NINE

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026, for Nine Energy Service, Inc. (Nine), a leading completion services provider for unconventional oil and gas wells. The reporting period is bifurcated due to the Company's emergence from Chapter 11 bankruptcy on March 5, 2026 (the "Plan Effective Date"). Financial results are presented as the "Successor" (post-bankruptcy) and "Predecessor" (pre-bankruptcy) entities. The Company operates as a single reportable segment, Completions Solutions, offering cementing, coiled tubing, wireline, and completion tools.

Key Financial Metrics

Note: Successor Q2 2026 represents the three months ended June 30, 2026. Successor YTD 2026 represents the period from March 6, 2026, through June 30, 2026.

Material Changes vs. Prior Period

• Revenue Decline: Q2 2026 revenues decreased 3.7% to $141.8 million compared to $147.3 million in Q2 2025. Wireline revenue dropped significantly ($23.0M vs $33.0M), while Cementing revenue increased ($55.3M vs $52.2M).
• Profitability Improvement: Net loss narrowed to $4.9 million in Q2 2026 from $10.4 million in Q2 2025. This improvement was driven by a substantial reduction in interest expense ($1.9M vs $14.7M) following the debt restructuring.
• Balance Sheet Restructuring: Total debt was reduced from $369.6 million (Predecessor) to $99.0 million (Successor). The $300 million 2028 Notes were canceled and converted into equity. The Company now operates under a new $135 million Exit ABL Facility.
• Asset Revaluation: Due to fresh start accounting, Property and Equipment increased by $45.5 million and Intangible Assets were written down by $56.9 million to reflect fair value at the Plan Effective Date.

Guidance, Outlook, and Risks

Outlook: Management anticipates the average U.S. rig count in Q3 2026 to be relatively flat to slightly up compared to Q2. However, revenue and profitability for Q3 are expected to be flat to modestly lower than Q2 due to sustained revenue loss from a coiled tubing unit under repair and ongoing cost inflation.

Management Commentary: Despite elevated oil prices in Q2, operator activity remained disciplined. The Company faced margin compression in coiled tubing due to maintenance issues with two large-diameter units and inflationary pressures on labor and consumables.

Risks and Contingencies:

• Commodity Price Volatility: Business is highly cyclical and dependent on oil and natural gas prices and capital spending by E&P customers.
• Operational Disruptions: Two coiled tubing units were out of service in Q2; one returned in Q3, but the second remains under repair until year-end.
• Litigation: A pending patent infringement lawsuit regarding the Breakthru Casing Flotation Device has a $2.7 million letter of credit posted. No accrual has been made as the Company expects to prevail on appeal.
• Debt Covenants: The Exit ABL Facility requires a minimum excess availability of $5.0 million and a minimum fixed charge coverage ratio of 1.10 to 1.00 under certain conditions.

Investor Verification Checklist

• Debt Structure: Verify the terms of the new Exit ABL Facility, specifically the borrowing base calculations and covenant compliance status.
• Asset Utilization: Confirm the timeline for the return of the second coiled tubing unit to service and its impact on Q4 revenue.
• Cost Inflation: Assess the sustainability of current margin compression in cementing and coiled tubing due to labor and material costs.
• Litigation Status: Monitor the appeal process for the Breakthru Casing Flotation Device patent infringement case.
• Working Capital: Review the $12.5 million increase in accounts receivable in the Successor period and its impact on future cash flow.