The following is a summary of the Nine Energy Service, Inc (NINE) Q3 2024 Earnings Call Transcript:
Financial Performance:
Nine Energy Service reported Q3 2024 revenue of $138.2 million, surpassing the guidance range and showing an increase from the prior quarter.
Adjusted EBITDA reached $14.3 million, marking a 47% increase quarter-over-quarter.
Diluted EPS stood at negative $0.26, reflecting ongoing challenges despite revenue growth.The company achieved an incremental adjusted EBITDA margin of approximately 79%.
Business Progress:
The cementing business significantly contributed to revenue growth, gaining approximately 23% market share quarter-over-quarter.
Notable advances in technology and service differentiation with the pincer hybrid frac plug and frac dart, which reduce costs and increase efficiency for clients.
Coiled tubing revenue also rose due to better utilization and a 5% increase in revenue quarter-over-quarter.
Opportunities:
The company anticipates a moderate activity pickup in 2025 if supportive commodity prices prevail, particularly if natural gas prices average $3 or above.
Risks:
Q4 is expected to show a decline compared to Q3 due to traditional budget exhaustion, weather impacts, and a decrease in international tool sales, projecting Q4 revenue between $132 million and $142 million.
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