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DATE
Wednesday, August 6, 2025 at 10 a.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Ann Fox
Senior Vice President and Chief Financial Officer — Guy Sirkes
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RISKS
Oil-levered Market Exposure— Ann Fox stated, "began to receive pricing pressure across all of our service lines, most notably in the Permian, which negatively impacted revenue and earnings during the second quarter."
Further Rig and Activity Reductions— Ann Fox noted, "There is a possibility additional rigs could come out of the market in the back half of the year, specifically from private operators." and highlighted, "we do expect calendar gaps, completion delays, and overall more white space in conjunction with lower activity levels and oil prices."
Downward Guidance— Ann Fox projected, "we anticipate both revenue and adjusted EBITDA will be down compared to Q2 and project Q3 revenue between $135 million and $145 million."
TAKEAWAYS
Revenue-- $147.3 million in Q2 2025 revenue, reaching the upper end of original guidance and reflecting strong performance despite significant rig declines.
Adjusted EBITDA-- Adjusted EBITDA was $14.1 million.
Total Liquidity-- $65.5 million as of June 30, 2025, composed of $14.2 million in cash and $51.3 million of revolver availability.
Completion Tool Revenue-- $37 million, representing a 9% increase, with total first-half 2025 international tool revenue up approximately 20% compared to 2024, driven by increased Middle East barrier valve and plug sales.
Wireline Revenue-- $33 million, up 11%, with volumes also rising 11% and gains in remedial wireline market share in the Northeast.
Cementing Revenue and Volume-- $52.2 million, down 9%, with cementing jobs decreasing 15%, but average revenue per job increasing 7%.
Coiled Tubing Performance-- Revenue at $25.1 million, down 16%; days worked decreased 23%, while average blended day rate increased 9%.
Capital Expenditures-- $6.1 million spent, with 2025 total to date of $10.4 million; full-year CapEx budget unchanged at $15 million to $25 million.
Operational Adjustments-- "We have been able to utilize wireline equipment and personnel from West Texas to cover work in the Northeast," according to Ann Fox.
New Completion Tools Facility-- Ann Fox described a "little over 30,000 square feet" facility opening next year, with test wells and engineering capabilities geared for domestic and international customers.
SUMMARY
Management highlighted substantial pricing and activity headwinds in oil-weighted basins, especially the Permian, which has historically provided approximately 40% of revenue and proved vulnerable to rig declines and price pressure. Wireline and completion tools segments delivered revenue growth, supported by volume gains in the Northeast and international traction, with first-half 2025 international tool revenue up approximately 20% compared to 2024. Ann Fox indicated that international markets, notably Argentina and the Middle East, are expected to deliver full-year 2025 revenue above 2024, despite the lumpy nature of orders. Guidance signals further financial declines, with Q3 2025 revenue expected between $135 million and $145 million, due to anticipated ongoing calendar gaps and lower pricing in oil-linked regions.
Guy Sirkes confirmed that no shares were sold under the ATM program in Q2 2025, and as of July 2025, $13.4 million in additional revolver borrowings partially funded new ABL facility fees.
General and administrative expense totaled $13.9 million, while depreciation and amortization expense was $8.6 million.
Net cash provided by operating activities reached $10.1 million, with an average DSO of 55.9 days in Q3 2025.
The company reported completion of 30,331 tool stages (+4%), 8,585 wireline stages (+11%), and 1,061 cementing jobs (-15%), clarifying operational landscape shifts across business lines.
INDUSTRY GLOSSARY
MCPV Valve: Multi-cycle barrier valve used in completion tools, enabling repeated open/close cycles for zonal isolation during well completions, cited as a growth driver for international tool sales.
Remedial Wireline: Specialized wireline operations focused on repairs, re-completions, or interventions in existing wells, distinct from initial pump-down completions.
ATM Program: At-the-market equity offering program, permitting the company to sell shares directly into the market as opportunities arise.
ABL Facility: Asset-based lending credit facility secured primarily by company receivables and inventories, offering flexible working capital financing.
Full Conference Call Transcript
Ann Fox: Thank you, Heather. Good morning, everyone. Thank you for joining us today to discuss our second quarter results for 2025. Revenue for the quarter was $147.3 million, which was in the upper range of our original guidance of $138 million to $148 million despite significant rig declines throughout the quarter. We generated adjusted EBITDA of $14.1 million. In April, following the announcement of new tariffs, oil prices declined from an average of approximately $72 in Q1 to an average of approximately $65 in Q2, while also dropping below $60 for the first time in four years.
With the decline in commodity prices, increased costs due to tariffs, and uncertainty around the global economy, US activity and CapEx plans were reduced, resulting in significant rig declines throughout the second quarter. Between March 28 and July 3, 53 rigs came out of the US market, a decline of almost 10% in only three months. The majority of these rigs came out of oil-levered basins like the Permian, where Nine has historically generated approximately 40% of our total revenue. With these activity declines, we also began to receive pricing pressure across all of our service lines, most notably in the Permian, which negatively impacted revenue and earnings during the second quarter.
Natural gas prices remained mostly supportive during the quarter but declined from the Q1 average of approximately $4.14 to approximately $3.19 in Q2. We have begun to see a more positive sentiment around natural gas-levered basins as well as more consistent efficient operations, which benefited Nine, most specifically in the Northeast. However, natural gas continues to be a potential catalyst for Nine. Overall rig counts in both the Northeast and Haynesville once again remained relatively flat in Q2 versus Q1, and we remain positive on the medium and long-term outlook for the commodity and natural gas-levered regions.
Although activity declined throughout the quarter, our operational team performed well, and we were able to capitalize on an improving natural gas environment as well as continuing to grow our international tool business. Despite a very challenging macro backdrop, both our completion tool and wireline business grew revenue this quarter. Completion tool revenue grew by approximately 9%, driven in large part by increased sales in the Northeast and Haynesville, as well as an increase in international tool sales. We have talked about our strategy for growing our international tools share, and the team has been executing. Our total first-half international tools revenue has increased by approximately 20% when compared to 2024.
This was driven by both increased sales of our multi-cycle barrier valve into the Middle East as well as an overall increase in our plug sales. This will continue to be a focus for the team, and I am optimistic about the potential opportunities for Nine in the international market. Our wireline team increased revenue by approximately 11% in Q2. We have strong market share in the Northeast, and the team has capitalized on an improving market with both traditional pump-down work as well as increasing our market share on the remedial side.
During Q2, we saw revenue declines in both cementing and coil, driven by activity and pricing declines in the Permian Basin, where both operations hold meaningful market share. As a reminder, neither of these service lines operate in the Northeast and therefore did not benefit from any uplift in earnings from the improvement in those basins. I would now like to turn the call over to Guy to walk through detailed financial information.
Guy Sirkes: Thank you, Ann. As of June 30, 2025, Nine's cash and cash equivalents were $14.2 million, with $51.3 million of availability under the revolving credit facility, resulting in a total liquidity position of $65.5 million as of June 30, 2025. On June 30, 2025, the company had $49.4 million of borrowings under the revolving credit facility. In July 2025, the company borrowed an additional $13.4 million under its revolving credit facility, part of which was used for funding of fees related to the closing of our new ABL. During Q2, we did not sell any shares under the ATM program. During the second quarter, revenue totaled $147.3 million with adjusted gross profit of $25.8 million.
During the second quarter, we completed 1,061 cementing jobs, a decrease of approximately 15%. The average blended revenue per job increased by approximately 7%. Cementing revenue for the quarter was $52.2 million, a decrease of approximately 9%. During the second quarter, we completed 8,585 wireline stages, an increase of approximately 11%. The average blended revenue per stage was flat. Wireline revenue for the quarter was $33 million, an increase of 11%. For completion tools, we completed 30,331 stages, an increase of approximately 4%. Completion tool revenue was $37 million, an increase of approximately 9%. During the second quarter, our coiled tubing days worked decreased by approximately 23% with the average blended day rate increasing by approximately 9%.
Coiled tubing revenue was $25.1 million, a decrease of approximately 16%. During the second quarter, the company reported general and administrative expense of $13.9 million. Depreciation and amortization expense was $8.6 million. The company's tax benefit was approximately $300,000 year-to-date. The benefit for 2025 is the result of a $500,000 discrete tax benefit recorded during 2025, offset by tax provisions in state and non-US jurisdictions. For the second quarter, the company reported net cash provided by operating activities of $10.1 million. The average DSO for Q3 was 55.9 days. CapEx spend during Q2 was $6.1 million, and total CapEx for 2025 is $10.4 million. Our full-year CapEx budget remains unchanged at $15 million to $25 million.
I will now turn it back to Ann.
Ann Fox: As I mentioned, we saw many operators reduce activity in Q2 in response to lower oil prices. There is a possibility additional rigs could come out of the market in the back half of the year, specifically from private operators. And we do expect calendar gaps, completion delays, and overall more white space in conjunction with lower activity levels and oil prices. Natural gas prices remain mostly supportive, helping to drive more efficient operations in the Northeast and Haynesville, and building a more positive sentiment, which has benefited our operations and earnings.
The rig activity in these regions has been mostly stable, and while we would benefit from any incremental activity increases, it may not be enough to completely offset the activity and pricing declines we have seen in the Permian, which impacts all of our service lines. We are continuing to play both offense and defense to grow revenue and increase margins. This includes market share gains with current and potential new customers, R&D and technological advances across service lines, growing our international tools business, construction of our new completion tool facility, and potentially expanding service lines to new geographies, which we are currently evaluating.
We have been able to utilize wireline equipment and personnel from West Texas to cover work in the Northeast, and we are constantly evaluating where to best utilize our assets and people in conjunction with market dynamics. We remain focused on increasing our exposure to international markets, and I believe the team has implemented its strategy well thus far, demonstrated by our 20% revenue increase in the first half of the year versus 2024. In conjunction with these growth initiatives, we are working on reducing costs without impeding the quality of our business. Over the last twelve months, we believe we have taken significant sustainable costs out of the business.
These include, but are not limited to, improvements in fleet management and maintenance, reduction of corporate and field employees, reduction or elimination of consultants, software and subscriptions, and the consolidation and rationalization of vendors. We will continue to prioritize reducing costs while not impeding the quality of our technology, service, and safety. In Q3, we will see full quarter realizations of activity and pricing declines made throughout Q2. As I mentioned, we also anticipate more white space in the calendar in the oil-levered basins. Because of this, we anticipate both revenue and adjusted EBITDA will be down compared to Q2 and project Q3 revenue between $135 million and $145 million.
Our team is focused on increasing profitability in a declining market. We are nimble and diversified in both our service and technology offerings and commodity. This has and will continue to allow us to navigate these uncertain markets while still being able to capitalize on any potential growth opportunities both domestically and internationally. We will now open up the call for Q&A. Thank you.
Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Moment, please, while we poll for questions. Thank you. Our first question comes from the line of Waqar Syed with ATB.
Waqar Syed: Ann, you mentioned that there is some expectation that some private E&Ps may temper their work. Is that based on firm discussions with the customers, or is that just your view based on what your view on commodity prices is?
Ann Fox: It's a great question, Waqar. Good morning. Actually, it is not based on conversations. It's based on our knowledge that if commodity prices were to move very negatively for the remainder of the quarter or in Q4, those private operators typically will react more quickly than the public. So the commentary is that this is going to be more commodity price-driven, and they will be more reactionary than our large public operators.
Waqar Syed: And then in terms of your visibility into Q4, do you have any visibility there where customers have mentioned anything about what they are going to be doing in Q4?
Ann Fox: Hi, Waqar. We do not have visibility into Q4 insofar as major changes up or down. I would say we have had customer conversations indicating increased activity in Q1, and that is standard with budget refresh.
Waqar Syed: And this increased activity in Q1, is this a Permian comment or an all-over US comment?
Ann Fox: Specifically with certain customers in the Permian.
Waqar Syed: Okay. And is that relative to where activity was in Q2 or where relative activity is as of today?
Ann Fox: That would be an increase relative to activity as of today.
Waqar Syed: Okay. Fair enough. Now, Ann, in terms of your international sales, it looks like a pretty decent pickup in the first half of 2025 versus last year's first half. Could you maybe highlight how the second half of 2024 was versus the first half of 2024? And how does the first half of 2025 compare to the first half of 2024?
Ann Fox: So we had a 20% increase in the first half over the first half of last year. And I do think this is, as we have said many times to the market, a lumpy market. It's very hard to predict. Specifically, we have gained lots of traction in Argentina and also in the Middle East. We do expect we will be up year over year, Waqar. It's hard to predict how much, but we are gaining traction there. And so if you looked at 2025 on a full-year basis, we would expect that number internationally will be up over 2024.
Waqar Syed: Great. And then, you know, the traction, what products are you seeing the most traction with in the international markets?
Ann Fox: We are seeing it with our plugs and our MCPV valves. And it's been really nice. They are volume orders.
Waqar Syed: Alright. And do you have any visibility into the second half for these international sales?
Ann Fox: Again, it will be lumpy. What I can say is that if you look at the full year, we definitely anticipate being up over last year.
Waqar Syed: Okay. Great. Yeah. I think that's all for me for now. Appreciate the color. Thank you.
Ann Fox: Thank you, Waqar.
Operator: Our next question comes from the line of John Daniel with Daniel Energy Partners. Please proceed with your question.
John Daniel: Hey, Ann. Good morning. First question has to do with the completion tools facility that you highlighted. Can you tell us a bit more about this and what it's expected to do, where it will be?
Ann Fox: Sure. Yeah. Not going to give away too many secrets, but it's going to be a little over 30,000 square feet. We are going to put this right next to our assembly and manufacturing location in Jasper. It's going to have multiple test wells, lots of different pressures, temperatures, going to have drill-out capability, flowback loop, all kinds of capabilities for our customers to log in and see all these test results. I think this will be probably the largest state-of-the-art completion tool testing facility in the US.
John Daniel: Okay. Got it. And, John, this is also becoming increasingly important for our international customers. So as you know, with sustaining engineering, when you are working on fielding these tools, if issues arise, you need to be able to immediately test that. They need to be able to see those results. So we are just extremely excited about this. Very, very excited.
John Daniel: Does it open this year, or is it a next year event?
Ann Fox: It's a next year opening.
John Daniel: Got it. The next one is with the hope that we see some private operators strictly in the gassy markets continue to pick up activity. I'm just curious, in your experience, would you maybe say that there's a little bit less procurement rigor vis-a-vis their larger public peers? I mean, would these be additive to margins, if you will, just maybe because of less pricing power on the part of those buyers?
Ann Fox: Sure. So there's actually, yeah, there's of course, you know, the larger the customers get, the more that you are dealing with procurement and the further away you are from operations. Right? And so oftentimes, we see a correlation between that and efficiency in the field. You can certainly look at the Pioneer-Exxon coming together as an example of that. But you are absolutely right. Those smaller privates, they are very operationally driven. Some of them are very efficient. They do really grant their engineers in the field autonomy to pick the best service lines, to pick the best vendors, best technology. So that usually works out very well for us.
And they are also very decisive, and they are very fast. So that could be exciting for us. On top of that, there's a competitive dynamic that's a little bit kinder in areas like the Haynesville and the Northeast versus the Permian. So those gas markets actually set up quite well for us, so we are pretty excited. Looking at all of the power demand, we, you know, again, it seems like the country is going to need a lot of power generation from natural gas. So we are big believers and have been in the go-forward health of the natural gas market.
John Daniel: Got it. Okay. And the final one is in the press release, you've highlighted the incremental market share in the Remedial Wireline business. Is there any one thing in particular that is driving that?
Ann Fox: You know, this is, we've got annual strategic meetings, and we a few years ago. Our leader of that business is very well-versed in all things, both pump-down and remedial wireline. This was an effort really to diversify that top line from the ups and downs of pump-down work, and he's done a splendid job.
John Daniel: Okay. Awesome. Thank you for including me.
Ann Fox: Thank you for taking the time to be on the call this morning.
John Daniel: You bet.
Ann Fox: Thank you for your participation in the call today. I want to thank our employees, our E&P partners, and investors. Thank you.
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.