RPC NYSE: RES reported third-quarter 2026 revenue growth and improved adjusted margins despite what management described as subdued completion activity, while cautioning that typical year-end seasonality and ongoing market uncertainty could affect fourth-quarter demand.
Revenue increased 1% sequentially to $468 million, Chief Financial Officer Mike Schmit said during the company’s earnings call. Adjusted EBITDA rose to $71.5 million from $66 million in the prior quarter, lifting adjusted EBITDA margin by 100 basis points to 15.3%. Adjusted diluted earnings per share were $0.10.
Management attributed the margin improvement to operational execution, cost leverage in several product lines, technology adoption and returns from targeted investments. Technical Services, which accounted for 95% of third-quarter revenue, increased 1% sequentially, while Support Services revenue rose 3%.
Technical Services Growth Led by Coiled Tubing and Snubbing
President and CEO Ben Palmer said Cudd Pressure Control’s coiled tubing revenue increased 20% sequentially, with gains across all districts. He said results benefited from an “exceptionally strong job and equipment mix,” though he cautioned that those conditions may be difficult to replicate consistently.
The company took delivery of a third 2 7/8-inch reel trailer, an upgrade to an existing unit rather than an addition to its fleet. RPC now has two additional units that can be upgraded for 2 7/8-inch reel replacement. Palmer said the larger-diameter units have generated attractive utilization and support investments where the company sees strong full-cycle returns.
Cudd Pressure Control’s snubbing revenue increased 12% sequentially. A big-bore snubbing unit that began service during the second quarter completed its first full quarter of work in the third quarter. The unit is intended for regulatory-driven cavern storage inspections, an activity that Palmer said has multiyear visibility but likely experiences its strongest seasonal demand in the second and third quarters.
Thru Tubing Solutions’ downhole tools revenue declined 2% sequentially, primarily because of lower fishing activity after several strong quarters. However, management said core products grew in the Rocky Mountain, Northeast, Southeast and international districts.
The company is expanding adoption of MetalMax, its metal-on-metal power section. Palmer said some early-adopter districts are using the product on more than half of their jobs. The technology is designed to reduce trips out of hole, lower nonproductive time and operate in harsher conditions than traditional power sections. During the quarter, the company’s downhole tools set depth records in the Bakken and Montney formations.
Wireline Impairment and Pressure Pumping Conditions
Wireline revenue declined 8% sequentially. Palmer said Pintail Wireline has maintained a leading market position in the Permian Basin, but persistent pricing weakness and higher costs have reduced management’s long-term earnings expectations for the business.
As a result, RPC recorded $74.5 million in non-cash impairment charges related to Pintail Wireline. Schmit said the impairment will reduce future depreciation and amortization expense by about $3 million per quarter.
Cudd Energy Services’ pressure pumping revenue, including acidizing services, rose 3% sequentially. Slightly improved pricing was partially offset by lower pump hours, which were affected by customer delays tied primarily to third-party logistics issues. Revenue and cost per pump hour both increased marginally from the second quarter.
Palmer said the company’s gas-burning pressure pumping equipment remains well utilized, although external factors have created available capacity. Industry spare capacity appears “meaningfully lower” than it was several quarters ago, he said. RPC expects to maintain its current working fleets and will wait for returns to improve before reactivating equipment.
The company has also seen increased customer interest in enhanced production techniques on existing wells, which it has been able to serve using non-gas-burning equipment and smaller crews.
Cash Flow, Capital Spending and Outlook
Net cash provided by operating activities totaled $41 million during the quarter. After $40 million of capital expenditures, free cash flow was $1 million. Schmit said working capital increased by $25 million, primarily reflecting strategic inventory purchases of components in short supply, as well as the timing of customer collections and vendor payments.
At quarter-end, RPC held approximately $177 million in cash, had a $30 million note payable and no borrowings under its $100 million revolving credit facility. The company maintained its regular quarterly cash dividend at $0.04 per share, with year-to-date dividend payments totaling $27 million.
RPC expects 2026 capital expenditures of $155 million to $175 million. Some equipment deliveries anticipated for 2026 have shifted into 2027, and management said 2027 capital spending could be similar to 2026 assuming no additional delivery delays.
Management expects normal holiday-related seasonality to affect activity across several service lines in the fourth quarter, although customer schedules currently suggest the impact could be less severe than in recent years. Palmer said oil and gas producers appear cautiously optimistic about commodity prices, but inflation, demand concerns and geopolitical developments continue to create uncertainty.
Looking toward 2027, Palmer said the company is “optimistic” and sees encouragement among both large and small exploration and production companies. Still, he said RPC would not reactivate additional equipment without substantially better pricing and a firm customer commitment.
About RPC (NYSE:RES)
RPC, Inc NYSE: RES is an oilfield services company that provides specialized equipment and services to energy producers and exploration and production companies. Its offerings support the drilling, completion, production and maintenance of oil and natural gas wells.
The company's services include pressure pumping, coiled tubing, well control, nitrogen services, downhole tools, well testing, fishing and rental equipment. These services are used in activities such as hydraulic fracturing, well intervention, workover operations and production enhancement.
RPC was founded in 1984 and is headquartered in Atlanta, Georgia.
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