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RPC INC (RES)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered stable topline and improved profitability: revenue $332.9M (-1% q/q, -11.9% y/y), diluted EPS $0.06 (flat q/q, down y/y), and EBITDA $48.9M with margin expansion to 14.7% (+100 bps q/q) on lower costs despite competitive pricing in pressure pumping .
  • Results beat S&P Global consensus: EPS $0.06 vs $0.049* and revenue $332.9M vs $326.7M*, driven by cost discipline (lower insurance, transportation/fuel, and materials) and a favorable mix; EPS was held back by a normalized tax rate (27.2%) versus Q4’s unusually low rate .
    Values retrieved from S&P Global.
  • RPC closed the $245M Pintail Completions acquisition on April 1; management expects 2025 EPS and cash flow accretion. Pintail did ~$409M 2024 revenue with ~20% EBITDA margins, adding scale in Permian wireline and shifting mix toward lower-capex, higher FCF services .
  • Capital allocation remains conservative: $326.7M cash and no debt at quarter-end; dividend maintained at $0.04/share; 2025 capex framework raised/incremented post-deal to $165–$215M for the next nine months (was $150–$200M for 2025) as the company prioritizes maintenance and returns on capital in an uncertain macro/tariff backdrop .

What Went Well and What Went Wrong

  • What Went Well

    • EBITDA increased 6% q/q to $48.9M; margin up 100 bps to 14.7% on lower insurance, transportation/fuel (less customer-furnished fuel), and materials/supplies costs, despite flat pressure pumping revenue .
    • Rental tools grew with seasonal pickup; Support Services operating income +3% q/q; Technical Services operating income +32% q/q on cost actions .
    • Strategic M&A: Pintail adds >$400M revenue, ~20% EBITDA margin, ~30+ fleets, and Tier 1 E&P customer base in Permian; expected to be accretive in 2025. “We are excited for our combined prospects to bring world-class well completion services to our customers” — CEO Ben Palmer .

  • What Went Wrong

    • Pricing pressure persists in pressure pumping; Tier 2 diesel demand remains soft, with spot/semi-dedicated markets oversupplied and highly competitive .
    • SG&A rose to $42.5M (12.8% of revenue) due to IT implementation and slightly lower revenue; normalized tax rate (27.2%) reduced net income vs Q4 .
    • YoY declines: revenue (-11.9%), EPS ($0.06 vs $0.13), EBITDA ($48.9M vs $63.1M) and EBITDA margin (14.7% vs 16.7%) reflecting a tougher OFS environment .

Financial Results

  • Consolidated performance vs prior year, prior quarter, and margins
MetricQ1 2024Q4 2024Q1 2025
Revenue ($M)$377.8 $335.4 $332.9
Net Income ($M)$27.5 $12.8 $12.0
Diluted EPS ($)$0.13 $0.06 $0.06
Operating Income ($M)$32.3 $10.5 $12.4
EBITDA ($M)$63.1 $46.1 $48.9
Net Income Margin (%)7.3% 3.8% 3.6%
EBITDA Margin (%)16.7% 13.7% 14.7%
  • Actuals vs S&P Global consensus (Q1 2025)
MetricConsensusActualSurprise
Revenue ($M)$326.7*$332.9 +$6.2M; +1.9%
EPS ($)$0.049*$0.06 +$0.011; +22%

Values retrieved from S&P Global.

  • Segment performance
SegmentQ1 2024 Revenue ($M)Q4 2024 Revenue ($M)Q1 2025 Revenue ($M)Q1 2024 Op Inc ($M)Q4 2024 Op Inc ($M)Q1 2025 Op Inc ($M)
Technical Services$356.4 $314.6 $311.8 $32.0 $10.6 $14.0
Support Services$21.4 $20.7 $21.0 $3.6 $2.6 $2.7
Total$377.8 $335.4 $332.9 $32.3 $10.5 $12.4
  • KPIs and balance sheet/cash flow
KPIQ1 2025
Service line mix: Pressure pumping40.1% of revenue
Service line mix: Downhole tools28.2%
Service line mix: Coiled tubing9.6%
Service line mix: Cementing8.3%
Service line mix: Rental tools4.6%
Cash & Equivalents$326.7M
Operating Cash Flow$39.9M
Capital Expenditures$32.3M
Free Cash Flow$7.6M
DebtNo borrowings on $100M revolver

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpendituresFY 2025$150–$200M (Q4 release) $165–$215M for next 9 months inclusive of Pintail Raised/updated post-acquisition framework
Dividend per ShareQuarterly$0.04 (declared for Mar 10, 2025) $0.04 (payable Jun 10, 2025; record May 9) Maintained
Pintail impact2025N/AExpected accretive to 2025 EPS and cash flow New positive commentary
Tax RateForwardN/AQ1 at 27.2% normalized; no explicit forward rate N/A
Other P&L items (revenue/margins/OpEx/OI&E)2025Not providedNot providedNo formal guidance

Modeling notes: ~$170M cash used, $50M seller note at SOFR+200 bps, ~$25M restricted stock (~4.5M shares), Pintail CapEx up to ~$20M annualized; depreciation to approximate annualized capex .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
Pressure pumping pricing/competitionPricing and utilization pressure; Tier 4 DGB highly utilized; spot/semi-dedicated softness Pricing remains highly competitive; Tier 4 visibility stronger; Tier 2 diesel demand challenging; oversupplied market Competitive pressures persist
Non-pumping service linesRelative resilience; focus on downhole tools/coiled tubing innovation Non-PP lines down ~1% in aggregate; rental tools up; new downhole tools accepted Mixed but stable; innovation continuing
M&A strategyAppetite for high-quality acquisitions (Q3/Q4) Completed Pintail; accretive; wireline scale, blue-chip customers; Permian mix to ~60% pro forma Accelerating execution
Capex discipline2025 plan $150–$200M; maintain strong balance sheet Updated to $165–$215M (9 months) inclusive of Pintail; maintenance-heavy; cautious timing Slightly higher with deal; disciplined
Macro/tariffs/commodityLower oil/rig count headwinds (Q3) High uncertainty from tariffs; oil price volatility; cautious customer activity Uncertainty elevated
Customer consolidationCited as Q3 headwind Balancing pricing/utilization; seeking blue-chip E&Ps Ongoing focus on mix quality
Gas-directed activityNot highlightedPotential later; greatest opportunity in downhole tools if gas basins pick up Watchlist for H2

Management Commentary

  • Strategic direction: “Pintail’s strong Permian operations are driven by a blue chip customer base and a highly regarded management team. We are excited for our combined prospects… and continue to build RPC’s diversified oilfield services model.” — Ben Palmer .
  • Market conditions: “The oilfield services market remains challenged… We continue to see intense competition to keep assets utilized” .
  • Macro stance: “We’ve entered a period of high uncertainty and limited visibility with respect to tariffs… Oil at these prices makes it difficult for some customers to justify continued completion activities.” — Ben Palmer .
  • Capital allocation: “We are balancing the pricing and utilization strategy… not performing work at levels that generate inadequate returns.” — Ben Palmer .

Q&A Highlights

  • Pricing/utilization: Oversupplied frac capacity keeps pricing highly competitive; RPC prioritizes returns, with stronger utilization/visibility in Tier 4 DGB fleets vs weaker Tier 2 diesel .
  • M&A priorities: Accretive deals that add scale, strong brands, blue-chip E&P exposure, and high FCF characteristics; growth beyond pressure pumping into less capital-intensive lines .
  • Pintail modeling: ~$409M 2024 revenue; quarterly cadence ~“around $100M”; EBITDA margin “about 20%, plus or minus a few points”; light integration; back-office focus .
  • Capex cadence: Q1 capex in low $30M by timing; 2025 capex to pick up as needed; bias to maintenance and returns, preserving cash for potential M&A .
  • Gas basins: Early indications; downhole tools best positioned to capture gas-led uptick; less immediate for pressure pumping .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $332.9M vs $326.7M*; EPS $0.06 vs $0.049* — both beats; 4 revenue estimates and 5 EPS estimates underpin consensus*. Management noted normalized tax rate impacted EPS q/q .
    Values retrieved from S&P Global.

  • Implications: Consensus may need to reflect better cost control and mix supporting EBITDA margin resilience, offset by persistent pricing pressure and macro uncertainty; Pintail’s ~20% EBITDA margin profile could lift consolidated mix in coming quarters if activity holds .

Key Takeaways for Investors

  • Quality beat on both revenue and EPS vs consensus amid a difficult pricing backdrop; EBITDA margin expanded on cost discipline — constructive for near-term sentiment *. Values retrieved from S&P Global.
  • Pintail adds scale, margin, FCF, and a deeper Permian footprint with blue-chip E&Ps; accretive to 2025 EPS/CF and shifts mix toward lower-capex wireline .
  • Pressure pumping remains highly competitive and oversupplied; Tier 4 assets hold better visibility while Tier 2 demand lags — pricing remains the key risk .
  • Capex outlook nudged higher post-deal and focused on maintenance; balance sheet remains strong (no debt, $326.7M cash), supporting optionality for additional M&A and a steady dividend .
  • Watch for gas-led activity improvement benefiting downhole tools; near-term macro/tariff uncertainty can weigh on customer completion decisions and pricing traction .
  • Pro forma mix shift: management cited wireline at 23% and Permian at ~60% of revenue (pro forma ‘24), improving customer quality/visibility — supportive for medium-term margin stability .
  • Near-term trading lens: stock likely to key off cost execution vs pricing pressure, Pintail integration/trajectory, and any signs of gas basin uptick; estimate revisions may drift modestly higher on margin resilience and Pintail accretion .