Nine Energy Service, Inc. (NINE) Q1 2025 Earnings Conference Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals several concerning factors: declining market activity, pricing pressures, and uncertainty in forward guidance. While some financial metrics show growth, the lack of guidance, tariff challenges, and potential revenue declines overshadow these positives. The Q&A section highlights management's inability to quantify pricing pressures and future oil prices, further increasing uncertainty. These factors suggest a negative sentiment, likely leading to a stock price decline of -2% to -8% over the next two weeks.
Key Financial Performance
Revenue $150.5 million, an increase of approximately 6% quarter-over-quarter due to market share gains and cost reductions.
Adjusted EBITDA $16.5 million, an increase of approximately 17% quarter-over-quarter driven by increased activity and efficient operations.
Cementing Revenue $57.2 million, an increase of approximately 4% quarter-over-quarter due to an increase in jobs completed by approximately 11%.
Wireline Revenue $29.6 million, an increase of approximately 7% quarter-over-quarter due to more efficient operations and no holiday shutdowns.
Completion Tool Revenue $33.9 million, an increase of approximately 2% quarter-over-quarter due to market share gains in the Permian Basin.
Coiled Tubing Revenue $29.9 million, an increase of approximately 16% quarter-over-quarter due to significantly higher utilization.
General and Administrative Expense $13.3 million, no year-over-year change mentioned.
Depreciation and Amortization Expense $8.6 million, no year-over-year change mentioned.
Net Cash Used in Operating Activities $5.3 million, no year-over-year change mentioned.
CapEx Spend $4.3 million, with a full year CapEx budget unchanged at $15 million to $25 million.
Average Days Sales Outstanding (DSO) 57.6 days, no year-over-year change mentioned.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Completion Tools Revenue: Completion tool revenue for the quarter increased due to market share gains in the Permian Basin with our Plug offering.
Cementing Revenue: Cementing revenue for the quarter was $57.2 million, an increase of approximately 4%.
Wireline Revenue: U.S. Wireline division increased revenue by approximately 7% quarter-over-quarter.
Coiled Tubing Revenue: Coiled tubing revenue increased by approximately 16% this quarter.
Market Share Gains: We continue to execute our strategy of market share gains and cost reductions.
Natural Gas Outlook: We are optimistic on the long-term outlook for natural gas and the positive impacts it could have on Nine's earnings.
Pricing Pressure: In May, we began to see some activity declines as well as pricing pressure, specifically in the Permian Basin.
Operational Efficiency: We did not have the negative impacts of holidays, weather and budget exhaustion we saw in Q4, resulting in more efficient operations.
Increased Utilization: Utilization was significantly higher in Q1 versus Q4, driving an increase in both revenue and profitability quarter-over-quarter.
Board Appointment: The recent appointment of Joey Hall to the Board of Directors.
Refinancing of ABL: Closed on a new asset-based revolving credit facility with White Oak Commercial Finance due November 2027.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Economic Factors: The recent decline in oil prices, coupled with increased costs due to tariffs, has created uncertainty for the energy industry and global markets. The timing and totality of these impacts on customer plans and U.S. activity levels remain unclear.
Commodity Price Impact: Commodity prices will influence activity levels, with customers currently evaluating their plans. The recent OPEC announcement has led to falling oil prices, and the company is monitoring operator reactions.
Tariff Challenges: Tariffs are impacting Nine, particularly in the wireline division with perforating guns and coiled tubing reels. The company is engaging in pricing discussions with customers and exploring alternative material sources to mitigate cost increases.
Market Activity Decline: In May, there have been observed declines in activity and pricing pressure, especially in the Permian Basin, leading to uncertainty in forward-looking plans.
Revenue Projections: The company anticipates a decline in both revenue and adjusted EBITDA compared to Q1, projecting Q2 revenue between $138 million and $148 million.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Market Share Gains: Nine Energy Service continues to execute its strategy of market share gains and cost reductions, particularly within the cementing business.
Technology Development: The company emphasizes the development of its technology and maintaining service quality and execution at the well site.
Board Appointment: Joey Hall has been appointed to the Board of Directors, bringing industry expertise to enhance strategic decision-making.
Q2 Revenue Projection: Nine anticipates Q2 revenue to be between $138 million and $148 million, a decline compared to Q1.
Adjusted EBITDA Outlook: The company projects a decline in adjusted EBITDA compared to Q1 due to uncertainty in market conditions.
CapEx Budget: The full year CapEx budget remains unchanged at $15 million to $25 million.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
ATM Program: During Q1, we did not sell any shares under the ATM program.
Excess Cash Flow Offer: As per the terms of the indenture governing 9 senior secured notes, the company is required to periodically offer to repurchase such notes with a portion of any excess cash flow. Nine did not generate any excess cash flow as defined in the indenture in the most recently ended two fiscal quarters. As a result, no excess cash flow offer will be made to noteholders this month.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Could you maybe provide some details around pricing pressures? Which business line is being most impacted and maybe quantify some of the magnitude of the impact?
A:It's still very early to try and quantify the magnitude. Pricing pressure is largely related to West Texas activities, particularly in the cementing division due to tariffs and commodity prices. It's too early to understand these impacts, which may be small or significant.
Q:Is the current guidance more kind of a low 60s guidance or below $60 oil price staying over the next three, six months?
A:It's still early to say. The near-term oil prices matter, and the forward strip matters. We're not providing any guidance going forward.
Q:What is your ability to pass those extra costs over to the customer given that the customers are getting squeezed from low oil prices as well?
A:The service sector does not have the capacity to absorb these tariffs, so we plan to pass those tariffs on to customers, who understand the situation.
Q:Could you maybe highlight your thoughts on the relocation of equipment or refocus towards the natural gas markets?
A:We are not planning to relocate any equipment at this time, but we are excited about the gas markets.
Q:Were there any international completion tool sales in Q1?
A:Yes, we had international sales and are pleased with the performance of our multicycle barrier valve.
Q:How do you see the demand for the Plug business playing out in the next 1 to 2 years?
A:We are excited about the demand for long laterals and the complexity of completions, which will drive technology requirements.
Q:As the international tool sales accelerate, do you see any opportunities for that to be a pull-through for your other services?
A:We have no interest in proliferating heavy equipment or human assets on the ground; we are focusing on the international market from a product and technology perspective.
Q:Review of Unclear Management Responses
A:Management appeared to avoid giving a direct answer regarding the quantification of pricing pressures and the future oil price guidance, stating it is too early to provide specifics. Additionally, there was a lack of clarity on the potential impact of tariffs on pricing and customer absorption.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ABL cash
ABL commitment
ABL credit
ABL maturity
Basin Plug
CEO SVP
CFO Waqar
Commercial Finance
Conference participant
ET Greetings
Finance ABL
Guy information
Haynesville Completion
IR Fox
Inc VP
Northeast budget
Northeast stage
Northeast work
Oak Commercial
Oak summary
Officer Chief
White Oak
borrowing base
cash flow
charge
covenant
division
holiday
indenture
job increase
market share
month
note
presentation
ratio trigger
share gain
stage increase
trigger level
NINE Transcript
Nine Energy Service, Inc. (NINE) Q1 2026 Earnings Call Transcript
Unknown5-14
The earnings call reveals a mixed sentiment. The company faced significant Q1 challenges, including weather impacts and financial constraints, leading to weak results. However, management's optimistic guidance for Q2, driven by improved weather conditions and operational efficiencies, provides some positive outlook. The Q&A session highlights potential growth from DUC completions and refracs, but uncertainties remain around pricing strategies and cash flow normalization. Overall, the sentiment is neutral, reflecting both challenges and optimistic future prospects.
Nine Energy Service, Inc. (NINE) Q3 2025 Earnings Call Transcript
Unknown10-31
The earnings call reveals a decline in revenue and EBITDA, driven by rig count reductions and pricing pressures. Market share losses, operational challenges, and liquidity constraints compound these issues. The Q&A session highlights complex market conditions without clear solutions. Despite international expansion efforts, the overall sentiment is negative due to disappointing financial results, competitive pressures, and lack of actionable guidance.
Nine Energy Service, Inc. (NINE) Q2 2025 Earnings Call Transcript
Unknown8-6
The earnings call revealed mixed results: strong international growth and increased market share in some segments, but overall revenue decline and lack of clear guidance for Q4. The Q&A highlighted management's cautious outlook due to market unpredictability, with some optimism for Q1. These factors suggest a neutral impact on the stock price, as positive developments are offset by uncertainties and a lack of strong guidance.
Nine Energy Service, Inc. (NINE) Q1 2025 Earnings Conference Call Transcript
Unknown5-10
The earnings call reveals several concerning factors: declining market activity, pricing pressures, and uncertainty in forward guidance. While some financial metrics show growth, the lack of guidance, tariff challenges, and potential revenue declines overshadow these positives. The Q&A section highlights management's inability to quantify pricing pressures and future oil prices, further increasing uncertainty. These factors suggest a negative sentiment, likely leading to a stock price decline of -2% to -8% over the next two weeks.
NINE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
