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NE

Nine Energy Service, Inc. (NINE)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue was $147.3M, near the high end of guidance ($138–$148M), with net loss of $(10.4)M and adjusted EBITDA of $14.1M; revenue benefitted from stronger natural-gas basins and international tool sales while Permian pricing pressure weighed on earnings .
  • Versus Wall Street consensus, Nine beat revenue by ~$4.3M, missed EPS by ~$0.03, and came in below consensus EBITDA; management guided Q3 revenue down to $135–$145M and expects Q3 adjusted EBITDA below Q2 as pricing/activity declines are fully realized .
  • Segment performance was mixed: Completion Tools +~9% q/q to $37.0M and Wireline +~11% q/q to $33.0M, offset by Cementing down ~9% to $52.2M and Coiled Tubing down ~16% to $25.1M, reflecting Permian softness .
  • Strategic catalysts: continued international tools expansion (+~20% H1 YoY), remedial wireline share gains, and construction of a new 30K+ sq. ft. completion tools testing facility (opening next year) to strengthen technology differentiation .

What Went Well and What Went Wrong

What Went Well

  • Completion Tools revenue grew ~9% q/q to $37.0M, supported by international sales and gas-levered basins (Haynesville, Northeast) .
  • Wireline revenue grew ~11% q/q to $33.0M on more efficient Northeast operations and remedial wireline share gains; “our remedial wireline push… diversified the topline from ups and downs of pump-down work” .
  • H1 2025 international tools revenue +~20% YoY, with traction in the Middle East and Argentina (plugs and MPDV valves) .

What Went Wrong

  • Oil price declines (WTI fell below $60 for first time in four years) and tariffs drove activity reductions and pricing pressure, especially in the Permian (historically ~40% of revenue), compressing earnings despite revenue resilience .
  • Cementing and Coiled Tubing revenues declined (Cementing ~$52.2M, ~9% down; Coiled Tubing ~$25.1M, ~16% down q/q) amid Permian weakness and calendar whitespace .
  • Q3 outlook: management expects both revenue and adjusted EBITDA to be down sequentially, citing full-quarter impact of Q2 pricing/activity cuts and additional potential private-operator pullbacks .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$132.4 $141.4 $150.5 $147.3
Net Loss ($USD Millions)$(14.0) $(8.8) $(7.1) $(10.4)
Diluted EPS ($USD)$(0.40) $(0.22) $(0.18) $(0.25)
EBITDA ($USD Millions)$8.1 $12.5 $14.4 $12.2
Adjusted EBITDA ($USD Millions)$9.7 $14.1 $16.5 $14.1
Gross Profit ($USD Millions)$11.4 $16.5 $19.5 $17.3
Adjusted Gross Profit ($USD Millions)$20.4 $26.2 $28.0 $25.8
Cash from Operations ($USD Millions)$12.9 $15.0 $(5.3) $10.1
Capital Expenditures ($USD Millions)$2.6 $3.2 $4.0 $5.9

Segment revenue and q/q change (Q2 2025):

SegmentRevenue ($USD Millions)q/q Change
Completion Tools$37.0 +~9%
Wireline$33.0 +~11%
Cementing$52.2 ~9% decline
Coiled Tubing$25.1 ~16% decline

KPIs (Q2 2025):

KPIQ2 2025q/q Change
Cementing jobs completed1,061 ~15% decrease
Wireline stages completed8,585 ~11% increase
Completion tool stages30,331 ~4% increase
Coiled tubing days workedN/A (days not disclosed)~23% decrease; avg run-day rate +~9%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 2025N/A$135–$145M New (down vs Q2)
Adjusted EBITDAQ3 2025N/A“Down vs Q2” (directional) Lowered
Capital ExpendituresFY 2025$15–$25M $15–$25M (unchanged) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Tariffs/Macro, oil pricesRig declines; natural gas avg ~$2.19 depressed demand “Decline in oil prices… tariffs… uncertainty”; expecting Q2 down vs Q1 WTI fell below $60; tariffs raised costs; pricing pressure across lines Deteriorated sequentially
Natural gas basin sentimentLong-term gas demand positive; >30% revenue leveraged to gas Ready to capitalize on gas basins; diversity a differentiator Prices supportive; Northeast/Haynesville efficiency helped results Improving
Permian activity/pricingN/A in Q4 releasePermian-specific pricing pressure Significant rate declines; majority of rig removals from Permian Negative
International toolsPlan to grow; tech innovation emphasis N/A specific to H1H1 international +~20% YoY; traction in Middle East/Argentina Improving
R&D/testing facilityAnnounced state-of-the-art facility N/ANew 30K+ sq ft facility adjacent to Jacksboro manufacturing; opening next year Progressing
Wireline remedial shareN/AN/AIncremental remedial wireline share gains in Northeast Improving

Management Commentary

  • “Despite significant rig declines in the US land market throughout Q2, our revenue came in at the upper end of our original guidance.” — Ann Fox
  • “Following the announcement of US imposed tariffs in April, we saw WTI prices decline in Q2, falling below $60 for the first time in four years… pricing pressure across service lines negatively impacted revenue and earnings.” — Ann Fox .
  • “In Q3 we will see full quarter realizations of activity and pricing declines… anticipate Q3 revenue and earnings will be down compared to Q2.” — Ann Fox .
  • “Project Q3 revenue between $135,000,000 and $145,000,000.” — Ann Fox (prepared remarks) .
  • “We’re seeing traction internationally with plugs and MPDV valves… nice big volume orders.” — Ann Fox (Q&A) .
  • “This [new completion tool facility] will be… the largest data-centric completion tool assessment facility in the US.” — Ann Fox .

Q&A Highlights

  • Private operator sensitivity: management expects private operators to react more quickly to commodity price weakness; no specific Q4 visibility, with some customers indicating increased activity in Q1 (Permian) .
  • International traction: first-half international revenue +~20% YoY; strongest in Middle East and Argentina; products include plugs and MPDV valves; full-year 2025 international expected up YoY, but lumpy .
  • Gas-market setup: management views Haynesville/Northeast competitive dynamics as “kinder” than Permian and believes natural gas demand will remain strong, aiding margins and activity .
  • Remedial wireline strategy: multi-year initiative to diversify away from pump-down cyclicality; leadership with deep expertise cited as driver of share gains .
  • Testing facility specifics: ~30K sq. ft., multiple test wells, drill-out capability, flowback loop, pressure/temperature testing, customer data access; opening next year in Jacksboro .

Estimates Context

MetricConsensus (Q2 2025)ActualSurprise
Revenue ($USD Millions)$143.0*$147.3 +$4.3 (+3.0%)
Primary EPS ($USD)$(0.22)*$(0.25) $(0.03) (miss)
EBITDA ($USD Millions)$13.0*$12.2 $(0.8) (miss)

Values retrieved from S&P Global.*

Interpretation:

  • Revenue beat likely reflects efficiency gains in gas-levered basins (Northeast/Haynesville) and international tools strength; EPS/EBITDA miss tied to Permian pricing pressure and lower commodity backdrop in Q2 .

Key Takeaways for Investors

  • Mix resilience: Gas-levered basins and international tools offset Permian softness, enabling revenue near top of guidance despite macro headwinds .
  • Near-term caution: Q3 revenue guided to $135–$145M with adjusted EBITDA down vs Q2 as pricing/activity cuts roll through; expect calendar whitespace and potential private-operator pullbacks .
  • Strategic differentiation: Building a large-scale completion tool testing facility and growing international tools (plugs/MPDV) should enhance product validation, accelerate iteration, and support pricing over time .
  • Wireline diversification: Remedial wireline share gains reduce pump-down cyclicality, supporting margin stability, particularly in Northeast markets .
  • Liquidity intact: $65.5M total liquidity at 6/30 with new ABL capacity; capex guidance maintained ($15–$25M) indicating disciplined spend amid uncertain demand .
  • Estimate resets: Expect consensus to move down for Q3 on revenue and earnings given explicit guidance; watch for 2026 sentiment shifts tied to natural-gas demand and incremental activity in Q1 .
  • Trading setup: Heading into Q3, narrative skews defensive; upside catalysts include natural-gas price strength, international orders, and remedial wireline wins; downside risks centered on Permian pricing and further rate declines .

Financial Data Cross-Checks and Non-GAAP Notes

  • Company-reported EBITDA vs Adjusted EBITDA: Q2 EBITDA $12.2M and Adjusted EBITDA $14.1M; adjustments include stock-based compensation, cash awards, restructuring, and revaluation of contingent liabilities .
  • Adjusted Gross Profit excludes D&A; Q2 Adjusted Gross Profit $25.8M vs Gross Profit $17.3M .
  • Liquidity/cash flow: Q2 net cash from operations $10.1M; capex $6.1M; revolver availability $51.3M; cash $14.2M; total liquidity $65.5M .

Appendix: Additional Q2 2025 Press Releases and Prior Quarters

  • Q2 2025 earnings release timing notice .
  • Q1 2025 results: revenue $150.5M, net loss $(7.1)M, adjusted EBITDA $16.5M; noted Permian pricing pressure and expected Q2 sequential decline; closed $125M ABL .
  • Q4 2024 results: revenue $141.4M, net loss $(8.8)M, adjusted EBITDA $14.1M; tech innovation and market share gains highlighted .