Nine Energy Service (NINE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $132.4 million, with a net loss of $14.0 million and adjusted EBITDA of $9.7 million, aligning with guidance and reflecting continued rig declines and a depressed market across all service lines.

• Over 40 rigs exited the market since end of 2023, totaling nearly 200 since end of 2022, impacting all service lines and driving revenue and margin declines.

• The business operates as a single segment, Completion Solutions, with a diversified, technology-driven portfolio and a strong focus on refrac jobs, surpassing 300 to date.

• The company maintains an asset-light model, blue-chip customer base, and continues to invest in ESG and advanced completion technologies.

• Results remain closely tied to U.S. land rig count, with lower activity and pricing especially in cementing and coiled tubing.

Financial highlights

• Q2 2024 revenue was $132.4 million, down 18% year-over-year; adjusted EBITDA was $9.7 million (7% margin), and net loss was $14.0 million.

• Adjusted gross profit for Q2 was $20.4 million; gross margin (GAAP) was 8.6%.

• Net cash provided by operating activities was $12.9 million in Q2; capex for Q2 was $2.5 million, totaling $8.1 million YTD.

• Cash and equivalents stood at $26 million, with total liquidity of $50.8 million as of June 30, 2024.

• Sold 4.2 million shares under ATM program in Q2, generating $6.8 million in net proceeds.

Outlook and guidance

• Q3 2024 revenue projected between $127–$137 million, with adjusted EBITDA and margin expected to remain flat versus Q2.

• Full-year 2024 capex guidance lowered to $10–$15 million from $15–$25 million to preserve liquidity.

• Management remains positive on the medium- and long-term outlook for gas markets, with U.S. power demand projected to rise significantly.