Nine Energy Service, Inc.

What they do

Nine partners with E&P customers across major onshore basins in the U.S., Canada and abroad to design and deploy downhole solutions for horizontal, multistage wells. It provides cementing services, completion tools including toe-stage technologies and dissolvable frac plugs, wireline services (mostly plug-and-perf), and coiled tubing wellbore intervention. The company targets unconventional oil and gas resource development.

Revenue drivers

• Coiled Tubing — Wellbore intervention using continuous steel pipe deployed on a spool; management cited significant margin compression here in Q2 2026 after two large-diameter units were taken out of service for maintenance.
• Completion Tools — Toe-stage technologies and fully-composite, dissolvable, extended-range frac plugs for stage isolation; management said it delivered a strong Q2 2026 on higher domestic sales and international growth.
• Cementing — Blending cement, water and additives into a slurry pumped between casing and wellbore; described as a steady contributor but with uneven activity and inflationary material and labor costs.
• Wireline — Plug-and-perf multistage completions deploying perforating guns and isolation tools; management reported steady progress expanding in the Haynesville Basin.

Recent performance

Q2 2026 revenue was $141.8 million, with a net loss of $(4.9) million, or $(0.35) per diluted share, and adjusted EBITDA of $8.6 million; gross profit was $12.8 million and adjusted gross profit $19.9 million. G&A was $15.6 million, D&A was $7.2 million, and the tax provision was about $0.4 million. Net cash used in operating activities was $2.3 million, and capital expenditures were $4.8 million. Cash and equivalents were $16.8 million at June 30, 2026, with $30.0 million of revolver availability and $97.3 million of revolver borrowings. Full-year 2025 revenue was $561.9 million with a net loss of $51.3 million.

Strategy

Management is focused on operational execution, cost discipline, and expanding adoption of differentiated technologies, particularly dissolvable completion tools where it says demand is increasing as operators extend lateral lengths. It is also executing a Wireline expansion in the Haynesville Basin. Capital expenditures guidance for full-year 2026 is unchanged at $20 to $30 million. The company exited bankruptcy on March 5, 2026 under a prepackaged plan that converted Prepetition ABL obligations into a $125.0 million Exit ABL Facility and issued 100% of new common equity to the 2028 Notes holders.

Risks

• Coiled Tubing unit outage — Two large-diameter coiled tubing units, about 17% of the large-diameter fleet, were taken out of service; one returned early in Q3 2026 but the second is expected back near year-end, keeping Coiled Tubing constrained.
• Cost inflation — Management cited meaningful inflationary pressures in consumables, labor, and repairs and maintenance, plus material and labor costs in Cementing.
• Recent bankruptcy and equity cancellation — The company filed Chapter 11 on February 1, 2026; on the March 5, 2026 Plan Effective Date all pre-plan equity was canceled for no consideration and new equity was issued to 2028 Notes holders.
• Weak profitability and cash flow — Nine reported net losses in 2023 ($32.2 million), 2024 ($41.1 million) and 2025 ($51.3 million), and operating cash flow was negative $7.3 million in 2025.

Outlook

For Q3 2026, management expects revenue and profitability to be flat to modestly down versus Q2 2026, citing the sustained revenue loss from the damaged coiled tubing unit and persistent cost inflation across service lines. It expects the average U.S. rig count in Q3 to be relatively flat to slightly up versus Q2. Coiled Tubing operations are expected to remain constrained until the second unit is restored near year-end. Capital expenditures guidance remains $20 to $30 million for full-year 2026.