Nine(NINE) - 2025 Q2 - Quarterly Results

Nine Energy Service Second Quarter 2025 Results Financial & Operational Highlights Nine Energy Service reported Q2 2025 revenue at the upper end of guidance, driven by strong sequential growth in key segments despite market challenges Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Revenue | $147.3 million | | Net Loss | $(10.4) million | | Diluted EPS | $(0.25) | | Adjusted EBITDA | $14.1 million | | Total Liquidity (as of June 30, 2025) | $65.5 million | - Despite significant US rig declines, Q2 revenue met the upper end of the company's original guidance of $138.0 to $148.0 million[2][3] - The company saw strong sequential growth in key segments: Completion Tool revenue increased by ~9% and Wireline revenue grew by ~11% quarter-over-quarter[4][5] - International revenue for the first half of 2025 increased by approximately 20% compared to the first half of 2024[5] Management Commentary and Market Overview CEO Ann Fox highlighted strong operational performance and robust growth in key businesses despite challenging market conditions - The US market faced headwinds in Q2 as declining WTI prices and global uncertainty led to a drop of over 50 rigs, primarily in oil-levered basins, resulting in pricing pressure across service lines[4] - A more positive sentiment and efficient operations in natural gas-levered basins, particularly the Northeast, benefited Nine's performance[4] - The Completion Tool business revenue grew ~9% QoQ, driven by international sales and strength in gas basins, while the Wireline business revenue increased ~11% QoQ due to efficiency gains and market share growth[4] Business Outlook & Strategy The company implements strategies for market share and international growth, anticipating Q3 revenue and earnings decline due to Q2 activity and pricing impacts - Strategic initiatives include gaining market share, growing the international tools business, advancing R&D, and constructing a new completion tool facility, while simultaneously reducing costs[6] - The company anticipates Q3 revenue and earnings will be lower than Q2 due to the full-quarter impact of activity and pricing declines that occurred throughout the second quarter[6] - Nine's diversification in services, technology, and commodity exposure is expected to help navigate market uncertainty and capitalize on growth opportunities[6] Detailed Financial Performance Nine Energy Service generated $147.3 million in Q2 2025 revenues, achieving a 6.7% adjusted ROIC Q2 2025 Operating Results | Metric | Value | | :--- | :--- | | Revenues | $147.3 million | | Gross Profit | $17.3 million | | Adjusted Gross Profit | $25.8 million | | ROIC | -16.2% | | Adjusted ROIC | 6.7% | - General and administrative (G&A) expense was $13.9 million, and Depreciation and amortization (D&A) expense was $8.6 million for the second quarter of 2025[7] - The company recorded a tax benefit of approximately $0.3 million year-to-date, resulting from a $0.5 million discrete tax benefit in Q2[8] Liquidity and Capital Expenditures The company reported $10.1 million net cash from operations and $65.5 million total liquidity, maintaining full-year capex guidance - Net cash provided by operating activities was $10.1 million in Q2 2025[9] Capital Expenditures | Period | Amount | | :--- | :--- | | Q2 2025 | $6.1 million | | H1 2025 | $10.4 million | | Full-Year 2025 Guidance | $15 - $25 million | - As of June 30, 2025, total liquidity was $65.5 million, comprising $14.2 million in cash and $51.3 million available under the revolving credit facility. An additional $13.4 million was borrowed in July 2025[10] Consolidated Financial Statements Condensed Consolidated Statements of Income (Loss) Q2 2025 revenue slightly decreased to $147.3 million, and net loss widened to $10.4 million due to higher interest expenses Statement of Income Highlights (in thousands) | Account | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Revenues | $147,251 | $150,466 | | Income from operations | $3,378 | $5,629 | | Interest expense | $14,729 | $12,876 | | Net loss | $(10,391) | $(7,061) | | Diluted loss per share | $(0.25) | $(0.18) | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $361.2 million, with total liabilities rising to $442.9 million, leading to a larger stockholders' deficit Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,216 | $17,275 | | Total current assets | $175,731 | $174,577 | | Total assets | $361,165 | $359,181 | | Total current liabilities | $93,930 | $86,029 | | Long-term debt | $323,454 | $319,137 | | Total liabilities | $442,902 | $431,294 | | Total stockholders' equity (deficit) | $(81,737) | $(72,113) | Condensed Consolidated Statements of Cash Flows Q2 2025 generated $10.1 million cash from operations, a turnaround from Q1, with cash used in investing and financing activities Statement of Cash Flows Highlights (in thousands) | Account | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $10,088 | $(5,277) | | Net cash used in investing activities | $(5,765) | $(3,981) | | Net cash used in financing activities | $(3,915) | $(1,556) | | Net (decrease) increase in cash | $480 | $(10,605) | Reconciliation of Non-GAAP Financial Measures Reconciliation of Adjusted EBITDA Adjusted EBITDA for Q2 2025 was $14.1 million, a decrease from Q1, derived by adjusting net loss for various non-cash items Adjusted EBITDA Reconciliation (in thousands) | Account | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net loss | $(10,391) | $(7,061) | | EBITDA | $12,157 | $14,424 | | Adjusted EBITDA | $14,123 | $16,537 | Reconciliation and Calculation of Adjusted ROIC The company's Adjusted ROIC was 6.7% for Q2 2025, a decrease from Q1, calculated from adjusted after-tax net operating income and average total capital Adjusted ROIC Calculation | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Adjusted after-tax net operating income | $4,325 thousand | $5,676 thousand | | Average total capital | $257,097 thousand | $258,254 thousand | | Adjusted ROIC | 6.7% | 8.8% | Reconciliation of Adjusted Gross Profit Adjusted Gross Profit for Q2 2025 was $25.8 million, derived by adding back non-cash D&A to GAAP gross profit Adjusted Gross Profit Reconciliation (in thousands) | Account | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Gross profit | $17,333 | $19,477 | | Add: Depreciation | $5,683 | $5,723 | | Add: Amortization of intangibles | $2,796 | $2,796 | | Adjusted gross profit | $25,812 | $27,996 |