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DATE

Thursday, May 7, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Ben Palmer
  • Vice President and Chief Financial Officer — Michael Schmit

TAKEAWAYS

  • Total Revenue -- $455 million, a 7% sequential increase, primarily from higher activity across most service lines despite early quarter winter storms.
  • Technical Services Segment Revenue -- Represented 95% of total revenues and rose 7% sequentially; Support Services made up 5% and was flat compared to Q4 2025.
  • Service Line Mix -- Pressure pumping accounted for 31%, downhole tools 23.3%, wireline 22.7%, coiled tubing 8.5%, cementing 5.8%, and rental tools 3%, with these segments cumulatively comprising 94% of revenue.
  • Thru Tubing Solutions Revenue -- Increased 11% sequentially with double-digit growth in most geographic regions.
  • Metal Max Power Section -- Now accounts for 15% of power section utilization, with management seeing additional displacement potential as adoption broadens.
  • On-Plug and Surface Vibratory Technologies -- Demonstrated increased momentum, with operators adopting on-plug as "their primary stage isolation method" and new vibratory tech proving effective in longer laterals.
  • Cudd Pressure Control Revenue -- Decreased 7% sequentially due to regional weakness and fewer large well control events; partially offset by 13% nitrogen and 8% snubbing growth.
  • Cudd Coiled Tubing -- Down 7% sequentially, primarily due to "tough comparables" in Rockies and Northeast; company is upgrading a unit to handle 2 7/8-inch tubing.
  • Pintail Completions Revenue -- Relatively flat sequentially; management expects the wireline business to align closely with large Permian operator activity.
  • Cudd Pressure Pumping Revenue -- Up 20% sequentially, attributed to job mix and direct operator supply of materials, supplies, and fuel during the quarter.
  • Cost of Revenues (excl. D&A) -- $356 million, up from $330 million, driven primarily by increased materials, supplies, and fuel costs.
  • SG&A Expenses -- $48 million, slightly up, but as a percentage of revenue declined 60 basis points to 10.6% due to revenue growth.
  • Depreciation & Amortization -- $43 million, up from $39 million; the previous quarter reflected a $3 million reduction from a change in wireline cable accounting.
  • Adjusted Diluted EPS -- $0.03, with adjustments of $0.03 per share related to acquisition-related employment costs.
  • Adjusted EBITDA -- $53.5 million, down from $55.1 million; margin fell 110 basis points sequentially to 11.8% due to higher input costs and lower other income.
  • Operating Cash Flow -- $31 million year-to-date; CapEx $32 million; free cash flow negative $1 million, primarily due to increased receivables and lower unearned revenue offset by higher accounts payable.
  • Cash Position & Credit -- $201 million in cash, $50 million seller-financed note payable, and no draws on a $100 million revolving credit facility at the quarter's end.
  • Dividend -- Regular quarterly cash dividend maintained at $0.04 per share (total payout: $8.9 million).
  • 2026 Capital Expenditure Outlook -- Expected at $160 million–$180 million; low end of range increased due to opportunistic asset purchases, with ~$15 million delayed from 2025.
  • Spot Market Exposure -- "Spot really impacts...pressure pumping, and that's really only 31% of our overall revenue." Management added that spot market benefit "is not broad-based" but is incrementally positive in pockets.

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RISKS

  • The effective tax rate was "due to the disproportionate impact of permanent nondeductible items, mainly acquisition-related employment costs on a relatively low pretax income."
  • Management stated: "natural gas takeaway capacity, particularly in the New Mexico, could limit improvement in customer activity."
  • Persistent operator caution: "we believe operators are cautious and concerned about the duration of higher crude prices and the perception of capital budget increases in the equity market."
  • Negative free cash flow of $1 million attributed to increased working capital needs, specifically higher accounts receivable.

SUMMARY

Segment performance was uneven, with strong gains in downhole tools and pressure pumping offset by sequential declines in Cudd Pressure Control and coiled tubing services, reflecting ongoing regional and product-line variability. Management emphasized the accelerating adoption of proprietary technologies such as Metal Max and on-plug, which may influence future market share within Technical Services. Capital expenditures guidance increased at the low end due to opportunistic asset purchases, while balance sheet liquidity remained robust.

  • Pressure pumping benefited from favorable job mix and direct supply provision to operators, though management does not plan to reactivate additional fleets at current pricing levels.
  • Spot market exposure remains primarily limited to pressure pumping, with firming in selected pockets but no broad-based pricing uplift to date.
  • Customer inquiries are weighted toward private operators, according to management, which may suggest shifting demand patterns relative to public customers.
  • Management committed to a disciplined, full-cycle returns focus and will only increase spending or reactivate stacked fleets if market visibility and economics warrant.

INDUSTRY GLOSSARY

  • Power Section: The rotating component of a downhole drilling motor, critical for converting hydraulic energy into mechanical rotation of the drill bit or tool.
  • Metal Max: RPC's proprietary metal-on-metal power section product within Thru Tubing Solutions, designed for enhanced durability and broader application versus traditional elastomer-based components.
  • On-Plug Technology: A downhole stage isolation tool developed by RPC that replaces conventional bridge plugs during completion operations.
  • Snubbing: Hydraulic workover process allowing tubing or pipe to be run into or pulled from a live well under pressure, without killing the well.
  • Spot Market (in Oilfield Services): Short-term service contracts subject to real-time pricing shifts, as opposed to longer-term, fixed-rate arrangements.

Full Conference Call Transcript

Ben Palmer: Thank you, Mike, and thank you for joining our call this morning. Today, we'll talk about our first quarter results and provide you with a few operational highlights. First quarter results reflect a sequential revenue increase across the majority of our service lines despite the winter storms early in the quarter. Demand strengthened as the quarter progressed. Within Technical Services, Thru Tubing Solutions' downhole tools revenues increased 11% sequentially. We saw broad-based strength with most geographic regions growing double digits. Thru Tubing Solutions is a market leader in downhole completion tools with a portfolio of products supported by proprietary technologies. We have introduced a number of new products in recent years that have helped expand our market leadership position.

Thru Tubing Solutions continues the rollout of its new metal-on-metal power section, Metal Max. Adoption is accelerating with growth across both geographic markets and motor size offerings as inventory availability expands. Metal Max's performance and design characteristics are enabling entry into new markets and applications previously served by traditional power section components. Over the past 6 months, Metal Max has strategically displaced conventional power sections, but still only represents 15% of our power section utilization. We continue to see meaningful opportunities for further displacement as customers increasingly recognize the product's performance and value.

Thru Tubing Solutions' on-plug technology, which replaces traditional bridge plugs is picking up momentum with several operators opting to utilize the technology as their primary stage isolation method. We are also seeing success with our new surface vibratory technology, particularly in longer laterals. Overall, our downhole tools business is benefiting from longer laterals and the need for technologies to deal with the related completion challenges. Also within Technical Services, Cudd Pressure Control's revenues were down 7% sequentially, led by weakness in the Rockies region and tough comparables in well control as the fourth quarter had multiple large well control events.

This was partially offset by nitrogen, which was up 13% and snubbing, which was up 8% as equipment was well utilized during the quarter. Cudd Pressure Control's snubbing business is expected to receive and begin testing the big bore snubbing unit later this month. This unit was specifically designed for cavern gas storage work and was built to support a long-term customer with its storage well maintenance schedule. This work is regulatory driven and is part of our effort to continue diversifying into other markets. Coiled tubing our largest service line within Cudd Pressure Control was down 7% sequentially. Coiled tubing faced tough comparables in the Rockies and Northeast regions. Our new 2 7/8-inch unit continues to be well utilized.

And we are upgrading an existing unit to handle the larger 2 7/8-inch tubing. Pintail Completions, the largest wireline provider in the Permian Basin generated revenues that were relatively flat sequentially. Given our leading market position, we expect Pintail's business to trend closely with large Permian operator activity. Cudd Energy Services' pressure pumping business saw a 20% sequential revenue increase due to job mix, primarily from operators, and we provided materials and supplies, along with fuel during the quarter. We have no plans to reactivate fleets at current pricing levels, but we are cautiously optimistic based on higher oil prices and less calendar white space.

However, natural gas takeaway capacity, particularly in the New Mexico, could limit improvement in customer activity. Overall, we see recent geopolitical developments as incrementally positive as pricing pressures appear to be subsiding and current activity is being supported by higher commodity prices. However, we believe operators are cautious and concerned about the duration of higher crude prices and the perception of capital budget increases in the equity market. As such, we have only seen modest responses by customers since the Middle East events began. Our focus remains on full cycle returns, but our balance sheet affords us the optionality of leaning into certain markets where we see additional upside.

We will continue to evaluate these opportunities with our focus being on cash flow generation and maximizing value over the long term. And with that, Mike will now discuss the quarter's financial results.

Michael Schmit: Thanks, Ben. Our first quarter financial results, with sequential comparisons to the fourth quarter of 2025 are as follows: Revenues increased 7% to $455 million compared to Q4 '25. Breaking down our operating segments, Technical Services, which represented 95% of our first quarter revenues was up 7%. Support Services, which represented 5% of revenues was flat. The following is a breakdown of our first quarter revenues for our largest service lines. Pressure pumping was 31%, downhole tools was 23.3%, wireline 22.7%; coiled tubing 8.5%, cementing 5.8% and rental tools 3%. Together, these service lines accounted for 94% of our total revenues. Cost of revenues, excluding depreciation and amortization was $356 million compared to $330 million in the previous quarter.

This increase was primarily related to job mix as we provided higher levels of materials and supplies and fuel for customers during the quarter. In addition, the prior period also reflected the impact of transitioning wireline cables accounting to expensing. SG&A expenses were $48 million, up slightly from the prior quarter. As a percent of revenues, SG&A decreased 60 basis points to 10.6%, primarily due to only a modest increase in SG&A with the increase in revenues. Depreciation and amortization was $43 million, up from $39 million in the prior quarter. Fourth quarter D&A reflected a $3 million reduction related to the change in wireline cable accounting.

The effective tax rate was unusually high during the quarter due to the disproportionate impact of permanent nondeductible items, mainly acquisition-related employment costs on a relatively low pretax income. Adjusted diluted EPS was $0.03 in the first quarter. Adjustments totaled $0.03 per share and related to acquisition-related employment costs. Adjusted EBITDA was $53.5 million down from $55.1 million. Adjusted EBITDA margin decreased 110 basis points sequentially to 11.8%. The decrease was due to several factors, including higher materials and supplies, higher fuel costs and lower other income. Operating cash flow year-to-date was $31 million and CapEx of $32 million. Free cash flow was negative $1 million.

Operating cash flow was negatively impacted by increased revenues that resulted in higher working capital, specifically higher accounts receivable being a meaningful use of cash along with unearned revenue that we benefited from in the fourth quarter, partially offset by higher accounts payable. At quarter end, we had approximately $201 million in cash, a $50 million seller financed note payable and no borrowing on a $100 million revolving credit facility. Our regular cash dividend remains unchanged at $0.04 per share. Dividend payments totaled $8.9 million. We expect 2026 capital expenditures in the range of $160 million to $180 million.

We raised the low end of the range versus the prior quarter due to opportunistic asset purchases that we were able to deploy. Recall our 2026 range includes approximately $15 million delayed from late 2025. We will adjust our spend based on project returns and opportunity. I'll now turn it back over to Ben for some closing remarks.

Ben Palmer: Thank you, Mike. We are cautiously optimistic about the rest of the year as commodity prices are more supportive of activity than they were entering 2026. Much will depend on operators' ability to hedge at higher prices, the duration of higher commodity prices and service companies discipline in a more supportive market. I want to thank all of our employees who have put in tremendous work to provide high levels of service and value to our customers. Thanks for joining us this morning. And at this time, we're happy to address any questions.

Operator: [Operator Instructions] Our first question comes from the line of Don Crist with Johnson Rice.

Donald Crist: Obviously, things are moving pretty quick with the conflict overseas and oil pricing where it is today. Just your thoughts around the spot market here and pricing in the spot market. Obviously, compared to your competitors, you have more spot market exposure, generally speaking. Just curious as to what you're seeing and hearing from your customers out there.

Ben Palmer: Thanks for the question, Don. We -- as part of what we tried to relay in our comments there is, certainly, this environment with the prices is supportive. I'll say that we have seen some firming. We have seen instances of some firming. I wouldn't say it is not broad-based yet at this point. So I would say it's incrementally positive, but like I said, it's not really broad based yet at this point.

Michael Schmit: And Don, just -- sorry, just to point out too, spot really impacts -- you're referring to pressure pumping, and that's really only 31% of our overall revenue.

Donald Crist: Is that across all kind of product lines, right? Because I would assume that Thru Tubing and coil, which is the fastest kind of return dollars from an operator's perspective would see some firming as well.

Michael Schmit: Some, but they have a lot of larger customers. So really, I mean, the spot is not a big part of their business as it is for pumping.

Donald Crist: Okay. And then obviously, you stacked a few fleets over the past couple of quarters, and I don't know what state those fleets are in, but I would assume that they could be brought back fairly quickly if that call arises. Just any thoughts around the yards to bring back equipment or upgrade equipment here and the potential cost to bring back a fleet, I would assume that it's $3 million just for fluid ends and stuff like that, but any thoughts around the reactivation cost for a fleet?

Ben Palmer: There hasn't been a lot of discussion about that because like I said, they really haven't been broad-based opportunities to really look at that seriously. I mean, at the current pricing levels, no, we would not reactivate a fleet. There are some discussions going on that could result in us perhaps looking at that, but we would need some visibility into, obviously, the pricing and the duration of the work and the volume of the work that was going to occur. In terms of time, the fleets that you referred to that we have stacked, those are no longer staffed. So it would take some time and some planning to be able to restaff those.

And you're right, the pumps that we were to reactivate, they would be not necessarily all of them would need to have fluid ends replaced. So the cost really depends. But historically, you're right. If you needed to replace a full fleet worth of fluid ends that's probably a reasonable estimate. But I think it's still at this moment, it's still a little bit early. It's a good question, a reasonable question, but it's a little bit early. We're really not talking about leaning into reactivating fleets. I think the first thing we would try to do is take advantage of higher prices with the fleets that we already have deployed.

Michael Schmit: And Don, just point out, those fleets are both our Tier 2 diesel fleets, which aren't as customers are more focused on, obviously, dual fuel and lower cost. Diesel is pretty expensive right now. So that's the other factor there.

Donald Crist: I appreciate the color. If I could sneak in one more on the labor side. Are you able to get people today if you tried? Or do you think that, that would be more difficult given the current environment and people leaving to go to Amazon or other places?

Ben Palmer: Well, we haven't been hiring a tremendous amount and not trying to increase the staffing. So we don't know for sure. But that could present a challenge, yes. Again, that hopefully would play into the ability to firm up pricing as well, right?

Operator: [Operator Instructions] Our next question comes from the line of John Daniel with Daniel Energy Partners.

John Daniel: So Mike, I mean, when you listen to a lot of the E&P calls and read the press releases, it's essentially flattish with a couple of one-offs, I think Don alluded to in terms of incremental rigs. But you listen to the land drillers, they're all kind of calling for higher activity in Q2 and with prospects for more work going on in the back half. I'm just curious, what do you think the disconnect is? And for some of your product lines that might be tied more to the drilling side, are they seeing a similar rise of activities, maybe what the land drillers are [indiscernible]. Just any color on there?

Michael Schmit: I mean I think that there's hope that, obviously, as drilling improves, then that will improve some of our business as you alluded to. And the pricing still hasn't caught up. I mean there is -- there has been upward momentum, but I think the disconnect is we haven't -- and I think OFS companies haven't really seen the increase in pricing yet to really push us to start moving. So we still have kind of the supply/demand. And so until it actually starts and we start getting a fair price, making it worthwhile, you'll probably see more activity. I think it's just -- hopefully, we read your note this week.

Hopefully, that's accurate, and we see 50 new rigs come on that will help drive price and activity.

Ben Palmer: John, our business, our rental tools business is a relatively small percentage of our total revenue, and it's a nice business, it has good margins, [ low ] OpEx costs, therefore, increased revenue can really drop to the bottom line. So it has been a little bit -- had a little bit of a challenge in the last couple of quarters, but they're seeing some improvement. I don't know that because it's small and has particular regions where they are particularly active. They're seeing a little bit of improvement, but again, I wouldn't say that we're seeing anything that's broad-based yet.

John Daniel: Fair enough. I hope the forecast is right. I hate looking too stupid.

Michael Schmit: We hope it's true.

John Daniel: Yes. The next question I've got is just -- and I don't know if this might be too granular and you might not even have the data in front of you, but I'm curious as your guys, the businesses talk about quoting activity, if you had to hazard a guess, the inquiries that are coming in, what proportion of them would you characterize as being from the public operators versus privates. Again, you might not have that handy, but if you do, it would be interesting to hear.

Ben Palmer: The inquiries and questions.

John Daniel: People reaching out asking about availability, equipment, et cetera.

Ben Palmer: Yes, more are the privates, I would say.

Operator: [Operator Instructions] With no further questions in queue, I will now hand the call back over to Mr. Ben Palmer for closing remarks.

Ben Palmer: Well, thank you for joining this morning. We appreciate it. Appreciate your interest, and hope you have a great rest of the day. Take care.

Operator: And once again, I would like to remind everyone that the replay on today's call will be available at www.rpc.net within 2 hours following today's completion of the call. This does conclude today's conference call. You may now disconnect.