Nine Energy Service, Inc.

Previous wording

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 the second quarter of 2026, oil prices remained elevated relative to 2025 (during which the average West Texas Intermediate (“WTI”) price was $65.39 per barrel), driven in large part by geopolitical events and uncertainty surrounding global supply. WTI prices averaged $100.32 and $102.13 per barrel for April 2026 and May 2026, respectively; however, WTI prices declined to an average of $84.81 per barrel for June 2026 following the memorandum of understanding between the U.S. and Iran to end the conflict and reopen the Strait of Hormuz. Despite the elevated oil price environment during much of the second quarter of 2026, U.S. activity levels increased only modestly. At the end of the first quarter of 2026 (during which the average WTI price was $72.74 per barrel), the U.S. rig count was 543 rigs, and at the end of the second quarter of 2026, the U.S. rig count was 573 rigs. The increase in rig count during the second quarter was concentrated primarily in the latter part of the quarter, and operators continued to remain disciplined with capital spending despite higher commodity prices.

Current wording

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 the third quarter of 2026, oil prices remained elevated relative to 2025 (during which the average West Texas Intermediate (“WTI”) price was $65.39 per barrel), driven in large part by geopolitical events and uncertainty surrounding global supply. WTI prices averaged $80.46 and $83.90 per barrel for July 2026 and August 2026, respectively, and rose to an average of $97.31 per barrel for September 2026. As a result of sustained elevated oil prices, we have started to see U.S. activity levels modestly increase starting in the second quarter of 2026 and continuing into the third quarter of 2026. At the end of the second quarter of 2026, the U.S. rig count was 573 rigs, and at the end of the third quarter of 2026, the U.S. rig count was 599 rigs.

Previous wording

Natural gas prices have remained stable throughout the quarter, averaging $2.95 per million British thermal units (“MMBtu”) for the second quarter of 2026 compared to around $3.00 per MMBtu at the end of the first quarter of 2026. As a result, rig counts in natural gas-levered basins like the Haynesville Basin remained stable as well during the quarter. The Haynesville Basin had a total of 55 rigs at the end of the first quarter of 2026 and maintained the same rig count at the end of the second quarter of 2026. 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 wording

Natural gas prices experienced a slight decline throughout the quarter, averaging $2.87 per million British thermal units (“MMBtu”) for the third quarter of 2026 compared to an average of $2.95 per MMBtu for the second quarter of 2026. Rig counts in natural gas-levered basins like the Haynesville Basin remained stable during the quarter. The Haynesville Basin had a total of 55 rigs at the end of the second quarter of 2026 and a total of 56 rigs at the end of the third quarter of 2026. 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.

Previous wording

For the three months ended June 30, 2026 (the “2026 Successor Quarter”), revenues were $141.8 million. For the 2026 Successor Quarter, total cementing revenue (including pump downs) was $55.3 million, with utilization at 96%; tools revenue was $37.1 million, with completion tools stages of approximately 28,000 stages; coiled tubing revenue was $26.4 million, with total days worked of approximately 785 days; and wireline revenue was $23.0 million, with total completed wireline stages of approximately 6,400 stages.

Current wording

For the three months ended September 30, 2026 (the “2026 Successor Quarter”), revenues were $142.0 million. For the 2026 Successor Quarter, total cementing revenue (including pump downs) was $61.1 million, with utilization at 106%; tools revenue was $31.3 million, with completion tools stages of approximately 23,800 stages; wireline revenue was $25.0 million, with total completed wireline stages of approximately 6,600 stages; and coiled tubing revenue was $24.6 million, with total days worked of approximately 602 days.

Previous wording

For the three months ended June 30, 2025 (the “2025 Predecessor Quarter”), revenues were $147.3 million. For the 2025 Predecessor Quarter, total cementing revenue (including pump downs) was $52.2 million, with utilization at 88%; tools revenue was $37.0 million, with completion tools stages of approximately 30,300; wireline revenue was $33.0 million, with total completed wireline stages of approximately 8,600 stages; and coiled tubing revenue was $25.1 million, with total days worked of approximately 515 days.

Current wording

For the three months ended September 30, 2025 (the “2025 Predecessor Quarter”), revenues were $132.0 million. For the 2025 Predecessor Quarter, total cementing revenue (including pump downs) was $49.3 million, with utilization at 84%; tools revenue was $31.2 million, with completion tools stages of approximately 22,100; wireline revenue was $28.1 million, with total completed wireline stages of approximately 8,300 stages; and coiled tubing revenue was $23.4 million, with total days worked of approximately 458 days.

Previous wording

Cost of revenues for the 2025 Predecessor Quarter was $121.4 million. These costs included $65.8 million in costs related to materials installed and consumed while performing services, $40.0 million in employee-related costs, and $15.6 million in vehicle, repair and maintenance, travel, facility, and other costs.

Current wording

Cost of revenues for the 2026 Successor Quarter was $121.4 million. These costs included $65.4 million in costs related to materials installed and consumed while performing services, $38.9 million in employee-related costs, and $17.1 million in vehicle, repair and maintenance, travel, facility, and other costs.

Previous wording

Depreciation expense for the 2026 Successor Quarter and the 2025 Predecessor Quarter was $7.0 million and $5.8 million, respectively. As a result of our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Quarter in comparison to the 2025 Predecessor Quarter.

Current wording

Depreciation expense for the 2026 Successor Quarter and the 2025 Predecessor Quarter was $7.2 million and $5.8 million, respectively. As a result of our revaluation of our property and equipment due to the application of fresh start accounting, depreciation expense increased during the 2026 Successor Quarter in comparison to the 2025 Predecessor Quarter.

Previous wording

For the 2025 Predecessor Quarter, we recorded $14.7 million in interest expense, which was primarily related to $11.7 million in interest and amortized deferred financing costs associated with the 2028 Notes, $1.5 million in the write-off of unamortized deferred financing costs associated with a prior revolving credit facility, and $1.4 million in interest and amortized deferred financing costs associated with revolving credit facilities.

Current wording

For the 2025 Predecessor Quarter, we recorded $13.7 million in interest expense, which was primarily related to $11.8 million in interest and amortized deferred financing costs associated with the 2028 Notes and $1.8 million in interest and amortized deferred financing costs associated with the Prepetition ABL Facility (as defined and described in Note 9 – Debt Obligations).

Previous wording

We recorded a $0.4 million income tax provision for the 2026 Successor Quarter and a $0.5 million income tax benefit for the 2025 Predecessor Quarter. The $0.4 million income tax provision for the 2026 Successor Quarter was primarily related to our income tax position and state foreign tax jurisdictions. The $0.5 million income tax benefit for the 2025 Predecessor Quarter was primarily related to a discrete income tax benefit.

Current wording

We recorded a $0.1 million income tax provision for both the 2026 Successor Quarter and the 2025 Predecessor Quarter. The $0.1 million income tax provision for both the 2026 Successor Quarter and the 2025 Predecessor Quarter was primarily related to our income tax position in state and foreign tax jurisdictions.

Previous wording

For the 2026 Successor Quarter and the 2025 Predecessor Quarter, we recorded a net loss of $4.9 million and a net loss of $10.4 million, respectively. These net losses were primarily due to the revenues and expenses discussed above.

Current wording

For the 2026 Successor Quarter and the 2025 Predecessor Quarter, we recorded a net loss of $5.1 million and a net loss of $14.6 million, respectively. These net losses were primarily due to the revenues and expenses discussed above.

Previous wording

For the period from March 6, 2026 through June 30, 2026 (the “2026 Successor Period”), revenues were $183.4 million. For the 2026 Successor Period, total cementing revenue (including pump downs) was $72.8 million, with utilization at 94%; tools revenue was $45.6 million, with completion tools stages of approximately 35,500 stages; coiled tubing revenue was $34.6 million, with total days worked of approximately 1,000 days; and wireline revenue was $30.4 million, with total completed wireline stages of approximately 8,700 stages.

Current wording

For the period from March 6, 2026 through September 30, 2026 (the “2026 Successor Period”), revenues were $325.4 million. For the 2026 Successor Period, total cementing revenue (including pump downs) was $134.0 million, with utilization at 100%; tools revenue was $76.9 million, with completion tools stages of approximately 59,300 stages; coiled tubing revenue was $59.1 million, with total days worked of approximately 1,600 days; and wireline revenue was $55.4 million, with total completed wireline stages of approximately 15,300 stages.

Previous wording

General and administrative expenses for the 2026 Predecessor Period was $13.1 million. These expenses primarily included $6.0 million in professional fees, $5.3 million in employee-related costs, and $1.8 million in communications, vehicle, travel, and other costs.

Current wording

General and administrative expenses for the 2026 Predecessor Period were $13.1 million. These expenses primarily included $6.0 million in professional fees, $5.3 million in employee-related costs, and $1.8 million in communications, vehicle, travel, and other costs.

Previous wording

General and administrative expenses for the 2025 Predecessor Period was $27.1 million. These expenses primarily included $18.3 million in employee-related costs, $3.5 million in professional fees, and $5.3 million in communications, marketing, vehicle, travel, and other costs.

Current wording

General and administrative expenses for the 2025 Predecessor Period were $39.9 million. These expenses primarily included $27.5 million in employee-related costs, $5.3 million in professional fees, and $7.1 million in communications, marketing, vehicle, travel, and other costs.

Previous wording

Depreciation expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $9.2 million, $4.0 million, and $11.6 million, respectively. As a result of 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.

Current wording

Depreciation expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $16.5 million, $4.0 million, and $17.4 million, respectively. As a result of 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.

Previous wording

Amortization expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $0.3 million, $2.0 million, and $5.6 million, respectively. The amortizable asset base stayed the same between the 2025 Predecessor Period and the 2026 Predecessor Period. As a result of 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 wording

Amortization expense for the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, was $0.5 million, $2.0 million, and $8.4 million, respectively. The amortizable asset base stayed the same between the 2025 Predecessor Period and the 2026 Predecessor Period. As a result of 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.

Previous wording

For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $60 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 recur in the following 2026 Successor Period.

Current wording

For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a $42 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 recur in the following 2026 Successor Period.

Previous wording

For the 2026 Successor Period, we recorded approximately $2.4 million in interest expense primarily related to interest associated with the Exit ABL Facility.

Current wording

For the 2026 Successor Period, we recorded approximately $4.3 million in interest expense primarily related to interest associated with the Exit ABL Facility.

Previous wording

For the 2025 Predecessor Period, we recorded approximately $27.6 million in interest expense, which was primarily related to $23.3 million in interest and amortized deferred financing costs associated with the 2028 Notes, $2.5 million in interest and amortized deferred financing costs associated with revolving credit facilities and $1.5 million in the write-off of unamortized deferred financing costs associated with a prior revolving credit facility.

Current wording

For the 2025 Predecessor Period, we recorded approximately $41.3 million in interest expense, which was primarily related to $35.1 million in interest and amortized deferred financing costs associated with the 2028 Notes, $4.3 million in interest and amortized deferred financing costs associated with revolving credit facilities, and $1.5 million in the write-off of unamortized deferred financing costs associated with a prior revolving credit facility.

Previous wording

We recorded a $0.3 million income tax provision for the 2026 Successor Period, a $0.1 million income tax provision for the 2026 Predecessor Period, and a $0.3 million income tax benefit for the 2025 Predecessor Period. The $0.3 million income tax provision for the 2026 Successor Period and the $0.1 million income tax provision for the 2026 Predecessor Period was primarily related to our income tax position and state foreign tax jurisdictions. The $0.3 million income tax benefit for the 2025 Predecessor Period was primarily related to a discrete income tax benefit.

Current wording

We recorded a $0.4 million income tax provision for the 2026 Successor Period, a $0.1 million income tax provision for the 2026 Predecessor Period, and a $0.3 million income tax benefit for the 2025 Predecessor Period. The $0.4 million income tax provision for the 2026 Successor Period and the $0.1 million income tax provision for the 2026 Predecessor Period were primarily related to our income tax position in state and foreign tax jurisdictions. The $0.3 million income tax benefit for the 2025 Predecessor Period was primarily related to a discrete income tax benefit.

Previous wording

For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a net loss of $6.1 million, net income of $107.9 million, and a net loss of $17.5 million, respectively. These net losses and net income were primarily due to the revenues and expenses discussed above.

Current wording

For the 2026 Successor Period, the 2026 Predecessor Period, and the 2025 Predecessor Period, we recorded a net loss of $11.2 million, net income of $107.9 million, and a net loss of $32.1 million, respectively. These net losses and net income were primarily due to the revenues and expenses discussed above.

Previous wording

At June 30, 2026, we had $97.3 million of outstanding borrowings under the Exit ABL Facility. At June 30, 2026, we had $16.8 million of cash and cash equivalents and $30.0 million of availability under the Exit ABL Facility, which resulted in a total liquidity position of $46.8 million. For additional information on the Exit ABL Facility, see Note 9 – Debt Obligations included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Current wording

At September 30, 2026, we had $98.7 million of outstanding borrowings under the Exit ABL Facility. At September 30, 2026, we had $16.1 million of cash and cash equivalents and $29.9 million of availability under the Exit ABL Facility, which resulted in a total liquidity position of $46.0 million. For additional information on the Exit ABL Facility, see Note 9 – Debt Obligations included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Previous wording

Net cash used in operating activities was $4.7 million for the 2026 Successor Period, which resulted from a net loss of $6.1 million, adjusted for non-cash items of $16.9 million and net cash outflows of $15.5 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $9.5 million, amortization of operating leases of $4.7 million, and amortization of deferred financing costs of $2.0 million. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $12.5 million due to the timing of customer invoices and payments, a decrease in operating lease obligations of $3.9 million, and a decrease in accounts payable and accrued expense of $2.3 million due to the timing of vendor invoices and payments. The net cash outflows were partially offset by a decrease in prepaids and other current assets of $1.5 million and a decrease in inventories, net of $1.4 million due to timing of payments.

Current wording

Net cash provided by operating activities was one thousand dollars for the 2026 Successor Period, which resulted from a net loss of $11.2 million, adjusted for non-cash items of $31.7 million and net cash outflows of $20.4 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $17.0 million, amortization of operating leases of $8.3 million, amortization of deferred financing costs of $4.1 million, and $1.8 million of stock-based compensation. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $12.9 million due to the timing of customer invoices and payments, a decrease in operating lease obligations of $7.6 million due to timing of payments, and an increase in inventories, net of $6.9 million. The net cash outflows were partially offset by a decrease in prepaid expenses and other current assets of $3.8 million as well as an increase in accounts payable and accrued expenses of $2.9 million due to the timing of vendor invoices and payments.

Previous wording

Net cash used in operating activities was $10.0 million for the 2026 Predecessor Period, which resulted from net income of $107.9 million, adjusted for non-cash items of $123.6 million and net cash inflows of $5.7 million from changes in working capital. Non-cash items primarily consisted of non-cash income from reorganization items, net, of $139.2 million, depreciation and amortization expense of $5.9 million, amortization of operating leases of $2.9 million, non-cash inventory provisions of $2.5 million, and amortization of deferred financing costs of $2.4 million. The net cash inflow from changes in working capital was driven primarily by an increase in accounts payable and accrued expenses of $8.9 million due to the timing of vendor invoices and payments, as well as a decrease in inventories, net of $2.1 million and a decrease in prepaids and other current assets of $1.7 million due to timing of payments. The net cash inflows were partially offset by a decrease in operating lease obligations of $3.7 million and an increase in accounts receivable of $3.2 million due to timing of customer invoices and payments.

Current wording

Net cash used in operating activities was $10.0 million for the 2026 Predecessor Period, which resulted from net income of $107.9 million, adjusted for non-cash items of $123.6 million and net cash inflows of $5.7 million from changes in working capital. Non-cash items primarily consisted of non-cash income from reorganization items, net, of $139.2 million, depreciation and amortization expense of $5.9 million, amortization of operating leases of $2.9 million, non-cash inventory provisions of $2.5 million, amortization of deferred financing costs of $2.4 million, and $1.9 million of stock-based compensation. The net cash inflow from changes in working capital was driven primarily by an increase in accounts payable and accrued expenses of $8.9 million due to the timing of vendor invoices and payments, as well as a decrease in inventories, net of $2.1 million and a decrease in prepaid expenses and other current assets of $1.7 million due to timing of payments. The net cash inflows were partially offset by a decrease in operating lease obligations of $3.7 million and an increase in accounts receivable of $3.2 million due to timing of customer invoices and payments.

Previous wording

Net cash provided by operating activities was $4.8 million for the 2025 Predecessor Period, which resulted from a net loss of $17.5 million, adjusted for non-cash items of $33.6 million and net cash outflows of $11.3 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $17.2 million, amortization of operating leases of $7.1 million, and amortization of deferred financing costs of $6.3 million. The net cash outflow from changes in working capital was driven primarily by an increase in accounts receivable of $12.8 million due to the timing of customer invoices and payments, a decrease in operating lease obligations of $7.1 million and an increase of inventories, net of $4.3 million. The net cash outflows were partially offset by an increase in accounts payable and accrued expenses of $12.6 million due to the timing of vendor invoices and payments.

Current wording

Net cash used in operating activities was $5.1 million for the 2025 Predecessor Period, which resulted from a net loss of $32.1 million, adjusted for non-cash items of $50.9 million and net cash outflows of $23.9 million from changes in working capital. Non-cash items primarily consisted of depreciation and amortization expense of $25.8 million, amortization of deferred financing costs of $11.1 million, amortization of operating leases of $10.2 million, stock-based compensation expense of $1.8 million, and non-cash inventory provisions of $1.4 million. The net cash outflow from changes in working capital was driven primarily by a decrease in operating lease obligations of $11.0 million, an increase in inventories, net of $7.2 million, and a decrease in accounts payable and accrued expenses of $6.9 million due to the timing of vendor invoices and payments. The net cash outflows were partially offset by a decrease in prepaid expenses and other current assets of $2.2 million.

Previous wording

Net cash used in investing activities was $7.3 million for the 2026 Successor Period primarily due to cash purchases of property and equipment of $7.5 million, which were partially offset by $0.2 million in proceeds from sales of property and equipment.

Current wording

Net cash used in investing activities was $11.3 million for the 2026 Successor Period primarily due to cash purchases of property and equipment of $11.5 million, which were partially offset by $0.2 million in proceeds from sales of property and equipment.

Previous wording

Net cash used in investing activities was $9.7 million for the 2025 Predecessor Period and consisted of $9.8 million of cash purchases of property and equipment, which were partially offset by $0.1 million of proceeds from sales of property and equipment.

Current wording

Net cash used in investing activities was $13.2 million for the 2025 Predecessor Period and primarily consisted of $13.3 million of cash purchases of property and equipment, which were partially offset by $0.2 million of proceeds from sales of property and equipment.

Previous wording

Net cash provided by financing activities was $1.8 million for the 2026 Successor Period and primarily consisted of $5.0 million in proceeds from the Exit ABL Facility, which were partially offset by $3.1 million in payments on other short-term debt.

Current wording

Net cash provided by financing activities was $0.2 million for the 2026 Successor Period and primarily consisted of $5.0 million in proceeds from the Exit ABL Facility, which were partially offset by $4.8 million in payments on other short-term debt.

Previous wording

Net cash used in financing activities was $5.5 million for the 2025 Predecessor Period and primarily consisted of $51.0 million of payments on revolving credit facilities, $4.5 million of debt issuance costs, $2.7 million in payments on other short-term debt, and $0.2 million in payments of contingent liabilities, which were partially offset by $52.9 million of proceeds from revolving credit facilities.

Current wording

Net cash provided by financing activities was $6.6 million for the 2025 Predecessor Period and primarily consisted of $65.9 million of proceeds from revolving credit facilities, which was partially offset by $51.0 million of payments on revolving credit facilities, $4.6 million of debt issuance costs, $3.6 million in payments on other short-term debt, and $0.2 million in payments of contingent liabilities.