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RE

Ranger Energy Services, Inc. (RNGR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $143.1M and diluted EPS was $0.25; Adjusted EBITDA was $21.9M with a 15.3% margin, the highest fourth-quarter profitability on record, though down sequentially due to wireline seasonality .
  • High Specification Rigs delivered another record revenue quarter ($87.0M) with continued utilization and rate strength; Ancillary Services grew year over year, while Wireline saw expected seasonal and structural headwinds .
  • Management raised the quarterly dividend 20% to $0.06/share and reiterated a disciplined capital return strategy; year-end liquidity was $112.1M with $40.9M cash and no long-term debt .
  • 2025 outlook: Q1 EBITDA unlikely to reach $20M (weather headwind), but “above mid-teens” absent further disruptions; modest YoY growth expected in rigs and ancillary; wireline margins targeted to high single digits in Q2–Q3 .

What Went Well and What Went Wrong

What Went Well

  • High Spec Rigs posted record Q4 revenue ($87.0M), supported by 115,900 rig hours and 1% higher hourly rate to $751; segment Adjusted EBITDA was $19.0M as Ranger gained share with major operators and maintained strong safety and execution .
  • Ancillary Services delivered Q4 revenue of $33.5M (+8% YoY) and Adjusted EBITDA of $8.0M; Torrent doubled EBITDA in 2024 and is expected to more than double again in 2025 with potential full utilization later this year .
  • Capital returns increased: dividend up 20% to $0.06 and $15.5M repurchases in 2024 at ~$10.11/share; liquidity expanded to $112.1M with $40.9M cash and no long-term debt, reinforcing allocation flexibility .

What Went Wrong

  • Wireline Services revenue fell to $22.6M (–25% QoQ, –46% YoY) with completions stage counts down to 1,800 (–28% QoQ, –64% YoY); pricing pressure and lost operating leverage drove an operating loss of $3.0M and Adjusted EBITDA of $0.2M .
  • Consolidated results declined QoQ (revenue $143.1M vs. $153.0M; Adjusted EBITDA $21.9M vs. $25.1M) due to typical holiday seasonality and wireline softness; management also flagged extreme winter weather in early 2025 as a near‑term headwind .
  • Full-year revenue fell to $571.1M (from $636.6M), with Free Cash Flow down modestly to $50.4M (from $54.3M), primarily due to the structural downturn in wireline completions activity .

Financial Results

Consolidated Performance (comparative)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$151.5 $138.1 $153.0 $143.1
Diluted EPS ($USD)$0.09 $0.21 $0.39 $0.25
Adjusted EBITDA ($USD Millions)$18.4 $21.0 $25.1 $21.9
Cost of Services (% Revenue)86% 82% 80% 82%

Segment Breakdown

Segment MetricQ4 2023Q3 2024Q4 2024
High Spec Rigs Revenue ($MM)$79.0 $86.7 $87.0
High Spec Rigs Operating Income ($MM)$10.0 $13.8 $13.4
High Spec Rigs Adjusted EBITDA ($MM)$15.4 $19.2 $19.0
Wireline Services Revenue ($MM)$41.5 $30.3 $22.6
Wireline Services Operating Income (Loss) ($MM)$(1.8) ~$0.0 $(3.0)
Wireline Services Adjusted EBITDA ($MM)$2.8 $2.7 $0.2
Processing & Ancillary Revenue ($MM)$31.0 $36.0 $33.5
Processing & Ancillary Operating Income ($MM)$3.4 $6.6 $5.5
Processing & Ancillary Adjusted EBITDA ($MM)$5.3 $8.8 $8.0

KPIs and Balance/Liquidity

KPIQ4 2023Q3 2024Q4 2024
Rig Hours (#)107,900 116,900 115,900
Hourly Rig Rate ($/hour)$733 $741 $751
Wireline Completions Stage Count (#)5,000 2,500 1,800
Liquidity ($MM)$85.1 $86.1 $112.1
Cash ($MM)$15.7 $14.8 $40.9
Free Cash Flow ($MM)$29.1 $10.8 $27.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend/ShareOngoing; payable Mar 28, 2025$0.05 (declared Oct 28, 2024) $0.06 Raised
Q1 2025 Adjusted EBITDAQ1 2025n/a“Unlikely to reach $20M; above mid-teens absent disruptions” New
Maintenance CapEx (% of Revenue)FY 20254–6% (company framework) 4–6% (similar to 2024) Maintained
Wireline Margin OutlookQ2–Q3 2025n/aHigh single-digit margins targeted New
Segment ActivityFY 2025Q3’24: rigs lead; stabilization in wireline Modest YoY growth in High Spec Rigs and Ancillary; wireline revenues may decline slightly YoY Maintained/Updated

Note: 8‑K dividend record date in Item 8.01 references March 14, 2024, while press release states March 14, 2025; treat the press release date as the operative disclosure .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Torrent gas processingRevenues doubled; mobile field power demand growing Growth continues; strong contribution EBITDA doubled in 2024; expected to more than double again in 2025; potential full utilization later this year Accelerating
Plugging & Abandonment (P&A)Rebound with record revenue/EBITDA after Q1 seasonality Strong contribution; growth in Q3 Investments to activate spreads; primarily E&P-driven with pursuit of IRA-related government work Expanding
Wireline pivotRestructuring; focus on production wireline; target 8–10% margins Stabilization; breakeven in Q3; production shift Seasonal decline; Q1 2025 depressed; margins targeted high single digits in Q2–Q3 Gradual improvement post Q1
Customer consolidation/vendor reductionNarrowing vendor lists; long-term contracts in discussion Continued; supportive of share gains “Steady as she goes” demand; share gains at expense of smaller incumbents Positive for RNGR
Safety/TRIR as differentiatorn/an/aBest TRIR on record; critical to major accounts Strengthening
Macro/gas basinsn/an/aHaynesville/Mid-Con strengthening on gas price run-up; back-half optimism tied to LNG demand Improving in gas plays
CapEx disciplineGrowth CapEx front‑loaded in 1H’24 YTD CapEx $28.7M (supporting customers) 2025 CapEx similar to 2024; maintenance 4–6% of revenue Stable discipline

Management Commentary

  • CEO: “We posted our highest fourth quarter profitability ever…High Specification Rigs delivered another record quarter of revenue…Ancillary Services…posted significantly improved margins” .
  • CFO: “Q4 revenue was $143.1M…Adjusted EBITDA $21.9M at 15.3%…Q1 2025 unlikely to reach $20M; above mid-teens absent further disruptions…High Spec Rigs and Ancillary will post modest YoY growth” .
  • CEO on wireline: commoditization and pricing deterioration in completions; pivot to conventional/production-oriented wireline underway .
  • CEO on capital returns: “20% increase to the regular quarterly dividend from $0.05 to $0.06…$15.5M repurchases at ~$10.11/share” .

Q&A Highlights

  • P&A investments: Activating additional spreads (rig, wireline, cementing); primarily E&P-led demand with pursuit of IRA-related government opportunities .
  • Gas basin outlook: Strengthening in Mid-Con and Haynesville; cautious back-half optimism aligned with LNG demand and recent gas price run-up .
  • Safety/vendor consolidation: Safety record, training, and multi-basin scale increasingly crucial as majors shrink vendor lists; RNGR positioned to win share .
  • Rig demand visibility: “Steady as she goes” across majors; incremental share gains from smaller incumbents through 2024–2025 .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 revenue/EPS was unavailable at time of query due to S&P Global daily request limit. As a result, estimate beat/miss analysis cannot be determined from S&P Global consensus data at this time [GetEstimates error].
  • Implication: With sequential declines driven by wireline and seasonal factors, any estimate revisions likely hinge on wireline trajectory, winter impacts in Q1 2025, and the visible strength in rigs/ancillary. Management’s Q1 caution and FY 2025 modest growth framing may temper near-term consensus for Q1 while supporting stable FY views .

Key Takeaways for Investors

  • High Spec Rigs remain the core earnings driver with record revenue, strong utilization, and rising rates; EBITDA resilience offsets wireline volatility .
  • Wireline headwinds are structural (commoditization, pricing) and seasonal; pivot to production wireline continues with margin recovery targeted in Q2–Q3 2025 .
  • Ancillary momentum (P&A, Torrent, Rentals) is meaningful; Torrent poised for another year of EBITDA doubling with possible full utilization in 2025—an underappreciated growth lever .
  • Liquidity improved to $112.1M and cash to $40.9M with no long-term debt; supports opportunistic capital returns and disciplined M&A when valuations align .
  • Dividend raised 20% to $0.06/share; combined with buybacks (~$15.5M in 2024) underscores confidence in FCF durability and shareholder-friendly capital deployment .
  • Near-term trading: Expect Q1 softness (weather-driven) and watch for Q2/Q3 margin inflection in wireline; rigs/ancillary stability should anchor the story .
  • Medium-term thesis: Production-focused model, vendor consolidation tailwinds, safety/scale differentiation, and growing Torrent/P&A platforms support steady cash generation and optionality .