RPC Q4 Earnings Call Highlights

Key Points

• RPC reported a broad sequential slowdown in Q4 with revenue down 5% to $426 million, driven by weakness late in December across most service lines though pockets of strength included cementing, tubular services, and Cudd Pressure Control.
• Adjusted EBITDA fell to $55.1 million (12.9% margin); management began expensing wireline cables (shorter useful life), which raised cost of revenues and lowered CapEx but did not change free cash flow, and the company ended the quarter with about $210 million of cash and no revolver borrowings.
• Operationally RPC is keeping pressure-pumping fleets idled until returns improve, is rolling out new tools (A-10 motor, MetalMax, UnPlug) to gain share, and expects 2026 CapEx of $150–180 million while warning near-term results may be pressured by winter weather and subdued commodity prices.

RPC NYSE: RES executives told investors its fourth quarter of 2025 reflected a broad, sequential slowdown across most service lines, with the most notable softness emerging late in the period. On the company’s earnings call, President and CEO Ben Palmer said October and November activity was consistent with the third quarter, but December weakened “particularly later in the month,” contributing to a 5% sequential revenue decline to $426 million.

Fourth-quarter activity softened late in the year

Palmer said the sequential revenue decline was spread across “the majority of our service lines.” Businesses outside pressure pumping continued to represent the majority of revenue, accounting for 70% of the total and declining 4% sequentially versus the third quarter.

Despite the overall decline, Palmer highlighted pockets of strength. The company posted revenue increases at Spinnaker Cementing Solutions; Patterson Tubular Services; its storage and inspection business; and within the Cudd Pressure Control, snubbing, and well control operations. Other areas, including Thru Tubing Solutions’ downhole tools, saw a 9% sequential revenue decrease, according to management.

Regionally, Palmer said Thru Tubing Solutions experienced growth in the Southeast and Northeast. The Western MidCon region, including Elk City and Odessa, was flat sequentially, while weakness was seen internationally and in the Rocky Mountain region.

Operational highlights: new tools, snubbing utilization, and pressure pumping discipline

Management spent considerable time discussing technology and product rollout within Thru Tubing Solutions, which Palmer described as a market leader in downhole completion tools. He said RPC has seen success since the late 2024 rollout of its A-10 downhole motor, which the company positioned for longer laterals and higher flow rates. Palmer added that the tool has supported “incremental share gains.”

Palmer also discussed the continued rollout of MetalMax, a metal-on-metal power section component designed to enable a shorter motor, higher torque output, reduced downtime, and improved performance in demanding environments. The company said it began with prototypes in key areas and has expanded into other regions.

Another product focus was UnPlug technology, which Palmer said can reduce or sometimes eliminate the need for bridge plugs during well completion and can deliver faster drill-out times while maintaining stage isolation. He characterized adoption as “steadily increased,” though still early in its life cycle.

Within Technical Services, Cudd Pressure Control revenue increased 1% sequentially, led by higher well control activity and snubbing revenue that increased 13% as equipment was “well utilized.” Palmer said the snubbing business expects delivery of a big-bore snubbing unit in 2026 designed for cavern gas storage work under a long-term customer maintenance schedule, which he described as “regulatory driven” and part of RPC’s broader diversification efforts.

Coil tubing, the largest service line within Cudd Pressure Control, declined 2% sequentially following what management called a strong third quarter. Palmer noted that a new 2 7/8-inch unit remained well utilized and said the company is upgrading an existing unit to handle larger tubing, with that equipment expected to be in service by mid-2026.

In wireline, Palmer said Pintail Completions—described as the largest wireline provider in the Permian Basin—saw a 3% revenue decline. He said the company expects 2026 to track closely with activity levels among large Permian operators.

Pressure pumping revenue declined 6% sequentially, which management attributed largely to holiday shutdowns and an idled fleet in October. Palmer said RPC does not expect to reactivate any fleets until returns improve, a stance he reiterated in response to analyst questions about what would be required to bring equipment back.

Financial results: EBITDA declined; wireline accounting change affected classification, not free cash flow

Chief Financial Officer Mike Schmidt said fourth-quarter revenues fell 5% sequentially to $426 million. Technical Services represented 95% of revenue and declined 4% sequentially, while Support Services represented 5% and declined 18%.

Schmidt provided a revenue mix for the quarter, with the largest service lines as follows:

• Pressure pumping: 27.6%
• Wireline: 24.1%
• Downhole tools: 22.4%
• Coiled tubing: 9.7%
• Cementing: 5.9%
• Rental tools: 3.4%

Those lines accounted for 93% of total revenue, the company said.

RPC also disclosed an accounting change: beginning in the fourth quarter, the company started expensing wireline cables that had previously been capitalized, which Schmidt said was driven by a change in useful life due to increased activity and a shift in work type. Management said the impact was seen primarily through higher cost of revenues and lower capital expenditures, along with a modest decrease in depreciation and amortization. In the Q&A, Schmidt described the shift as tied to increased Simul-frac and trimul-frac work and said the company determined cable life was “closer to under a year” rather than the 18 months used previously.

Cost of revenues excluding depreciation and amortization was $337 million, up from $335 million in the prior quarter, with Schmidt citing the wireline cable expensing and other materials and supplies tied to job mix. SG&A rose to $48 million from $45 million, with SG&A as a percentage of revenue increasing to 11.2% due primarily to employee incentives and higher employment-related costs.

Schmidt said the effective tax rate was “unusually high” during the quarter, driven largely by the liquidation of company-owned life insurance policies associated with the previously announced dissolution of RPC’s non-qualified supplemental retirement income plan, along with the non-deductible portion of acquisition-related employment costs.

Adjusted diluted EPS was $0.04, with adjustments totaling $0.06 related to expensing wireline cables purchased and capitalized in prior quarters, acquisition-related employment costs, and an increase in tax expense tied to taxable gains on sales of the company-owned life insurance policies and other investments.

Adjusted EBITDA was $55.1 million, down from $67.8 million sequentially, reflecting “broad-based declines across the majority of the businesses,” and adjusted EBITDA margin fell 230 basis points to 12.9%, management said.

Cash, capital spending, and balance sheet flexibility

Schmidt reported operating cash flow of $201.3 million for the year to date, with capital expenditures of $148.4 million, resulting in free cash flow of $52.9 million. He said the shift to expensing wireline cables reduced both operating cash flow and CapEx but had “no change to free cash flow.”

At quarter end, RPC had about $210 million in cash, a $50 million seller finance note payable, and no borrowings under its $100 million revolving credit facility. The company paid $35.1 million in dividends during 2025 through the fourth quarter, including $8.8 million during the quarter.

Full-year 2025 CapEx of $148 million was primarily maintenance-related and included opportunistic asset purchases along with ERP and other IT upgrades. Schmidt said CapEx was $12 million lower due to wireline cables being expensed rather than capitalized in the fourth quarter, and that about $15 million of anticipated 2025 CapEx was delayed into 2026. RPC now expects 2026 capital expenditures in the range of $150 million to $180 million, with spending to be adjusted based on activity levels.

Early 2026 pressures: weather disruptions and cautious outlook

Palmer said many RPC businesses were impacted by winter storms early in the first quarter. While activity is expected to continue as conditions improve, he said lost operating days are “not fully recoverable” and that associated costs will weigh on near-term profitability.

In closing remarks, Palmer described 2025 as a challenging year, noting year-end oil prices were at their lowest level since COVID. While he said oil and natural gas prices have improved recently, he added that further increases are needed to drive “significant customer activity levels.” He emphasized cost focus, returns, and maintaining financial flexibility, including the ability to pursue selective organic investment, new technologies, and M&A. Asked about share repurchases, Palmer said buybacks remain an option the company evaluates, but he did not signal an imminent change in approach.

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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