Nine Energy Service, Inc.
For the period ended Mar 31, 2026. Filed May 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 13, 2026
NINE$7.44+9.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001532286-25-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001532286-26-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 115 current paragraphs.
38 unchanged; 16 reworded; 59 added; 58 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (59)
Current report
Bankruptcy Proceedings and Emergence from Bankruptcy
Current report
On February 1, 2026 (the “Petition Date”), we and our domestic and Canadian subsidiaries (the “Company Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to implement a prepackaged Chapter 11 plan of reorganization (the “Plan”) to effectuate a financial restructuring of the Company Parties’ existing indebtedness. Prior to filing the Chapter 11 Cases, on the Petition Date, the Company Parties entered into a restructuring support agreement (the “Restructuring Support Agreement”) with an ad hoc group (collectively, the “Consenting Stakeholders”) of certain holders of our 13.000% Senior Secured Notes due 2028 (the “2028 Notes”) and the lenders (the “Prepetition ABL Lenders”) under the Loan and Security Agreement, dated as of May 1, 2025 (the “Prepetition ABL Loan and Security Agreement”), by and among us and certain of our subsidiaries, each as a borrower or guarantor, as applicable, White Oak Commercial Finance, LLC, as agent for the lenders, and the lenders from time to time party thereto. Pursuant to the Restructuring Support Agreement, the Consenting Stakeholders agreed, subject to certain terms and conditions, to support the Plan.
Current report
On March 4, 2026, the Bankruptcy Court entered an order confirming the Plan, and on March 5, 2026, the Plan became effective in accordance with its terms and the Company Parties emerged from bankruptcy. Pursuant to the Plan, among other things:
Current report
•the Prepetition ABL Lenders provided the Company Parties with a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount of revolving credit commitments (the “DIP ABL Facility”), including a roll-up or refinancing of all obligations under the Prepetition ABL
Current report
Loan and Security Agreement, which converted into an exit senior secured asset-based revolving credit facility (the “Exit ABL Facility”) on the effective date of the Plan (the “Plan Effective Date”);
Current report
•on the Plan Effective Date, the reorganized Company issued 100% of a single class of common equity interests to the holders of the 2028 Notes and the 2028 Notes were canceled; and
Current report
•on the Plan Effective Date, all of the Company’s equity interests outstanding prior to the Plan Effective Date, including common stock, were canceled for no consideration.
Current report
See Note 1 – Company and Organization and Note 3 – Emergence from Bankruptcy in Item 1 of Part I of this Quarterly Report on Form 10-Q for more information regarding the bankruptcy and our emergence therefrom.
Current report
Fresh Start Accounting
Current report
Upon the Plan Effective Date, we applied fresh start accounting in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 852-Reorganizations (“ASC 852”). The application of fresh start accounting resulted in a new basis of accounting and becoming a new entity for financial reporting purposes. Accordingly, our financial statements and notes after the Plan Effective Date are not comparable to our financial statements and notes on and prior to that date. For additional information, see Note 3 – Emergence from Bankruptcy in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Current report
In this Quarterly Report on Form 10-Q, the “Successor” refers to the Company after our emergence from bankruptcy and the “Predecessor” refers to the Company prior to our emergence from bankruptcy, and references to the financial position and results of operations of the Successor are to the financial position and results of operations of the Company after the Plan Effective Date and references to the financial position and results of operations of the Predecessor are to the financial position and results of operations of the Company on and prior to the Plan Effective Date.
Current report
Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. Historically, these activity and spending levels have been strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. Following the announcement of tariffs in April of 2025, oil prices began to decline. In the first quarter of 2025, West Texas Intermediate (“WTI”) averaged $71.78 per barrel and fell to an average of $59.62 per barrel in the fourth quarter of 2025. The decline in oil prices led to a decrease in rig count and activity levels on U.S. land, which in turn led to pricing pressure across service lines, especially within the oil-levered basins, like the Permian. In the first quarter of 2025, the average rig count in the Permian Basin was 302 rigs, and by the fourth quarter of 2025, it had declined to 250 rigs. At the beginning of March 2026, WTI prices increased significantly due to the conflict with Iran. Although WTI prices rose to almost $100 per barrel in March 2026, and averaged $72.74 per barrel for the first quarter of 2026, the U.S. rig count remained flat in the first quarter of 2026 versus the fourth quarter of 2025. At the end of 2025, the U.S. rig count was 546 rigs, and at the end of the first quarter of 2026, the U.S. rig count was 543 rigs. U.S. public operators have not provided any indication that U.S. activity levels will increase in conjunction with higher oil prices.
Current report
In the first quarter of 2026, natural gas prices averaged $4.71 per million British thermal units (“MMBtu”), compared to $3.73 per MMBtu in the fourth quarter of 2025. However, prices have fallen to around $3.00 per MMBtu by the end of the first quarter of 2026. Nonetheless, natural gas prices have remained mostly supportive, which has led to slight increases in rig counts in natural gas-levered basins like the Haynesville. Since the end of the first quarter 2025, there have been 25 rigs added in the Haynesville Basin, which had a total of 55 rigs at the end of the first quarter of 2026. Due to the much smaller size of the Haynesville versus the Permian Basin, these increases have not been able to offset the activity declines and the pricing pressure in the oil-levered basins like the Permian. The long-term outlook on natural gas demand remains positive due mostly to potential increased demand coming from power generation related to artificial intelligence and data centers.
Current report
Due to the spot-market nature of our business, our revenue and profitability generally move very similarly to U.S. rig, frac, and stage counts. In the first quarter of 2026, however, although pricing and rig counts were relatively stable, our revenue and profitability were negatively impacted by severe weather in January and February, as well as inefficient operations, frac delays, and more whitespace in the calendar, especially in the Northeast region. Because of this, revenue and profitability in the first quarter of 2026 were down compared to the fourth quarter of 2025. Additionally, during the first quarter of 2026, we incurred costs related to our restructuring that negatively impacted profitability.
Current report
The macro-outlook is uncertain, especially with recent geopolitical events. With what we know today, we anticipate that U.S. activity levels will be relatively flat in the second quarter of 2026 compared to the first quarter levels. However, we anticipate more efficient operations and less whitespace in the calendar in the second quarter of 2026 and expect our second quarter revenue and earnings will increase as compared to the first quarter of 2026.
Current report
Results for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period
Current report
For the period from March 6, 2026 through March 31, 2026 (the “2026 Successor Period”), revenues were $41.6 million. For the 2026 Successor Period, total cementing revenue (including pump downs) was $17.6 million, with utilization at 88%; tools revenue was $8.5 million, with completion tools stages of approximately 7,200 stages; coiled tubing revenue was $8.1 million, with total days worked of approximately 225 days; and wireline revenue was $7.4 million, with total completed wireline stages of approximately 2,300 stages.
Current report
For the period from January 1, 2026 through March 5, 2026 (the “2026 Predecessor Period”), revenues were $88.4 million. For the 2026 Predecessor Period, total cementing revenue (including pump downs) was $35.9 million, with utilization at 85%; tools revenue was $17.3 million, with completion tools stages of over 12,000 stages; coiled tubing revenue was $18.8 million, with total days worked of approximately 455 days; and wireline revenue was $16.4 million, with total completed wireline stages of approximately 4,600 stages.
Current report
Cost of revenues for the 2026 Successor Period was $35.6 million. These costs included $19.1 million in costs related to materials installed and consumed while performing services, $11.7 million in employee-related costs, and $4.8 million in vehicle costs, repair and maintenance costs, insurance, facility costs and other costs.
Current report
Cost of revenues for the 2026 Predecessor Period was $80.5 million. These costs included $38.5 million in costs related to materials installed and consumed while performing services, $25.8 million in employee-related costs, $10.8 million in vehicle costs, repair and maintenance costs, insurance, facility costs and other costs, and $5.5 million in inventory write-downs.
Current report
Cost of revenues for the 2025 Predecessor Period was $122.5 million. These costs included $67.2 million in costs related to materials installed and consumed while performing services, $39.8 million in employee-related costs, and $15.5 million in vehicle costs, repair and maintenance costs, insurance, facility costs and other costs.
Current report
General and administrative expenses for the 2026 Successor Period was $4.6 million. These expenses included $2.6 million in employee-related costs, $1.2 million in professional fees, and $0.8 million in other costs such as communication costs, vehicle expenses, and insurance expenses.
Current report
General and administrative expenses for the 2026 Predecessor Period was $13.1 million. These expenses primarily included $6.0 million in professional fees, $5.1 million in employee-related costs, and $2.0 million in other costs such as communication costs, vehicle expenses, and insurance expenses.
Current report
General and administrative expenses for the 2025 Predecessor Period was $13.3 million. These expenses primarily included $9.1 million in employee-related costs and $4.1 million in professional fees and other costs such as communication costs, vehicle expenses, and insurance expenses.
Current report
Depreciation expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $2.2 million, $4.0 million, and $5.8 million, respectively. Due to our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Period in comparison to the 2026 Predecessor Period and 2025 Predecessor Period.
Current report
Amortization expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $0.1 million, $2.0 million, and $2.8 million, respectively. The amortizable asset base stayed the same between the 2025 Predecessor Period and the 2026 Predecessor Period. Due to our revaluation of our intangible assets due to the application of fresh start accounting, amortization expense decreased during the 2026 Successor Period in comparison to the 2026 Predecessor Period.
Current report
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $37 thousand gain, a $0.1 million gain, and a $0.4 million loss, respectively. The change between the 2025 Predecessor Period and the 2026 Predecessor Period occurred because of sales that occurred in the 2026 Predecessor Period that did not occur in the 2025 Predecessor Period. These sales also did not occur in the following 2026 Successor Period.
Current report
Interest Expense
Current report
For the 2026 Successor Period, we recorded approximately $0.5 million in interest expense primarily related to interest associated with the Exit ABL Facility.
Current report
For the 2026 Predecessor Period, we recorded approximately $5.3 million in interest expense, which was primarily related to $4.0 million in interest and deferred financing costs associated with the 2028 Notes. On the Petition Date, we ceased recording interest expense associated with the 2028 Notes and wrote off any unamortized deferred financing costs associated with the 2028 Notes to reorganization items, net. The remaining interest expense for the 2026 Predecessor Period was primarily related to $1.0 million in interest associated with revolving credit facilities.
Current report
For the 2025 Predecessor Period, we recorded approximately $12.9 million in interest expense, which was primarily related to $11.6 million in interest and deferred financing costs associated with the 2028 Notes and $1.0 million in interest associated with revolving credit facilities.
Current report
Reorganization Items, Net
Current report
We did not record any reorganization items, net for the 2026 Successor Period.
Current report
For the 2026 Predecessor Period, we recorded approximately $124.1 million of reorganization items, net, related to our emergence from the Chapter 11 Cases, which consisted primarily of the net gain from the consummation of the Plan, partially offset by the write-off of deferred financing costs associated with the 2028 Notes, adjustments from the application of fresh start accounting, costs incurred in connection with our DIP ABL Facility and professional fees. See Note 3 – Emergence from Bankruptcy for additional information.
Current report
We did not record any reorganization items, net for the 2025 Predecessor Period.
Current report
Net Income (Loss)
Current report
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded net loss of $1.3 million, net income of $107.9 million, and net loss of $7.1 million, respectively. These net losses and net income were primarily due to the revenues and expenses discussed above.
Current report
(2)For the 2026 Successor Period, amounts relate to professional fees incurred after the Plan Effective Date in relation to the Chapter 11 Cases. For the 2026 Predecessor Period, amounts relate to professional fees incurred prior to the Petition Date in relation to the Chapter 11 Cases.
Current report
Adjusted Gross Profit (Loss)
Current report
Capital Resources Prior to and During the Chapter 11 Cases
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Removed paragraphs (58)
Previous report
•Adjusted Return on Invested Capital (“Adjusted ROIC”): We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss) as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC. For additional information, see “Non-GAAP Financial Measures” below.
Previous report
Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. During 2024, natural gas prices were extremely depressed, averaging approximately $2.19 per million British thermal units (“MMBtu”) for the year. In 2025, through the third quarter, natural gas prices have improved as compared to 2024, averaging approximately $3.45 per MMBtu for the nine months ended September 30, 2025. However, despite a more supportive natural gas price environment thus far in 2025, we have yet to see any meaningful activity increases in the natural gas-levered basins like the Haynesville and Northeast. For example, during the fourth quarter of 2024, the average rig count in the Haynesville was 31 rigs and at the end of the third quarter of 2025, the rig count was 39 rigs. Nonetheless, the long-term outlook on natural gas demand remains positive.
Previous report
As for oil prices, towards the end of 2024, we began to see West Texas Intermediate (“WTI”) oil prices decline, which was exacerbated by the announcement of new tariffs by the Trump Administration in April 2025 and OPEC communicating they would be increasing production. In the second quarter of 2025, WTI price fell below $60 per barrel for the first time in four years. Because of the decline in oil prices, as well as increased costs and market uncertainty, our customers began to decrease activity. According to Baker Hughes, from the end of the first quarter of 2025 through the end of the third quarter of 2025, 43 rigs, most of which were in the Permian Basin, came out of the U.S. market, a decline of approximately 7% compared to the number of rigs at the end of the first quarter of 2025. During the first quarter of 2025, the average WTI price was $71.78 per barrel as compared to $65.82 per barrel in the third quarter of 2025, a decline of approximately 8%.
Previous report
Due to the spot-market nature of our business, our revenue and profitability generally move very similarly to U.S. rig, frac, and stage counts, and starting in the second quarter of 2025, we began to experience activity declines as well as receive pricing pressure across all of our service lines, especially in the oil-levered basins. During the third quarter of 2025, we had full quarter realizations of these activity declines, as well as continued pricing pressure on our services, which negatively impacted both revenue and earnings. In addition to negative market impacts, our completion tools division had market share losses, which were due mostly to customer consolidation and a change in certain of our customers’ completion designs, during the quarter that negatively impacted revenue and earnings.
Previous report
The current activity and pricing environment remains challenging. Additionally, we anticipate typical seasonal slowdowns and shutdowns in the fourth quarter of 2025 related to weather, holidays, and budget exhaustion, which will negatively impact revenue and earnings. As such, we anticipate revenue and earnings in the fourth quarter of 2025 will be down compared to the third quarter of 2025.
Previous report
Revenues decreased $6.1 million, or 4%, to $132.0 million for the third quarter of 2025. The decrease in comparison to the third quarter of 2024 was primarily related to coiled tubing revenue, which decreased $4.3 million, or 15%, mainly due to volume and utilization decreases as total days worked decreased 22%, coupled with pricing reductions, each in comparison to the third quarter of 2024. In addition, although total cement job count increased 1%, total cementing revenue (including pump downs) decreased $1.9 million, or 4%, in comparison to the third quarter of 2024, primarily due to pricing reductions within the service line. In addition, tools revenue decreased $0.2 million, or 1%, as completion tools stages decreased 11%, in comparison to the third quarter of 2024. The overall decrease was partially offset by wireline revenue, which increased $0.3 million, or 1%, as total completed wireline stages increased 31%, which more than offset pricing reductions, in comparison to the third quarter of 2024.
Previous report
Cost of revenues decreased $1.7 million, or 2%, to $111.7 million for the third quarter of 2025. The decrease in comparison to the third quarter of 2024 was primarily related to a $2.2 million decrease in materials installed and consumed while performing services and a $1.3 million decrease in employee-related costs. The overall decrease was partially offset by a $0.7 million increase in repairs and maintenance costs, a $0.6 million increase in vehicle costs, and a $0.5 million increase in insurance, facility and other costs, each in comparison to the third quarter of 2024.
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Adjusted gross profit decreased approximately $4.4 million to $20.3 million for the third quarter of 2025 due to the factors described above under “Revenues” and “Cost of Revenues.”
Previous report
General and administrative expenses increased $0.4 million to $12.8 million for the third quarter of 2025. The increase was primarily related to a $0.2 million increase in professional fees and a $0.1 million increase in employee-related costs between periods.
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Depreciation expense decreased $0.5 million to $5.8 million for the third quarter of 2025. The decrease in comparison to the third quarter of 2024 was primarily related to a decrease in capital expenditures across certain lines of service over the last twelve months.
Previous report
We recorded $2.8 million in amortization of intangibles expense (comprised of technology and customer relationships) in both the third quarter of 2025 and the third quarter of 2024.
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Non-Operating (Income) Expenses
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Non-operating expenses increased $0.9 million to $13.4 million for the third quarter of 2025. The increase in comparison to the third quarter of 2024 was primarily related to a $0.5 million increase in amortization of deferred financing costs between periods, coupled with a $0.3 million increase in interest expense associated with the 2025 ABL Credit Facility (as defined below) which carries a higher interest rate than our previous 2018 ABL Credit Facility (as defined below).
Previous report
(Gain) Loss on Revaluation of Contingent Liability
Previous report
We recorded a $0.1 million loss on revaluation of contingent liability in the third quarter of 2025 compared to a $0.4 million loss on revaluation of contingent liability in the third quarter of 2024. The decreased loss was related to a decrease in the fair value of the earnout associated with our acquisition of Frac Technology AS in comparison to the third quarter of 2024.
Previous report
Loss on sale of property and equipment decreased $0.4 million for the third quarter of 2025. The decrease in comparison to the third quarter of 2024 was primarily related to losses on equipment sales in the third quarter of 2024 that did not recur in the third quarter of 2025.
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Net Income (Loss) and Adjusted EBITDA
Previous report
Net loss increased $4.5 million, or 44%, to $14.6 million for the third quarter of 2025, and Adjusted EBITDA decreased $4.6 million, or 33%, to $9.6 million for the third quarter of 2025. The changes were primarily due to the fluctuations in revenues and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.
Previous report
Results for the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Previous report
Revenues
Previous report
Revenues increased $17.1 million, or 4%, to $429.7 million for the first nine months of 2025. The increase in comparison to the first nine months of 2024 was primarily related to cementing revenue (including pump downs), which increased $13.4 million, or 9%, as total cement job count increased 16%, each in comparison to the first nine months of 2024. In addition, wireline revenue increased $7.0 million, or 8%, as total completed wireline stages increased 28%, and tools revenue increased $3.0 million, or 3%, as completion stages increased 8%, each in comparison to the first nine months of 2024. The overall increase was partially offset by coiled tubing, which decreased its revenue by $6.3 million, or 7%, in comparison to the first nine months of 2024 due to pricing pressure coupled with volume reductions as total days worked decreased by 10% between periods. Lower pricing across cementing and wireline also partially offset overall revenue increases between periods.
Previous report
Cost of revenues increased $14.1 million, or 4%, to $355.6 million for the first nine months of 2025. The increase in comparison to the first nine months of 2024 was related to a $9.8 million increase in materials installed and consumed while performing services, a $2.1 million increase in vehicle costs, a $1.6 million increase in insurance costs, and a $0.6 million increase in repair and maintenance, each in comparison to the first nine months of 2024.
Previous report
Adjusted gross profit increased approximately $2.9 million to $74.1 million for the first nine months of 2025 due to the factors described above under “Revenues” and “Cost of Revenues.”
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General and Administrative Expenses
Previous report
General and administrative expenses increased $2.8 million to $39.9 million for the first nine months of 2025. The increase was primarily related to a $2.4 million increase in employee-related costs and a $0.7 million increase in professional fees, each in comparison to the first nine months of 2024. The overall increase was partially offset by a $0.4 million decrease in marketing and other general and administrative costs between periods.
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Depreciation
Previous report
Depreciation expense decreased $2.2 million to $17.4 million for the first nine months of 2025. The decrease in comparison to the first nine months of 2024 was primarily due to a decrease in capital expenditures across certain lines of service over the last twelve months.
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Amortization of Intangibles
Previous report
We recorded $8.4 million in amortization of intangibles expense (comprised of technology and customer relationships) in both the first nine months of 2025 and the first nine months of 2024.
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Non-Operating (Income) Expenses
Previous report
Non-operating expenses increased $2.9 million to $40.2 million for the first nine months of 2025. The increase was primarily attributed to the write-off of $1.5 million of deferred financing costs associated with the 2018 ABL Credit Facility in the first nine months of 2025 that did not occur in the first nine months of 2024. The increase was also partly attributed to a $1.3 million increase in amortization of deferred financing costs in comparison to the first nine months of 2024.
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Provision (Benefit) for Income Taxes
Previous report
We recorded an income tax benefit of $0.3 million for the first nine months of 2025 compared to an income tax provision of $0.4 million for the first nine months of 2024. The difference between the periods was primarily attributed to a $0.5 million discrete income tax benefit in the first nine months of 2025 that did not occur in the first nine months of 2024.
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Net Income (Loss) and Adjusted EBITDA
Previous report
Net loss decreased $0.1 million, or less than 1%, to $32.1 million for the first nine months of 2025, and Adjusted EBITDA increased $1.2 million, or 3%, to $40.3 million for the first nine months of 2025. The changes were primarily due to the fluctuations in revenues and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.
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Adjusted Return on Invested Capital
Previous report
Adjusted ROIC is a non-GAAP financial measure. We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss), which is a non-GAAP financial measure, as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC.
Previous report
Management believes Adjusted ROIC provides useful information to us and our investors regarding our financial condition and results of operations because it quantifies how well we generate operating income relative to the capital we have invested in our business and illustrates the profitability of a business or project taking into account the capital invested. Management uses Adjusted ROIC to assist them in capital resource allocation decisions and in evaluating business performance. Although Adjusted ROIC is commonly used as a measure of capital efficiency, definitions of Adjusted ROIC differ, and our computation of Adjusted ROIC may not be comparable to other similarly titled measures of other companies.
Previous report
The following table provides our calculation of Adjusted ROIC for the three and nine months ended September 30, 2025 and 2024. The following table also presents ROIC (defined as net income (loss), divided by average total capital) and a reconciliation of the non-GAAP financial measure of adjusted after-tax net operating profit (loss) to the most directly comparable GAAP measure of net income (loss), in each case for the three and nine months ended September 30, 2025 and 2024.
Previous report
At September 30, 2025, we had $63.3 million of outstanding borrowings under the 2025 ABL Credit Facility. We also had $300.0 million aggregate principal amount of 2028 Notes outstanding as of September 30, 2025. Our ability to satisfy these obligations and our long-term liquidity requirements generally depends on our future operating performance. Our business is cyclical and depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies; the level of such activity is volatile and strongly influenced by current and expected oil and natural gas prices, general economic conditions, and other factors beyond our control.
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Previous wording
•Adjusted Gross Profit (Loss): Adjusted gross profit (loss) is a key metric that we use to evaluate operating performance. We define adjusted gross profit (loss) as revenues less direct and indirect costs of revenues (excluding depreciation and amortization). Costs of revenues include direct and indirect labor costs, costs of materials, maintenance of equipment, fuel and transportation freight costs, contract services, crew cost, and other miscellaneous expenses. For additional information, see “Non-GAAP Financial Measures” below.
Current wording
•Adjusted Gross Profit (Loss): Adjusted gross profit (loss) is a key metric that we use to evaluate operating performance. We define adjusted gross profit (loss) as revenues less direct and indirect costs of revenues (excluding depreciation and amortization). Costs of revenues include direct and indirect labor costs, costs of materials, maintenance of equipment, fuel and transportation freight costs, contract services, crew cost, and other miscellaneous expenses.
Previous wording
•Adjusted EBITDA: We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business. For additional information, see “Non-GAAP Financial Measures” below.
Current wording
•Adjusted EBITDA: We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
Previous wording
Significant factors that are likely to affect commodity prices moving forward include geopolitical and economic developments in the U.S. and globally, including conflicts, the pace of economic growth in the U.S. and throughout the world, including the potential for macro weakness; tariffs imposed by the U.S. and other countries or retaliatory trade measures; instability, acts of war or terrorism in oil producing countries or regions, particularly the Middle East, Russia, South America and Africa; actions of the members of OPEC and other oil exporting nations that relate to or impact oil production or supply; weather conditions; the effect of energy, monetary, and trade policies of the U.S.; changes to energy regulations and policies, including those of the U.S. Environmental Protection Agency and other governmental bodies; and overall North American oil and natural gas supply and demand fundamentals, including the pace at which export capacity grows. We expect that U.S. activity levels will be impacted by commodity prices and many of the same factors expected to impact commodity prices, including the production of OPEC and other oil exporting nations and governmental policies, such as tariffs. We cannot predict the scope or extent of such impacts. Furthermore, although as noted above, our customers’ activity and spending levels, and thus demand for our services and products, are strongly influenced by current and expected oil and natural gas prices, even with price improvements in oil and natural gas, operator activity may not materially increase, as operators remain focused on operating within their capital plans and uncertainty remains around supply and demand fundamentals.
Current wording
Significant factors that are likely to affect commodity prices moving forward include geopolitical and economic developments in the U.S. and globally, including conflicts, instability, acts of war or terrorism in oil-producing countries or regions, particularly Iran and elsewhere in the Middle East, Russia, South America and Africa; the pace of economic growth in the U.S. and throughout the world, including the potential for macro weakness; tariffs imposed by the U.S. and other countries or retaliatory trade measures; actions of the members of OPEC and other oil-exporting nations that relate to or impact oil production or supply; weather conditions; the effect of energy, monetary, and trade policies of the U.S.; changes to energy regulations and policies, including those of the U.S. Environmental Protection Agency and other governmental bodies; and overall North American oil and natural gas supply and demand fundamentals, including the pace at which export capacity grows. We expect that U.S. activity levels will be impacted by commodity prices and many of the same factors expected to impact commodity prices, including the production of OPEC and other oil-exporting nations and governmental policies, such as tariffs. We cannot predict the scope or extent of such impacts. Furthermore, although as noted above, our customers’ activity and spending levels, and thus demand for our services and products, are strongly influenced by current and expected oil and natural gas prices, even with price improvements in oil and natural gas, operator activity may not materially increase, as operators remain focused on operating within their capital plans and uncertainty remains around supply and demand fundamentals.
Previous wording
Results for the Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Current wording
For the three months ended March 31, 2025 (the “2025 Predecessor Period”), revenues were $150.5 million. For the 2025 Predecessor Period, total cementing revenue (including pump downs) was $57.2 million, with utilization at 105%; tools revenue was $33.8 million, with completion tools stages of approximately 29,000; coiled tubing revenue was $29.9 million, with total days worked of approximately 670 days; and wireline revenue was $29.6 million, with total completed wireline stages of approximately 7,700 stages.
Previous wording
We recorded an income tax provision of $0.1 million for both the third quarter of 2025 and the third quarter of 2024. The income tax provision for both periods is related to our income tax position in state and foreign tax jurisdictions.
Current wording
For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $0.1 million benefit, $0.1 million provision, and $0.1 million provision, respectively. The income tax for all periods is related to our income tax position and state foreign tax jurisdictions.
Previous wording
Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) or as an indicator of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computation of Adjusted
Current wording
Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) or as an indicator of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
Previous wording
The following table presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss) for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss):
Previous wording
The following table presents a reconciliation of adjusted gross profit (loss) to GAAP gross profit (loss) for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents a reconciliation of adjusted gross profit (loss) to GAAP gross profit (loss):
Previous wording
Historically, we have met our liquidity needs principally from cash on hand, cash flows from operations and, if needed, external borrowings and issuances of debt and equity securities. We continually monitor potential capital sources, including equity and debt financing, to meet our investment and target liquidity requirements. Our future success and growth will be highly dependent on our ability to continue to access outside sources of capital, which we cannot guarantee. Our principal uses of cash are to fund capital expenditures, service our outstanding debt, and fund our working capital requirements. Due to our high level of variable costs and the asset-light make-up of our business, we have historically been able to quickly implement cost-cutting measures. For example, in 2024, we implemented certain cost reduction and supply chain initiatives. These ongoing initiatives have helped reduce some of our largest material costs, and starting at the end of the second quarter of 2024, we began to see positive impacts, that have continued into 2025, on our earnings as a result of such efforts.
Current wording
Historically, we have met our liquidity needs principally from cash on hand, cash flows from operations and, if needed, external borrowings and issuances of debt and equity securities. Our principal uses of cash are to fund capital expenditures, service our outstanding debt, and fund our working capital requirements. Due to our high level of variable costs and the asset-light make-up of our business, we have historically been able to quickly implement cost-cutting measures as the market dictates.
Previous wording
For 2025, our planned capital expenditure budget, excluding possible acquisitions, is expected to be between $15 million and $25 million. The nature of our capital expenditures is comprised of a base level of investment required to support our current operations and amounts related to growth and company initiatives. Capital expenditures for growth and company initiatives are discretionary. We continually evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including expected industry activity levels and company initiatives. Although we do not budget for acquisitions, pursuing growth through acquisitions may continue to be a part of our business strategy. Our ability to make significant additional acquisitions for cash will require us to obtain additional equity or debt financing, which we may not be able to obtain on terms acceptable to us or at all.
Current wording
For 2026, our planned capital expenditure budget, excluding possible acquisitions, is currently expected to be between $20.0 million to $30.0 million. The nature of our capital expenditures is comprised of a base level of investment required to support our current operations and amounts related to growth and company initiatives. Capital expenditures for growth and company initiatives are discretionary. We continually evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including expected industry activity levels and company initiatives. Although we do not budget for acquisitions, pursuing growth through acquisitions may continue to be a part of our business strategy. Our ability to make significant additional acquisitions for cash may require us to obtain additional equity or debt refinancing, which we may not be able to obtain on terms acceptable to us or at all.
Previous wording
At September 30, 2025, we had $14.4 million of cash and cash equivalents and $25.9 million of availability under the 2025 ABL Credit Facility, which resulted in a total liquidity position of $40.3 million. As a result of the current commodity price environment and its impact on our inventory’s appraised value, we currently expect our borrowing base under the 2025 ABL Credit Facility will be reduced by approximately $2.2 million as of October 31, 2025 and will be further reduced by approximately $2.2 million on each of November 30, 2025, December 31, 2025, and January 31, 2026, which would reduce our availability thereunder and our total liquidity position by such amounts. Future increases or decreases in our inventory’s appraised value would increase or decrease, respectively, our borrowing base. Our next inventory appraisal is currently expected to be conducted by mid-December 2025 and could increase or decrease our borrowing base as of December 31, 2025. The availability under the 2025 ABL Credit Facility could also be reduced in the future if the agent thereunder (the “Agent”) establishes reserves against the borrowing base or the Maximum Revolving Facility Amount (as defined below); the Agent may from time to time establish and revise such reserves in such amounts as the Agent, using reasonable business judgment exercised in good faith, deems appropriate, subject to the terms of the 2025 ABL Credit Agreement (as defined below). Also, as in the past, we expect our total liquidity position to be materially impacted by the semi-annual interest payments ($19.5 million each, based on amounts outstanding as of September 30, 2025) to the holders of the 2028 Notes (as defined below). Our liquidity position will also be impacted by our operating performance (which is subject to general economic conditions and other factors, many of which are beyond our control, including those discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and this Quarterly Report on Form 10-Q) and may also be adversely impacted by our vendors’ or customers’ actions (e.g., if our vendors were to require earlier payment from us or if our customers were to delay payment to us). Based on our current forecasts, we believe that our cash on hand, together with cash flows from operations and borrowings under the 2025 ABL Credit Facility, should be sufficient to meet our cash requirements, including for normal operating needs, debt service obligations, and planned capital expenditures and commitments, for at least the next twelve months from the issuance date of our condensed consolidated financial statements. However, we can make no assurance regarding our ability to achieve our forecasts, which are materially dependent on our improved financial performance and the ever-changing market.
Current wording
Based on our current forecasts, we believe that our cash on hand, together with cash flows from operations and borrowings under the Exit ABL Facility, should be sufficient to meet our cash requirements, including for normal operating needs, debt service obligations, and planned capital expenditures and commitments, for at least the next twelve months from the issuance date of our condensed consolidated financial statements. However, we can make no assurance regarding our ability to achieve our forecasts, which are materially dependent on our improved financial performance and the ever-changing market.
Previous wording
On May 1, 2025, we entered into a Loan and Security Agreement (the “2025 ABL Credit Agreement”) with White Oak Commercial Finance, LLC, as the Agent, and the lenders from time to time party thereto. The 2025 ABL Credit Agreement provides for an asset-based revolving credit facility (the “2025 ABL Credit Facility”) with lender commitments of $125.0 million (the “Maximum Revolving Facility Amount”) and a sub-limit of $5.0 million for letters of credit, which will mature on the earlier of (i) May 1, 2028 and (ii) the date that is 91 days prior to the maturity date of the 2028 Notes. The outstanding balance of the borrowings under the 2025 ABL Credit Facility may not exceed in the aggregate at any time the lesser of (a) the Maximum Revolving Facility Amount reduced by certain customary reserves and (b) the borrowing base, which is calculated on the basis of eligible accounts and inventory. The Maximum Revolving Facility Amount could increase from time to time pursuant to an uncommitted accordion by an aggregate amount for all such increases not to exceed $50.0 million. Borrowings under the 2025 ABL Credit Facility bear interest at a per annum rate equal to the term-specific Secured Overnight Financing Rate (SOFR) for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00% to 4.50%, depending on our fixed charge coverage ratio.
Current wording
Borrowings under the DIP ABL Facility bore interest at a per annum rate equal to the term-specific Secured Overnight Financing Rate (“SOFR”) for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00%.
Previous wording
The 2025 ABL Credit Agreement contains customary representations and warranties, events of default, and various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the 2025 ABL Credit Agreement contains a financial covenant requiring a minimum fixed charge ratio of 1.10 to 1.00 that is tested quarterly when the availability under the 2025 ABL Credit Facility is less than $10.0 million. This financial covenant applies until the availability exceeds such threshold for 30 consecutive days. We were in compliance with all covenants contained in the 2025 ABL Credit Agreement as of September 30, 2025.
Current wording
The Exit Loan and Security Agreement contains certain representations and warranties, events of default, and various affirmative and negative covenants that are customary for asset-based credit facilities of this type, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, and investments (including acquisitions). In addition, the Exit Loan and Security Agreement contains certain financial covenants, including a minimum excess availability of not less than $5.0 million and a minimum fixed charge coverage ratio of 1.10 to 1.00 that will be tested when the excess availability under the Exit ABL Facility is less than the lesser of (a) 7.5% of the lesser of (x) the Exit Maximum Revolving Facility Amount minus reserves and (y) the borrowing base and (b) $9.0 million, which minimum fixed charge coverage ratio would apply until the excess availability is greater than or equal to such threshold for a period of 30 consecutive days.
Previous wording
Cash flows provided by (used in) operations by type of activity were as follows for the nine months ended September 30, 2025 and 2024:
Current wording
Cash flows provided by (used in) operations by type of activity were as follows:
Previous wording
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Our critical accounting estimates, which are estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations, are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our critical accounting estimates as described therein.
Current wording
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Our critical accounting estimates, which are estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations, are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 2 – Basis of Presentation and Note 3 – Emergence from Bankruptcy in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Previous wording
See Note 3 – New Accounting Standards included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a summary of recently issued accounting pronouncements.
Current wording
See Note 2 – Basis of Presentation included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a summary of recently issued accounting pronouncements.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The DIP Loan and Security Agreement contained certain representations and warranties, events of default, and various affirmative and negative covenants that were customary for debtor-in-possession loan agreements of this type, including limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the DIP Loan and Security Agreement contained certain financial covenants, including a minimum excess availability of not less than $5.0 million.
Current report — wording carried from elsewhere
Borrowings under the Exit ABL Facility bear interest at a per annum rate equal to the term-specific SOFR for an interest period of one month, subject to a 1.50% floor, plus an applicable margin ranging from 3.50% to 4.00%, depending on our fixed charge coverage ratio, subject to an additional margin of 0.50% with respect to any revolving loans or letters of credit utilizing any of M&E Availability, Real Property Availability, SOFA Availability, and/or Foreign Accounts Availability.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Cost of Revenues (Exclusive of Depreciation and Amortization)
Previous report — wording carried elsewhere
EBITDA may not be comparable to other similarly titled measures of other companies.
Previous report — wording carried elsewhere
The 2018 ABL Credit Agreement, as amended by the 2018 ABL Facility Amendments, contained various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions) and transactions with affiliates.