RPC's Q3 Revenue Soars, But Acquisition Costs Drag Down Net Income

TL;DR

**RPC's revenue surge is overshadowed by acquisition costs, making it a 'growth at a cost' play that demands careful scrutiny of future integration benefits.**

AI Summary

RPC, Inc. reported a significant increase in revenues for the three and nine months ended September 30, 2025, reaching $447.1 million and $1.2 billion, respectively, compared to $337.7 million and $1.08 billion in the prior year periods. Despite this revenue growth, net income decreased to $13.0 million for the three months ended September 30, 2025, from $18.8 million in 2024, and to $35.1 million for the nine months ended September 30, 2025, from $78.7 million in 2024. This decline in net income is primarily due to increased costs, including a substantial rise in cost of revenues to $334.7 million (from $247.5 million) and selling, general and administrative expenses to $44.6 million (from $37.7 million) for the three-month period. The company also incurred $6.5 million in acquisition-related employment costs for the quarter and $13.0 million for the nine-month period, stemming from the April 1, 2025 acquisition of Pintail Alternative Energy, L.L.C. This acquisition, valued at $181.4 million, expanded RPC's oilfield wireline perforating services in the Permian Basin. Cash and cash equivalents decreased significantly from $326.0 million at December 31, 2024, to $163.5 million at September 30, 2025, largely due to $117.8 million in capital expenditures and $165.7 million for the Pintail acquisition.

Why It Matters

RPC's robust revenue growth, driven by the Pintail acquisition and strong market demand in the Permian Basin, signals a positive operational trajectory for investors. However, the substantial drop in net income and cash reserves due to acquisition-related expenses and capital expenditures could raise concerns about short-term profitability and liquidity. This mixed performance highlights the challenges of integrating new businesses while maintaining financial efficiency, potentially impacting RPC's competitive standing against rivals who may be achieving growth with lower integration costs. Employees of Pintail and RPC will see continued investment in the Technical Services Segment, while customers in the Permian Basin benefit from expanded wireline services.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant decrease in net income by 55.4% for the nine months ended September 30, 2025 ($35.1 million vs. $78.7 million in 2024), despite a 11.2% revenue increase. This is coupled with a substantial reduction in cash and cash equivalents from $326.0 million to $163.5 million, a 49.9% decrease, largely driven by the $165.7 million Pintail acquisition and $117.8 million in capital expenditures, indicating increased financial leverage and integration risks.

Analyst Insight

Investors should closely monitor RPC's integration of Pintail Alternative Energy and its ability to realize expected synergies to offset the increased acquisition-related employment costs of $13.0 million. Evaluate future earnings reports for signs of improved profitability and cash flow generation, as the current quarter's net income decline suggests a 'wait and see' approach before increasing exposure.

Financial Highlights

debt To Equity

0.36

revenue

$1.2B

operating Margin

N/A

total Assets

$1.5B

total Debt

$396.4M

net Income

$35.1M

eps

N/A

gross Margin

N/A

cash Position

$163.5M

revenue Growth

+11.2%

Revenue Breakdown

Key Numbers

• $447.1M — Revenues for Q3 2025 (Increased from $337.7M in Q3 2024)
• $1.2B — Revenues for nine months ended Sept 30, 2025 (Increased from $1.08B in 2024)
• $13.0M — Net income for Q3 2025 (Decreased from $18.8M in Q3 2024)
• $35.1M — Net income for nine months ended Sept 30, 2025 (Decreased from $78.7M in 2024)
• $163.5M — Cash and cash equivalents as of Sept 30, 2025 (Decreased from $326.0M at Dec 31, 2024)
• $165.7M — Purchase of business, net of cash and debt assumed (Related to Pintail acquisition)
• $117.8M — Capital expenditures for nine months ended Sept 30, 2025 (Increased from $179.5M in 2024)
• $13.0M — Acquisition related employment costs for nine months ended Sept 30, 2025 (New expense due to Pintail acquisition)
• 220.6M — Shares of common stock outstanding as of Oct 24, 2025 (Increased from 214.9M at Dec 31, 2024)
• $181.4M — Purchase price of Pintail Alternative Energy, L.L.C. (Consisted of cash and seller note)

Key Players & Entities

• RPC, Inc. (company) — registrant
• Pintail Alternative Energy, L.L.C (company) — acquired company
• Thru Tubing Solutions, Inc. (company) — wholly owned subsidiary of RPC, Inc.
• Amy R. Kreisler (person) — director of RPC, Inc.
• Timothy C. Rollins (person) — director of RPC, Inc.
• Houston LP (company) — recipient of Seller Note
• Permian Basin (other) — geographic concentration for Pintail
• New York Stock Exchange (other) — exchange where RPC common stock is registered
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Acquisition Integration and Financing [high — financial]: The acquisition of Pintail Alternative Energy, L.L.C. for $181.4 million, financed partly by a $50 million seller note and $25 million in RPC common stock, introduces integration risks and potential financial strain. The company's cash and cash equivalents decreased by $162.5 million to $163.5 million as of September 30, 2025, largely due to this acquisition and $117.8 million in capital expenditures.
• Increased Operating Costs [medium — operational]: RPC Inc. experienced a significant rise in operating costs, with cost of revenues increasing to $334.7 million for Q3 2025 (from $247.5 million in Q3 2024) and SG&A expenses rising to $44.6 million (from $37.7 million). This, along with $6.5 million in acquisition-related employment costs for the quarter, impacted profitability.
• Declining Profitability Despite Revenue Growth [high — financial]: While revenues increased to $447.1 million in Q3 2025, net income decreased to $13.0 million from $18.8 million in the prior year. For the nine months, net income fell to $35.1 million from $78.7 million, indicating margin compression due to rising costs.
• Dependence on Oilfield Services Market [high — market]: RPC's business is heavily concentrated in the oilfield services sector, particularly in the Permian Basin. Fluctuations in oil and gas prices and exploration activity directly impact demand for its services, posing a significant market risk.
• Integration of Acquired Business [medium — operational]: The successful integration of Pintail Alternative Energy, L.L.C. is critical. The acquisition involved complex accounting for contingent consideration and seller notes, and the company faces risks related to retaining key personnel and realizing expected synergies.

Industry Context

RPC, Inc. operates in the highly competitive oilfield services sector, with a strategic focus on the Permian Basin. The industry is characterized by cyclicality tied to oil and gas prices and exploration activity. Recent consolidation, such as RPC's acquisition of Pintail, aims to strengthen market position and service offerings in key producing regions.

Regulatory Implications

RPC must comply with financial reporting regulations (SEC's Form 10-Q) and accounting standards (U.S. GAAP) for acquisitions and financial disclosures. Changes in environmental regulations or safety standards within the oil and gas industry could also impact operational costs and compliance requirements.

What Investors Should Do

1. Monitor operating margins closely.
2. Assess the integration success of Pintail.
3. Evaluate the impact of capital expenditures and cash flow.

Key Dates

• 2025-04-01: Acquisition of Pintail Alternative Energy, L.L.C. — Expanded RPC's oilfield wireline perforating services in the Permian Basin, but also significantly impacted cash position and introduced integration complexities.
• 2025-09-30: End of Q3 2025 — Reporting period for the 10-Q, showing increased revenues but decreased net income, and a substantial reduction in cash and cash equivalents.
• 2024-12-31: End of Fiscal Year 2024 — Baseline for comparison of cash and cash equivalents, which stood at $326.0 million prior to the significant expenditures in 2025.

Glossary

Pintail Alternative Energy, L.L.C.

A company acquired by RPC, Inc. that expands its oilfield wireline perforating services in the Permian Basin. (Key driver of recent revenue growth and significant cash outflow, as well as acquisition-related costs.)

SOFR

Secured Overnight Financing Rate, a benchmark interest rate. (Used to determine the variable interest rate on the seller note associated with the Pintail acquisition.)

Contingent Consideration

A portion of the acquisition price that is dependent on future events, such as continued employment of the seller. (Represents $25 million of the seller note and $25 million of RPC common stock for the Pintail acquisition, subject to forfeiture.)

Goodwill

An intangible asset representing the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. (RPC recorded $23.4 million in goodwill from the Pintail acquisition, reflecting the premium paid over the net assets.)

Other intangibles, net

Intangible assets such as customer relationships and trade names, net of amortization. (Increased significantly from $13.8 million to $104.5 million due to the acquisition of Pintail, which included $97.3 million in identifiable intangible assets.)

Year-Over-Year Comparison

RPC Inc. has demonstrated strong revenue growth, with Q3 2025 revenues up 32.4% year-over-year to $447.1 million and nine-month revenues up 11.2% to $1.2 billion. However, this top-line growth has been overshadowed by a significant decline in net income, falling from $18.8 million to $13.0 million in Q3 and from $78.7 million to $35.1 million for the nine months, primarily due to increased cost of revenues and SG&A expenses. The company's cash position has also sharply decreased by $162.5 million, largely driven by the $165.7 million acquisition of Pintail and substantial capital expenditures.

Key Financial Figures

• $0.10 — ch registered: Common stock, par value $0.10 RES New York Stock Exchange Indic

Filing Documents

• res-20250930x10q.htm (10-Q) — 2169KB
• res-20250930xex3d2.htm (EX-3.2) — 128KB
• res-20250930xex31d1.htm (EX-31.1) — 12KB
• res-20250930xex31d2.htm (EX-31.2) — 12KB
• res-20250930xex32d1.htm (EX-32.1) — 8KB
• 0001104659-25-104292.txt ( ) — 9862KB
• res-20250930.xsd (EX-101.SCH) — 50KB
• res-20250930_cal.xml (EX-101.CAL) — 73KB
• res-20250930_def.xml (EX-101.DEF) — 183KB
• res-20250930_lab.xml (EX-101.LAB) — 398KB
• res-20250930_pre.xml (EX-101.PRE) — 329KB
• res-20250930x10q_htm.xml (XML) — 2218KB

Financial Information

Part I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets – As of September 30, 2025, and December 31, 2024 3 Consolidated Statements of Operations – For the three and nine months ended September 30, 2025, and 2024 4 Consolidated Statements of Comprehensive Income – For the three and nine months ended September 30, 2025, and 2024 5 Consolidated Statements of Stockholders' Equity – For the three and nine months ended September 30, 2025, and 2024 6 Consolidated Statements of Cash Flows – For the nine months ended September 30, 2025, and 2024 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 – 22 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 – 33 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 33 Item 4.

Controls and Procedures

Controls and Procedures 33

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 35 Item 1A.

Risk Factors

Risk Factors 35 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 35 Item 3. Defaults upon Senior Securities 35 Item 4. Mine Safety Disclosures 35 Item 5. Other Information 35 Item 6. Exhibits 36

Signatures

Signatures 37 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS RPC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025, AND DECEMBER 31, 2024 (In thousands, except share and par value data) September 30, December 31, 2025 2024 ASSETS (Unaudited) Note 1 Cash and cash equivalents $ 163,462 $ 325,975 Accounts receivable, net 359,901 276,577 Inventories 117,685 107,628 Income taxes receivable 3,376 4,332 Prepaid expenses 12,023 16,136 Retirement plan assets 32,653 — Other current assets 12,189 2,194 Total current assets 701,289 732,842 Property, plant and equipment, net 560,298 513,516 Operating lease right-of-use assets 24,726 27,465 Finance lease right-of-use assets 5,758 4,400 Goodwill 74,257 50,824 Other intangibles, net 104,501 13,843 Retirement plan assets — 30,666 Other assets 27,967 12,933 Total assets $ 1,498,796 $ 1,386,489 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Accounts payable $ 143,228 $ 84,494 Accrued payroll and related expenses 30,651 25,243 Accrued insurance expenses 9,089 7,942 Accrued state, local and other taxes 7,096 3,234 Income taxes payable 810 446 Unearned revenue — 45,376 Current portion of operating lease liabilities 7,482 7,108 Current portion of finance lease liabilities and finance obligations 4,222 3,522 Retirement plan liabilities 24,129 — Current portion of notes payable 20,000 — Accrued expenses and other liabilities 5,402 4,548 Total current liabilities 252,109 181,913 Accrued insurance expenses 13,816 12,175 Retirement plan liabilities — 24,539 Notes payable 30,000 — Operating lease liabilities 18,291 21,724 Finance lease liabilities 1,011 559 Other long-term liabilities 10,897 9,099 Deferred income taxes 70,279 58,189 Total liabilities 396,403 308,198 Commitments and contingencies (Note 12) STOCKHOLDERS' EQUITY Preferred

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. GENERAL The accompanying unaudited consolidated financial statements include the accounts of RPC, Inc. and its wholly-owned subsidiaries ("RPC" or "the Company") and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These consolidated financial statements have been prepared in accordance with Accounting Standards Codification (ASC) Topic 810, "Consolidation" and Rule 3A-02(a) of Regulation S-X. In accordance with ASC Topic 810 and Rule 3A-02 (a) of Regulation S-X, the Company's policy is to consolidate all subsidiaries and investees where it has voting control. In the opinion of management, all adjustments (all of which consisted of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025. The balance sheet at December 31, 2024, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2024. A group that includes Amy R. Kreisler and Timothy C. Rollins, each of whom is a director of the Company, certain of their family members, and certain companies under their and/or their family members' c

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) oilfield services platform with geographic concentration in the most active oil producing region in the U.S. land market. Pintail is included in our Technical Services Segment. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, on the Closing Date, 100 % of Pintail's equity was automatically canceled and converted into the right to receive (i) $ 170 million in cash ("the Closing Cash"), (ii) $ 25 million of RPC common stock, which was paid by the issuance of 4,545,454 shares of restricted common stock of RPC ("Stock Consideration") to one of the previous owners (the "Seller"), and (iii) $ 50 million in the form of a secured note payable to Houston LP (the "Seller Note"). Interest on the Seller Note accrues at a variable rate equal to the Simple Secured Overnight Financing Rate ("SOFR"), for the applicable interest period, plus 2.0 % per annum, or where applicable, at a specified default rate. The Stock Consideration and 50 % of the Seller Note (together "Contingent Consideration") are subject to continued employment of Seller for a period of three years and subject to automatic forfeiture in the event of Seller termination. In accordance with U.S. GAAP, the Contingent Consideration is not accounted for as part of purchase price. As of Closing Date, the Company evaluated the fair value of the Seller Note using a market interest rate based on the Company's IBR ("Incremental Borrowing Rate"). As the contractual interest rate on the Seller Note ( 6.0 % based on prevailing SOFR) was materially consistent with the estimated market rate, the Seller Note was recorded on the Consolidated Balance Sheet at the estimated present value of $ 50 million. The Seller Note is disclosed as Notes Payable in the current and non-current section of Total liabilities on the Consolidated Balance Sheet as of September 30, 2025. The Company recognized an acquisition related employment obligation a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) combined operations of the Company and Pintail and the assembled workforce. The accompanying Consolidated Balance Sheet as of September 30, 2025 includes the assets and liabilities of Pintail, which have been measured at fair value as of the acquisition date. The preliminary allocation of purchase price recorded for Pintail under U.S. GAAP as of the Closing Date was as follows: Amount Cash and cash equivalents $ 3,000 Accounts receivable 66,268 Inventories 7,544 Prepaid expenses 302 Property, plant and equipment, net 49,310 Operating lease right-of-use assets 541 Finance lease right-of-use assets 1,134 Other intangibles, net 97,300 Other assets 6 Total assets 225,405 Accounts payable ( 46,288 ) Accrued payroll and related expenses ( 4,911 ) Accrued state, local and other taxes ( 1,498 ) Current portion of notes payable ( 4,375 ) Current portion of operating lease liabilities ( 514 ) Accrued expenses and other liabilities ( 8,673 ) Long-term finance lease liabilities ( 1,159 ) Total liabilities ( 67,418 ) Net assets acquired 157,987 Preliminary purchase price allocation 181,420 Goodwill recorded $ 23,433 The purchase price allocation above excludes the contingent portion of total consideration consisting of $ 25 million of the Seller Note and $ 25 million of Stock Consideration. The following table summarizes the amounts allocated to identifiable intangible assets acquired: Preliminary Fair Value Estimated Useful Life (in thousands) Customer relationships $ 87,200 10 Trade names and trademarks 10,100 10 Intangible assets acquired $ 97,300 The fair value of customer relationships was estimated using the multi-period excess earnings method. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the customer relationships intangible ass

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) performance obligations. The Company assumed finance leases related to trucks and operating leases for both vehicles and certain real estate. There were no favorable or unfavorable market terms for the leases. Pintail's operating results are included in the Consolidated Statements of Operations for the period from Apil 1, 2025 to September 30, 2025. Pintail's revenues for the three months ended September 30, 2025 were $ 99.8 million and $ 198.6 million for the period from April 1, 2025, to September 30, 2025. Pintail's Net income for the three months ended September 30, 2025, was $ 7.2 million and $ 14.2 million for the period from April 1, 2025, to September 30, 2025, using a normalized estimated effective tax rate. Pintail's Net income includes the impact of the amortization of intangibles totaling $ 2.6 million and $ 5.2 million, as well as other purchase accounting adjustments, for the three months ended September 30, 2025, and for the period from April 1, 2025, to September 30, 2025, respectively. Acquisition related employment costs are recorded at the consolidated level and not allocated to Pintail. The following unaudited pro forma financial information presents the Company's results of operations for the three and nine months ended September 30, 2025, and 2024, as if the acquisition of Pintail had occurred on January 1, 2024. The unaudited pro forma information includes incremental depreciation expense related to fair value adjustments to property, plant and equipment, amortization of intangible assets acquired, removal of non-recurring transaction costs directly associated with the Merger, and interest expense on the Seller Note, as well as the Acquisition related employment costs associated with the Contingent Consideration and Redistribution Payments. The unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies th

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