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 prior guidance.

• Market conditions remained depressed, with over 40 rigs exiting since end of 2023, totaling nearly 200 since end of 2022, driving declines across all service lines.

• Revenues and earnings are closely tied to U.S. land rig count, which continues to decline and pressure results.

• The company operates as a single segment, Completion Solutions, providing cementing, coiled tubing, wireline, and completion tools for unconventional wells.

• Asset-light, technology-driven business model with a diversified completion portfolio and focus on ESG technology and advanced completion tools.

Financial highlights

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

• Adjusted gross profit for Q2 was $20.4 million; gross profit (GAAP) was $11.4 million.

• Net cash provided by operating activities was $12.9 million in Q2 2024.

• CapEx for Q2 was $2.5 million, totaling $8.1 million through June 30, 2024.

• Cash and cash equivalents at quarter-end were $26.0 million; total liquidity was $50.8 million.

Outlook and guidance

• Q3 2024 revenue and profitability expected to be relatively flat compared to Q2, with continued low activity in gas-levered basins.

• 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 grow by up to 40% over two decades.