Nine Energy Service NYSEAMERICAN: NINE reported second-quarter 2026 revenue of $141.8 million, within its prior guidance range, while adjusted EBITDA of $8.6 million fell below expectations as its Coiled Tubing business faced equipment outages, inflationary costs and margin compression.
President and Chief Executive Officer Ann Fox said industry activity improved modestly during the quarter, with the U.S. rig count rising to 573 at the end of the second quarter from 543 at the end of the first quarter. However, two large-diameter Coiled Tubing units were removed from service for maintenance-related issues, representing about 17% of the company’s large-diameter fleet.
One of the units returned to service early in the third quarter, while the other is expected to remain under repair until near year-end. Fox said the company expects its Coiled Tubing operations to remain constrained until the second unit returns.
Coiled Tubing Pressures Weigh on Profitability
Fox said Coiled Tubing experienced cost inflation in consumables, labor, repairs and maintenance, with costs increasing by an average of approximately 12% from the first quarter. While the company implemented price increases during the quarter, those adjustments did not fully offset the inflationary pressures because of the timing required to negotiate and put new pricing into effect.
Coiled Tubing days worked increased about 16% quarter over quarter, but the average blended day rate declined about 15%, driven primarily by job mix and greater white space between jobs. Segment revenue declined approximately 2% from the first quarter to $26.4 million.
During the question-and-answer session, Fox said the company has 12 specialized deep-reach Coiled Tubing units and that the affected units are significant revenue generators, particularly in the Permian Basin. Nine Energy Service has retained the skilled workforce associated with the inactive equipment rather than reducing those costs, she said.
Fox characterized the outages as unusual rather than evidence of broad fleet maintenance problems. One unit was damaged after becoming stuck, while another suffered a maintenance failure that resulted in damage to its reel, according to Fox.
She added that there is limited excess Coiled Tubing capacity in the market, noting that the number of U.S. Coiled Tubing units available is down by nearly 40% from pre-COVID 2019 levels. Investment in new units has also declined, she said.
Completion Tools Growth Offsets Some Weakness
The company’s Completion Tools business delivered the strongest sequential growth among its reported service lines. Nine completed 28,256 Completion Tools stages during the second quarter, up approximately 45% from the first quarter, while revenue increased approximately 44% to $37.1 million.
Fox attributed the outperformance partly to international demand, particularly for dissolvable plugs. International revenue increased 17% during the first six months of 2026 compared with the same period a year earlier. She also cited domestic market-share gains and continued commercialization of dissolvable solutions as operators extend lateral lengths.
The company said its barrier valves and composite offerings are also areas of focus within its downhole technology portfolio.
Cementing revenue increased approximately 3% sequentially to $55.3 million. The company completed 1,155 Cementing jobs, up about 13% from the first quarter, but average blended revenue per job declined approximately 8%, largely because of job mix. Fox said the Cementing operation remained a steady contributor, though labor and material inflation affected margins.
Wireline revenue declined approximately 4% sequentially to $23 million. The company completed 6,414 wireline stages, down about 7%, while average blended revenue per stage increased roughly 3%.
Fox said Nine Energy Service is continuing its wireline expansion in the Haynesville Basin, where it has repositioned assets from the Permian Basin to address natural-gas-focused activity. She said the Haynesville’s high-pressure and high-temperature wells create opportunities for wireline, cementing and Completion Tools services.
Liquidity, Capital Spending and Outlook
Chief Financial Officer Heather Schmidt said Nine ended the quarter with $16.8 million in cash and cash equivalents and $30 million of availability under its credit facility, for total liquidity of $46.8 million. Outstanding borrowings under the credit facility totaled $97.3 million as of June 30.
- Adjusted gross profit was $19.9 million in the second quarter.
- General and administrative expense was $15.6 million.
- Depreciation and amortization expense was $7.2 million.
- Net cash used in operating activities was $2.3 million.
- Average days sales outstanding was 59 days.
- Second-quarter capital expenditures totaled $4.8 million, bringing year-to-date spending to $10.4 million.
Schmidt said the company continues to expect full-year capital expenditures of $20 million to $30 million, though spending is now expected to trend toward the middle to lower end of that range. She said Nine expects to be cash-flow neutral through the second half of the year and is comfortable with its balance sheet, including its 7% interest rate and asset-based lending facility.
For the third quarter, Nine projected revenue of $133 million to $143 million and said revenue and adjusted EBITDA are expected to be flat to modestly lower than second-quarter levels. The outlook reflects continued lost revenue from the inactive Coiled Tubing unit and inflation that remains ahead of pricing adjustments.
Fox said the company expects the average U.S. rig count in the third quarter to be relatively flat to slightly higher than the second quarter, though operator activity remains dependent on commodity prices and capital discipline. She said service-sector pricing power could improve as rig activity approaches 600 rigs, reducing available capacity across the industry.
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.
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