RPC Q2 Earnings Call Highlights

RPC (NYSE:RES) reported second-quarter 2026 revenue of $461 million, up 1% sequentially, as growth in several technical-service lines and improved job mix supported a 250-basis-point increase in adjusted EBITDA margin.

Adjusted EBITDA rose to $66 million from $53.5 million in the first quarter, while adjusted diluted earnings per share were $0.08. Chief Financial Officer Michael Schmit said EBITDA margin reached 14.3%, benefiting from modest pricing gains, improved job mix, operating leverage at several locations and a sales-tax refund.

President and CEO Ben Palmer said the company’s results reflected “strong execution, improved job mix, technology adoption, and contributions from targeted investments,” even as industry activity remained relatively subdued.

Technical Services Growth Offsets Wireline Pressure

Technical Services, which accounted for 95% of quarterly revenue, increased 1% sequentially. Support Services, representing the remaining 5%, increased 11%.

Downhole tools revenue at ThruTubing Solutions increased 10% sequentially, including growth of more than 20% in the Rocky Mountain region. Palmer attributed the performance to demand for the company’s proprietary tools and to increasingly complex and longer well laterals.

The company expanded the availability and sizes of its MetalMax metal-on-metal power section, which Palmer said has increased its addressable market and market penetration. He said the technology can reduce the number of trips operators need to make out of a well, reducing nonproductive time. ThruTubing Solutions also completed several horseshoe wells in the Permian Basin exceeding 27,000 feet in recent weeks.

Cudd Pressure Control revenue rose 8% from the first quarter, led by coiled tubing, snubbing and well-control services. Snubbing revenue increased 14%, aided by a new big-bore snubbing unit that began work in early June and later moved to a multi-project assignment. Palmer said the unit is suited for cavern gas storage inspections, a regulatory-driven market that supports the company’s effort to diversify beyond well completions.

Coiled tubing revenue increased 6%, with the strongest growth in Elk City and additional gains in Pennsylvania and Michigan. Utilization increased across the company’s larger-diameter units, with its 2 7/8-inch unit fully utilized.

RPC expects to have three 2 7/8-inch-capable coiled tubing units by year-end. Two will result from reel-trailer upgrades to previously modernized units, while the third is associated with the previously delivered Trailblazer unit. Palmer said the company’s current geographic focus for the upgraded units is South Texas, the Mid-Continent and the Permian Basin, although the equipment can be moved based on customer relationships and returns.

Wireline remained a challenging market. Pintail Wireline revenue declined 16% sequentially due to reduced customer activity and lost crews amid aggressive competitor pricing. Palmer said RPC has remained disciplined on pricing while maintaining relationships with key customers.

Pressure Pumping Holds Steady as Mix Improves

Cudd Energy Services’ pressure pumping revenue declined 1% sequentially. Slightly improved pricing was offset by lower pump hours, according to Palmer. However, reduced fuel, materials and supplies provided to customers lowered revenue but improved profitability through job mix.

Palmer said RPC does not currently plan to reactivate pressure-pumping fleets at prevailing market levels. Instead, the company is selectively investing in upgrades and newer technology, including equipment that is fully or partially dual-fuel capable.

“We’re trying to remain disciplined,” Palmer said during the question-and-answer session, adding that the business is intended to fund the investment needs that the company believes can generate acceptable returns.

The company sees easing gas takeaway constraints and a potentially more supportive commodity-price environment as possible positives for 2027 exploration and production budgets. Still, Palmer said customers remain cautious because of uncertainty surrounding commodity prices and geopolitical volatility. RPC does not expect a significant near-term change in activity levels.

Costs, Cash Flow and Capital Spending

Cost of revenues, excluding depreciation and amortization, declined to $346 million from $356 million in the prior quarter, primarily because the company supplied lower levels of materials, fuel and other inputs on customer jobs.

Selling, general and administrative expense rose to $52 million from $48 million. The increase reflected incentive compensation, higher bad-debt expense and consulting costs. SG represented 11.2% of revenue, up 60 basis points sequentially. Depreciation and amortization was $43 million, slightly higher than in the first quarter.

Year-to-date operating cash flow totaled $75 million, while capital expenditures were $71 million, resulting in free cash flow of $4 million. Schmit said working capital was affected by higher revenue and the timing of customer payments.

• Cash at quarter-end: approximately $180 million
• Notes payable: $30 million
• Revolving credit facility borrowings: none
• Revolving credit facility: $100 million, amended and extended through June 2031
• Regular quarterly dividend: $0.04 per share
• Year-to-date dividend payments: $17.7 million

RPC raised its 2026 capital-expenditure outlook to a range of $170 million to $190 million, citing targeted growth investments that it believes offer strong full-cycle returns and can further differentiate its services. Schmit said some spending could shift into 2027 because of project timing and equipment lead times.

CEO Transition Underway

Palmer also reiterated his plans to retire as president and CEO and step down from the board by the end of 2026, following 30 years with the company. The board has started a search for his successor and expects to complete it before year-end. Palmer said he will remain in an advisory role to assist with the leadership transition.

Looking ahead, Palmer said the company believes its technology portfolio, financial flexibility and balance sheet position it to pursue attractive opportunities while maintaining its focus on cash generation and full-cycle returns.

About RPC (NYSE:RES)

RPC, Inc (NYSE: RES) provides essential equipment and services to companies engaged in the exploration, production and maintenance of oil and natural gas wells. The firm operates as an equity interest holding company, partnering with a network of independent service businesses to deliver a comprehensive suite of offerings for well completion and production operations.

Through its affiliated service companies, RPC offers pressure pumping and fracturing services, coiled tubing and nitrogen pumping, downhole tools and telemetry solutions, well intervention and workover services, along with rental tools and supply-chain logistics.

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