Nine Energy Service Reports Decline in Revenues and Increased Net Losses for Q3 and Nine Months Ended September 30, 2024

Nine Energy Service, Inc. reported its financial results for the three and nine months ended September 30, 2024, revealing a decline in revenues and an increase in net losses compared to the same periods in 2023. For the third quarter of 2024, total revenues were $138.2 million, down from $140.6 million in Q3 2023, marking a decrease of 2%. For the nine months ended September 30, 2024, revenues totaled $412.7 million, an 11% decline from $465.5 million in the prior year.

Despite the revenue drop, the company showed improvement in operational income for Q3 2024, reporting income from operations of $2.5 million, a significant turnaround from a loss of $0.8 million in Q3 2023. However, the net loss for Q3 2024 was $10.1 million, an improvement from a net loss of $13.3 million in the same quarter of 2023. For the nine-month period, the net loss increased to $32.2 million from $21.9 million in 2023.

The company’s adjusted gross profit for Q3 2024 was $24.7 million, an 8% increase from $22.9 million in Q3 2023. However, for the nine months ended September 30, 2024, adjusted gross profit fell to $71.2 million, down 24% from $93.2 million in the same period in 2023. The decline in profitability was attributed to lower revenues and increased operational costs.

Nine Energy's total current assets decreased to $157.6 million as of September 30, 2024, from $183.6 million at the end of 2023. Total assets also fell to $353.2 million, down from $402.0 million. Current liabilities were reduced to $23.1 million, while total liabilities decreased to $410.8 million. However, total stockholders’ equity worsened to a deficit of $57.6 million from a deficit of $35.6 million at the end of 2023.

The company has been actively managing its capital expenditures, reducing its budget for 2024 to between $10 million and $15 million, down from an initial estimate of $15 million to $25 million due to market declines. Additionally, Nine Energy has implemented cost reduction and supply chain initiatives that began to positively impact profitability in Q2 2024.

In terms of liquidity, Nine Energy reported cash and cash equivalents of $15.7 million and availability under its ABL Credit Facility of approximately $27.6 million, resulting in a total liquidity position of $43.3 million as of September 30, 2024. The company also faced a notification from the NYSE regarding non-compliance with the minimum market capitalization requirement, necessitating a plan to regain compliance within 18 months.