Nine Energy Service Reports Q4 & Full-Year 2024 Results
Nine Energy Service, Inc. (“Nine” or the “Company”) has announced its financial results for the fourth quarter and full year of 2024. The company reported fourth-quarter revenues of $141.4 million, with a net loss of $(8.8) million, equating to $(0.22) per diluted share and $(0.22) per basic share. Adjusted EBITDA for the quarter stood at $14.1 million. These results aligned closely with the company’s earlier guidance range of $132.0 to $142.0 million, coming in at the upper end.
CEO’s Perspective
President and Chief Executive Officer Ann Fox remarked on the company’s performance, stating, “We had a good Q4 with revenue increasing sequentially, despite a flat average US rig count and typical Q4 seasonality.”
Fox acknowledged the challenges facing the oilfield services sector in 2024 but highlighted Nine’s resilience. “Despite significant US rig declines, largely due to depressed natural gas prices averaging $2.19 for the year, our earnings have historically mirrored rig count trends. However, in 2024, we implemented a two-pronged strategy focused on market share growth and cost reductions. This approach has enabled us to maintain profitability even in a declining rig count environment. The impact of this strategy became evident in Q3 and continued into Q4, as we achieved sequential revenue growth despite external challenges.”
Strong Performance in Cementing Services
One of the strongest contributors to Nine’s performance was the cementing division, which significantly drove revenue and profitability growth. The company recorded approximately a 20% increase in quarterly cementing revenue from Q2 to Q4, despite an overall US rig count decline in Q4. Nine concluded 2024 with a Q4 cementing market share of approximately 19% in its operational regions—an increase of around 14% compared to Q4 2023.
Fox also emphasized the continued development of new technologies in Nine’s completion tools segment. “Our completion tools team remained dedicated to innovation in 2024, introducing multiple new technologies, including the Pincer Hybrid Frac Plug and a new frac dart element. We remain bullish on dissolvable plug technology, particularly as lateral well lengths continue to expand. Technology innovation will remain a key priority in 2025, supported by the launch of our new, state-of-the-art R&D and completion tools testing facility.”
Commitment to Safety and Sustainability
Beyond financials and technology, Nine Energy Service also focused on operational safety and sustainability. The company reported a 22% reduction in its Total Recordable Incident Rate (TRIR), which dropped to 0.49 in 2024. “The severity of our incidents also declined, reflecting our commitment to safety,” Fox noted. In 2024, Nine released its first-ever Sustainability Report, which included in-depth metrics despite the challenges of collecting such data for a company of its size.
Looking ahead to 2025, Fox expressed optimism about the company’s future, particularly regarding natural gas demand. “We believe the long-term demand for natural gas will increase, and with over 30% of our revenue tied to natural gas basins, higher activity levels in these regions would positively impact our revenue and profitability.”
Fox expects US activity levels in 2025 to remain stable overall. “Despite weather-related impacts in January and relatively flat activity so far in Q1, we anticipate sequential revenue and profitability growth in Q1 compared to Q4, as we continue to build on our market share gains and cost-cutting initiatives.”
Operating Results
For the full year ending December 31, 2024, Nine reported revenues of $554.1 million and a net loss of $(41.1) million, translating to $(1.11) per diluted share and $(1.11) per basic share. Adjusted EBITDA for the year stood at $53.2 million. The company also reported a full-year gross profit of $61.1 million and an adjusted gross profit of $97.4 million. Return on invested capital (ROIC) was reported at (14.9)%, while adjusted ROIC reached 3.7%.
For the fourth quarter, Nine recorded revenues of $141.4 million, gross profit of $16.5 million, and adjusted gross profit of $26.2 million. The quarterly ROIC was reported at (13.3)%, with an adjusted ROIC of 6.0%.
General and administrative (G&A) expenses for Q4 amounted to $14.2 million, while full-year G&A expenses stood at $51.3 million. The company’s depreciation and amortization (D&A) expenses were $8.8 million for Q4 and $36.8 million for the full year. Nine also recorded a tax provision of approximately $0.2 million for the year, reflecting its tax positions in state and non-U.S. jurisdictions.
Liquidity and Capital Expenditures
Nine Energy Service generated net cash of $13.2 million from operating activities in 2024. Total capital expenditures for the year were approximately $14.6 million, aligning with management’s guidance range of $10 to $15 million.
As of December 31, 2024, Nine held cash and cash equivalents amounting to $27.9 million and had an additional $24.2 million available under its revolving credit facility. This resulted in a total liquidity position of $52.1 million. The company reported borrowings of $47.0 million under the revolving credit facility at the end of the year.
Nine Energy Service entered into an Equity Distribution Agreement on November 6, 2023. Although no shares were sold under this agreement in Q4 2024, the company sold approximately 5.4 million shares throughout the year, generating net proceeds of $8.2 million.
Future Outlook and Growth Strategy
Nine Energy Service remains committed to driving profitability and improving its financial position. “We are constantly challenging ourselves to enhance profitability,” said Fox. “Our experienced and motivated team is dedicated to executing our strategy, and I look forward to seeing what we can achieve in 2025.”
As the company moves forward, it will continue focusing on market share expansion, cost optimization, technological advancements, and maintaining a strong liquidity position to navigate market fluctuations effectively. Nine’s ability to adapt to changing market conditions while continuing to innovate and expand its operations positions it well for growth and success in the coming year.
The company also expects continued traction in cementing services and completion tools innovation. With lateral well lengths increasing, dissolvable plug technology adoption is expected to grow, further strengthening Nine’s position in the market.
Additionally, Nine Energy Service will continue to explore strategic partnerships and expansion opportunities that align with its long-term vision. By staying ahead of industry trends and leveraging its operational strengths, Nine aims to remain a leader in the oilfield services sector in 2025 and beyond.
