Nine Energy Service (NINE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $138.2M, up 4% sequentially and above guidance, despite a 3% decline in U.S. rig count and weak natural gas prices.

• Adjusted EBITDA was $14.3M, up 47% quarter over quarter, with a margin of 10.3%; net loss improved to $(10.1)M, or $(0.26) per share.

• Cementing revenue grew 12% sequentially, driven by market share gains and advanced technology, offsetting declines in other service lines.

• Cost reduction and supply chain initiatives improved profitability, with ongoing focus on liquidity and market share.

• Management remains optimistic on long-term natural gas demand despite current market headwinds and NYSE delisting risk.

Financial highlights

• Q3 2024 revenue: $138.2M; adjusted EBITDA: $14.3M; net loss: $(10.1)M; EPS: $(0.26); gross profit: $16.1M; adjusted gross profit: $24.7M.

• Cash and equivalents at September 30, 2024: $15.7M; total liquidity: $43.3M; ABL/revolver availability: $27.6M.

• Net cash used in operating activities was $(5.9)M in Q3; capex was $3.6M, with YTD spend at $11.7M.

• Paid down $5M on ABL credit facility in Q3 and $3M in October; $50M outstanding at quarter-end.

• Sold 5.4M shares YTD under ATM program, raising $8.2M.

Outlook and guidance

• Q4 revenue and profitability expected to decline due to seasonality, budget exhaustion, and lower international tool sales.

• Capex guidance for 2024 reduced to $10M–$15M from $15M–$25M.

• Moderate activity pickup anticipated in 2025 if commodity prices recover and customer budgets reset.

• Q3 results viewed as repeatable in a similar rig count environment.