McCOY GLOBAL ANNOUNCES FIRST QUARTER 2026 RESULTS
Revenue halved, backlog gutted, and a surprise $6.5M order cancellation push McCoy Global to an unexpected loss, slashing confidence in its turnaround just as a leadership handoff begins.
The most recent release (Q1 2026 results, May 15 2026) reveals a severe deterioration: revenue plunged 52% year‑over‑year to $9.4 million, a net loss of $3.2 million ($0.12 per share) replaced a profit of $0.9 million, and gross margin collapsed to 6%. A single Middle East customer cancelled a $6.5 million order, driving negative order intake net of cancellations of $6.5 million. Booked backlog shrank to $23.3 million from $27.5 million a year earlier, and the book‑to‑bill ratio fell to 0.69. In response, management implemented headcount reductions and other cost cuts, and secured a new US$10 million credit facility (closed May 14) to preserve liquidity.
Earlier news outlined: - May 14 2026: Closure of a US$10 million asset‑based revolving credit facility, replacing a previous Canadian facility; no amounts drawn initially. - March 6 2026: FY2025 results—revenue $83.8 million (+8%), net earnings $9.0 million (+2%), but dividend paused due to Middle East logistics risk. - Feb 26 2026: CEO Jim Rakievich to retire in May 2026, COO Bing Deng appointed successor. - Nov 7 2025: Q3 2025 revenue $14.8 million (–6%), smartProduct adoption growing, dividend declared.
The Q1 2026 results are a stark departure from prior expectations and represent a material negative development. While management previously flagged Middle East disruptions and parked the dividend as a precaution, the magnitude of the collapse—a 52% revenue drop and a swing to a $3.2 million loss—was not telegraphed. A single $6.5 million order cancellation from a Middle East customer single‑handedly wiped out a large portion of expected intake and exposed severe concentration risk. Even excluding that cancellation, order intake would still be $13 million, far below the prior‑year run‑rate.
Despite the new credit facility, the operating results raise serious concerns about the company’s near‑term viability. Gross profit of only 6% signals that fixed costs could not be adjusted rapidly enough, and the cost‑cutting measures (layoffs, capex deferrals) may undermine the technology roadmap that was supposed to drive future growth. The sharp decline in smartProduct revenue as a percentage of total sales (41% vs. 59% a year ago) suggests that even higher‑margin offerings are not immune to market turmoil. The book‑to‑bill of 0.69 indicates backlog is burning faster than it is replenished, pointing to further revenue erosion ahead. This news materially raises the risk of a covenant breach or a need to draw on the new facility, despite management’s claim of “conservative financial profile.”
McCoy Global specializes in wellbore integrity and drilling equipment, with a technology roadmap centered on “smart” products (smartCRT™, smartFMS™, smarTR™, smartTSA™). Its flagship offering is the smarTR™ system, a data‑enabled tubular running tool that began generating SaaS‑like subscription revenue in 2025. The company operates globally, with key exposure to Middle East NOCs and U.S. land markets. The 2025 successes included multiple smartCRT™ deliveries, technical approval from a major NOC, and a $3.7 million deep‑water offshore hydraulic power tong commitment. However, the Q1 2026 news shows that geopolitical disruptions in the Strait of Hormuz can quickly overwhelm the commercial pipeline.