RPC's Q2 2025 Earnings Call: Unpacking Contradictions in M&A Strategy, Revenue Projections, and Margin Pressures

M&A strategy and approach, Pintail revenue projections, pressure pumping customer diversification, insurance cost impact on margins, and M&A strategy and market conditions are the key contradictions discussed in RPC's latest 2025Q2 earnings call.



Revenue Growth and Acquisition Impact:
- RPC, Inc. reported revenues increased 26% to $421 million in the second quarter, driven by the full quarter impact of the recent Pintail acquisition.
- The growth was primarily due to the acquisition, as Pintail contributed approximately $99 million in the second quarter, representing 23% of total revenues.

Pressure Pumping Challenges and Strategic Shifts:
- The pressure pumping segment faced a challenging environment, with a 200% increase in third-party nonproductive time, impacting operational efficiencies.
- To mitigate these issues, RPC shifted to dedicated customers, increasing the mix of simul-frac and twin frac operations, which generally require additional equipment and less Cudd supplied materials.

Downhole Tools and Coiled Tubing Expansion:
- Revenues in downhole tools were up 6% sequentially, with particular strength in the Northeast and Rocky Mountain regions.
- The growth was driven by the successful introduction of the A10 motor and UnPlug products, which are gaining market traction, especially in longer laterals wells.

Wireline Segment Expansion and Strategic Acquisition:
- Wireline revenues contributed approximately $99 million in the second quarter, with Pintail being the largest wireline provider in the Permian Basin.
- The acquisition of Pintail provided operational leadership, a well-regarded management team, and a blue-chip customer base, diversifying RPC's portfolio and improving its cash flow profile.