RPC’s Earnings Call: Coil Tubing Focus Stands Despite Market Shifts, Horsepower Hesitation Amid Pricing Optimism

Date of Call: Jul 30, 2026

Financials Results

• Revenue: $461M, up 1% sequentially
• EPS: $0.08 adjusted diluted EPS
• Operating Margin: Adjusted EBITDA margin of 14.3%, up 250 basis points sequentially

Guidance:

• 2026 capital expenditures expected in the range of $170 to $190 million.
• Some CapEx may occur in 2027 based on project returns and opportunity.

Business Commentary:

Revenue Growth and Margin Expansion:

• RPC Inc. reported revenue of $461 million for Q2 2026, up 1% sequentially.
• The company experienced meaningful margin expansion with an adjusted EBITDA margin increase of 250 basis points to 14.3%.
• Growth was driven by strong execution, improved job mix, technology adoption, and targeted investments, particularly in the downhole tools and pressure control segments.

Technical Services and Downhole Tools:

• Technical services, representing 95% of total Q2 revenues, were up 1%, with downhole tools revenues increasing 10% sequentially.
• The growth in downhole tools was due to broad-based strength in the Rocky Mountain region and successful introductions of new products like the MetalMax power section.

Coil Tubing and Strategic Investments:

• Coil tubing revenues were up 6% sequentially, with significant growth in the Elk City, Pennsylvania, and Michigan regions.
• RPC is enhancing its large diameter capabilities with plans for three 2-8-7 capable units by year-end, focusing on high-return markets.

Wireline Segment Challenges:

• Wireline revenues were down 16% sequentially due to customer activity reductions and aggressive competitor pricing.
• Despite market conditions, RPC has maintained a strong position with key customers by adhering to disciplined pricing strategies.

Financial Position and Strategic Outlook:

• RPC maintained a strong balance sheet with $180 million in cash and no borrowings on its revolving credit facility.
• The company is well-positioned with differentiated technologies and financial flexibility to pursue opportunities while generating cash and delivering strong full-cycle returns.

Sentiment Analysis:

Overall Tone: Neutral

• Management expressed caution regarding industry improvement pace, stating 'While we remain cautious regarding the pace of broader industry improvement...' but highlighted operational strengths like 'sequential revenue growth' and 'meaningful margin expansion' from strong execution and targeted investments.

Q&A:

• Question from John Daniel (Daniel Energy Partners): On the coil tubing, the upgrades, are they staying in one basin or do you see the opportunity to take them across the u.s and just just your thoughts on where that could go over the next you know a couple years in terms of for more of those units
  Response: Focus is currently on the Permian, Midcon, and South Texas basins, with deployment driven by customer relationships.

• Question from John Daniel (Daniel Energy Partners): On the frack side of the business... just some thoughts on, do you see opportunities for incremental horsepower deployments?
  Response: No plans for incremental fleets; focus is on disciplined, selective upgrades and equipment modernization to maintain returns.

Contradiction Point 1

Focus Basins for Coil Tubing Unit Deployment

The strategic deployment focus for upgraded coil tubing units is stated to remain unchanged.

John Daniel (Daniel Energy Partners) - John Daniel (Daniel Energy Partners)

2026Q2: Currently, the focus is likely to remain on these key basins with no significant shifts anticipated. - Ben Palmer(CEO)

Will the coil tubing upgrades remain in one basin or expand across the U.S., and what are your thoughts on their growth potential over the next few years? - John Daniel (Daniel Energy Partners)

2026Q2: The primary focus remains on these specific basins with no significant shifts anticipated. - Ben Palmer(CEO)

Contradiction Point 2

Opportunities for Incremental Horsepower Deployments

The assessment of potential new horsepower investments is stated to be unchanged.

John Daniel (Daniel Energy Partners) - John Daniel (Daniel Energy Partners)

2026Q2: No significant opportunities for new incremental horsepower deployments at this time. - Ben Palmer(CEO)

Are there opportunities for incremental horsepower deployments in your fracturing operations? - John Daniel (Daniel Energy Partners)

2026Q2: There are no current plans for incremental horsepower deployments. - Ben Palmer(CEO)

Contradiction Point 3

Coil Tubing Unit Deployment Strategy

Contradiction on whether focus remains regional or expands nationally.

John Daniel (Daniel Energy Partners) - John Daniel (Daniel Energy Partners)

2026Q2: Currently, the focus is likely to remain on these key basins with no significant shifts anticipated. - Ben Palmer(Responder)

Will the coil tubing upgrades expand beyond a single basin to other U.S. regions, and what are your plans for additional units over the next couple of years? - Don Crist (Johnson Rice)

2026Q1: The company is... continually upgrading older units to newer technology... Investments are being made selectively and prudently, focusing on strong full-cycle returns. The business is funded to support these necessary upgrades. - Ben Palmer(Responder)

Contradiction Point 4

Opportunities for Incremental Fracking Horsepower

Contradiction on the potential for new horsepower deployments.

John Daniel (Daniel Energy Partners) - John Daniel (Daniel Energy Partners)

2026Q2: No significant opportunities for new incremental horsepower deployments at this time. - Ben Palmer(Responder)

Are there opportunities for additional horsepower capacity in your fracking operations? - Don Crist (Johnson Rice)

2026Q1: The environment is 'incrementally positive' but not yet 'broad-based.' Pricing pressures appear to be subsiding... Recent geopolitical developments have led to some firming in pricing... - Ben Palmer(Responder)

Contradiction Point 5

Geographic Focus for Coil Tubing Upgrades

Contradiction on whether deployment will stay in key basins or expand nationally.

John Daniel (Daniel Energy Partners) - John Daniel (Daniel Energy Partners)

2026Q2: The upgrades have been focused on basins like South Texas, Midcon, and the Permian. The units are mobile, and specific customer relationships will influence their deployment. Currently, the focus is likely to remain on these key basins with no significant shifts anticipated. - Ben Palmer(CEO)

Will the coil tubing upgrades remain in one basin or expand across the U.S., and what are your plans for their growth over the next few years? - Donald Crist (Johnson Rice & Company, L.L.C., Research Division)

2025Q4: There has been some benefit as less capitalized competitors reorganize or are sold. This market stress could eventually benefit RPC. - Ben Palmer(CEO)