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Sep 30, 2023
Nine Energy Q3 2023 Earnings Report
Nine Energy's Q3 2023 performance was affected by activity declines and operational inefficiencies, but the company anticipates a recovery in Q4.
Key Takeaways
Nine Energy Service reported Q3 2023 revenues of $140.6 million, a net loss of $(13.3) million, and adjusted EBITDA of $11.6 million. The company's revenue was within its original guidance range, but activity declines and operational inefficiencies impacted profitability. Nine anticipates Q4 revenue and earnings to be flat to slightly up sequentially.
Q3 revenue was in line with expectations, within the original guidance.
Activity declines and operational inefficiencies related to weather and frac delays impacted revenue and profitability in August.
Cementing was impacted by rig declines, while completion tool revenue decreased due to reduced international sales and U.S. completion activity.
The company anticipates 2024 activity to increase over current levels and expects Q4 revenue and earnings to be flat to slightly up sequentially to Q3.
Forward Guidance
Nine Energy Service anticipates Q4 revenue and earnings to be flat to slightly up sequentially to Q3, with overall activity levels remaining mostly flat and pricing stabilizing.
Positive Outlook
- Expect Q4 revenue and earnings to be flat to slightly up sequentially to Q3.
- Overall activity levels are anticipated to remain mostly flat.
- Pricing is expected to stabilize.
- No recurrence of August's challenges is anticipated in Q4.
- Cementing revenue is anticipated to be slightly higher than Q3.
Challenges Ahead
- Holidays, weather, and budget exhaustion are expected to impact operations, especially in the Northeast.
- Anticipate normal holiday and winter seasonality.
- Cementing was impacted by the continued rig declines in Q3.
- Completion tool revenue was down quarter over quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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