Fourth Quarter Highlights:
Revenue increased 1% to $25.6 million, compared to $25.2 million in Q4 2024, driven by strong demand for recently commercialized smartProducts.
smartProduct revenue5 accounted for $14.1 million, or 55%, of total revenue, an increase of $2.0 million or 16% from Q4 2024.
Net earnings of $6.1 million, a 44% increase from $4.3 million in 2024.
Adjusted EBITDA1 remained consistent with Q4 2024 at $6.5 million, or 25% of revenue (Q4 2024 $6.5 million, 26% of revenue).
Annual Highlights:
Revenue increased 8% to $83.8 million, compared to $77.5 million in 2024, driven by strong demand for smartProducts.
smartProduct revenue5 accounted for $43.6 million, or 52%, of total revenue, an increase of $13.9 million from 2024.
Net earnings of $9.0 million, a 2% increase from $8.9 million in 2024.
Adjusted EBITDA1 of $16.8 million, or 20% of revenue, compared to $16.2 million, or 21% of revenue, in 2024.
Advanced its Technology Roadmap, and since January 1, 2025:
McCoy successfully concluded in-field trials and commercialized its innovative smarTR™ system for land and shelf applications in the second quarter of 2025, which led to $11.0 million of contract awards from our US field trial partners for system hardware. In addition to the equipment award, the contract included utilization-based software-as-a-service (SaaS) revenue enabled by our integrated software platform for remote control, automation, and data-driven operational intelligence. McCoy completed deliveries for these in Q4 and recognized its first SaaS‑like subscription revenues for this technology in 2025. Recent field deployments have validated the system's technical performance, and have met or exceeded all technical objectives, delivering targeted safety and efficiency outcomes. The smarTR™ system integrates McCoy's proprietary hydraulic smart casing running tool (smartCRT™), connected flush mount spider (smartFMS™), and related tubular running accessories into a first-to-market solution that significantly enhances safety and efficiency, with the goal to significantly reduce TRS labor costs.
McCoy continued to advance the commercialization of its smartCRT™ technology, delivering multiple hydraulic smartCRT™ units to the Middle East and the US land market throughout 2025. First introduced in Q4 2024, the hydraulic smartCRT™ has successfully executed numerous operations, demonstrating exceptional reliability and efficiency in demanding field conditions. This patented solution offers a hydraulic alternative to conventional mechanical casing running tools and is designed to integrate seamlessly into McCoy's smarTR™ system. By mitigating risks inherent in traditional mechanical CRT technologies while providing actionable performance insights, it represents a significant step forward in operational safety and optimization. Following extensive rig trials, the smartCRT™ received technical approval from a major NOC in a key market, marking a critical milestone in its commercialization and positioning it for inclusion in upcoming tenders. During the third quarter, McCoy also successfully commercialized and delivered its first external grip smartCRT™, designed for expanded casing applications and broadening the scope of McCoy's smartProduct portfolio beyond the capabilities of previous tools.
McCoy successfully commercialized and delivered its 500T smartFMS™, a versatile solution that supports both drilling and casing operations while offering the enhanced load capacity required for many international well profiles.
McCoy delivered a deep-water offshore integrated casing running system destined for Latin America and completed commissioning in Q4 2025. Delivering and commissioning this technology completes the first step on a roadmap to a comprehensive smarTR™ system tailored for offshore and deep-water markets. This integrated deep-water system differs from our smarTR™ solution designed for land and shelf casing operations that is centered around CRT technology, as deep-water casing installation requires hydraulic power tongs to meet technical specifications for offshore well profiles. The Latin America contract award also marked the first offshore commercial SaaS purchase commitment for McCoy's Virtual Thread-Rep™ technology. McCoy's Virtual Thread-Rep™ technology enables customers to remotely monitor and control premium connection make-up. It also facilitates the autonomous evaluation and confirmation of premium connection make-up on location. In Q4 2025, McCoy received a $3.7 million purchase commitment for integrated hydraulic power tong systems intended for deep-water offshore operations in the Eastern Hemisphere, with a portion delivered in 2025 and the remainder scheduled for 2026.
"Throughout 2025, we continued to demonstrate meaningful progress against our Technology Roadmap, successfully commercializing multiple smartProduct offerings and delivering systems that are already generating strong technical results for our customers. The rapid growth of smartProduct revenue, combined with our first SaaS‑like contributions, underscores the compelling value our technologies bring to improving safety, efficiency, and operational consistency," said Jim Rakiviech, President and CEO. "Recent geopolitical developments in the Middle East have introduced an additional layer of near‑term uncertainty. With more than two‑thirds of our year‑end backlog destined for this region, ongoing shipping suspensions and restricted port access may delay certain deliveries and temporarily defer associated revenue and cash receipts. Importantly, underlying customer demand remains intact, but timing may create near‑term pressure on operating cash flow and working capital. While the timing of certain NOC-driven tenders and the pace of technology adoption across other markets remains difficult to forecast, the milestones we achieved in 2025 reinforce our confidence that our technology strategy is the right one. We remain committed to disciplined execution as we expand our smartProduct portfolio and work closely with customers to advance adoption across global markets."
"In response to emerging logistics disruptions stemming from the Middle East conflict and the limited visibility on NOC tender timing, in the first quarter of 2026 we have taken decisive action to optimize our cost structure and preserve margins and liquidity against downside scenarios, while ensuring continued investment in the strategic initiatives most critical to our long-term growth," said Lindsay McGill, Vice President & CFO. "Our disciplined approach resulted in approximately US$1.9 million of annualized cost reductions, driven by reductions in force, tighter discretionary spending controls, and the deferral of non‑essential capital expenditures. Additionally, we made the decision to preserve financial flexibility by pausing our quarterly dividend due to the recent conflict in the Middle East. At the same time, we protected our key technology development and customer support programs, enabling us to sustain momentum in smartProduct commercialization. This balanced approach ensures we remain agile, preserve liquidity, and maintain the financial flexibility required to support our customers and deliver on our strategic priorities."
Fourth Quarter Financial Highlights:
Total revenue of $25.6 million, compared with $25.2 million in 2024.
Net earnings of $6.1 million, compared to net earnings of $4.3 million in 2024.
Adjusted EBITDA1 of $6.5 million, or 25% of revenue, compared with $6.5 million, or 26% of revenue, in 2024.
Booked backlog2 of $25.8 million at December 31, 2025, a 10% increase from the $23.5 million in the fourth quarter of 2024.
Book-to-bill ratio3 was 0.94 for the three months ended December 31, 2025, compared with 0.67 in the fourth quarter of 2024.
Annual Financial Highlights:
Total revenue of $83.8 million, an 8% increase from the $77.5 million reported in 2024, driven by strong demand for recently commercialized smartProducts.
Net earnings of $9.0 million, compared to net earnings of $8.9 million in 2024.
Adjusted EBITDA1 of $16.8 million, or 20% of revenue, compared with $16.2 million, or 21% of revenue, in 2024.
Financial Summary
Revenue for the three months ended December 31, 2025, increased by 1% compared to the same period in 2024. Notably, smartProduct sales, rental and service revenue increased 16% compared to the prior period. The improvement reflects a combination of accelerating smartProduct adoption and the timing of order intake and deliveries in the quarter. Key contributors included the delivery of smarTR™ systems to a leading US TRS company and an integrated hydraulic power tong system supporting deep‑water offshore operations in the Eastern Hemisphere. For the three months ended December 31, 2025, smartProduct revenue of $14.1 million accounted for 55% of revenue (three months ended December 31, 2024, 48%), an increase of $2.0 million from the comparative period. For the year ended December 31, 2025, revenues increased by 8% from the comparative period, driven by smartProduct sales, rental and service revenue.
Gross profit, as a percentage of revenue for the three months and year ended December 31, 2025, was 37% and 34% respectively, a decrease of four and two percentage points, respectively, from the comparable periods in 2024. The year‑over‑year decline primarily reflects production facility expansions, higher production overheads, and increased staffing levels to support planned throughput growth, as well as expansion of service and commissioning personnel and related facilities to support customer success with newly commercialized technologies. These factors reduced gross margin in the near term but are expected to contribute to enhance operational leverage as smartProduct technology adoption continues to expand.
For the three months ended December 31, 2025, the Corporation reported $0.1 million in general and administrative expenses (G&A) that was largely a result of a $1.6 million reversal of stock‑based compensation expense, driven by volatility in the Corporation's share price and its effects cash-settled share-based compensation, reversal of prior allowances for doubtful accounts of $0.6 million recognized during the quarter, as well as lower employee short-term incentives. For the year ended December 31, 2025, McCoy reported G&A of $9.2 million or 11% of revenue, a decrease of $0.8 million from 2024. The reduction was driven primarily by lower stock‑based compensation expense reflecting volatility in the Corporation's share price and its impact on cash‑settled share‑based awards as well as reduced employee short‑term incentive costs. These decreases were partially offset by the Corporation's investment in an AI platform to enhance operational decision‑making, along with increased human resources and corporate support costs aligned with the organization's growth. For the year ended December 31, 2025, as a percentage of revenue, G&A decreased by two percentage points to 11% compared to 2024.
During the three months and year ended December 31, 2025, product development and support expenditures totaled $2.0 million and $7.8 million, respectively, with the design and development of additional smart product enhancements and complementary product accessories for the smartTR™ system, and included internal engineering hours, prototype builds, and field trial activities supporting the commercialization and customer validation of next‑generation technologies. For the three months and year ended December 31, 2024, product development and support expenditures totaled $2.1 million and $6.2 million, respectively, and the Corporation's support efforts were primarily focused on developing, testing, and commercializing enhancements and complementary accessories for the smartCRT™ platform to meet emerging contractual and operating requirements in key geographic markets.
For the three months and year ended December 31, 2025, sales and marketing expenses increased from the comparative period to $1.1 million and $3.2 million, respectively, driven by enhanced customer engagement activities, travel associated with global smartProduct deployments, and expanded marketing initiatives. As a percentage of revenue, Sales & Marketing remained consistent with the comparative periods at 4%.
Net earnings for the three months ended December 31, 2025, was $6.1 million or $0.23 per basic share, compared with net earnings of $4.3 million or $0.16 per basic share in the fourth quarter of 2024. Net earnings for the year ended December 31, 2025, was $9.0 million or $0.34 per basic share, compared with net earnings of $8.9 million or $0.33 per basic share in 2024.
Adjusted EBITDA1 for the three months ended December 31, 2025, was $6.5 million compared with $6.5 million for the fourth quarter of 2024. For the year ended December 31, 2025, Adjusted EBITDA1 was $16.8 million compared with $16.2 million in 2024. EBITDA performance reflects both strong smartProduct contribution which was offset by costs associated with expansion of service and commissioning personnel and facilities to support customer success with newly commercialized technologies, as well as increased production staffing levels and facility expansions to accommodate higher throughput.
As at December 31, 2025, the Corporation had $3.0 million in net cash4, along with an additional $5.4 million available under undrawn credit facilities.
Selected Quarterly Information
