Nine Energy Service, Inc.

Welcome to Nine Energy Service first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Heather Schmidt, Vice President, Strategic Development and Investor Relations.

Thank you. Good morning, everyone, and welcome to the Nine Energy Service Earnings Conference call to discuss our results for the first quarter of 2025. With me today are Anne Fox, President and Chief Executive Officer, and Guy Serkis, Chief Financial Officer. We appreciate your participation. Some of our comments today may include forward-looking statements reflecting nine views about future events. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures, additional details, and a reconciliation to the most directly comparable GAAP financial measures are also included in our first quarter press release and can be found in the investor relations section of our website. I will now turn it all over to you. Thank you, Heather. Good morning, everyone. Thank you for joining us today to discuss our first quarter results for 2025. Revenue for the quarter was $150.5 million, which was in the upper range of our original guidance of $146 to $152 million, and an increase of approximately 6% versus Q4. We generated adjusted EBITDA of $16.5 million, an increase of approximately 17% quarter over quarter. Incremental adjusted EBITDA margins were approximately 26%. We had a strong quarter relative to the market as we continued to execute our strategy of market share gains and cost reduction. The U.S. land market was relatively stable in Q1, with the U.S. rig count remaining flat versus Q4. Despite this, we generated revenue growth within all of our service lines and generated final EBITDA margins of approximately 25%, driven in large part by increased activity from our market share gains, most specifically within cementing. Additionally, we did not have the negative impact of holiday, weather, and budget exhaustion we saw in Q4, resulting in more efficient operations and less white space, most evident in our co-op tubing division, where we increased revenue by approximately 16% quarter over quarter. Pricing across service lines was mostly stable in Q1, with the exception of our wireline operations in the Northeast, where we saw the impact of lower cage pricing, implemented during the bidding process in 2024. As I mentioned, our total revenue grew by approximately 6% quarter-over-quarter, with our cementing business increasing its revenue by approximately 4% and jobs completed by approximately 11%, despite a flat rigged town environment and sustained low activity levels in Hainesville. Completion tool revenue for the quarter increased due to market share gains in the Permian Basin with our plug offerings. Our technology continues to perform very well, and we continue to be a premier completion tool provider for the U.S. and abroad. Our U.S. wireline division increased revenue by approximately 7% quarter over quarter due in large part to more efficient operations in the Northeast as budgets reset and we did not have the impact of holiday shutdowns. We have seen state price reductions in the Northeast as the reprice work for 2025 bids completed during a lower natural gas price in 2024. Coal tubing revenue increased by approximately 16% this quarter. Utilization was significantly higher in Q1 versus Q4, driving an increase in both revenue and profitability quarter over quarter. I would now like to turn the call over to Guy to walk through detailed financial information.

Thank you, Ann. Before I walk through Q1 results, I want to discuss the recent refinancing of our ABL revolving credit facility. On May 1st, we closed on a new asset-based revolving credit facility with White Oak Commercial Finance, due November 2027. The new ABL will provide us with $125 million of commitments and a $50 million uncommitted accordion, and will replace the company's previous revolving credit facility. Based on our March borrowing base and excluding one-time transaction costs, the new facility provides nine with approximately $22 million of incremental covenant-compliant liquidity through an increase in our borrowing base of approximately $14.4 million, as well as lowering our fixed charge coverage ratio trigger level by approximately $7.5 million. Additionally, the new ABL extends the previous maturity by approximately nine months to November 2027. We estimate the new ABL will increase our annual cash interest expense by approximately $1 million. The combination of additional borrowing base availability and lower fixed charge covenant ratio trigger levels significantly increases our liquidity and financial flexibility, and we are excited about our new partnership with White Oak. A summary of the terms are contained within the company's recent filing with the SEC, and there is a supplemental presentation that can be found in the investor relations section of our website. As of March 31st, 2025, NINES cash and cash equivalents were $17.3 million, with $36.5 million of availability under the previous revolving ABL credit facility, resulting in a total liquidity position of $53.8 million as of March 31st, 2025. At March 31st, we had $47 million of borrowings under the ABL credit facility. During Q1, we did not sell any shares under the ATM program. As for the terms of the indenture governing nine senior secured notes, the company is required to periodically offer to repurchase such notes with a portion of any excess cash flow. Nine did not generate any excess cash flow as defined in the indenture in the most recently ended two fiscal quarters. As a result, no excess cash flow offer will be made to note holders this month. During the first quarter, revenue totaled $150.5 million, with adjusted gross profit of $28 million. During the first quarter, we completed 1,245 cementing jobs, an increase of approximately 11%. The average blended revenue per job decreased by approximately 6%. Cementing revenue for the quarter was $57.2 million, an increase of approximately 4%. During the first quarter, we completed 7,713 wireline stages, an increase of approximately 15%. The average blended revenue per stage decreased by approximately 7%. Wireline revenue for the quarter was $29.6 million, an increase of approximately 7%. For completion tools, we completed 29,057 stages, an increase of approximately 14%. Completion tool revenue was $33.9 million, an increase of approximately 2%. During the first quarter, our coil tubing days were increased by approximately 36%, with the average blended day rate decreasing by approximately 15%. Coil tubing revenue was $29.9 million, an increase of approximately 16%. During the first quarter, the company reported general and administrative expense of $13.3 million. Depreciation and amortization expense was $8.6 million. The company's tax provision was approximately $0.1 million for the first quarter of 2025. The provision for 2025 is the result of the company's tax position in state and non-U.S. tax jurisdictions. For the first quarter, the company reported net cash used in operating activities of $5.3 million. The average VSO for Q3 was 57.6 days. CapEx spend during Q1 was $4.3 million, and our full-year CapEx budget remains unchanged at $15 to $25 million. I will now turn it back to Ann.