Business Context and Reporting Period
Company: RPC, Inc. (NYSE: RES)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: RPC provides specialized oilfield services, primarily in the United States, categorized into Technical Services (well-site equipment and personnel) and Support Services (off-site tools and services). The company's performance is closely tied to oil and natural gas prices, drilling activity, and customer capital expenditures.
Key Financial Metrics
| Metric (in thousands) | Three Months Ended June 30, 2026 |
Three Months Ended June 30, 2025 |
Six Months Ended June 30, 2026 |
Six Months Ended June 30, 2025 |
|---|---|---|---|---|
| Revenues | $460,869 | $420,809 | $915,624 | $753,686 |
| Operating Income | $14,771 | $15,536 | $17,391 | $27,922 |
| Net Income | $12,075 | $10,148 | $12,930 | $22,178 |
| Diluted EPS | $0.05 | $0.05 | $0.06 | $0.10 |
| Adjusted EBITDA | $65,973 | $60,869 | $119,488 | $109,763 |
| Free Cash Flow | $4,702 | $10,025 | $3,770 | $17,620 |
| Cash and Equivalents | $179,468 (as of June 30, 2026) | |||
| Debt (Notes Payable) | $30,000 (Total); $0 Revolver Outstanding |
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 9.5% quarter-over-quarter (QoQ) and 21.5% year-over-year (YoY) for the six-month period. The YoY increase is largely attributed to the full six-month contribution from the Pintail Alternative Energy acquisition (closed April 2025) and higher activity in pressure pumping, downhole tools, and coiled tubing.
- Profitability: While Q2 2026 operating income ($14.8M) was slightly lower than Q2 2025 ($15.5M), the six-month operating income declined significantly to $17.4M from $27.9M in the prior year. Net income for the six months dropped to $12.9M from $22.2M.
- Segment Performance: Technical Services revenues grew 10.4% QoQ and 23.1% YoY (six months). Conversely, Support Services revenues declined 5.4% QoQ and 4.1% YoY (six months) due to job mix changes.
- Cash Flow: Operating cash flow for the six months decreased to $74.6M from $92.9M, primarily due to a $51.0M increase in accounts receivable driven by higher activity levels. Free cash flow declined to $3.8M from $17.6M.
- Acquisition Costs: Acquisition-related employment costs totaled $7.3M for the quarter and $14.6M for the six months, representing non-cash adjustments related to the Pintail deal.
Guidance, Outlook, and Risks
- Capital Expenditures: Management expects 2026 capital expenditures to range between $170 million and $190 million, focused on maintenance, growth opportunities, and ERP system upgrades. $70.8M was incurred in the first six months.
- Market Outlook: Management notes that the oilfield services completion market remains over-supplied, impacting asset utilization and pricing. However, recent geopolitical events in the Middle East have supported higher oil prices (up 49.1% QoQ), which may benefit activity outside the region.
- Liquidity: The company maintains a strong liquidity position with $179.5M in cash and $81.8M available under its $100M revolving credit facility (maturity extended to June 2031). No borrowings were outstanding on the revolver as of June 30, 2026.
- Risks: Key risks include volatility in oil and natural gas prices, intense competition, potential supply chain disruptions, and the impact of tariffs on material costs. The company also faces ongoing sales and use tax audits.
- Dividends: A quarterly dividend of $0.04 per share was declared on July 28, 2026, payable September 10, 2026.
Investor Verification Checklist
- Working Capital Trends: Verify the sustainability of the $51M increase in accounts receivable and its impact on future cash conversion cycles.
- Segment Mix: Monitor the divergence between the high-growth Technical Services segment and the declining Support Services segment to assess overall margin stability.
- Acquisition Integration: Review the ongoing impact of Pintail-related employment costs ($14.6M YTD) on net income and Adjusted EBITDA margins.
- Capital Allocation: Track progress against the $170M-$190M full-year CapEx guidance, specifically regarding the ERP implementation costs.
- Debt Covenants: Confirm continued compliance with the amended credit agreement covenants, specifically the leverage and debt service coverage ratios.