<div id="readability-page-1"><p>Nine Energy Service, Inc. ((NINE)) has held its Q1 earnings call. Read on for the main highlights of the call.</p><h3>Claim 55% Off TipRanks</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Discover top-performing stock ideas and upgrade to a portfolio of market leaders with  Smart Investor Picks  </li></ul> <p>Nine Energy Service’s latest earnings call painted a mixed but cautiously optimistic picture, as management balanced near-term headwinds with signs of tangible progress. Executives acknowledged weather disruptions, a sizable inventory write-down and negative operating cash flow, yet emphasized improved positioning post-bankruptcy, solid Q1 revenue and a notably stronger outlook for the rest of 2026.</p> <h2>Quarterly Revenue and Profitability</h2> <p>Nine reported first-quarter 2026 revenue of $130.0 million, underscoring resilient activity despite operational noise from its recent restructuring. Adjusted gross profit reached $13.8 million and adjusted EBITDA came in at $3.0 million, though this figure was weighed down by a $5.5 million noncash inventory write-down that compressed reported profitability.</p> <h2>Positive Q2 Guidance Showing Sequential Improvement</h2> <p>Management set the tone with constructive second-quarter guidance, signaling a rebound from a choppy start to the year. The company expects Q2 revenue between $136 million and $146 million and adjusted EBITDA of $10 million to $15 million, pointing to meaningful sequential improvement in both sales and margins as operations normalize.</p> <h2>Post-Bankruptcy Fresh Start and Improved Financial Position</h2> <p>Nine completed its Chapter 11 process and adopted fresh start accounting on March 5, marking a reset for the balance sheet and financial reporting. Management framed the restructuring as transformative, arguing that the company is now on firmer financial footing and better positioned to compete in core basins and product lines.</p> <h2>Liquidity and Capital Structure</h2> <p>As of March 31, Nine held $11.2 million of cash and cash equivalents, with $35.7 million of availability under its revolving credit facility for total liquidity of $46.9 million. Revolver borrowings stood at $90.4 million at quarter end and increased by another $5 million in late April, leaving investors focused on leverage and future cash generation.</p> <h2>Operational Milestones and Market Expansion</h2> <p>Operationally, Nine continued to expand its footprint and product traction, opening a new wireline facility in the Haynesville to target gas-driven work. The company also crossed a major product milestone with more than 500,000 Scorpion plugs sold, underscoring sustained demand for its completion tools and reinforcing its competitive position.</p> <h2>International Tool Growth</h2> <p>The international tools business remained a bright spot, delivering roughly 14% sequential revenue growth in 2025 on the back of sales into the UAE, Argentina and Saudi Arabia. Management noted that geopolitical tensions, including conflict involving Iran, had only minimal impact so far, highlighting the resiliency of these overseas markets.</p> <h2>Selective Service-Line Strength</h2> <p>Performance across service lines was uneven but showed pockets of strength, particularly in cementing and coiled tubing. Cementing revenue was $53.4 million, up about 1% quarter over quarter, as jobs rose 4% to 1,022, while coiled tubing revenue climbed roughly 4% amid a 28% increase in days worked despite softer day rates.</p> <h2>Commodity Backdrop Supporting Activity</h2> <p>The macro backdrop offered support, especially for gas-levered basins where Nine is investing. Natural gas prices averaged about $4.70 in Q1 versus $3.73 in Q4, a roughly 26% increase, and the Haynesville added around 25 rigs over the past year to finish the quarter with 55 rigs, creating a more constructive environment for completions services.</p> <h2>Capital Expenditure and R&amp;D Plans</h2> <p>Nine is leaning into technology and assets despite near-term volatility, reporting Q1 capital expenditures of $5.6 million and reiterating full-year CapEx guidance of $20 million to $30 million. The company is upping its R&amp;D and engineering spend, with new testing and R&amp;D facilities and refreshed Scorpion and dissolvable Stinger plug designs in the pipeline to drive future differentiation.</p> <h2>Inventory Write-Down and EBITDA Impact</h2> <p>A key drag on Q1 results was a $5.5 million noncash inventory write-down, which hit both net income and adjusted EBITDA. Notably, management chose not to add this charge back to its adjusted EBITDA figure, a more conservative stance that depressed reported earnings but may bolster credibility around future adjustments.</p> <h2>Weather-Related Operational Disruption</h2> <p>Severe winter weather in January and February disrupted operations, particularly in wireline-heavy regions, leading to inefficiencies and job delays. The company cited pronounced impacts in the Northeast wireline market and additional disruptions in the Permian, which reduced Q1 utilization and pressured margins across several service lines.</p> <h2>Weakness in Wireline and Completion Tools</h2> <p>Wireline and completion tools lagged other segments, reflecting both volume and pricing pressure. Wireline revenue fell to $23.9 million, down about 5% quarter over quarter on a 4% decline in stages, while completion tool revenue dropped 10% to $25.8 million with stages also down roughly 10% from the prior quarter.</p> <h2>Pressure on Pricing and Day Rates</h2> <p>Pricing remained a headwind even where volumes improved, illustrating competitive dynamics in North American completions. Average blended revenue per cementing job slipped about 2%, while coiled tubing experienced an 18% decline in blended day rates, offsetting part of the benefit from increased activity levels.</p> <h2>OperatingCash Flow and Near-Term Cash Use</h2> <p>On the cash side, Q1 was a usage period, with net cash used in operating activities totaling $12.4 million amid restructuring-related noise and seasonal challenges. Management acknowledged the negative operating cash flow but framed it as partly transitory, expecting better working capital trends as volumes normalize and one-time costs roll off.</p> <h2>High Revolver Borrowings</h2> <p>Nine’s reliance on its revolving credit facility remained elevated, a key risk marker for investors tracking leverage. Borrowings of $90.4 million at quarter end, followed by an additional $5 million draw in April, emphasize the importance of achieving the guided EBITDA ramp and improved cash generation to stabilize the capital structure.</p> <h2>First-Quarter Reporting Noise and Bankruptcy Costs</h2> <p>The company stressed that Q1 results were heavily distorted by fresh start accounting and lingering Chapter 11-related items, including asset revaluations and restructuring expenses. This reporting noise complicates year-over-year comparisons and masks the underlying earning power that management expects to emerge in subsequent quarters.</p> <h2>Uncertainty on Near-Term Activity Upside</h2> <p>While Nine highlighted early green shoots such as potential DUC drawdowns and some incremental activity, executives cautioned that operators remain disciplined. The company does not expect a sharp near-term rig ramp, suggesting that any major upside in activity is more likely in the back half of the year than in the immediate quarters.</p> <h2>Forward-Looking Guidance and Outlook</h2> <p>Looking ahead, Nine’s guidance centers on a cleaner and stronger second quarter, with revenue projected at $136 million to $146 million and adjusted EBITDA between $10 million and $15 million. Management reiterated full-year CapEx of $20 million to $30 million and annual cash interest around $7 million, and expects improved financial performance as weather effects fade, operational efficiencies take hold and potential upside emerges from DUC drawdowns and incremental activity later in 2026.</p> <p>Nine’s earnings call underscored a company in transition, moving from a bankruptcy-constrained past toward a more stable, growth-oriented future, albeit with lingering risks. Investors will be watching whether the promised Q2 rebound, improved cash flow and international and Haynesville opportunities materialize, validating management’s confidence that the worst of the noise is now behind Nine Energy Service.</p></div>

NINE

<p>Nine Energy Service reported Q1 2026 revenue of $130 million, showing resilience despite challenges like weather disruptions and a $5.5 million inventory write-down. Management provided optimistic Q2 guidance, expecting revenue between $136 million and $146 million. The company completed its Chapter 11 process, enhancing its financial position. Operationally, Nine expanded its footprint and reported strong international tool growth. However, wireline and completion tools faced pricing pressures, impacting overall performance.</p>

Nine Energy Service Signals Rebound After Rough Q1