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01/11 08:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a decline in revenue and EBITDA, driven by rig count reductions and pricing pressures. Market share losses, operational challenges, and liquidity constraints compound these issues. The Q&A session highlights complex market conditions without clear solutions. Despite international expansion efforts, the overall sentiment is negative due to disappointing financial results, competitive pressures, and lack of actionable guidance.
Revenue $132 million, a decrease from the original guidance range of $135 million to $145 million. This decline was due to significant rig declines, pricing pressure, tariffs, and a drop in oil prices.
Adjusted EBITDA $9.6 million, impacted by activity declines and pricing pressure across all service lines.
Cementing Revenue $49.3 million, a decrease of approximately 6% year-over-year. This was due to a 4% decrease in cementing jobs and a 1% decrease in average blended revenue per job.
Wireline Revenue $28.2 million, a decrease of approximately 15% year-over-year. This was due to a 4% decrease in wireline stages and an 11% decrease in average blended revenue per stage.
Completion Tool Revenue $31.2 million, a decrease of approximately 16% year-over-year. This was due to a 27% decrease in completion tool stages, driven by customer consolidation and changes in completion designs.
Coiled Tubing Revenue $23.4 million, a decrease of approximately 7% year-over-year. This was due to an 11% decrease in coiled tubing days, partially offset by a 5% increase in the average blended day rate.
Cash and Cash Equivalents $14.4 million as of September 30, 2025, with a total liquidity position of $40.3 million, including $25.9 million of availability under the revolving credit facility.
CapEx Spend $3.5 million for Q3, with total CapEx through Q3 at $13.9 million. The full-year CapEx budget remains unchanged at $15 million to $25 million but is expected to be at the lower end of the range.
Completion Tool Design: R&D team is working on designing and testing tools to address changes in casing sizes due to customer consolidation and completion design changes.
Cementing Division Innovation: Developed a latex-based cement slurry for challenging environments in the Haynesville basin, capable of maintaining stability, reducing friction pressure, and improving operational efficiency.
International Revenue Growth: International revenue grew by approximately 19% in the first 9 months of 2025 compared to the same period in 2024, driven by increased sales in the UAE, Argentina, and Australia.
Revenue Decline: Q3 revenue was $132 million, below the guidance range of $135 million to $145 million, due to rig declines, pricing pressure, and market share losses.
Segment Performance: Cementing revenue decreased by 6%, wireline revenue by 15%, completion tool revenue by 16%, and coiled tubing revenue by 7% in Q3.
Operational Challenges: Completion delays and inefficiencies in the Northeast due to droughts negatively impacted wireline and completion tool operations.
Cost Management and Market Share Focus: The company is focusing on lowering costs while maintaining service quality and growing market share domestically and internationally.
Revenue Decline: Revenue for Q3 2025 was $132 million, below the original guidance of $135 million to $145 million, driven by significant rig declines, pricing pressure, and a decline in oil prices.
Rig Count Decline: The U.S. rig count declined by 43 rigs (approximately 7%) from Q1 to Q3 2025, with the Permian region experiencing a 15% decline, leading to reduced activity levels and revenue.
Pricing Pressure: Increased competition and unsolicited bids from oilfield service providers have led to pricing pressure, forcing the company to lower prices or lose market share.
Market Share Loss: The completion tool division experienced domestic market share losses due to customer consolidation and changes in customer completion designs, negatively impacting revenue and earnings.
Northeast Operational Challenges: Droughts in the Northeast caused a lack of water, leading to completion delays and inefficiencies, negatively impacting wireline and completion tool operations.
Liquidity Constraints: The borrowing base under the 2025 ABL credit facility is expected to be reduced by $2.2 million monthly from October 2025 to January 2026, impacting liquidity.
Commodity Price Volatility: Volatility in oil prices has created uncertainty in operators' 2026 CapEx plans, affecting future activity and revenue projections.
Seasonal Slowdowns: Q4 2025 is expected to experience typical seasonality effects, including weather, holidays, and budget exhaustion, leading to reduced activity and revenue.
Natural Gas 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 and will continue to benefit operations and earnings.
Q4 Revenue and Adjusted EBITDA: For Q4, the company does not expect any significant changes in activity but anticipates typical seasonality related to weather, holidays, and budget exhaustion, as well as continued low pricing of services. Revenue and adjusted EBITDA are projected to be down compared to Q3, with Q4 revenue projected between $122 million and $132 million.
2026 Activity and CapEx Plans: It is too early to provide specifics on potential 2026 activity. Many operators have begun bidding out 2026 work but are continuing to evaluate their 2026 CapEx plans, especially with the recent volatility in oil prices.
Full Year CapEx Budget: The full year CapEx budget remains unchanged at $15 million to $25 million but will likely come in at the lower end of the range.
ATM program: During Q3, we did not sell any shares under the ATM program.
Repurchase of senior secured notes: As per the terms of the indenture governing Nine senior secured notes, the company is required to periodically offer to repurchase such notes with a portion of any excess cash flow. Nine did not generate any excess cash flow as defined in the indenture in the most recently ended 2 fiscal quarters. As a result, no excess cash flow offer will be made to noteholders this month.
The earnings call reveals a decline in revenue and EBITDA, driven by rig count reductions and pricing pressures. Market share losses, operational challenges, and liquidity constraints compound these issues. The Q&A session highlights complex market conditions without clear solutions. Despite international expansion efforts, the overall sentiment is negative due to disappointing financial results, competitive pressures, and lack of actionable guidance.
The earnings call revealed mixed results: strong international growth and increased market share in some segments, but overall revenue decline and lack of clear guidance for Q4. The Q&A highlighted management's cautious outlook due to market unpredictability, with some optimism for Q1. These factors suggest a neutral impact on the stock price, as positive developments are offset by uncertainties and a lack of strong guidance.
The earnings call reveals several concerning factors: declining market activity, pricing pressures, and uncertainty in forward guidance. While some financial metrics show growth, the lack of guidance, tariff challenges, and potential revenue declines overshadow these positives. The Q&A section highlights management's inability to quantify pricing pressures and future oil prices, further increasing uncertainty. These factors suggest a negative sentiment, likely leading to a stock price decline of -2% to -8% over the next two weeks.
The earnings call presents a mixed outlook. While there is a slight increase in Q4 revenue and stable cash flow, the company faces challenges such as a net loss, reduced EBITDA, and risks from natural gas price fluctuations. The optimistic guidance for future revenue growth in certain segments is tempered by uncertainties in margins and regulatory risks. The lack of margin guidance and potential tariff impacts add to the uncertainty. Given these factors, the stock price is likely to remain stable, resulting in a neutral sentiment.
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