Nine Energy Service (NINE) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was $609.5 million versus $593.4 million in 2022; Adjusted EBITDA fell to $73.0 million from $93.7 million.

• Q4 revenue was $144.1 million and Adjusted EBITDA was $14.6 million, up from $140.6 million and $11.6 million in Q3; revenue was within guidance.

• Despite lower U.S. activity, dissolvable tool sales and international revenue grew; strategy emphasized asset-light operations, completion tools and international markets.

Financial highlights

• FY revenue was $609.5 million versus $593.4 million; gross profit was $80.2 million versus $97.9 million in 2022.

• FY adjusted gross profit was $118.8 million versus $136.3 million; Q4 adjusted gross profit was $25.6 million versus $22.9 million in Q3.

• FY net loss was $32.2 million versus net income of $14.4 million in 2022; Q4 net loss was $10.3 million versus $13.3 million in Q3.

• Q4 G&A and D&A expenses were $12.8 million and $9.8 million; FY expenses were $59.8 million and $40.7 million.

Outlook and guidance

• FY 2024 capital expenditures expected at $15 million–$25 million.

• Q1 2024 revenue was expected to be relatively flat QoQ, with activity and pricing mostly flat versus Q4 and no near-term catalyst for activity increases anticipated.

• FY 2023 capex of $22.3 million was below the original $25 million–$35 million guidance range.

• 2024E industry indicators included an average U.S. rig count of 648, 660,000 U.S. frac stages and 11,745 new horizontal wells.