, mainly due to a recovery of share-based compensation and cost reduction measures.

• Product development and support expenditures increased 7% to $1.7 million, with continued investment in technology roadmap initiatives.

• Sales and marketing expenses decreased 19% year-over-year, primarily due to lower discretionary spending.

• Booked backlog at March 31, 2026, was $23.3 million, down from $27.5 million a year earlier.

• Book-to-bill ratio was 0.69, compared to 1.21 in Q1 2025.

Outlook and guidance

• Logistics disruptions and subdued Middle East order activity are expected to persist through at least late Q3 2026, with normalization anticipated thereafter.

• Near-term revenue visibility is supported by existing backlog, but extended conflict has reduced visibility beyond Q2 2026.

• Several large TRS contract awards in the Middle East remain under consideration, with further opportunities expected in 2027.

• North American drilling activity remains subdued; adoption of new technology is expected to be gradual and iterative.

• Capital expenditures for 2026 are expected to be lower than 2025, with targeted investments in technology and rental equipment.