Ranger Energy Services, Inc. (RNGR)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue fell to $128.9M (-8% q/q, -16% y/y), with diluted EPS of $0.05 and Adjusted EBITDA of $16.8M (13% margin) as completions-focused services softened and northern districts saw activity declines .
• Reported results missed S&P Global consensus: revenue $141.0M* and EPS $0.38*; prior quarter revenue and EPS were slight beats vs consensus ($140.0M*, $0.24*) .
• Strategic acquisition of American Well Services (AWS) for ~$90.5M (cash/equity/earnout), expanding rig count ~25%, with identified ~$4M annual synergies, pro forma leverage <0.5x, and management targeting >$100M Adjusted EBITDA in 2026 .
• Capital returns continued: 667,500 shares repurchased for $8.3M; dividend maintained at $0.06 per share; liquidity a solid $116.7M with no revolver borrowings at quarter-end .
• Near-term narrative: softness in completions (wireline/coiled tubing) offsets steady production-focused rigs; integration of AWS and initial deployment of ECHO hybrid rigs are key catalysts into 2026 .

What Went Well and What Went Wrong

What Went Well

• Integration and strategic fit: “This transaction galvanizes our role as the leading well services provider…The combined company will become the largest well services provider in the Lower 48” .
• Balance sheet and cash generation: Free cash flow of $8.0M in Q3 and $25.8M YTD; liquidity $116.7M; continued dividends and buybacks reflect capital discipline .
• Technology progress: First two ECHO hybrid electric rigs delivered and undergoing final testing with strong customer interest; management set an “over/under at 10” ECHO rigs built in 2026 .

What Went Wrong

• Completions softness: Wireline revenue down 22% q/q and 43% y/y; completions stage counts fell to 1,800 from 2,500; operating loss impacted by $1.6M non-cash explosives inventory adjustment .
• Segment margin pressure: Adjusted EBITDA declined to $16.8M from $20.6M in Q2; HSR hourly rates dipped to $727 with increased standby time between jobs .
• Northern region headwinds and macro: Reduced activity in Bakken and Powder River; broader commodity-price-driven declines caused higher standby and activity breaks, depressing sequential results .

Financial Results

Segment revenues:

Segment Adjusted EBITDA:

KPIs:

Q3 2025 vs S&P Global Consensus:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “This transaction galvanizes our role as the leading well services provider…The combined company will become the largest well services provider in the Lower 48 with the most compelling technology in the space.” — Stuart Bodden, CEO .
• “Purchase price of approximately $90.5 million represents less than 2.5x trailing 12 months EBITDA…expected ~$4 million in annual cost and revenue synergies…pro forma leverage of less than one-half turn.” — Stuart Bodden .
• “Rig hours…down as a consequence of reduction in completion related work and softness in our northern region…Hourly rig rates slightly decreased…reflecting an increase in standby hours at lower rates.” — Press release segment detail .
• “This segment was impacted by lower activity, as well as non-cash inventory adjustments of $1.6M that affected operating income but were treated as an adjustment to EBITDA.” — Melissa Cougle, CFO (Wireline) .
• “The first two ECHO rigs have been delivered and are being deployed presently. Customer interest remains robust…” — Stuart Bodden .

Q&A Highlights

• AWS footprint and revenue mix: AWS is “100% Permian Basin”; ~55% revenue overlap with Ranger’s rigs and ~45% complementary services (tubing rentals/inspection, chemicals, logistics) .
• ECHO adoption curve: Two rigs in Bakken and Permian entering service; management set 2026 ECHO build over/under at 10, suggesting additive deployments with potential to displace conventional rigs over time .
• Customer base: Significant overlap with Ranger’s major customers plus new relationships, expanding cross-sell opportunities .

Estimates Context

• Q3 2025 results missed consensus: revenue $141.0M* vs $128.9M, EPS $0.38* vs $0.05; softness in completions and regional activity plus increased standby drove the miss .
• Q2 2025 results modestly beat revenue ($140.0M* vs $140.6M) and EPS ($0.24* vs $0.32), aided by improved wireline and ancillary activity and margin efficiency .
• Estimate depth was limited (# of estimates = 1*), reducing statistical confidence in pre-announcement expectations. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Q3 contraction reflects cyclical completions weakness; core production-focused rigs remain resilient and should underpin stability until macro improves .
• Near-term setup: integration of AWS (accretive, low leverage, ~$4M synergies) plus first ECHO deployments create tangible catalysts into 2026; monitor synergy capture milestones and ECHO contract flow .
• Watch mix and pricing: standby time and northern district softness pressured HSR rates; recovery in completions and P&A is expected later in 2026 — key for margin normalization .
• Balance sheet optionality: $116.7M liquidity, ongoing dividend ($0.06) and buybacks signal continued cash discipline even amid softness .
• Segment focus: Wireline requires stabilization; inventory adjustment was one-time; two new customer contracts suggest a path to more sustainable 2026 revenue .
• Estimates recalibration: Street likely to trim near-term EPS/revenue expectations given Q3 miss, while increasing medium-term EBITDA outlook post-AWS and ECHO scaling (consensus depth limited)* .
• Tactical: Stock narrative likely driven by M&A integration updates, ECHO adoption metrics, and any early signs of completions activity recovery; track Q4 commentary and early 2026 contracting .

Notes: Values retrieved from S&P Global.*