8-K: RPC Reports Q4 Loss, Full Year Profit Down 65%

RPC, Inc. announced a net loss of $3.1 million for the fourth quarter of 2025, while full-year net income declined 65% despite a 15% revenue increase driven by an acquisition.

Summary

• Revenues for the fourth quarter of 2025 decreased 5% sequentially to $425.8 million.
• A net loss of $3.1 million was reported for Q4 2025, compared to net income of $13.0 million in the prior quarter, resulting in a Loss Per Share of $0.02.
• Adjusted net income for Q4 2025 was $9.4 million, down from $16.8 million sequentially, with adjusted diluted EPS of $0.04.
• Adjusted EBITDA for Q4 2025 was $55.1 million, a decrease from $67.8 million in the prior quarter, with adjusted EBITDA margin falling 230 basis points sequentially to 12.9%.
• Full year 2025 revenues increased 15% to $1.6 billion, primarily due to the Pintail Completions acquisition which closed on April 1, 2025.
• Full year 2025 net income was $32.1 million, a 65% decrease compared to the prior year, with EPS of $0.15.
• Adjusted EBITDA for the full year 2025 was $232.7 million, essentially unchanged from the prior year, but the adjusted EBITDA margin decreased 220 basis points year-over-year to 14.3%.
• Net cash from operating activities for the full year 2025 was $201.3 million, and free cash flow was $52.9 million.
• Beginning in Q4 2025, wireline cables, previously capitalized, are now expensed due to a change in estimated useful lives, negatively impacting Q4 Adjusted EBITDA by approximately $4.6 million.
• The company paid $35.1 million in dividends and repurchased $2.9 million of common stock in 2025, primarily for tax withholding related to restricted stock vesting.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging quarter with significant sequential declines and a net loss, compounded by a substantial year-over-year drop in full-year net income, despite some revenue growth from an acquisition.

Positives

• Full year 2025 revenues increased 15% to $1.6 billion, largely driven by the Pintail Completions acquisition.
• Net cash from operating activities for the full year 2025 was strong at $201.3 million, with free cash flow of $52.9 million.
• The company maintains a healthy balance sheet with cash and cash equivalents of $210.0 million and no outstanding borrowings under its $100 million revolving credit facility.
• Cudd Pressure Controls snubbing revenues within the Technical Services segment grew by 13% sequentially in Q4 2025.

Negatives

• RPC reported a net loss of $3.1 million in Q4 2025, a significant decline from net income of $13.0 million in the prior quarter.
• Fourth quarter revenues decreased 5% sequentially to $425.8 million, indicating a slowdown in activity.
• Full year 2025 net income plummeted 65% to $32.1 million compared to the prior year, and EPS decreased to $0.15 from $0.43.
• Adjusted EBITDA for Q4 2025 declined to $55.1 million from $67.8 million sequentially, with margins also decreasing.
• The effective tax rate in Q4 2025 was unusually high due to the liquidation of company-owned life insurance policies and non-deductible acquisition-related employment costs.
• Technical Services operating income decreased 65% sequentially to $8.5 million, significantly impacted by the change in wireline cable accounting.
• Support Services revenues declined 18% sequentially, with operating income down 63%, primarily due to decreased rental tools activity in December.

Risks

• The price of oil and natural gas and the overall performance of the U.S. economy can significantly impact customer capital spending and demand for services.
• Tariffs may increase material costs and negatively affect profitability.
• Business interruptions due to adverse weather conditions pose a risk to operations.
• Changes in the competitive environment of the industry, including potential impacts from U.S. actions in Venezuela, could affect market position.
• Political instability in petroleum-producing regions of the world and actions of the OPEC oil cartel can influence crude oil prices and demand.
• Customers' drilling and production activities directly affect the demand for RPC's services.
• The ability to identify, complete, and successfully integrate acquisitions and/or other strategic investments or transactions is crucial for growth.

Future Outlook

Management is focused on disciplined execution, leveraging strong brands and diversified offerings as the company enters 2026. The macro environment remains challenging with increased crude oil price volatility due to geopolitical developments. The long-term focus is on delivering full cycle returns by maintaining cost discipline, strategically deploying capital, and positioning the company for sustained success.

Management Comments

• "During the fourth quarter we experienced modest revenue declines primarily due to the holiday slowdowns."
• "We experienced a solid start to the fourth quarter but encountered a weak December as a number of our customers reduced activity, particularly late in the month."
• "The macro environment remains challenging, with crude oil prices showing increased volatility due to recent geopolitical developments."
• "As we look ahead, our focus remains on delivering full cycle returns by maintaining cost discipline, deploying capital strategically, and positioning the company for long-term success."

Industry Context

StockSavvy.ai notes that the U.S. rig count saw a modest sequential increase of 1.5% in Q4 2025, while oil prices declined 9.2% sequentially and 15.3% year-over-year. Natural gas prices, however, surged 21.4% sequentially and 51.9% year-over-year. This mixed industry data, particularly the decline in oil prices and customer activity in December, aligns with RPC's commentary on a challenging macro environment and holiday slowdowns impacting their Q4 performance.

Corporate Governance

Stakeholder Impact

• Shareholders: Experienced a net loss in Q4 and a significant decline in full-year EPS, but will receive a regular quarterly dividend.
• Employees: Acquisition-related employment costs, contingent upon continued employment, suggest efforts to retain key personnel from the Pintail acquisition.
• Customers: Reduced activity in December and shifted jobs indicate a cautious spending environment, particularly impacting rental tools services.
• Creditors: The company maintains a strong liquidity position with no outstanding borrowings under its revolving credit facility, indicating low credit risk.

Next Steps

• The Board of Directors declared a regular quarterly cash dividend of $0.04 per share, payable on March 10, 2026, to common stockholders of record on February 10, 2026.
• Management is focused on disciplined execution, leveraging strong brands and diversified offerings as the company enters 2026.
• The company plans to continue delivering full cycle returns by maintaining cost discipline, deploying capital strategically, and positioning for long-term success.

Key Dates

Recommendation

The company reported a net loss in Q4 2025 and a substantial decline in full-year net income, indicating operational challenges and a difficult macro environment. However, the full-year revenue growth driven by the Pintail acquisition, positive free cash flow, and a debt-free balance sheet provide some stability. The strategic focus on disciplined execution for 2026 suggests management is addressing the issues. A 'hold' recommendation is appropriate to observe if these strategies can reverse the negative trends in profitability amidst ongoing market volatility.

Keywords

Oilfield services, energy, drilling, completions, pressure pumping, wireline, downhole tools, financial results, SEC filing, RPC Inc., Q4 2025, Full Year 2025