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RPC INC (RES)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $420.8M, up 26% sequentially; excluding Pintail’s $98.9M contribution, adjusted revenue fell 3%. Adjusted EBITDA rose to $65.6M with margin up 90 bps to 15.6%, while GAAP diluted EPS was $0.05 and adjusted diluted EPS was $0.08 .
  • Versus S&P Global consensus, revenue modestly beat, adjusted EBITDA was above, but adjusted EPS missed: Revenue $420.8M vs $417.5M consensus*, Adjusted EBITDA $65.6M vs $63.4M*, Adjusted EPS $0.08 vs $0.092* (GAAP EPS $0.05) .
  • Mix and pricing were headwinds in pressure pumping (down 18% QoQ) due to weather, non‑productive time (NPT), and customer delays; non‑pumping service lines (downhole tools, coiled tubing, rental tools) grew sequentially and now comprise ~74% of total revenues .
  • Management raised 2025 capex outlook to $165–$215M (incl. Pintail for 9 months) and guided full‑year effective tax rate to mid‑30s; declared a $0.04 quarterly dividend .

What Went Well and What Went Wrong

What Went Well

  • Non‑pressure pumping service lines delivered sequential growth: downhole tools, coiled tubing, and rental tools increased; Technical Services +27%, Support Services +14% QoQ .
  • Pintail acquisition added scale and diversified wireline; contributed ~$99M in Q2 revenue and accretive 2025 outlook. “Pintail brings significant scale, a blue chip customer base…” .
  • Adjusted EBITDA improved to $65.6M and margin to 15.6% (+90 bps QoQ), aided by Pintail and SG&A leverage to 9.7% of revenue (-310 bps QoQ) .

What Went Wrong

  • Pressure pumping revenue fell 18% QoQ amid weaker activity, pricing pressure, weather, external NPT (up >200% per management), and customer startup delays, particularly in June .
  • GAAP net income declined to $10.1M (EPS $0.05), with an unusually high 41.3% effective tax rate largely driven by non‑cash acquisition‑related employment costs (largely non‑deductible) .
  • Wireline pricing pressure intensified in Permian; management expects slightly lower Pintail EBITDA margins than previously communicated (still strong operating cash flow), tempering near‑term profitability .

Financial Results

Consolidated P&L and Margins

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$364.153 $332.877 $420.809
Diluted EPS (GAAP) ($)$0.15 $0.06 $0.05
Adjusted Diluted EPS ($)$0.15 $0.06 $0.08
EBITDA ($USD Millions)$59.035 $48.894 $59.035
Adjusted EBITDA ($USD Millions)$68.533 $48.894 $65.589
Net Income Margin (%)8.9% 3.6% 2.4%
Adjusted EBITDA Margin (%)18.8% 14.7% 15.6%

Notes:

  • Sequential change narrative: Revenue +26% QoQ; Adjusted EBITDA margin +90 bps QoQ; Net income margin -120 bps QoQ .

Segment Breakdown

SegmentQ2 2024 Revenue ($M)Q1 2025 Revenue ($M)Q2 2025 Revenue ($M)Q2 2024 Op Inc ($M)Q1 2025 Op Inc ($M)Q2 2025 Op Inc ($M)
Technical Services$341.484 $311.844 $396.754 $30.198 $14.003 $21.123
Support Services$22.669 $21.033 $24.055 $4.379 $2.661 $4.639
Corporate/Other———$(2.447) $(5.804) $(5.871)
Acquisition-related Employment Costs—————$(6.554)
Gain on Disposition of Assets, net———$3.338 $1.526 $2.199
Total Operating Income———$35.468 $12.386 $15.536

Service Line Mix (Q2 2025)

Service Line% of Total Revenue
Pressure Pumping25.9%
Wireline (incl. Pintail)24.7%
Downhole Tools23.7%
Coiled Tubing8.5%
Cementing6.6%
Rental Tools4.3%
Combined (above)94%

KPIs and Balance Sheet

KPIQ2 2025
Cash & Equivalents ($M)$162.1
Revolver ($100M) Outstanding$0
Seller Note Payable ($M)$50.0
Operating Cash Flow YTD ($M)$92.9
Free Cash Flow YTD ($M)$17.6
Capex YTD ($M)$75.3
Dividend Declared$0.04/share (payable Sep 10, 2025)
Share Repurchases YTD ($M)$2.9
Pintail Revenue Contribution ($M)$98.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateFY 2025Not previously quantifiedMid‑30s % Provided
CapexFY 2025$150–$200M $165–$215M (incl. Pintail for 9 months) Raised
DividendQuarterly$0.04/share (Q1 2025) $0.04/share (Q2 2025) Maintained
Pintail Wireline EBITDA MarginFY 2025Higher margin previously communicated (qualitative)Slightly lower than prior view; still strong operating cash flow Lowered
Natural Gas Pressure Pumping UnitQ3 2025Not previously disclosedFirst 100% natural gas unit testing/deployment in Q3 New
Pintail Specific GuidanceFY 2025N/ANo specific guidance to be provided on Pintail Not provided

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Pressure Pumping Activity & PricingQ4: pricing under pressure; sequential improvement; focus on Tier 4 DGB, semi‑dedicated work . Q1: competitive pricing offsetting utilization gains .Q2: weaker activity, pricing pressure; >200% increase in third‑party NPT; shift to dedicated customers; simul/twin frac mix .Cautious near‑term; aiming to stabilize with more dedicated customers.
Product/Tech Innovation (A10 motor, Unplugged)Q4: 3.5” motor and unplug system launched; hundreds of stages completed .Q2: A10 motor gaining traction (50+ customers); unplugged tech early adoption expanding .Building momentum and share gains.
Coiled Tubing ScaleQ4: up low double digits; new business wins .Q2: largest U.S. unit delivered; high customer interest; strong sequential growth .Scaling; positive demand signals.
Tariffs/Macro/Commodity VisibilityQ1: tariffs from new administration create macro concerns; volatile commodities; fluid policy environment .Q2: tariffs impacting costs; market challenged by lower prices and uncertainties .Persistent headwind; mitigation via pricing and efficiencies.
Wireline Competitive Dynamics (Permian)Q4/Q1: not central focus; mix commentary .Q2: intensified pricing; expect slightly lower EBITDA margins at Pintail; accretive overall .Competitive pressure rising; still cash‑generative.
Capital Allocation & M&AQ4: evaluate accretive M&A; maintain discipline; $150–$200M capex .Q2: capex raised to $165–$215M; opportunistic M&A with caution on valuations; maintain balance sheet optionality .Selective; maintaining flexibility.

Management Commentary

  • “Pintail brings significant scale, a blue chip customer base and builds on RPC’s diversified portfolio of companies.”
  • “The second quarter results were negatively impacted by our pressure pumping service line as we experienced weaker activity and pricing pressure along with impacts from weather, external non‑productive time and customer startup delays…”
  • “Non‑pressure pumping service lines represented 74% of total revenues during the second quarter… Revenues without the contribution of Pintail were up 7%.”
  • “We saw more than a 200% increase in third‑party non‑productive time… most pronounced in June.”
  • “We expect our full year 2025 effective tax rate percentage to be in the mid‑30s.”
  • “2025 capital spending is expected to be between $165 million and $215 million, inclusive of Pintail for nine months…”

Q&A Highlights

  • M&A posture: Maintain optionality, be selective amid pricing pressure and potential Q4 slowdown; not pausing but cautious on valuations; diversification outside oilfield considered opportunistically .
  • Coiled tubing scale: New largest U.S. unit shows “very good” results and is staying busy; no second unit order yet—capex discipline emphasized .
  • Segment outlook: Dedicated pressure pumping customers expected to reduce seasonality; potential sequential improvement despite lower materials mix; calendar more certain into Q3/Q4 .
  • Free cash flow trajectory: H2 FCF to improve with full 2H contribution from Pintail; H1 FCF impacted by ~$45M prepayment timing received in Q4 2024 .
  • Wireline pricing: Permian pressure affecting Pintail as with peers; expect slightly lower EBITDA margins vs prior expectations but accretive for 2025 .

Estimates Context

  • Q2 2025 vs consensus: Revenue beat and EBITDA beat; adjusted EPS miss.
    • Revenue: Actual $420.809M vs Consensus $417.500M* .
    • Adjusted EBITDA: Actual $65.589M vs Consensus $63.442M* .
    • Adjusted EPS: Actual $0.08 vs Consensus $0.0915* .
  • Q1 2025 and Q2 2024 context:
    • Q1 2025 revenue actual $332.877M vs consensus $326.715M*; EPS $0.06 vs $0.049*; EBITDA ~in line ($48.894M vs $46.159M*) .
    • Q2 2024 revenue actual $364.153M vs $380.395M*; EPS $0.15 vs $0.131*; EBITDA $68.533M vs $63.078M* .

Values marked with * retrieved from S&P Global.

Drivers of variance:

  • EPS miss due to high effective tax rate (41.3%) and non‑cash, largely non‑deductible acquisition‑related employment costs; operational headwinds in pressure pumping reduced GAAP profitability .
  • Revenue and EBITDA beats reflect Pintail wireline contribution and SG&A leverage, offset by pressure pumping weakness .

Key Takeaways for Investors

  • Mix shift toward less capital‑intensive service lines is progressing (non‑pumping ~74% of revenue), improving resilience; watch for continued traction in A10 motor and unplugged technologies to drive share gains independent of frac cycles .
  • Pressure pumping headwinds (pricing, NPT, weather) remain, but increased alignment with dedicated customers may reduce seasonal volatility and support utilization into H2 2025 .
  • Pintail is accretive and scaled but faces Permian pricing pressure; expect strong cash flow with slightly lower EBITDA margins than previously communicated—monitor margin trajectory and competitive responses .
  • Raised 2025 capex ($165–$215M) and mid‑30s tax rate guide imply lower GAAP EPS conversion; consensus EPS may need trimming to reflect tax headwinds and mix changes .
  • Balance sheet remains strong (cash $162M, no revolver draw, $50M seller note), supporting selective M&A and organic investments; dividend maintained at $0.04/share .
  • Near‑term trading: Expect sensitivity to pressure pumping utilization/pricing updates and Permian wireline competitive dynamics; positive catalysts include technology adoption, coiled tubing scale wins, and any reduction in tariff‑driven cost inflation .
  • Medium‑term: Diversification, disciplined capital allocation, and selective acquisitions should reduce earnings volatility through cycle; monitor execution on IT/ERP upgrades for SG&A leverage and operational efficiencies .