Nine Energy Q1 2023 Earnings Report
Key Takeaways
Nine Energy Service reported first quarter 2023 revenues of $163.4 million, a net loss of $(6.1) million, and an adjusted EBITDA of $25.0 million. The company's performance was as expected, with revenue falling within the original guidance range. However, they anticipate a slight sequential decrease in revenue for Q2 due to softening market conditions and pricing pressure.
First quarter revenue was $163.4 million, within the original guidance.
Net loss for the quarter was $(6.1) million, or $(0.19) per diluted share.
Adjusted EBITDA for the quarter was $25.0 million.
Company expects Q2 revenue to be down slightly sequentially to Q1 due to market softening.
Nine Energy
Nine Energy
Forward Guidance
Nine Energy anticipates a slight sequential decrease in revenue for Q2 compared to Q1, due to softening market conditions and pricing pressure, particularly in the Northeast and Haynesville areas.
Positive Outlook
- Cementing service line continues to be a strong performer.
- Company believes it has one of the top completion tool portfolios in the U.S.
- Increased the total number of StingerTM Dissolvable plugs sold by approximately 23%, due in large part to a significant international sale.
- Increased completion tool revenue by approximately 7%, quarter-over-quarter.
- Company has demonstrated ability to navigate through all market cycles and quickly increase earnings in conjunction with activity growth
Challenges Ahead
- Softening in the market due largely to the decline in natural gas prices over the past several months.
- Decrease in activity and pricing thus far in 2023 versus Q4 levels.
- Wireline and coiled tubing markets remain fragmented and highly competitive.
- Activity levels thus far in Q2 are down.
- Company continues to see some pricing pressure from select customers, especially in the Northeast and Haynesville.