Nine Energy Service Q2 Earnings Call Highlights

Nine Energy Service NYSEAMERICAN: NINE reported second-quarter 2026 revenue of $141.8 million, within its prior guidance range, while adjusted EBITDA of $8.6 million fell below expectations as its Coiled Tubing business faced equipment outages, inflationary costs and margin compression. President and Chief Executive Officer Ann Fox said industry activity improved modestly during the quarter, with the U.S. rig count rising to 573 at the end of the second quarter from 543 at the end of the first quarter.

However, two large-diameter Coiled Tubing units were removed from service for maintenance-related issues, representing about 17% of the company’s large-diameter fleet. One of the units returned to service early in the third quarter, while the other is expected to remain under repair until near year-end. Fox said the company expects its Coiled Tubing operations to remain constrained until the second unit returns.

Fox said Coiled Tubing experienced cost inflation in consumables, labor, repairs and maintenance, with costs increasing by an average of approximately 12% from the first quarter. While the company implemented price increases during the quarter, those adjustments did not fully offset the inflationary pressures because of the timing required to negotiate and put new pricing into effect. Coiled Tubing days worked increased about 16% quarter over quarter, but the average blended day rate declined about 15%, driven primarily by job mix and greater white space between jobs. Segment revenue declined approximately 2% from the first quarter to $26.4 million.

During the question-and-answer session, Fox said the company has 12 specialized deep-reach Coiled Tubing units and that the affected units are significant revenue generators, particularly in the Permian Basin. Nine Energy Service has retained the skilled workforce associated with the inactive equipment rather than reducing those costs, she said. Fox characterized the outages as unusual rather than evidence of broad fleet maintenance problems. One unit was damaged after becoming stuck, while another suffered a maintenance failure that resulted in damage to its reel, according to Fox. She added that there is limited excess Coiled Tubing capacity in the market, noting that the number of U.S. Coiled Tubing units available is down by nearly 40% from pre-COVID 2019 levels. Investment in new units has also declined, she said.

The company’s Completion Tools business delivered the strongest sequential growth among its reported service lines. Nine completed 28,256 Completion Tools stages during the second quarter, up approximately 45% from the first quarter, while revenue increased approximately 44% to $37.1 million. Fox attributed the outperformance partly to international demand, particularly for dissolvable plugs. International revenue increased 17% during the first si...