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RE

Ranger Energy Services, Inc. (RNGR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered resilient results despite severe winter weather: revenue $135.2M (-6% q/q, -1% y/y), diluted EPS $0.03 (vs -$0.03 y/y), and Adjusted EBITDA $15.5M (11.4% margin, +42% y/y), driven by record High Spec Rigs, while Wireline was a drag .
  • Segment mix: High Spec Rigs hit another record revenue ($87.5M), Ancillary grew y/y (+25% to $30.5M), Wireline fell sharply (revenue $17.2M; EBITDA loss -$2.3M), largely due to Northern weather impacts .
  • Balance sheet remains a “fortress”: $104.4M liquidity ($40.3M cash), zero net debt; FCF $3.4M with $7.2M capex supporting rig fleet modernization; quarterly dividend maintained at $0.06/share .
  • Guidance tone: management reiterated mid-teens margin trajectory post-winter; Wireline expected to move back into positive territory with cost actions and redeployment; capital returns (dividend) and optional buybacks intact .
  • Near-term stock narrative catalysts: continued rigs market-share gains and Ancillary margin resilience vs normalization in Wireline; disciplined capital allocation with M&A optionality as bid-ask spreads narrow .

What Went Well and What Went Wrong

  • What Went Well

    • High Spec Rigs posted “yet another record revenue quarter” with strong operating hours and rate increases; segment Adjusted EBITDA rose to $17.4M, +28% y/y .
    • Ancillary Services grew revenue 25% y/y to $30.5M and more than doubled Adjusted EBITDA to $5.6M; Torrent gas capture revenues quadrupled y/y with margins “solidly between 25% and 30% monthly” .
    • Balance sheet and capital returns: $104.4M liquidity, zero net debt, dividend sustained at $0.06/share, and ongoing flexibility for buybacks/M&A from strong cash generation .

  • What Went Wrong

    • Wireline was the largest headwind: revenue -48% y/y to $17.2M; Adjusted EBITDA -$2.3M; completions stage counts dropped to 1,400 (-64% y/y), with severe winter weather driving losses .
    • Sequential softness from weather and seasonality compressed consolidated profitability: revenue -6% q/q to $135.2M and Adjusted EBITDA -29% q/q to $15.5M; rig margins slightly down q/q on seasonal costs .
    • Cost pressures and macro uncertainties (tariffs, coil string costs) present pass-through challenges; management flagged balanced discussions with customers versus immediate surcharges .

Financial Results

MetricQ1 2024Q4 2024Q1 2025Q1 2025 Consensus
Revenue ($USD Millions)$136.9 $143.1 $135.2 N/A*
Diluted EPS ($USD)-$0.03 $0.25 $0.03 N/A*
Adjusted EBITDA ($USD Millions)$10.9 $21.9 $15.5 $17.0*
Adjusted EBITDA Margin (%)N/A15.3% 11.4% N/A*
Cash from Operations ($USD Millions)$12.0 N/A$10.6 N/A*
Free Cash Flow ($USD Millions)$5.5 N/A$3.4 N/A*
Liquidity ($USD Millions)N/A$112.1 $104.4 N/A*

Values retrieved from S&P Global.*

Segment breakdown

SegmentQ1 2024Q4 2024Q1 2025
High Spec Rigs Revenue ($M)$79.7 $87.0 $87.5
High Spec Rigs Operating Income ($M)$7.8 $13.4 $12.0
High Spec Rigs Adjusted EBITDA ($M)$13.6 $19.0 $17.4
Ancillary Revenue ($M)$24.4 $33.5 $30.5
Ancillary Operating Income ($M)$0.5 $5.5 $3.3
Ancillary Adjusted EBITDA ($M)$2.5 $8.0 $5.6
Wireline Revenue ($M)$32.8 $22.6 $17.2
Wireline Operating Income (Loss) ($M)-$2.9 -$3.0 -$5.8
Wireline Adjusted EBITDA ($M)$0.2 $0.2 -$2.3

KPIs

KPIQ1 2024Q4 2024Q1 2025
Rig Hours (thousands)111.0 115.9 115.7
Hourly Rig Rate ($/hr)$718 $751 $756
Wireline Completions Stage Count3,400 1,800 1,400
Cash on Hand ($M)N/A$40.9 $40.3
Capital Expenditures ($M)$6.5 N/A$7.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total company EBITDAQ1 2025“Unlikely to reach $20M; absent further disruptions should get above mid-teens” Actual $15.5M; CFO expects margins to return to mid-teen levels as winter effects fade Maintained trajectory; realized below $20M
Adjusted EBITDA MarginFY 2025 (near-term)Mid-teens expectation as activity normalizes Reiterated mid-teens trajectory post-winter Maintained
Wireline Segment MarginQ2–Q3 2025Improve to high single digits Positive margins achieved in March; expected to continue into next quarters Maintained with early progress
Dividend per ShareQuarterlyRaised to $0.06 for March 28, 2025 payment Maintained at $0.06; payable May 23, 2025 Maintained
Maintenance CapExFY 20254–6% of revenue; similar to 2024 Reiterated; Q1 capex $7.2M; judicious incremental growth capex Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Production-focused resilienceDifferentiated production services; record rigs; margin expansion Record Q4 rigs; >20% rigs margins; steady cash flow Emphasized OpEx tie-in (~80% of revenue); record rigs revenue Strengthening
Wireline pivot & recoveryStreamlining; shift to production wireline; improved q/q Challenged; expected depressed Q1; recovery later Losses in Jan–Feb; breakeven in March; improving into Q2 Gradual improvement
Tariffs/coil costsNot highlightedMarket subdued backdrop Coil string cost and tariff pass-through discussions; balanced with customers Emerging risk
Customer consolidation & share gainsGains across basins; vendor rationalization Benefits from consolidation; vendor shrink supports leaders Continued share gains; “preferential provider” positioning Continuing tailwind
Capital returns & balance sheetBuybacks and dividend; zero net debt Dividend raised; strong FCF; buybacks compounding Dividend maintained; buybacks paused in Q1, optional toolkit Steady returns
M&A optionalityActive dialogue; rationalizing marketAccretive deals only; bid-ask too wide Bid-ask narrowing later 2025; potential opportunities Watch list

Management Commentary

  • CEO (prepared remarks): “Despite the typical impacts of weather and seasonality, we reported significant improvements year-over-year in adjusted EBITDA and margin, led once again by the strength of our high-specification rigs business.” .
  • CEO on segment strength: “Our flagship High Specification Rigs business delivered yet another record revenue quarter with strong operating hours and rates.” .
  • CFO (prepared remarks): “Adjusted EBITDA increased 42% year-over-year to $15.5 million… we expect margins to return to mid-teen levels.” .
  • Strategy and capital allocation: “We remain convicted in our capital return strategy and announced a 20% increase to the dividend last quarter to $0.06 per share… buyback strategy remains an important tool in 2025.” .

Q&A Highlights

  • Resilience via OpEx exposure: ~80% of revenues tied to production/OpEx budgets, insulating activity levels vs CapEx cuts; aligned with largest operators for consistent programs .
  • Wireline trajectory: Expected to move into positive territory in back half; pivoting toward conventional wireline (production-oriented) given challenged completions economics .
  • Capital allocation: Fortress balance sheet enables optionality across M&A and buybacks; management sees potential bid-ask narrowing later in 2025 and will be opportunistic .
  • Tariffs/coil cost pass-through: Coil strings are the most exposed item; conversations with customers are balanced as cost bases change, with pass-through dependent on macro conditions .
  • Industry consolidation: Smaller competitors under pressure; Ranger positioned to benefit as operators rationalize vendor lists, potentially supporting share gains .

Estimates Context

  • Q1 2025: EPS and revenue consensus unavailable; EBITDA consensus $17.0M vs actual EBITDA $12.7M (S&P Global basis) and company Adjusted EBITDA $15.5M — indicating an EBITDA miss versus consensus, partly driven by severe winter weather and Wireline losses . Values retrieved from S&P Global.*
  • Forward (low coverage): Q3 2025 EPS $0.38 (1 estimate), revenue $141.0M (1 estimate), EBITDA $21.0M (1 estimate); Q4 2025 EPS $0.30 (1), revenue $138.8M (1), EBITDA $16.2M (1); Target Price consensus $18.00 (2 estimates) — coverage remains thin. Values retrieved from S&P Global.*
MetricQ1 2025 ActualQ1 2025 Consensus
Revenue ($USD Millions)$135.2 N/A*
Diluted EPS ($USD)$0.03 N/A*
EBITDA ($USD Millions, SPGI basis)$12.7*$17.0*
Adjusted EBITDA ($USD Millions, Company)$15.5 N/A*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • High Spec Rigs remains the core earnings engine with record revenue and durable margins; continued market-share gains underpin mid-teens consolidated margin trajectory as weather normalizes .
  • Ancillary momentum (Torrent, Rentals, P&A) is a differentiator; Torrent’s margin profile (25–30%) and quadrupled y/y revenue supports mix-driven margin resilience .
  • Wireline is the swing factor: cost actions and redeployment are improving results; monitor stage counts and margin recovery into Q2–Q3 for upside vs conservative expectations .
  • Capital returns are consistent: $0.06 dividend sustained; buybacks remain opportunistic based on share price and market conditions, supported by $104M+ liquidity and zero net debt .
  • Weather-driven Q1 EBITDA miss vs consensus was transitory; with seasonality fading, margin recovery should support estimate recalibration (particularly for EBITDA) .
  • Strategic optionality: disciplined M&A remains on the table as bid-ask spreads narrow; expect accretive deals or continued organic investments in high-ROI assets .
  • Trading implication: near-term narrative likely pivots to rigs/ancillary strength offset by wireline normalization; catalysts include Q2 margin recovery, Torrent growth, and any M&A/buyback actions .

Citations:

Values retrieved from S&P Global.*