RPC(US:RES)2025-10-30 19:19Financial Performance - Total revenues for Q3 2025 were $447.1 million, an increase of 32.4% compared to $337.7 million in Q3 2024[118]. - Net income for Q3 2025 was $13.0 million, or $0.06 diluted earnings per share, down from $18.8 million, or $0.09 diluted earnings per share in Q3 2024[119]. - Adjusted EBITDA for Q3 2025 was $72.3 million, with an Adjusted EBITDA margin of 16.2%, compared to $55.2 million and 16.4% in Q3 2024[145]. - Revenues for the nine months ended September 30, 2025, were $1.2 billion, an increase of 11.2% compared to the same period in 2024, driven by $198.6 million from the Pintail acquisition[147]. - Net income for the nine months ended September 30, 2025, was $35.1 million, or $0.16 diluted earnings per share, down from $78.7 million, or $0.37 diluted earnings per share in the prior year[160]. - Adjusted EBITDA was $186.8 million with an Adjusted EBITDA margin of 15.6%, compared to $186.9 million and 17.3% in the same period last year[161]. Segment Performance - The Technical Services segment revenues increased by 34.7% in Q3 2025, primarily due to the acquisition of Pintail[134]. - Technical Services segment revenues increased by 11.8% to $59.6 million in operating income, while Support Services segment revenues rose by 2.5% with operating income of $11.9 million[149]. Costs and Expenses - Cost of revenues increased by 35.2% to $334.7 million in Q3 2025, compared to $247.5 million in Q3 2024, largely due to costs from the Pintail acquisition[135]. - Selling, general and administrative expenses rose to $44.6 million in Q3 2025, up from $37.7 million in Q3 2024, driven by increased employment incentives and costs related to Pintail[136]. - Cost of revenues increased by 14.0% to $896.3 million, primarily due to costs from the Pintail acquisition, while excluding Pintail, costs decreased in line with lower activity levels[150]. - Selling, general and administrative expenses rose to $128.0 million, up from $115.2 million, mainly due to increased employment incentives and costs related to the Pintail acquisition[151]. Cash Flow and Liquidity - Free cash flow for Q3 2025 was $4.1 million, down from $19.1 million in Q3 2024, primarily due to a decrease in cash provided by operating activities[146]. - Cash provided by operating activities decreased to $139.5 million from $255.2 million, primarily due to unfavorable changes in working capital[162]. - Free cash flow decreased to $21.7 million from $75.8 million, attributed to lower cash provided by operating activities[162]. - Cash and cash equivalents decreased by $162.5 thousand to $163.5 million as of September 30, 2025, compared to $326.0 million as of December 31, 2024[170]. - The Company has a $100.0 million revolving credit facility with no outstanding borrowings as of September 30, 2025, and $84.2 million available for use[178]. Capital Expenditures - Capital expenditures for 2025 are expected to be between $170 million and $190 million, with $117.8 million already spent as of September 30, 2025[182]. - The implementation of the One Big, Beautiful Bill Act resulted in a lower tax obligation due to 100% bonus depreciation on capital expenditures[180]. Shareholder Returns - A regular quarterly cash dividend of $0.04 per share was declared, payable on September 10, 2025, to stockholders of record[191]. - The Company has a stock buyback program to repurchase up to 49,578,125 shares, with 12,768,870 shares remaining available for repurchase as of September 30, 2025[187]. - The Company expects to continue paying cash dividends, subject to industry conditions and financial performance[191]. Risks and Compliance - The company is exposed to risks from volatility in oil and natural gas prices, which can significantly impact demand for its services[213]. - The company faces risks related to customer concentration in the energy industry, which can lead to downturns in business due to capital spending dependencies[213]. - The company relies on a limited number of suppliers for certain equipment and materials, which poses a risk to service delivery[213]. - The company is subject to increasing expectations regarding environmental, social, and governance practices from stakeholders[213]. - Potential political unrest in oil-producing regions, including conflicts in Israel and Gaza, may adversely affect drilling activity and demand for services[213]. - The company’s operations are vulnerable to cyber-attacks, which could disrupt digital systems and processes[213]. - The Company is in compliance with the financial covenants of its credit facility[178]. - The company has ongoing sales and use tax audits that could result in unfavorable outcomes, but the impact is currently uncertain[186]. Market Conditions - The average price of oil was 14.0% lower, while the average price of natural gas was 44.8% higher in Q3 2025 compared to the same period in 2024[133]. - The current and projected prices of oil and natural gas are important for U.S. domestic drilling activity, with potential volatility impacting customer completion activities[193]. - The majority of the company's transactions occur in U.S. currency, minimizing the impact of foreign exchange rate fluctuations on its financial results[215]. - Capital expenditures are contingent on current business expectations, and any changes may lead to significant adjustments in spending plans[213]. - The company must navigate competition in the oil and gas industry, particularly in pressure pumping, which could impact profitability[213].