Conditions in the oil market continued their slow yet uneven improvement during the second quarter. As a result, RigNet (NASDAQ:RNET) once again reported mixed results. While its revenue improved, the company continues to lose money. That unevenness will likely continue, given the renewed volatility in the oil market, though RigNet does see several positives that should help propel its results in the future.

RigNet results: The raw numbers


Q2 2019

Q2 2018



$60.3 million

$60.0 million


Net income (loss)

($6.2 million)

($4.3 million)


Earnings per share




Data source: RigNet Inc.

What happened with RigNet this quarter? 

RigNet showed some underlying positives again this quarter:

  • Revenue from RigNet's managed communications services segment was $41.2 million. That's a decline of 1.2% year over year and 2.7% versus the first quarter. The main issue was that the company had lower equipment resale revenue during the quarter.
  • Sales in the applications and Internet of Things (apps & IoT) business unit surged 21.7% versus the year-ago period and was roughly flat sequentially. While acquisitions helped fuel the year-over-year jump, the company wasn't able to deliver any organic growth this year due to the continued challenges in the oil and gas market.
  • Systems integration revenue, meanwhile, jumped 55.3% sequentially while declining 5.1% compared to the year-ago period. That's due entirely to the variability of this segment, which benefited from several new projects ramping up during the second quarter.
  • Despite the uptick in revenue, RigNet's loss deepened due in large part to higher general and administrative costs as a result of its dispute with a supplier. On a more positive note, its underlying earnings as measured by adjusted EBITDA was $9.8 million. That's a 16.6% improvement from the first quarter and 20.7% above the year-ago period.
An offshore drilling rig at sea.

Image source: Getty Images.

What management had to say 

CEO Steven Pickett commented on the company's results by saying:

RigNet delivered solid operating results in the second quarter of 2019, growing total revenue by 4.9% and improving adjusted EBITDA by 16.6% compared to the prior quarter. We continue to see positive developments across all three segments of RigNet's business. We are winning and renewing long-term contracts to provide communications services to major oil and gas customers who are choosing us for our global reach, ultra-secure network, and service delivery. Intelie, our real-time machine learning solution, is rapidly gaining acceptance as "the" standard for speed, efficiency, and ease of implementation. As we continue to execute breakthrough contracts, which expand in scope and complexity, Intelie is quickly becoming the flagship solution in RigNet's applications portfolio. Finally, our systems integration team delivered another strong quarter and is responding to an increasing number of global opportunities as customers continue to call upon RigNet's trusted team to execute these complex projects around the world.

One of the company's recent highlights was that it signed two multiyear agreements with top offshore driller Transocean (NYSE:RIG). RigNet will provide Transocean with rig analytics applications through its Intelie Live real-time analytics platform. In addition to that, RigNet will fully implement its LIVE-IT solution across Transocean's operations. "This is a testament to the unique capabilities and custom services of Intelie's technology platform to help companies like Transocean transform their data into actionable opportunities," stated Pickett.

Looking forward

Contracts like those with Transocean should help boost RigNet's results in the coming quarters. The company should also benefit as the offshore drilling market continues improving. Transocean, for example, recently noted that opportunities for new drilling rig contracts have been on the rise. That's another sign that the oil industry is wading back offshore after years of cutting investment. As more rigs resume drilling, it should drive demand for RigNet's services and software solutions.

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