Breaking Down Nine Energy Service, Inc. (NINE) Financial Health: Key Insights for Investors

You're looking at Nine Energy Service, Inc. (NINE) right now and seeing a stock that took a hit after their Q3 2025 earnings, and you're defintely wondering if the pain is over. The direct takeaway is this: the company's recent performance reflects broader market contraction, but their cash position buys them runway. The third quarter, reported in October, saw revenue come in at $132.0 million, missing their own guidance range, which is a clear signal of the pricing pressure they're facing as the U.S. rig count dropped from 592 to 549 over two quarters. This market reality translated to a net loss of $(14.6) million and an Earnings Per Share (EPS) loss of $(0.35), missing the consensus estimate by five cents, but the real story is in the capital structure. The market is punishing any revenue miss right now. While the Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $9.6 million for the quarter, the critical number for a high-debt, cyclical player is liquidity, which stood at $40.3 million as of September 30, 2025, so we need to map out just how long that can sustain operations given the Q4 revenue guidance is projected to be even lower, between $122 million and $132 million.

Revenue Analysis

You need a clear picture of Nine Energy Service, Inc. (NINE)'s top line, and the data shows a challenging domestic market in 2025, despite strong international growth. Total revenue for the third quarter of 2025 came in at $132.0 million, a clear miss against the company's own guidance, reflecting significant market headwinds.

The company operates primarily in the Completion Solutions segment, which is a mix of specialized services for unconventional oil and gas development. This segment is the core of their business, generating revenue from services like cementing, coiled tubing, wireline, and completion tools across the U.S., Canada, and other international regions.

Here's the quick math on the quarterly segment contribution, using Q2 2025 as a concrete example before the full Q3 market pressures hit, to illustrate the mix:

The year-over-year (YoY) trend shows the pressure. Nine Energy Service, Inc.'s Q3 2025 revenue of $132.0 million was a 4% decrease compared to the third quarter of 2024, primarily driven by declines in coiled tubing and cementing revenues. Sequentially, the drop was even sharper, falling 10.3% from the Q2 2025 revenue of $147.3 million. That's a defintely tough quarter.

What this estimate hides is the varied performance across service lines and geographies. The U.S. market is struggling with a significant rig count decline-a drop of about 7% from the end of Q1 to the end of Q3 2025-which brings heavy pricing pressure, especially in the Permian Basin.

• Coiled Tubing revenue fell 15% in Q3 2025 due to lower utilization.
• Cementing revenue decreased 4% as a result of pricing reductions.
• Wireline revenue managed a slight 1% increase, but only because a 31% jump in completed stages offset the pricing cuts.
• Completion Tools faced market share losses, with stages completed decreasing by 11%.

Still, the bright spot is the international business. For the first nine months of 2025, international revenue increased by approximately 19% compared to the same period in 2024, a key growth area for the company's completion tools. This international focus is critical to offset domestic weakness, so keep an eye on their Mission Statement, Vision, & Core Values of Nine Energy Service, Inc. (NINE). for strategic alignment.

Next step: Analyze the cost structure to see if management's cost-cutting efforts are keeping pace with this revenue decline.

Profitability Metrics

You want to know if Nine Energy Service, Inc. (NINE) is making money, and the short answer for 2025 is: not yet, but the gross margin is holding up better than the bottom line. The profitability picture for the first nine months of 2025 shows a clear and concerning trend of margin compression, driven by market headwinds like US rig declines and subsequent pricing pressure.

For the first nine months of 2025 (9M 2025), Nine Energy Service, Inc. generated total revenue of $429.8 million. While the company managed a Gross Profit of $48.7 million, the overall Net Loss for the period was a significant $(32.1) million. This tells us the core business is covering its direct costs, but the operating expenses and interest costs are eating up all the profit and more.

Here's the quick math on the key margins for the first three quarters of 2025, which really shows the operational efficiency (or lack thereof) as the year progressed:

You can see the clear trend: margins are defintely moving in the wrong direction. The Gross Profit Margin (Gross Profit divided by Revenue) declined steadily from 12.96% in Q1 to just 9.02% in Q3. That three-point drop in margin over two quarters is a direct signal of pricing pressure and rising costs that the company is struggling to manage in a declining US rig count environment.

The operating profit (earnings before interest and taxes, or EBIT) is where the real challenge lies. We estimate the operating margin fell from a loss of -1.59% to -7.20% over the same period. This steep drop means the company's selling, general, and administrative (SG&A) expenses, plus depreciation, are too high relative to the shrinking gross profit. The net result is the Net Profit Margin plummeting to a loss of over 11% in Q3.

Compare Nine Energy Service, Inc.'s 11.33% Gross Margin for the first nine months of 2025 to a peer like Powell Industries, which reported a full-year fiscal 2025 Gross Profit of 29.4% of revenue. That gap is massive. While not a perfect apples-to-apples comparison, it highlights that Nine Energy Service, Inc. has a long way to go in terms of operational efficiency (cost management and pricing power) to match the profitability of stronger players in the oilfield services sector.

• Gross margin is the immediate operational risk.
• Net loss is worsening as the year progresses.
• Cost management is not keeping pace with revenue decline.

To understand the investor sentiment around this performance, you should be Exploring Nine Energy Service, Inc. (NINE) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Nine Energy Service, Inc. (NINE) and trying to figure out how they pay for their growth. Honestly, the capital structure here is the first thing that jumps out to any seasoned analyst; it tells a story of significant financial stress, even with recent operational improvements.

The core issue is a balance sheet heavily tilted toward debt, with equity deep in the red. As of mid-2025, Nine Energy Service, Inc. carries a total debt load of approximately $360 million USD. The vast majority of this is long-term, with about $323 million USD classified as Long-Term Debt as of June 30, 2025. That leaves a smaller, but still meaningful, amount of roughly $37 million USD in short-term debt and current maturities.

Here's the quick math on their leverage: Nine Energy Service, Inc. has a Debt-to-Equity (D/E) ratio that is not just high, but mathematically inverted. The company reported a negative total shareholder equity of approximately $-95.9 million USD. When you divide the total debt by negative equity, you get a D/E ratio of roughly -3.75, or -375%. This is defintely a red flag.

• Total Debt (June 2025): $360 million USD
• Shareholder Equity (Mid-2025): $-95.9 million USD
• Calculated D/E Ratio: Approximately -3.75

What this estimate hides is the fundamental problem: a negative equity position means the company's total liabilities exceed its total assets. The industry benchmark for Oil and Gas Equipment and Services is a D/E ratio of about 0.52, so Nine Energy Service, Inc. is nowhere near the industry standard. This structure forces a reliance on debt financing and operational cash flow just to service existing obligations, not necessarily to fund growth.

To be fair, the company has been proactive in managing its debt maturity profile. In a key move on May 1, 2025, Nine Energy Service, Inc. closed on a new $125 million senior secured Asset-Based Lending (ABL) revolving credit facility. This refinancing extended the maturity of their revolving commitments out to 2028, buying them crucial time and improving immediate liquidity.

The balance between debt and equity is currently non-existent; the company is effectively 100% financed by debt and liabilities. Their primary long-term debt consists of senior secured notes, which were part of a larger refinancing in 2023. For investors, the focus shifts entirely to the company's ability to generate enough cash flow-specifically Adjusted EBITDA-to cover interest payments and eventually chip away at that principal. This is a high-risk, high-reward situation, where debt holders are senior to equity, which is why we must keep a close eye on their cash flow generation in the coming quarters. You can review the full analysis in Breaking Down Nine Energy Service, Inc. (NINE) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You're looking at Nine Energy Service, Inc. (NINE) to see if they can cover their short-term bills, which is the core of liquidity analysis. The direct takeaway is that while their current ratios look healthy on paper, the recent trend of negative operating cash flow and a looming credit facility reduction point to a tightening liquidity situation you need to watch closely.

A quick look at their most recent trailing twelve months (TTM) data shows a Current Ratio of about 2.21 and a Quick Ratio of around 1.30. The Current Ratio (current assets divided by current liabilities) is well above the safe 1.0 benchmark, and the Quick Ratio (a tougher test that excludes inventory) is also comfortably over 1.0. This suggests Nine Energy Service, Inc. has more than enough liquid or near-liquid assets to cover its obligations coming due in the next year. That's a good starting point.

Here's the quick math on their working capital (current assets minus current liabilities):

• Current Ratio of 2.21 is a sign of short-term financial strength.
• Quick Ratio of 1.30 means they don't rely heavily on selling inventory to pay immediate debt.
• Current liabilities have grown to about 24% of total assets as of March 2025, which is a trend to monitor.

Still, you need to look beyond the balance sheet. The real-world trend in working capital is a bit more mixed. The company's average Days Sales Outstanding (DSO)-how long it takes customers to pay-was 56.8 days in the third quarter of 2025. That's not terrible for the energy services sector, but in a period of market pressure, a longer collection cycle can strain cash flow.

The cash flow statement for Nine Energy Service, Inc. is where the near-term risk becomes clearer. For the third quarter of 2025 alone, the company reported net cash used in operating activities (OpCF) of $9.9 million. This is a red flag. When a business burns cash from its core operations, it has to rely on financing or selling assets. To be fair, for the trailing twelve months, OpCF was a positive $9.86 million, but the recent quarter's negative number shows the impact of rig count declines and pricing pressure.

Let's break down the 2025 cash flow trends:

The biggest liquidity concern is the reliance on their revolving credit facility (Asset-Based Lending, or ABL). As of September 30, 2025, their total liquidity was $40.3 million, which includes $14.4 million in cash and $25.9 million of available credit. However, the company expects its borrowing base under this facility to be reduced due to the current commodity price environment, which will defintely reduce their available liquidity in the coming months. You are seeing a clear trade-off: a strong static ratio but a weak dynamic cash flow position. For more on the strategic implications, check out Breaking Down Nine Energy Service, Inc. (NINE) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Nine Energy Service, Inc. (NINE) and trying to figure out if this stock is a deep-value play or a value trap. Honestly, the valuation picture is complicated. The technical signals are flashing a clear warning, but some long-term analyst price targets suggest massive upside. You need to look past the simple metrics to see the real story.

Since Nine Energy Service, Inc. is currently unprofitable, the traditional Price-to-Earnings (P/E) ratio is not applicable. When a company has negative earnings, the P/E ratio is meaningless. Similarly, the Price-to-Book (P/B) ratio is also not available, which is a common issue with companies in a restructuring or turnaround phase. So, we have to rely on Enterprise Value-to-EBITDA (EV/EBITDA), which is a better measure for capital-intensive energy service companies.

Here's the quick math on the key valuation metrics as of late 2025:

• Enterprise Value-to-EBITDA (EV/EBITDA): 8.24
• Trailing 12-Month (TTM) EBITDA: $61.17 Million
• Market Capitalization: $19.51 Million

An EV/EBITDA of 8.24 is not defintely cheap for a company facing revenue headwinds, but it's not wildly expensive either, especially if you believe the energy cycle is about to turn up. What this estimate hides is the company's significant debt load, which is why the Enterprise Value of $381.03 Million is so much higher than the tiny Market Cap.

Stock Price Trends and Analyst Disconnect

The stock price trend over the last 12 months tells a story of severe investor pessimism. The stock has plummeted by over 63.71% in the last 52 weeks, moving from a high of $1.87 to a recent low of $0.41. The latest closing price is around $0.43, which is near the 52-week bottom.

This downtrend has led to a consensus rating of Sell from analysts, with one firm explicitly stating a 0 Buy, 0 Hold, and 1 Sell rating. Technical indicators are also leaning toward a 'Strong Sell.' Still, you see a huge disconnect in price targets.

Some analysts still project a highly optimistic average price target of $3.2198 for 2025, with a high prediction of $5.3163. That's a potential return of over 600% from the current price. But to be fair, these targets often lag the market's current reality. The technical analysis, which is more near-term focused, suggests the price will trade in a channel around $0.4064 for the rest of 2025.

The bottom line is that Nine Energy Service, Inc. is a speculative bet on a significant turnaround in the oilfield services sector, plus a successful deleveraging of its balance sheet. The market has priced it for distress, but the upside targets show what a successful restructuring could unlock.

If you want to dig deeper into who is currently buying and selling, you should check out Exploring Nine Energy Service, Inc. (NINE) Investor Profile: Who's Buying and Why?

Finance: Track Q4 2025 revenue guidance of $122 Million to $132 Million to see if the company can meet its near-term targets.

Risk Factors

You need to understand the true threats to Nine Energy Service, Inc. (NINE)'s financial health, because the near-term market headwinds are strong and directly impacting their liquidity. The company is battling a tough external environment, but the biggest immediate risk is financial leverage coupled with declining activity.

The core of the problem is the drop in U.S. drilling and completion activity. The U.S. rig count fell from 592 at the end of Q1 2025 to 549 by the end of Q3 2025, a drop of about 7%. This decline translates directly into a revenue miss: Q3 2025 revenue was only $132.0 million, below their guidance range of $135.0 million to $145.0 million. Less work means service companies, including Nine Energy Service, Inc., have to fight harder for every job, leading to significant pricing pressure, especially in the competitive Permian Basin.

Here's the quick math on the financial strain: S&P Global Ratings expects Nine Energy Service, Inc. to generate negative free operating cash flow (FOCF) for the full year 2025. This is a serious red flag. Plus, their debt-to-EBITDA ratio is expected to stay above 5x through 2026, which is viewed as unsustainable leverage.

• Market Volatility: Rig count declines and persistent pricing pressure are hitting all service lines.
• Liquidity Crunch: Total liquidity was $40.3 million as of September 30, 2025. Still, the borrowing base on their Asset-Based Lending credit facility is expected to be reduced due to lower inventory values, tightening available capital.
• Operational Headwinds: The Completion Tools Division has lost market share due to customer consolidation and changes in completion designs, a direct internal challenge they must fix.

What this estimate hides is the potential for a downgrade if liquidity deteriorates further, which could increase their cost of capital. Also, the stock has traded below $1.00 per share, putting the company at risk of being delisted from the NYSE. You defintely need to keep an eye on that. For a deeper dive into who is buying and selling the stock in this environment, you can check out Exploring Nine Energy Service, Inc. (NINE) Investor Profile: Who's Buying and Why?

Management is not sitting still, though. Their mitigation plan is clear: focus on what they can control. They are investing in R&D to commercialize new technology for completion tools to win back market share. They are also pushing hard on international expansion, which has been a bright spot, with international revenue increasing by approximately 19% for the first nine months of 2025 compared to the same period in 2024. Finally, they are committed to disciplined cost management to lower operating costs without sacrificing service quality.

To put a finer point on the Q3 2025 results, here is the breakdown:

Growth Opportunities

You're looking at Nine Energy Service, Inc. (NINE) in a tough spot for the energy sector, but honestly, the company's growth strategy is smart: they're aggressively moving away from the volatile U.S. oil market and into more stable international and natural gas basins. This pivot is the real story, not just the near-term headwinds.

The biggest catalyst for Nine Energy Service, Inc. is its international expansion, which is defintely working. The total first-half 2025 international tools revenue surged by approximately 20% compared to the first half of 2024, and for the first nine months of 2025, international revenue was up approximately 19% year-over-year. This growth is driven by demand for their multi-cycle barrier valves in the Middle East and increased plug sales in places like Argentina and Australia. It's a deliberate strategy to reduce reliance on the cyclical Permian Basin.

• Pivot to gas-levered markets (Haynesville, Northeast).
• International tools revenue up 19% (9M 2025 YoY).
• R&D focus on barrier valves and plugs.

On the domestic front, the company is capturing market share in gas-levered basins where competition is less fierce. For example, in the second quarter of 2025, their Wireline business revenue increased by approximately 11% quarter-over-quarter, and Completion Tool revenue grew by approximately 9%, largely due to stronger sales in the Northeast and Haynesville. Plus, they're investing in the future with a new 30,000-square-foot completion tool testing center in Jacksboro, Texas, set to open in 2026, which will act as a key innovation hub for both domestic and global clients.

Here's the quick math on what analysts expect for the full year 2025, which maps out the near-term financial reality:

What this estimate hides is the resilience shown through Q2 2025, where revenue hit $147.3 million, beating analyst expectations, but also the Q3 2025 revenue of $132.0 million, which missed guidance due to persistent pricing pressure and rig count declines in the Permian. Still, the company has a solid financial foundation, securing a $125 million senior secured asset-based revolver in May 2025, helping maintain total liquidity at $65.5 million as of June 30, 2025.

Nine Energy Service, Inc.'s competitive advantage isn't just about their technology, like their dissolvable plugs, but also their operational discipline and geographic diversity. They operate in all major onshore basins in the U.S. and Canada, which helps them mitigate basin-specific risk. They differentiate through superior service quality and wellsite execution, which is what keeps customers coming back, even with intense competition. For a deeper dive into the company's financial structure, check out Breaking Down Nine Energy Service, Inc. (NINE) Financial Health: Key Insights for Investors.

Finance: Track Q4 2025 revenue results against the $122 million to $132 million guidance to confirm the impact of the international growth strategy by year-end.