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RPC INC (RES)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue rose 6% sequentially to $447.1M and 32% year over year; GAAP diluted EPS was $0.06 and adjusted diluted EPS was $0.09 .
  • Versus Wall Street, revenue and EBITDA materially beat consensus for Q3 2025, while GAAP EPS was roughly in line and adjusted EPS beat; management cited stabilization late in the quarter and broad-based service line improvement, led by pressure pumping (+14% q/q) and coiled tubing (+19% q/q) . Values retrieved from S&P Global*.
  • Adjusted EBITDA increased 10% q/q to $72.3M with margin up 60 bps to 16.2%; net income margin improved 50 bps to 2.9% q/q but remained below prior-year levels .
  • Near-term caution: management flagged potential Q4 headwinds from sub-$60 oil, holiday slowdowns, and budget exhaustion; they laid down a pressure pumping fleet in October and are making incremental cost reductions .

What Went Well and What Went Wrong

What Went Well

  • Sequential revenue growth across most service lines, including pressure pumping (+14% q/q), coiled tubing (+19% q/q), downhole tools (+5% q/q), rental tools (+4% q/q), and modest wireline gains; “signs of stabilization” in August/September versus June lows .
  • Strong adjusted EBITDA performance: $72.3M (+10% q/q) with margin up to 16.2%, supported by reduced third-party non-productive time and less “white space” in pressure pumping .
  • Product innovation supporting demand and share gains: Thru-Tubing’s A10 downhole motor and MetalMax component, plus “Unplugged” technology advancing customer efficiency; “The motor is proving highly effective… longer laterals… market share gains” .

What Went Wrong

  • GAAP tax rate spiked to 42.6% due to non-deductible acquisition-related employment costs and provision-to-return adjustments, compressing GAAP EPS despite operating improvement .
  • Pressure pumping remains challenged industry-wide; company laid down a fleet in October and reduced staffing, reflecting return-based deployment discipline amid volatile oil prices .
  • Year-over-year profitability headwinds: net income margin 2.9% vs 5.6% in Q3 2024 despite higher revenue, with SG&A up to $44.6M and acquisition-related employment costs of ~$6.5M burdening GAAP results .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

MetricQ3 2024 (oldest)Q2 2025Q3 2025 (newest)
Revenue ($USD Millions)$337.7 $420.8 $447.1
GAAP Diluted EPS ($)$0.09 $0.05 $0.06
Adjusted Diluted EPS ($)$0.09 $0.08 $0.09
Net Income Margin (%)5.57% 2.41% 2.90%
Adjusted EBITDA ($USD Millions)$55.2 $65.6 $72.3
Adjusted EBITDA Margin (%)16.36% 15.59% 16.18%
Revenue Consensus Mean ($USD Millions)*——$402.7*
Primary EPS Consensus Mean ($)*——$0.062*
EBITDA Consensus Mean ($USD Millions)*——$58.9*

Values retrieved from S&P Global*.

Segment Breakdown

MetricQ3 2024 (oldest)Q2 2025Q3 2025 (newest)
Technical Services Revenue ($USD Millions)$313.5 $396.8 $422.2
Technical Services Operating Income ($USD Millions)$16.3 $21.1 $24.4
Support Services Revenue ($USD Millions)$24.2 $24.1 $24.9
Support Services Operating Income ($USD Millions)$5.3 $4.6 $4.6
Total Operating Income ($USD Millions)$19.2 $15.5 $20.8

KPIs and Mix

KPIQ3 2024 (oldest)Q2 2025Q3 2025 (newest)
Cost of Revenues excl. D&A ($USD Millions)$247.5 $317.7 $334.7
SG&A ($USD Millions)$37.7 $40.8 $44.6
Acquisition-related Employment Costs ($USD Millions)—$6.6 $6.5
D&A ($USD Millions)$35.0 $42.3 $44.1
Interest Income ($USD Millions)$3.5 $1.6 $1.7
Interest Expense ($USD Millions)$0.26 $1.01 $0.95
Effective Tax Rate (%)19.9% (4,675/23,471) 41.3% 42.6%
Cash & Equivalents ($USD Millions, end of period)—$162.1 $163.5
OpCF YTD ($USD Millions)—$92.9 $139.5
Free Cash Flow YTD ($USD Millions)—$17.6 $21.7
Dividend Declared ($/share)—$0.04 $0.04 (payable Dec 10, 2025)
Service Line Mix (% of Q3 revenue)——Pressure pumping 27.9%; Wireline 23.5%; Downhole tools 23.5%; Coiled tubing 9.5%; Cementing 5.4%; Rental tools 4.2%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital Expenditures ($USD Millions)FY 2025Not specified in Q2 materials reviewed$170–$190 New/Specified
Effective Tax Rate (qualitative)Q4 2025Not specifiedOne-time discrete increase expected due to SERP liquidation; ongoing impact from non-deductible acquisition-related employment costs Cautioned higher
Supplemental Executive Retirement Plan (SERP)Q4 2025N/APlan liquidation; net cash distribution ≈ $8M (subject to markets) New
DividendQ4 2025$0.04 (Sep 2025 payment) $0.04 declared; payable Dec 10, 2025; record Nov 10, 2025 Maintained
Pressure Pumping Fleet DeploymentNear-termOngoing evaluationFleet laid down in October; staffing reduced; continue return-based framework Lowered capacity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Macro/CommodityVolatility; tariff uncertainty; cautious stance Market challenged; resiliency via diversification Oil < $60 risk; holiday/budget headwinds near term Persistently cautious; Q4 risks elevated
Pressure Pumping StrategyFlat revs; intense competition; disciplined capital Weaker activity/pricing; non-productive time; Pintail offset Activity improved; reduced NPT; laid down fleet in Oct; return focus Rationalization continues
Product Innovation (Downhole Tools)New launches gaining acceptance —A10 motor effective on longer laterals; MetalMax >100 runs; “Unplugged” tech emphasized Accelerating adoption
Regional Trends——Strength in Rocky Mountain and Southeast regions Improving
Wireline/Permian—Pintail acquired; scale, blue-chip customers Modest increases; simulfrac shifts; gun usage up Stable-to-improving utilization
Tax/AccountingNormalized tax rate vs 4Q:24 Elevated tax rate from non-deductible acquisition costs 42.6% effective rate; discrete Q4 tax increase expected Higher near term
Capital AllocationDividend maintained; strong cash Dividend maintained; cash $162M Dividend maintained; cash $163.5M; capex $170–$190M Balanced spend; liquidity intact

Management Commentary

  • CEO: “Sequentially we saw most of our service line revenues improve… pressure pumping… 14% increase… coiled tubing… 19% increase… downhole tools continued to experience strong demand… our diversified offerings… provide resiliency” .
  • CEO on outlook: “With oil prices recently dipping below $60… expected holiday slow downs and customer budget exhaustion… likely to face additional headwinds during the fourth quarter… we will continue to make incremental cost reductions” .
  • CFO: “Adjusted diluted EPS was $0.09… Adjusted EBITDA was $72.3 million… margins increased 60 bps to 16.2%… effective tax rate 42.6%… impacted by non-deductible acquisition-related employment costs” .
  • Strategic posture: “We continue to strategically grow our less capital-intensive service lines… we believe our balance sheet offers us optionality in challenging market conditions” .

Q&A Highlights

  • Outlook and seasonality: Management is “comfortable” with Q4 setup but bracing for holiday slowdowns; recovery into Q1 depends on severity of Q4 pauses .
  • Portfolio focus: Investor asked about pivoting away from pressure pumping; management reiterated focus on less capital-intensive lines while prudently maintaining PP capacity .
  • Technology differentiation: A10 motor and engineering cadence driving faster, more reliable drill-outs on longer laterals; expected to translate into improved returns and additional work .

Estimates Context

  • Q3 2025 actuals vs consensus: Revenue $447.1M vs $402.7M*; EBITDA $72.3M (adjusted) vs $58.9M*; GAAP diluted EPS $0.06 vs $0.062*; adjusted diluted EPS $0.09 vs $0.062* . Values retrieved from S&P Global*.
  • Implications: Consensus likely underappreciated Pintail’s contribution and late-quarter stabilization; EPS optics impacted by tax and acquisition-related employment costs. Forward estimates may need upward revisions for revenue/EBITDA, while GAAP EPS will remain sensitive to non-deductible items and potential Q4 tax discrete impacts .

Q3 2025 Actual vs S&P Global Consensus

MetricConsensus*Actual
Revenue ($USD Millions)402.7*447.1
EBITDA ($USD Millions)58.9*72.3 (Adjusted)
Primary EPS ($)0.062*0.06 GAAP / 0.09 Adjusted

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Broad-based sequential improvement, with clear operational momentum in coiled tubing and downhole tools; innovation pipeline (A10, MetalMax, “Unplugged”) is a differentiator supporting mix and margins .
  • Revenue and adjusted EBITDA beats vs consensus are notable; however, headline GAAP EPS is masked by elevated tax rate and acquisition-related employment costs—focus on adjusted metrics and cash generation . Values retrieved from S&P Global*.
  • Near-term setup skews cautious given oil volatility, holiday/budget dynamics, and a discrete Q4 tax item; expect disciplined capacity actions (fleet laydowns) and incremental cost reductions to protect returns .
  • Liquidity remains solid with $163.5M cash, no revolver borrowings; dividend maintained at $0.04 per share, signaling confidence in cash flows amidst strategic shift to less capital-intensive service lines .
  • Segment trajectory: Technical Services operating income up 16% q/q; anticipate relative outperformance in downhole tools/wireline vs pressure pumping in volatile macro .
  • Watch Q4 execution on cost controls and customer activity cadence; stabilization signs in Aug/Sep are encouraging, but volatility can re-emerge—monitor rig count, simulfrac trends, and Permian wireline utilization .
  • Medium-term thesis: Diversification, product innovation, and disciplined capital allocation (capex $170–$190M) position RES to compound adjusted EBITDA through cycles while preserving balance sheet flexibility .