Revenues Decreased In Q2: Quarter-over-quarter, RPC’s (RES) revenues decreased by 4% in Q2 due primarily to over-supply of oilfield equipment. On top of that, frac spreads moving from gassy basins into the Permian and efficiency gains by adding to pump hour capacity without a corresponding increase to pressure pumps kept RES under pressure in Q2. The Q2 result reflects lower asset utilization and softness in its spot and semi-dedicated customer base. However, introducing new products and services helped its downhole tools and coiled tubing performance. During the quarter, the company deployed a Tier 4 dual-fuel fleet, which replaced one of its diesel frac spreads.

Margin And Net Income Increased In Q2: RES’s adjusted EBITDA margin expanded by 210 basis points compared to a quarter ago. Selling, general, and administrative expenses decreased in Q2 due to lower employment costs and lower incentive compensation accruals. Lower costs resulted in the EBITDA margin expansion in Q2, leading to an 18% rise in net income. Read more about the company in our previous article here.

RES’s Balance Sheet Remains Clean: As of June 30, RES maintained a debt-free balance sheet. This, along with a cash balance of $262 million and a $100 million revolving credit facility, allowed dividend payments ($0.04 per share) to continue. Year-over-year, free cash flows deteriorated in 1H 2024 (22% down) because capex increased sharply.

Thanks for reading the RES Take Three, designed to give you three critical takeaways from RES’s earnings report.  Soon, we will present a second update on RES earnings, highlighting its current strategy, news, and notes we extracted from our deeper dive.