Ranger Energy Services(RNGR) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $143.1 million, down from$ 153 million in Q3 2024, reflecting typical seasonality [29] - Adjusted EBITDA for Q4 2024 was $21.9 million with a margin of 15.3%, slightly lower than the previous quarter but up 320 basis points from Q4 2023 [30] - Full-year revenue for 2024 was$ 571.1 million, a 10% decrease from the previous year, primarily due to lower activity levels and wireline completions [30] - Adjusted EBITDA for the full year was $78.9 million, down from$ 84.4 million in 2023 [30] - Free cash flow for 2024 was $50.4 million, representing 64% of adjusted EBITDA [22] Business Line Data and Key Metrics Changes - High Spec Rigs achieved a quarterly revenue record of$ 87 million in Q4 2024, with adjusted EBITDA of $19 million, up 21% year-over-year [31] - For the full year, High Spec Rigs generated revenues of$ 336.1 million and adjusted EBITDA of $70.5 million, increases of 7% and 10% respectively [32] - Ancillary services also had a record year with revenue of$ 124.8 million and adjusted EBITDA of $26.6 million, increases of 1% and 18% respectively [32] - Wireline revenue in Q4 2024 was$ 22.6 million, down 26% from the prior quarter, with breakeven margins [33] Market Data and Key Metrics Changes - The US land services market is expected to remain subdued through the first half of 2025, with potential recovery in the latter half [36] - The company anticipates that high-spec rigs and ancillary segments will post modest year-over-year growth in 2025 [38] - Wireline segment conditions are not expected to improve significantly in 2025, with potential slight revenue declines year-over-year [39] Company Strategy and Development Direction - The company focuses on maximizing free cash flow, prioritizing shareholder returns, and pursuing disciplined growth opportunities [21][42] - Strategic investments have been made in the plugging and abandonment (P&A) market, primarily driven by E&P activities [48] - The company aims to consolidate its position in a fragmented industry and is actively seeking accretive acquisition opportunities [26] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding potential rig demand in the latter half of 2025, particularly in the Mid Con and Haynesville markets [50] - The company is experiencing challenges in the wireline segment but is pivoting towards conventional wireline services to stabilize and extract long-term value [20][39] - Management remains committed to enhancing shareholder value through a balanced approach to growth and returns [40] Other Important Information - The company announced a 20% increase in the regular quarterly dividend from $0.05 to$ 0.06 per share, reflecting confidence in business stability [24] - The company ended 2024 with nearly $41 million in cash and zero long-term debt, providing financial flexibility for future opportunities [25] Q&A Session Summary Question: Investments in P&A market and drivers of increase - Management indicated that investments in the P&A market are mainly driven by E&P activities, with efforts to bid on government-related work as well [48] Question: Potential rig demand from gas companies - Management noted cautious optimism regarding rig demand in the back half of the year, with some strength observed in the Mid Con and Haynesville markets [50] Question: Importance of safety records and training for contracts - Management emphasized that safety records and maintenance schedules are increasingly important for securing contracts with larger companies [51][55]