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RPC (RES) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Jul 30, 2026

Source: earnings call transcript

Executive summary

RPC, Inc. Q2 FY26 — Sequential Revenue Growth and Margin Expansion

RPC delivered sequential revenue growth and meaningful margin expansion in Q2 FY26, driven by strong execution and technology adoption in its technical services segments. Despite a subdued industry activity level and competitive pricing pressures in some areas, the company maintained a disciplined approach to capital allocation and is making targeted investments for future growth, while navigating commodity price uncertainty.

Highlights

5

  • Sequential revenue increased by 1% to $461 million.

  • Adjusted EBITDA increased to $66 million, up from $53.5 million sequentially.

  • Adjusted EBITDA margins expanded by 250 basis points sequentially to 14.3%.

  • ThruTubing Solutions revenues increased 10% sequentially, with the Rocky Mountain region growing over 20%.

  • Cut Pressure Control's snubbing business was up 14% sequentially, and coil tubing was up 6%.

Concerns

4

  • Wireline revenues decreased 16% sequentially due to customer activity reductions and lost crews from aggressive competitor pricing.

  • Pressure pumping business saw a 1% sequential revenue decrease, offset by slightly lower pump hours.

  • SG&A expenses increased to $52 million, up from $48 million, primarily due to incentive comp, higher bad debt, and consulting expenses.

  • Operators are cautious due to uncertainty around commodity price duration and levels, leading to no expected significant change in activity near term.

Guidance & targets

CategoryTargetConfidence
Capital expenditures
$170 million to $190 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Technical Services
Represented 95% of total second quarter revenues.
Revenue as % of total: 95%
——1%—
Support Services
Represented 5% of total second quarter revenues.
Revenue as % of total: 5%
——11%—
Pressure Pumping
Revenues benefited from slightly improved pricing but was also offset by slightly lower pump hours.
Revenue as % of total: 30.3%
——-1%—
Downhole Tools (ThruTubing Solutions)
Saw broad-based strength with our Rocky Mountain region growing more than 20% sequentially.
Revenue as % of total: 25.3%Rocky Mountain region growth: >20% sequentially
——10%—
Wireline
Revenues were impacted by customer activity reductions and lost crews due to aggressive competitor pricing.
Revenue as % of total: 19.2%
——-16%—
Coil Tubing (within Cut Pressure Control)
Had the strongest growth in Elk City, which serves multiple basins, as well as growth in Pennsylvania and Michigan.
Revenue as % of total: 8.8%
——6%—
Cementing
Revenue as % of total: 6.2%
————
Rental Tools
Revenue as % of total: 3.6%
————
Cut Pressure Control (overall)
Led by coil tubing, snubbing, and well control.
Snubbing business growth: 14% sequentially
——8%—

Risks & headwinds

Competitive pricing in wireline market Q2 FY26

Wireline revenues down 16% sequentially

Mitigation:Remained disciplined on pricing and continue to maintain a strong position with key customers.

Uncertainty around commodity prices and geopolitical events Near term

Operators are being cautious due to uncertainty around the duration and ultimate levels of commodity prices.

Mitigation:Do not expect a significant change in activity near term, but acknowledge the dynamic nature of the market and are in a position to respond. Focus on controllable factors, strong full cycle returns, and cash flow generation.

Subdued industry activity levels Q2 FY26

Industry activity levels remained relatively subdued.

Mitigation:RPC delivered sequential revenue growth and meaningful margin expansion driven by strong execution, improved job mix, technology adoption, and contributions from targeted investments.

Increased SG&A expenses Q2 FY26

SG&A expenses were $52 million, up from $48 million in the prior quarter. As a percent of revenue, SG&A increased 60 basis points to 11.2%.

What to watch in Q3 FY26

CEO Succession Progress

Before year end 2026
Current Search initiated, expected to conclude before year end 2026
Target Successor announced

Why it matters

Successful leadership transition is critical for strategic continuity and long-term shareholder value.

The board has initiated a search for my successor, which is expected to conclude before year end, and I will remain in an advisory capacity to support a smooth leadership transition.

Find out whether RES delivers this. Inve re-checks your case every morning.

Q&A highlights

John inquired about the deployment strategy for upgraded coil tubing units (single basin vs. across the U.S.) and the potential for incremental horsepower deployments in the frac business.

Ben Palmer stated that upgraded coil tubing units have been focused on South Texas, VidCon, and the Permian, but are mobile and deployment depends on customer relationships. For the frac business, he indicated no plans for increased horsepower deployments but confirmed ongoing selective upgrades to newer, more efficient technology (DGB type equipment) to support the business and generate decent returns.

“In terms of increased, I would say no. What we are doing, though, we are supporting the business, we are making selective, you call them upgrades or whatever you know as equipment uh obviously something you manage over over time in terms of uh older units or those refurbed or replaced obviously we're upgrading those to the newer technology obviously leaning more and more uh into uh the the equipment that is either entirely or the DGB type of equipment.”

asked by John Daniel · answered by Ben Palmer

2 min read 5 chapters

Detailed narrative

CEO Succession

Ben Palmer announced his plan to retire as President and CEO by the end of 2026 after 30 years with RPC. The board has initiated a search for his successor, which is expected to conclude before year-end. Palmer will remain in an advisory capacity to support a smooth leadership transition, emphasizing continuity for employees, customers, and shareholders.

ThruTubing Solutions Performance

This segment saw a 10% sequential revenue increase, driven by broad-based strength, particularly in the Rocky Mountain region, which grew over 20%. Key product innovations like the Metal Max power section and Unplugged technology are enabling entry into new markets and applications. These solutions are well-suited for complex and longer laterals, reducing non-productive time for operators, as demonstrated by multiple horseshoe wells completed in the Permian.

Cut Pressure Control Growth

Revenues for Cut Pressure Control were up 8% sequentially, led by strong performance in coil tubing (up 6%) and snubbing (up 14%). A new big bore snubbing unit began work in early June, diversifying services into regulatory-driven cavern gas storage inspections. The company is accelerating investments in coil tubing, expecting a total of three 2-8 7th capable units by year-end, with two coming from upgrades to existing units.

Pressure Pumping Dynamics

The pressure pumping business experienced a 1% sequential revenue decrease, despite modest pricing improvements, due to slightly lower pump hours. A favorable job mix, with lower material and supply costs, benefited profit margins. Management stated no plans to reactivate fleets at current activity levels but is encouraged by easing gas takeaway constraints and the potential for a more supportive commodity price environment in 2027.

Financial Highlights

Total revenues increased 1% sequentially to $461 million. Adjusted EBITDA rose to $66 million, resulting in a 250 basis point expansion in adjusted EBITDA margins to 14.3%. The company ended the quarter with approximately $180 million in cash, $30 million in notes payable, and no borrowings on its $100 million revolving credit facility, which was amended and extended through June 2031.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.