Business Context and Reporting Period
Company: Nine Energy Service, Inc. (Nine)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal Year Ended December 31, 2025
Business Overview: Nine is a leading North American onshore completion services provider targeting unconventional oil and gas resource development. Services include cementing, completion tools (dissolvable, composite, and hybrid plugs), wireline, and coiled tubing.
Current Status: On February 1, 2026, the Company filed voluntary Chapter 11 bankruptcy petitions to implement a prepackaged plan of reorganization. The Bankruptcy Court confirmed the Plan on March 4, 2026, with an anticipated emergence date of March 5, 2026. The Company's common stock was delisted from the NYSE and is trading on the OTC Pink market under the symbol "NINEQ."
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 |
|---|---|---|
| Revenues | $561.9 million | $554.1 million |
| Net Loss | $(51.3) million | $(41.1) million |
| Adjusted EBITDA | $49.4 million | $53.2 million |
| Operating Cash Flow | $(7.3) million | $13.2 million |
| Total Debt (Prepetition) | $369.6 million | $350.6 million |
| Cash and Equivalents | $18.4 million | $27.9 million |
| Stockholders' Deficit | $(115.0) million | $(66.1) million |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 1% ($7.8 million) driven by a 6% increase in cementing revenue and a 4% increase in wireline revenue. These gains were partially offset by a 6% decline in coiled tubing revenue and a 1% decline in tools revenue due to product mix changes and market share losses.
- Profitability Decline: Net loss widened by 25% to $51.3 million. Operating income dropped 74% to $2.3 million due to increased General and Administrative (G&A) expenses and higher cost of revenues.
- Expense Increases: G&A expenses rose 16% ($8.4 million), primarily due to $4.5 million in employee retention payments and $2.7 million in professional fees related to the Chapter 11 restructuring.
- Cash Flow Deterioration: Operating cash flow swung from positive $13.2 million in 2024 to negative $7.3 million in 2025, driven by a $12.9 million decrease in cash provided by working capital (increased inventory) and higher net losses.
- Debt Structure: The Company refinanced its 2018 ABL facility in May 2025 with a new Prepetition ABL Facility. As of Dec 31, 2025, outstanding debt included $300 million in 2028 Notes and $63.3 million under the Prepetition ABL Facility.
Guidance, Outlook, and Risks
Bankruptcy and Restructuring Plan:
- Equity Cancellation: The Plan contemplates the cancellation of all existing common stock for no consideration. Current shareholders are expected to receive no recovery.
- Capital Restructuring: Holders of the 2028 Notes will receive 100% of the new common equity of the Reorganized Company. The 2028 Notes will be canceled.
- Financing: The Company secured a $125 million Debtor-in-Possession (DIP) ABL Facility, which is expected to convert to a $135 million Exit ABL Facility upon emergence.
- Going Concern: The filing raises substantial doubt about the Company's ability to continue as a going concern without successful implementation of the Plan.
Outlook and Risks:
- Market Conditions: The Company anticipates U.S. activity levels to be relatively flat compared to 2025 exit levels. Q1 2026 revenue and earnings are expected to be down due to weather-related inefficiencies and restructuring costs.
- Commodity Prices: Business is highly sensitive to oil and natural gas prices. WTI oil prices declined in late 2025, leading to reduced customer activity and pricing pressure.
- Operational Risks: Risks include the potential failure to consummate the Plan, inability to meet DIP facility covenants, loss of key personnel, and customer/vendor reluctance to do business with a bankrupt entity.
Investor Verification Checklist
- Plan Confirmation Status: Verify the final confirmation of the Plan of Reorganization and the exact Plan Effective Date (anticipated March 5, 2026).
- Equity Value: Confirm the total cancellation of existing common stock and the specific exchange ratio or terms for the new equity issued to 2028 Noteholders.
- Liquidity Position: Monitor the utilization of the $125 million DIP facility and the Company's ability to meet the $5.0 million minimum excess availability covenant.
- Operational Continuity: Assess customer retention rates and vendor payment terms post-filing to gauge business disruption.
- Debt Obligations: Review the terms of the Exit ABL Facility, including interest rates (SOFR + margin) and restrictive covenants post-emergence.