Nine Energy Service Inc (NINE) Reports Q3 2023 Earnings, Net Loss of $13.3 Million

On November 6, 2023, Nine Energy Service Inc (NINE, Financial) released its third quarter 2023 earnings report. The company reported revenues of $140.6 million, a net loss of $13.3 million, and adjusted EBITDA of $11.6 million. Despite experiencing activity declines and operational inefficiencies related to weather and frac delays in August, the company’s revenue fell within its original guidance.

Financial Performance and Challenges

According to Ann Fox, President and Chief Executive Officer of Nine Energy Service, the company saw a decline in activity throughout Q3, with the U.S. rig count declining by over 150 rigs, or approximately 20%, since the end of 2022. Despite these challenges, the company’s Q3 revenue was in line with expectations. Fox also noted that the company anticipates Q4 cementing revenue to be slightly higher than Q3, despite continued rig declines.

Financial Achievements and New Product Launch

NINE also announced the commercialization of its new Pincer Hybrid Frac Plug, which is comprised of 47% less material than its predecessor and has industry-leading drill-out times. The company believes this new product will help increase its market share growth in the plug market.

Key Financial Details

As of September 30, 2023, Nine Energy Service’s cash and cash equivalents were $12.2 million, and the company had $22.7 million of availability under the revolving credit facility, resulting in a total liquidity position of $34.9 million. The company reported net cash used in operating activities of $(9.9) million and capital expenditures totaled $3.9 million during the third quarter of 2023.

Company’s Outlook

Looking ahead, NINE anticipates overall activity levels to remain mostly flat and pricing to stabilize in Q4. The company does not anticipate a recurrence of August’s challenges in the fourth quarter, but does expect holidays, weather, and budget exhaustion to impact operations, particularly in the Northeast. As a result, the company expects Q4 revenue and earnings to be flat to slightly up sequentially to Q3.

Explore the complete 8-K earnings release (here) from Nine Energy Service Inc for further details.