RPC(RES) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Second Quarter 2025 Highlights RPC, Inc. reported Q2 2025 unaudited results, with sequential revenue growth driven by the Pintail acquisition, while GAAP net income declined, and adjusted metrics improved - The Company acquired Pintail Completions, a leading wireline perforation service provider in the Permian Basin, effective April 1, 2025[6] Key Financial Highlights (2Q:25) | Metric | 2Q:25 (Millions) | Sequential Change | % Change (Sequential) | | :-------------------------------- | :--------------- | :---------------- | :-------------------- | | Revenues | $420.8 | +$87.9 | +26% | | Adjusted Revenues (Excl. Pintail) | - | -$10.0 | -3% | | Net Income | $10.1 | -$1.9 | -16% | | Diluted EPS | $0.05 | -$0.01 | -16.7% | | Net Income Margin | 2.4% | -120 bps | - | | Adjusted Net Income | $17.5 | +$5.5 | +46% | | Adjusted Diluted EPS | $0.08 | +$0.02 | +33.3% | | Adjusted Net Income Margin | 4.2% | +60 bps | - | | Adjusted EBITDA | $65.6 | +$16.7 | +34% | | Adjusted EBITDA Margin | 15.6% | +90 bps | - | Management Commentary Management noted sequential revenue increases, driven by Pintail, but pressure pumping faced challenges from weak activity and pricing pressure - Downhole tools, coiled tubing, and rental tools all generated sequential revenue increases[5] - Wireline revenues benefited from the acquisition of Pintail, which brings significant scale and a blue-chip customer base[5] - Pressure pumping service line was negatively impacted by weaker activity, pricing pressure, weather, external non-productive time, and customer startup delays[5] - The oilfield services market remains challenged by lower commodity prices and macro uncertainties, leading the company to focus on efficiencies, cost improvements, and opportunistic investments[5] Selected Industry Data Key Industry Metrics Q2 2025 industry data shows sequential and year-over-year declines in U.S. rig count, with oil and natural gas prices also decreasing sequentially Selected Industry Data (2Q:25 vs 1Q:25 and 2Q:24) | Metric | 2Q:25 | 1Q:25 | Sequential Change | % Change (Sequential) | 2Q:24 | YoY Change | % Change (YoY) | | :-------------------- | :------ | :------ | :---------------- | :-------------------- | :------ | :--------- | :------------- | | U.S. rig count (avg) | 571 | 588 | (17) | (2.9)% | 603 | (32) | (5.3)% | | Oil price ($/barrel) | $64.74 | $71.93 | $(7.19) | (10.0)% | $81.78 | $(17.04) | (20.8)% | | Natural gas ($/Mcf) | $3.20 | $4.14 | $(0.94) | (22.7)% | $2.07 | $1.13 | 54.6% | Consolidated Financial Results (2Q:25) Revenues Total revenues for Q2 2025 increased 26% sequentially to $420.8 million, primarily driven by the Pintail acquisition, with pressure pumping revenues declining 2Q:25 Revenues (Sequential Comparison) | Metric | 2Q:25 (Millions) | 1Q:25 (Millions) | Sequential Change | % Change (Sequential) | | :-------------------- | :--------------- | :--------------- | :---------------- | :-------------------- | | Total Revenues | $420.8 | $332.9 | +$87.9 | +26% | | Pressure Pumping | - | - | - | -18% | | Rental Tools | - | - | - | +17% | - The increase in total revenues was primarily due to the inclusion of Pintail. Excluding Pintail, adjusted revenues decreased 3% sequentially[6][8] - Pressure pumping, the largest service line, saw an 18% decline in revenues, while coiled tubing and downhole tools experienced the biggest organic increases outside of wireline[8] Costs and Expenses Cost of revenues increased 30% sequentially due to Pintail, while SG&A as a percentage of revenues decreased, benefiting from employment cost reductions and revenue leverage 2Q:25 Costs and Expenses (Sequential Comparison) | Metric | 2Q:25 (Millions) | 1Q:25 (Millions) | Sequential Change | % Change (Sequential) | | :------------------------------------ | :--------------- | :--------------- | :---------------- | :-------------------- | | Cost of Revenues (excl. D&A) | $317.7 | $243.9 | +$73.8 | +30% | | Selling, General & Administrative (SG&A) | $40.8 | $42.5 | -$1.7 | -4% | | SG&A as % of Revenues | 9.7% | 12.8% | -310 bps | - | | Acquisition related employment costs | $6.6 | $0 | +$6.6 | - | - The increase in cost of revenues was primarily due to the addition of Pintail, partially offset by lower pressure pumping activity[9] - SG&A as a percentage of revenues decreased due to a reduction in employment-related costs and SG&A cost leverage from Pintail's revenue[10] Net income and diluted EPS GAAP net income and diluted EPS decreased sequentially, but adjusted net income and EPS significantly increased, with an unusually high effective tax rate from non-deductible acquisition costs 2Q:25 Net Income and EPS (Sequential Comparison) | Metric | 2Q:25 | 1Q:25 | Sequential Change | % Change (Sequential) | | :-------------------------- | :------ | :------ | :---------------- | :-------------------- | | Net Income (Millions) | $10.1 | $12.0 | -$1.9 | -16% | | Diluted EPS | $0.05 | $0.06 | -$0.01 | -16.7% | | Net Income Margin | 2.4% | 3.6% | -120 bps | - | | Adjusted Net Income (Millions) | $17.5 | $12.0 | +$5.5 | +46% | | Adjusted Diluted EPS | $0.08 | $0.06 | +$0.02 | +33.3% | | Adjusted Net Income Margin | 4.2% | 3.6% | +60 bps | - | | Income Tax Provision (Millions) | $7.2 | $4.5 | +$2.7 | +60% | | Effective Tax Rate | 41.3% | 27.2% | +14.1% | - | - The effective tax rate was unusually high at 41.3% mainly due to acquisition-related employment costs, which contributed to lower pre-tax income and are largely non-deductible[12] Adjusted EBITDA Adjusted EBITDA for Q2 2025 increased 34% sequentially to $65.6 million, primarily driven by the Pintail acquisition, with the margin improving to 15.6% 2Q:25 Adjusted EBITDA (Sequential Comparison) | Metric | 2Q:25 (Millions) | 1Q:25 (Millions) | Sequential Change | % Change (Sequential) | | :--------------- | :--------------- | :--------------- | :---------------- | :-------------------- | | Adjusted EBITDA | $65.6 | $48.9 | +$16.7 | +34% | | Adjusted EBITDA Margin | 15.6% | 14.7% | +90 bps | - | - The increase in Adjusted EBITDA was primarily due to the contribution from the Pintail acquisition[14] Balance Sheet, Cash Flow and Capital Allocation Liquidity and Cash Position RPC, Inc. maintained strong liquidity at Q2 2025, with $162.1 million in cash and no outstanding borrowings, despite reduced cash balances post-Pintail acquisition 2Q:25 Liquidity Position | Metric | Amount (Millions) | | :------------------------------------ | :---------------- | | Cash and cash equivalents (June 30, 2025) | $162.1 | | Outstanding borrowings (Revolving credit facility) | $0 | | Revolving credit facility limit | $100 | | Interest income (2Q:25) | $1.6 | | Interest expense (2Q:25) | $1.0 | - Cash balances decreased from the previous quarter, reflecting the impact of the Pintail acquisition[11] Cash Flow Activities Year-to-date through Q2 2025, net cash provided by operating activities was $92.9 million, resulting in free cash flow of $17.6 million YTD 2Q:25 Cash Flow Activities | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Net cash provided by operating activities | $92.9 | | Free cash flow | $17.6 | Capital Allocation RPC, Inc. paid $17.5 million in YTD dividends and declared a $0.04 per share quarterly dividend, with $2.9 million in share repurchases for tax withholding YTD 2Q:25 Capital Allocation | Metric | Amount (Millions) | | :------------------------------------ | :---------------- | | Dividends paid (YTD) | $17.5 | | Declared quarterly cash dividend (per share) | $0.04 | | Share repurchases (YTD) | $2.9 | - The declared quarterly cash dividend is payable on September 10, 2025, to stockholders of record on August 11, 2025[16] - Share repurchases were related to tax withholding for restricted stock vesting[16] Segment Operations Technical Services The Technical Services segment reported a 27% sequential increase in revenues to $396.8 million and a 51% increase in operating income to $21.1 million, primarily driven by the Pintail acquisition - Technical Services performs value-added completion, production, and maintenance services directly to customer wells[17] 2Q:25 Technical Services Segment Performance (Sequential Comparison) | Metric | 2Q:25 (Thousands) | 1Q:25 (Thousands) | Sequential Change | % Change (Sequential) | | :---------------- | :---------------- | :---------------- | :---------------- | :-------------------- | | Revenues | $396,754 | $311,844 | +$84,910 | +27% | | Operating Income | $21,123 | $14,003 | +$7,120 | +51% | - Results were primarily driven by the addition of Pintail[20] Support Services The Support Services segment saw a 14% sequential increase in revenues to $24.1 million and a 74% increase in operating income to $4.6 million, driven by higher rental tool activity and fixed costs - Support Services provides equipment for customer use or services to assist customer operations, including rental tools and pipe inspection services[18] 2Q:25 Support Services Segment Performance (Sequential Comparison) | Metric | 2Q:25 (Thousands) | 1Q:25 (Thousands) | Sequential Change | % Change (Sequential) | | :---------------- | :---------------- | :---------------- | :---------------- | :-------------------- | | Revenues | $24,055 | $21,033 | +$3,022 | +14% | | Operating Income | $4,639 | $2,661 | +$1,978 | +74% | - Results were driven by higher activity in rental tools and the fixed-cost nature of these service lines[20] Additional Information Conference Call Details RPC, Inc. held a conference call on July 24, 2025, to discuss the Q2 results, with access available via webcast and phone, and a replay accessible for 90 days - A conference call was held on July 24, 2025, at 9:00 a.m. ET[21] - Access was available via live webcast on RPC, Inc.'s investor relations website (www.rpc.net) or by phone using conference ID 9842359[21] - A replay of the call is available on the investor relations website for 90 days[21] About RPC RPC, Inc. is a diversified oilfield services company providing specialized services and equipment primarily to independent and major oilfield companies across the United States and in selected international markets - RPC provides a broad range of specialized oilfield services and equipment[22] - Services are primarily offered to independent and major oilfield companies engaged in exploration, production, and development of oil and gas properties[22] - Geographic focus includes the United States (Gulf of America, mid-continent, southwest, Appalachian, Rocky Mountain regions) and selected international markets[22] Forward Looking Statements This section contains forward-looking statements on Pintail acquisition benefits, market challenges, and strategic responses, outlining risk factors like commodity prices and political instability - Forward-looking statements include beliefs about the Pintail acquisition bringing a scaled and high-quality company, Pintail's strong Permian operations, and RPC's diversified portfolio providing resiliency[23] - Management believes the oilfield services market is challenged and that business leaders are responding by focusing on efficiencies, cost improvements, passing on supplier costs, and opportunistic investments[23] - Risk factors include oil and natural gas prices, U.S. economy performance, adverse weather, changes in competitive environment, political instability, OPEC actions, customer drilling activities, and the ability to complete acquisitions[23] Financial Statements and Non-GAAP Reconciliations Consolidated Statements of Operations The consolidated statements of operations detail RPC, Inc.'s revenues, costs, and profitability for Q2 2025, with total revenues of $420.8 million and net income of $10.1 million Consolidated Statements of Operations (Selected Data, In thousands) | Metric | 2Q:25 | 1Q:25 | 2Q:24 | YTD 2025 | YTD 2024 | | :-------------------------------------------------------------------------------- | :------ | :------ | :------ | :------- | :------- | | REVENUES | $420,809 | $332,877 | $364,153 | $753,686 | $741,986 | | Cost of revenues (exclusive of depreciation and amortization) | 317,746 | 243,895 | 262,284 | 561,641 | 538,893 | | Selling, general and administrative expenses | 40,825 | 42,499 | 37,406 | 83,324 | 77,491 | | Acquisition related employment costs | 6,554 | — | — | 6,554 | — | | Depreciation and amortization | 42,347 | 35,623 | 32,333 | 77,970 | 62,337 | | Gain on disposition of assets, net | (2,199) | (1,526) | (3,338) | (3,725) | (4,552) | | Operating income | 15,536 | 12,386 | 35,468 | 27,922 | 67,817 | | Interest expense | (1,007) | (131) | (99) | (1,138) | (333) | | Interest income | 1,618 | 3,395 | 3,343 | 5,013 | 6,308 | | Other income, net | 1,152 | 885 | 732 | 2,037 | 1,499 | | Income before income taxes | 17,299 | 16,535 | 39,444 | 33,834 | 75,291 | | Income tax provision | 7,151 | 4,505 | 7,025 | 11,656 | 15,405 | | NET INCOME | $10,148 | $12,030 | $32,419 | $22,178 | $59,886 | | Diluted EPS | $0.05 | $0.06 | $0.15 | $0.10 | $0.28 | Consolidated Balance Sheets Consolidated balance sheets show total assets increased to $1.46 billion by June 30, 2025, driven by the Pintail acquisition, with corresponding increases in liabilities, particularly accounts payable and notes payable Consolidated Balance Sheets (Selected Data, In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Cash and cash equivalents | $162,113 | $325,975 | | Accounts receivable, net | 303,353 | 276,577 | | Inventories | 117,701 | 107,628 | | Total current assets | 641,909 | 732,842 | | Property, plant and equipment, net | 560,936 | 513,516 | | Goodwill | 93,206 | 50,824 | | Other intangibles, net | 107,135 | 13,843 | | Total assets | $1,464,396 | $1,386,489 | | Accounts payable | $132,360 | $84,494 | | Current portion of notes payable | 20,000 | — | | Total current liabilities | 242,962 | 181,913 | | Note payable (long-term) | 30,000 | — | | Total liabilities | 373,381 | 308,198 | | Total stockholders' equity | 1,091,015 | 1,078,291 | Condensed Consolidated Statements of Cash Flows Condensed consolidated cash flow statements for YTD Q2 2025 show a significant decrease in cash, primarily due to substantial cash used in investing activities for the Pintail acquisition, despite positive operating cash flow Condensed Consolidated Statements of Cash Flows (Selected Data, In thousands) | Metric | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------- | :------- | | Net cash provided by operating activities | $92,943 | $184,487 | | Capital expenditures | (75,323) | (127,799) | | Purchase of business, net of cash and debt assumed | (165,656) | — | | Net cash used for investing activities | (231,483) | (118,916) | | Payment of dividends | (17,478) | (17,203) | | Repayment of debt assumed at acquisition | (4,502) | — | | Cash paid for common stock purchased and retired | (2,868) | (9,858) | | Net cash used for financing activities | (25,322) | (27,365) | | Net (decrease) increase in cash and cash equivalents | (163,862) | 38,206 | | Cash and cash equivalents at end of period | $162,113 | $261,516 | Non-GAAP Measures Explanation RPC, Inc. uses non-GAAP measures like adjusted revenues, net income, EPS, EBITDA, and free cash flow to provide a consistent view of core business performance and liquidity, excluding acquisition-related costs - Non-GAAP measures used include adjusted revenues, adjusted operating income, adjusted net income, adjusted earnings per share, adjusted EBITDA, adjusted EBITDA margin, and free cash flow[29] - Management believes these measures help investors compare operating performance consistently over time and assess the ability to generate additional cash from business operations[29] - Adjusted measures that exclude revenues and costs related to Pintail's performance allow for period-to-period comparison of the core, pre-acquisition business[29] Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP adjusted measures, including operating income, net income, diluted EPS, EBITDA, and free cash flow, highlighting acquisition-related cost impacts Adjusted Operating Income Reconciliation This section reconciles GAAP operating income to adjusted operating income, detailing the impact of acquisition-related employment costs Reconciliation of Operating Income to Adjusted Operating Income (In thousands) | Metric | 2Q:25 | 1Q:25 | 2Q:24 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Operating income | $15,536 | $12,386 | $35,468 | $27,922 | $67,817 | | Add: Acquisition related employment costs | 6,554 | — | — | 6,554 | — | | Adjusted operating income | $22,090 | $12,386 | $35,468 | $34,476 | $67,817 | Adjusted Net Income and EPS Reconciliation This section reconciles GAAP net income and diluted EPS to their adjusted non-GAAP counterparts, accounting for acquisition-related employment costs and their tax effects Reconciliation of Net Income to Adjusted Net Income (In thousands) | Metric | 2Q:25 | 1Q:25 | 2Q:24 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------- | :------- | | Net income | $10,148 | $12,030 | $32,419 | $22,178 | $59,886 | | Add: Acquisition related employment costs, before taxes | 6,554 | — | — | 6,554 | — | | Add: Tax effect of Acquisition related employment costs | 802 | — | — | 802 | — | | Total adjustments, net of tax | 7,356 | — | — | 7,356 | — | | Adjusted net income | $17,504 | $12,030 | $32,419 | $29,534 | $59,886 | Reconciliation of Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share | Metric | 2Q:25 | 1Q:25 | 2Q:24 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :---- | :---- | :---- | :------- | :------- | | Diluted earnings per share | $0.05 | $0.06 | $0.15 | $0.10 | $0.28 | | Add: Acquisition related employment costs, before taxes | 0.03 | — | — | 0.03 | — | | Add: Tax effect of Acquisition related employment costs | — | — | — | — | — | | Total adjustments, net of tax | 0.03 | — | — | 0.03 | — | | Adjusted diluted earnings per share | $0.08 | $0.06 | $0.15 | $0.13 | $0.28 | EBITDA and Adjusted EBITDA Reconciliation This section reconciles GAAP net income to EBITDA and adjusted EBITDA, incorporating adjustments for taxes, interest, depreciation, amortization, and acquisition-related costs Reconciliation of Net Income to EBITDA and Adjusted EBITDA (In thousands) | Metric | 2Q:25 | 1Q:25 | 2Q:24 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net income | $10,148 | $12,030 | $32,419 | $22,178 | $59,886 | | Add: Income tax provision | 7,151 | 4,505 | 7,025 | 11,656 | 15,405 | | Add: Interest expense | 1,007 | 131 | 99 | 1,138 | 333 | | Add: Depreciation and amortization | 42,347 | 35,623 | 32,333 | 77,970 | 62,337 | | Less: Interest income | 1,618 | 3,395 | 3,343 | 5,013 | 6,308 | | EBITDA | $59,035 | $48,894 | $68,533 | $107,929 | $131,653 | | Add: Acquisition related employment costs | 6,554 | — | — | 6,554 | — | | Adjusted EBITDA | $65,589 | $48,894 | $68,533 | $114,483 | $131,653 | | Revenues | $420,809 | $332,877 | $364,153 | $753,686 | $741,986 | | Net income margin | 2.4% | 3.6% | 8.9% | 2.9% | 8.1% | | Adjusted EBITDA margin | 15.6% | 14.7% | 18.8% | 15.2% | 17.7% | Free Cash Flow Reconciliation This section reconciles net cash provided by operating activities to free cash flow, accounting for capital expenditures Reconciliation of Operating Cash Flow to Free Cash Flow (In thousands) | Metric | YTD 2025 | YTD 2024 | | :-------------------------------- | :------- | :------- | | Net cash provided by operating activities | $92,943 | $184,487 | | Capital expenditures | (75,323) | (127,799) | | Free cash flow | $17,620 | $56,688 |