Company: NINE
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001532286-25-000016
Chunk: 108

Company: Nine Energy Service, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 108
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 as increased costs and market uncertainty, our customers began to decrease activity. According to Baker Hughes, during the second quarter of 2025, 45 rigs, most of which were in the Permian Basin, came out of the U.S. market, a decline of approximately 8% from the first quarter of 2025. Due to the spot-market nature of our business, our revenue and profitability 

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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, which negatively impacted both revenue and earnings during the second quarter of 2025. 

With the current oil price environment, our customers are continuing to review their capital plans real-time, and activity levels will be significantly impacted by current and forward-looking commodity prices. The third quarter of 2025 will reflect the impact of a full quarter of activity and pricing declines that occurred throughout the second quarter of 2025. As such, we anticipate revenue and earnings in the third quarter of 2025 will be down compared to the second quarter of 2025.

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