RES Third Quarter Results Show Broad-Based Revenue Growth Despite Market Headwinds

Technical Services Lead Gains, Highlighting Broad-Based Improvement

RPC, Inc. (RES) reported sequentially stronger financial results for the third quarter of 2025, underpinned by improvements across most of its core oilfield service lines. Revenue climbed 6% to $447.1 million compared to the prior quarter, driven largely by a robust 14% increase in pressure pumping and steady momentum in technical services such as coiled tubing and downhole tools.

The technical services segment remains the primary growth engine, generating $422.21 million in quarterly revenue (up 6% sequentially) and a 16% surge in operating income. Support services also contributed with a 4% revenue lift, underscoring broad-based strength despite only modest gains in certain areas. RPC’s diversified portfolio and operational focus were crucial to these gains amid an environment characterized by low oil prices and cautious customer spending.

Cost Discipline Preserved Margins as Market Softened

Management’s disciplined approach kept adjusted EBITDA rising by 10% to $72.33 million and lifted adjusted EBITDA margin to 16.18%, even as the sector faces clear headwinds. Notably, net income grew to $12.96 million (up 28% sequentially) with diluted earnings per share at $0.06, and adjusted net income reached $18.38 million, or $0.09 per share.

Key operating metrics—including net income margin and adjusted net income margin—remained steady at 2.9% and 4.1% respectively. Cost of revenues increased 5% (to $334.67 million), reflecting the higher business activity but were balanced by efficient cost controls. Despite increases in SG&A and ongoing non-cash costs from the Pintail acquisition, margin expansion suggests effective management through an otherwise difficult industry period.

Cash Flow Remains Healthy Amid Lower Industry Activity

RES exited the quarter with $163.46 million in cash and cash equivalents, zero borrowings under its $100 million revolver, and continued to return capital to shareholders through dividends and share repurchases. Year-to-date through the third quarter, operating cash flow stood at $139.47 million, with free cash flow at $21.69 million despite increased capital expenditures and strategic acquisitions.

Reflecting a continued commitment to shareholder returns, the Board declared a regular $0.04 per share quarterly cash dividend, scheduled for payment in December. Total dividends paid for the year so far stand at $26.3 million, reinforcing RPC’s steady approach to capital allocation even during volatile periods for the industry.

Industry Conditions: Oil Prices Dip and Rig Count Softens, but Select Services Outperform

Despite oil prices recently dipping below $60/barrel and average U.S. rig count sliding for both quarter-over-quarter and year-over-year, select service lines—pressure pumping (+14%), coiled tubing (+19%), and downhole tools—defied the softness and posted healthy sequential increases. These pockets of strength suggest targeted operational excellence, though management signaled ongoing caution and cost controls heading into the fourth quarter, citing budget exhaustion and anticipated holiday slowdowns among clients.

Key Financials Signal Operational Resilience

With these solid financials, RPC continues to weather a turbulent sector landscape. A healthy cash reserve, manageable leverage, and steady operational improvements allow the company to balance growth and risk prudently as macroeconomic uncertainties persist.

Looking Ahead: Resilience and Prudence as Key Themes

RPC, Inc.’s third quarter results reflect its operational flexibility, capital discipline, and focus on profitable service lines. The coming months will pose additional challenges, as oilfield services confront holiday seasonality and soft commodity prices. Still, the company’s broad portfolio and strong cash position should help navigate uncertainty.

For investors and industry watchers, the message is clear: in an industry where many struggle amid price pressure, select leaders can outperform through disciplined management and focus on areas of persistent demand. Whether this outperformance continues depends on management’s ability to stay agile as industry headwinds persist into year-end and beyond.

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