Nine Energy Service Q2 2026 Earnings Call: Complete Transcript

Nine Energy Service (NYSE: NINE ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

6 million, below expectations due to margin compression in coiled tubing operations. The company faced significant challenges with maintenance issues in the coiled tubing units, impacting nearly 20% of the fleet and contributing to constrained operations and revenue loss. Despite inflationary pressures, Completion Tools business performed well with a 44% increase in revenue, driven by strong domestic and international demand. Cementing operations saw a 13% increase in jobs completed, while wireline operations faced a 7% decrease in stages completed, affecting overall revenue.

The company projects Q3 revenue between $133 million and $143 million, with adjusted EBITDA expected to be flat or slightly down due to ongoing challenges. Nine Energy Service remains focused on cost control, disciplined execution, and the development of its technology portfolio to navigate the current market environment. 8 million and anticipates full-year capex to be between $20 to $30 million, with a focus on efficient capital management. Full Transcript OPERATOR Good morning, ladies and gentlemen, and welcome to the Q2 2026 Nine Energy Service Earnings Conference Call.

At this time, all lines are in listen-only mode, and following the presentation we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star-zero for the operator. This call is being recorded on Thursday, August 6, 2026. I will now turn the conference call over to Mr.

Josh Riley, Senior Vice President, Corporate Finance and Investor Relations. Please go ahead. Josh Riley, Senior Vice President, Corporate Finance and Investor Relations Thank you. Good morning, everyone.

Welcome to the Nine Energy Service earnings conference call to discuss our results for the second quarter of 2026. With me today are Anne Fox, President and Chief Executive Officer, and Heather Schmidt, Chief Financial Officer. We appreciate your participation. Some of our comments today may include forward-looking statements reflecting Nine Energy Service’s views about future events.

Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Our comments today also include non-GAAP financial measures. Additional details and the reconciliation of these measures to the most directly comparable GAAP financial measures are also included in our second quarter press release and can be found in the Investor Relations section of our website. I will now turn the call over to Anne. Anne Fox, President and Chief Executive Officer Thank you, Josh, and good morning, everyone.

Thank you for joining us today to discuss our second quarter results for 2026. 8 million, which was within the range of our original guidance. 6 million, which was below our original guidance. While industry activity improved modestly during the second quarter, rising from 543 rigs at the end of Q1 to 573 rigs at the end of Q2, our profitability was negatively impacted by significant margin compression within our coiled tubing business.

During the quarter, two of our large-diameter coiled tubing units, representing approximately 17% of our large-diameter fleet, were taken out of service due to maintenance-related issues. This is a unique situation, and we have not previously experienced this percentage of our active fleet unexpectedly taken out of service. One of the affected coiled tubing units returned to service early in the third quarter, while the second unit remains under repair and is currently expected to return near year-end. As a result, we anticipate our coiled tubing operations will remain constrained until that unit is restored to service.

Coiled tubing also experienced meaningful inflationary pressures across several cost categories, including consumables, labor, and repairs and maintenance, which on average increased by approximately 12% quarter over quarter. Although we implemented incremental price increases during the quarter, these increases did not fully offset the inflationary cost pressures. In addition, there is typically a delay between when cost increases are incurred and when pricing adjustments can be negotiated and reflected in customer work, which contributed to the margin compression in the quarter.

While the EBITDA shortfall is disappointing, we do not believe it reflects the underlying momentum of the broader business. Our Completion Tools business delivered a strong quarter, supported by increased domestic sales and continued growth in international markets, where revenue increased 17% in the first six months of 2026 versus the same period last year. We also continue to make meaningful progress commercializing our new technologies, and demand for our dissolvable solutions is increasing as operators extend lateral length. These trends reinforce our confidence in the long-term growth opportunities across our product offerings.

Cementing remained a steady contributor. However, this business also experienced inflationary cost pressures during Q2 related to materials and labor. Negatively impacting margins in wireline, we are making steady progress executing our expansion in the Haynesville Basin. I would now like to turn the call over to Heather to walk through detailed financial information.

Heather Schmidt, Chief Financial Officer Thank you, Anne. 8 million. 3 million in outstanding borrowings under our credit facility. 9 million.

During the second quarter, we completed 1,155 cementing jobs, an increase of approximately 13% as compared to the first quarter of 2026. The average blended revenue per job decreased by approximately 8%, primarily due to job mix versus pricing. 3 million, an increase of approximately 3% from the first quarter of this year. During the second quarter, we completed 6,414 wireline stages, a decrease of approximately 7% quarter over quarter.

The average blended revenue per stage was up by approximately 3%. Wireline revenue for the quarter was $23 million, a decrease of approximately 4%. For Completion Tools, we completed 28,256 stages, an increase of approximately 45%. 1 million, an increase of approximately 44% from the prior quarter.

During the second quarter, our coiled tubing days worked increased by approximately 16%, while the average blended day rate decreased by approximately 15%, driven primarily by job mix and increased white space between jobs. 4 million during the second quarter. 6 million. 2 million.

S. jurisdictions. 3 million. The average DSO for Q2 was 59 days.

4 million. Today we anticipate full-year capex will range between $20 to $30 million. I will now turn it back to Anne. Anne Fox, President and Chief Executive Officer Thank you, Heather.

The macro backdrop remains uncertain, particularly given recent geopolitical events and the continued focus by operators on capital discipline. S. rig count during the third quarter to be relatively flat to slightly up compared to the second quarter, with any incremental activity likely to be measured and dependent on the sustainability of commodity prices. In the near term, we will continue to navigate a dynamic market environment.

As mentioned, we are facing inflationary cost pressure across our service lines, and we often see lags between price increases and cost inflation that result in margin compression. One of our large-diameter coiled tubing units that was out of service during the second quarter remains under repair and is expected to be inactive for potentially the remainder of the year. With the sustained revenue loss from this unit combined with cost inflation that continues to outpace pricing adjustments, we expect third quarter revenue and adjusted EBITDA to be flat to modestly down compared to the second quarter.

We are currently projecting third quarter revenue in the range of $133 million to $143 million. We remain focused on disciplined execution, cost control, and the continued development of our technology portfolio. Our operations are diversified across service lines, basins, commodities, and domestic and international markets, which remains an important differentiator for Nine. S.

shale, the need for efficient completion services, and the potential growth in natural gas demand remain constructive for Nine. We believe our strengthened financial position, combined with our asset-light operating model, provides flexibility to execute through market volatility and continue pursuing profitable growth. We will now open up the call for Q&A. OPERATOR Thank you, ladies and gentlemen.

We will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two.

If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from John Daniel from Daniel Energy. Please go ahead.

John Daniel, Analyst at Daniel Energy Anne, my first question relates to the CT units, but correct me if I'm wrong, the revenue decline would be suggestive that there's no slack in the system. And I'm just curious if you could elaborate on that, given the rising demand and therefore the implications. And then often when we write and others write, we talk about oilfield attrition in the oilfield, and we tend to associate that with just the frac market, but it would seem to extend beyond frac. And just if you could also pontificate on that as well.

Anne Fox, President and Chief Executive Officer Sure. No, it's a great question, Don. Thank you and good morning. You know, it's interesting you mentioned that because we lost a significant percentage of our fleet.

On an absolute basis, it's two, but if you said to anybody across the space, hey, you're going to take down nearly 20% of your fleet of anything, it's significant. And typically you'd pull something off the fence, right, because there would be that slack, there would be that excess. In this case, for most of the OFS peers, there's not lots of excess equipment sitting on the fence line that's ready to go and/or is actually geared for the wells today. So, you know, if you look at kind of end of 2019—let's just say pre-COVID—you're probably down almost 40% the number of coiled tubing units available in the United States.

That's extraordinarily significant. And it's also, you know, important to note that the investment in new units is also down considerably. You can't see that as well because, you know, a lot of the public do not play in the coil space. But there's not much slack.

So I think, you know, depending on where the rig count goes, you know, obviously pricing will have to follow that because there's just not availability. So although very challenging to lose these units now, we're definitely excited about the coil space and for what's to come, and we see this absolutely as very temporary. John Daniel, Analyst at Daniel Energy Okay, fair enough. A quick follow-up just on your rolling out the wireline operations in the Haynesville.

Can you just update us on how that's going and then what the opportunities are for pull-through of other services? Anne Fox, President and Chief Executive Officer Yes. So it's another great question. We love the Haynesville because it's very complicated to complete wells there.

Right. Extremely high temperatures, very high pressures. So we really decided to reposition assets out of the Permian and shift to gas markets as we're seeing—and most of the folks on the phone understand—that this natural gas demand could be very real and very significant as we see the proliferation of data centers and the use of AI. So that was the rationale behind moving assets there.

We're looking forward to strong incremental plug use there. We've got cement services there. So this will be a really nice offering and a great basin for us moving forward. So, so far, going quite well, John.

John Daniel, Analyst at Daniel Energy Okay, thank you. I'll turn it back over. OPERATOR Thank you. And your next question comes from Steve Fernandi.

Please go ahead. Steve Fernandi, Analyst Great. Thanks, Anne. Thanks, Heather, for the detail on the call.

I do want to dig in a little bit on if you can quantify in some way the impact of the lost coiled tubing units, timing of when they went down, because your revenue was quite healthy, as you noted. So I'm just trying to figure out if those were late in the quarter or if you were running ahead of your guidance prior to those going down. And then did we see costs in that number that would have pressured margins, or that was just simply you still were absorbing costs when you weren't getting revenue from two units? Anne Fox, President and Chief Executive Officer Thanks for the question, Steve.

Yes, to answer the second part of the question first, yes, there were significant costs moving upward, you know, throughout the quarter. And when we have these inflationary environments in OFS, we typically see a lag in the timeframe for which we can reprice the customers and then actually realize that new pricing. So you're obviously finishing the well pad that you're on for them, you're negotiating that price, and then you're waiting for that new work to start. If you look at our guidance moving forward, you'll see the midpoint to Q3 dropped a good significant chunk.

Without giving up too much competitive information, a good significant chunk of that revenue is from that unit. Keep in mind we've got a very small fleet. We've got 12 deep reach units, and so these units are very specialized to go very deep into the wells. We're using a lot of these units in the Permian, so they're huge revenue generators for us.

You're also not sheltering your costs by getting rid of the collection of workforce that relates to that unit. That's a really important point to note and separate that from inflationary pressures due to geopolitical events and kind of the cost of crude. And that's important because those guys are extraordinarily skilled at what they do, and they've been trained over years. They've got implicit communication in those crews, and we are absolutely going to hang onto them and drag margin until these units can get back up into service.

Steve Fernandi, Analyst That makes sense. It's very helpful. You said those somewhat extraordinary events. Is there any concern among the remaining coiled tubing units you could see similar issues?

Anne Fox, President and Chief Executive Officer No. You know, we have a very good eye on maintenance and, you know, one of these units, just to be specific, to give you an idea—like if you drive a pickup truck, you might have a gross weight somewhere a little over 10,000 pounds. Our coil units are getting up over 300,000 pounds of gross weight. So if we're going out to location and one sinks in the sand, it's not your average tow truck that's pulling that thing out.

So when you retrieve it, once it's sunk, you can do very significant damage. And that's exactly what happens. So it's not like we've got some fleet that's not well maintained and not ready for action. But because of the size and the weight of these units and the depth that they have to reach to, oftentimes you can—you know, it's pretty challenging to get them to where they need to be if they get stuck.

And that's what happened in the case of one unit. And then we had a very, very unusual failure—maintenance failure—in one of them that we have not previously seen, that resulted in a reel dropping down onto the pavement and becoming damaged. So in the time that we've had coil, which has been since 2017, we have never seen this percentage of the fleet drop. And we have always been able to maneuver.

But again, these fleets are highly utilized, critically important to that revenue and margin. So it is temporary. It's painful in the meantime, but it's absolutely temporary. And I'm absolutely hanging onto that workforce.

Steve Fernandi, Analyst Absolutely. Okay, that's helpful.