Nine Energy Service (NYSEAMERICAN:NINE) said its first quarter of 2026 was marked by the company’s emergence from Chapter 11 bankruptcy, the adoption of fresh start accounting and weather-related disruptions that weighed on revenue and profitability.
Interim Chief Financial Officer Heather Schmidt said the company emerged from bankruptcy on March 5 and applied fresh start accounting as of that date. For purposes of the earnings call, Schmidt said management discussed the full quarter on a combined basis, though Securities and Exchange Commission filings report the predecessor and successor periods separately.
“Importantly, we believe these issues are behind us,” Fox said. “We expect improved and more normalized quarterly run rates beginning in the Q2 and continuing through the remainder of 2026.”
First-quarter revenue declines amid weather disruption
Nine reported first-quarter revenue of $130 million and adjusted EBITDA of $3 million. Fox said adjusted EBITDA included a $5.5 million non-cash inventory write-down, which the company did not add back in order to maintain consistency with prior-period reporting.
Fox said completion activity declined from the fourth quarter despite a flat U.S. rig count, largely because of severe weather in January and February. Pricing across Nine’s technology and service offerings remained mostly unchanged from the prior quarter.
The weather impact was most pronounced in the company’s wireline operations in the Northeast, Fox said, but also affected Permian Basin operations across Nine’s service lines. During the question-and-answer session, Fox said the Northeast experienced unusually severe conditions, including the Ohio River freezing and a record number of days below freezing.
“We did see a normalization of operations and financial run rates during March, and we expect this improved operating cadence to continue into Q2,” Fox said.
Segment performance mixed across service lines
Schmidt provided detailed first-quarter operating metrics across Nine’s business lines:
- Cementing: Nine completed 1,022 cementing jobs, up about 4% from the fourth quarter of 2025. Average blended revenue per job fell about 2%, while cementing revenue rose about 1% to $53.4 million.
- Wireline: The company completed 6,890 wireline stages, down about 4%. Average blended revenue per stage declined about 1%, and wireline revenue fell about 5% to $23.9 million.
- Completion tools: Nine completed 19,422 stages, down about 10%. Completion tool revenue declined about 10% to $25.8 million.
- Coiled tubing: Days worked increased about 28%, while the average blended day rate fell about 18%. Coiled tubing revenue increased about 4% to $26.9 million.
Fox said the largest revenue declines were in wireline and completion tools, both of which have significant exposure to the Northeast. Completion tools were also affected by minimal international disruptions, she said. Cementing and coiled tubing revenue were relatively flat, with incremental revenue in the Haynesville helping offset weather impacts in the Permian.
Fox also highlighted a milestone in the company’s completion tools business, saying Nine has surpassed 500,000 Scorpion plugs sold. She said the company expects to build on that momentum with updated versions of the Scorpion plug and dissolvable Stinger plugs, as well as additional tools for its portfolio.
Liquidity and capital spending outlook
As of March 31, Nine had $11.2 million in cash and cash equivalents and $35.7 million of availability under its revolving credit facility, for total liquidity of $46.9 million, Schmidt said. Borrowings under the revolver stood at $90.4 million at quarter-end, and the company borrowed an additional $5 million on April 28.
Nine reported general and administrative expense of $17.7 million and depreciation and amortization expense of $8.2 million for the quarter. Net cash used in operating activities was $12.4 million, and average days sales outstanding were 61 days. Capital expenditures totaled $5.6 million in the first quarter.
Schmidt said Nine expects full-year capital expenditures of $20 million to $30 million and annual cash interest expense of about $7 million.
In response to an analyst question from Steve Ferazani of Sidoti & Company, Fox said a “good chunk” of the projected capital spending reflects catch-up investment. She said Nine would not be putting capital into the business without seeing a need and opportunity, adding that management is focused on both organic and inorganic growth opportunities.
Natural gas activity and international tools remain focus areas
Fox said natural gas prices were constructive during the first quarter, averaging about $4.70 compared with $3.73 in the fourth quarter, though prices had recently fallen below $3. She said activity in the Lower 48 responded to the earlier supportive gas price environment, particularly in the Haynesville Basin, which added about 25 rigs over the prior four quarters and ended the first quarter with 55 rigs.
Nine recently opened a wireline facility in the Haynesville, which Fox said positions the company to participate in natural gas-driven activity in the near and medium term. She said the company plans to leverage established customer relationships and its reputation across service lines to capture profitable market share.
Internationally, Fox said the company saw minimal impact from the Iranian conflict in the first quarter and so far in the second quarter, though management is monitoring developments. She said international tools remain an important part of Nine’s growth strategy. In 2025, Fox said international tool revenue grew about 14% sequentially, driven primarily by sales in the UAE, Argentina and Saudi Arabia.
Second-quarter guidance calls for sequential improvement
Nine expects second-quarter revenue of $136 million to $146 million and adjusted EBITDA of $10 million to $15 million. Fox said the improvement is expected to come from reduced weather-related downtime and continued operational efficiencies, rather than a meaningful change in U.S. rig count.
Fox said the near-term outlook for U.S. land activity has improved with the recent increase in oil prices, though Nine has not seen material changes to customer plans so far in the second quarter. She said operators remain disciplined while evaluating the durability of higher prices.
During the Q&A session, Fox said any industry benefit from incremental activity is more likely to appear in the back half of the year, rather than in Nine’s second-quarter guidance. She said the company is seeing indications of potential increases in completion activity through drilled but uncompleted wells, as well as possible incremental rigs.
Asked by John Daniel of Daniel Energy Partners about customer inquiries, Fox said the level of “noise and volume” had picked up considerably over the previous two weeks, particularly from larger private companies, while two months earlier “it was nothing.”
Fox also said Nine expects costs to rise, including wage inflation and higher cost of goods, and that customer pricing will need to increase. “Our prices to our customers across the board need to go up,” she said.
Looking beyond the second quarter, Fox said Nine expects normalized reporting and does not anticipate another quarter with the same level of complexity as the first quarter. She said the company is focused on disciplined execution, profitable growth and maintaining financial flexibility as it operates after bankruptcy.
About Nine Energy Service (NYSEAMERICAN:NINE)
Nine Energy Service is an oilfield services company that provides completion and production solutions to upstream oil and gas operators. The company focuses on delivering field services and rental equipment used in well completion and production phases of drilling programs. Its client base includes exploration and production companies operating in onshore resource plays.
Nine Energy’s offerings center on specialized equipment and on-site technical services designed to support well completions and ongoing production operations.
