RPC INC (RES)
SIC breadcrumb: Mining > SIC Major Group 13 > SIC 1389 Oil & Gas Field Services, NEC
SEC company page: https://www.sec.gov/edgar/browse/?CIK=742278. Latest filing source: 0001104659-26-021480.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,626,566,000 | USD | 2025 | 2026-02-27 |
| Net income | 32,080,000 | USD | 2025 | 2026-02-27 |
| Assets | 1,468,385,000 | USD | 2025 | 2026-02-27 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000742278.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 728,974,000 | 1,595,227,000 | 1,721,005,000 | 1,222,409,000 | 598,302,000 | 864,929,000 | 1,601,762,000 | 1,617,474,000 | 1,414,999,000 | 1,626,566,000 |
| Net income | -141,246,000 | 162,511,000 | 175,402,000 | -87,111,000 | -212,192,000 | 7,217,000 | 218,363,000 | 195,113,000 | 91,444,000 | 32,080,000 |
| Operating income | -238,942,000 | 226,217,000 | 210,030,000 | -114,288,000 | -309,635,000 | 16,291,000 | 287,940,000 | 244,950,000 | 97,538,000 | 44,732,000 |
| Diluted EPS | -0.66 | 0.75 | 0.82 | -0.41 | -1.00 | 0.03 | 1.01 | 0.90 | 0.43 | 0.15 |
| Assets | 1,035,452,000 | 1,147,224,000 | 1,199,580,000 | 1,053,218,000 | 790,505,000 | 864,365,000 | 1,129,013,000 | 1,286,845,000 | 1,386,489,000 | 1,468,385,000 |
| Liabilities | 228,653,000 | 235,527,000 | 249,161,000 | 222,885,000 | 158,938,000 | 222,574,000 | 271,278,000 | 264,332,000 | 308,198,000 | 369,214,000 |
| Stockholders' equity | 806,799,000 | 911,697,000 | 950,419,000 | 830,333,000 | 631,567,000 | 641,791,000 | 857,735,000 | 1,022,513,000 | 1,078,291,000 | 1,099,171,000 |
| Cash and cash equivalents | 131,835,000 | 91,050,000 | 116,262,000 | 50,023,000 | 84,496,000 | 82,433,000 | 126,424,000 | 223,310,000 | 325,975,000 | 209,974,000 |
| Net margin | -19.38% | 10.19% | 10.19% | -7.13% | -35.47% | 0.83% | 13.63% | 12.06% | 6.46% | 1.97% |
| Operating margin | -32.78% | 14.18% | 12.20% | -9.35% | -51.75% | 1.88% | 17.98% | 15.14% | 6.89% | 2.75% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000742278.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 0.22 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.32 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | 71,524,000 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.33 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 415,858,000 | 0.30 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | 65,013,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 330,417,000 | 0.08 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 394,531,000 | 40,259,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 377,833,000 | 27,467,000 | 0.13 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | 27,467,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-06-30 | 32,419,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 364,153,000 | 0.15 | reported discrete quarter | |
| 2024-Q3 | 2024-09-30 | 337,652,000 | 0.09 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 335,361,000 | 12,762,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 332,877,000 | 12,030,000 | 0.06 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 12,030,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-06-30 | 10,148,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 420,809,000 | 0.05 | reported discrete quarter | |
| 2025-Q3 | 2025-09-30 | 447,103,000 | 0.06 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 425,777,000 | -3,061,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 454,755,000 | 855,000 | 0.00 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001104659-26-057794.
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The following discussion should be read in conjunction with the Consolidated Financial Statements included elsewhere in this document. See also Forward-Looking Statements on page 27.
RPC, Inc. (“RPC” or “the Company”) provides a broad range of specialized oilfield services primarily to independent and major Oilfield companies engaged in exploration, production and development of oil and gas properties throughout the United States, including the Gulf of America, mid-continent, southwest, Rocky Mountain and Appalachian regions, and in selected international locations. The Company’s revenues and profits are generated by providing equipment and services to customers who operate oil and gas properties and invest capital to drill new wells and enhance production or perform maintenance on existing wells. We continuously monitor factors that impact current and expected customer activity levels, such as the prices of oil and natural gas, changes in pricing for our services and equipment, and utilization of our equipment and personnel. Our financial results are affected by geopolitical factors such as political instability in the petroleum-producing regions of the world, the actions of the OPEC oil cartel, overall economic conditions and weather in the United States, the prices of oil and natural gas, other shifting trends in our industry, and our customers’ drilling and production activities.
The discussion of our key business and financial strategies set forth under the Overview section in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025, is incorporated herein by reference.
During the first quarter of 2026, total revenues of $454.8 million increased by $121.9 million or 36.6% compared to the same period in the prior year.
Operating income was $2.6 million for the three months ended March 31, 2026, compared to $12.4 million for the same period of 2025.
Net income for the three months ended March 31, 2026, was $0.9 million, or $0.00 (rounded) diluted earnings per share compared to net income of $12.0 million, or $0.06 diluted earnings per share in the same period of 2025.
Net cash provided by operating activities decreased to $31.2 million for the three months ended March 31, 2026, compared to $39.9 million for the same period of 2025.
As of March 31, 2026, there were no outstanding borrowings under our credit facility.
Pintail Acquisition
As described in more detail in the notes to financial statements, on April 1, 2025, we completed our acquisition of Pintail Alternative Energy, L.L.C. ("Pintail”). Under the acquisition agreement, the consideration for the transaction consisted of: (i) $170 million in cash ("the Closing Cash”), subject to certain adjustments (ii) $25 million of RPC common stock (pursuant to which 4,545,454 shares were issued) (the “Stock Consideration”), and (iii) $50 million in the form of a secured note payable to Houston LP (the "Seller Note”). For further information, see “Acquisition related employment costs” and “Material Cash Requirements” below.
How We Evaluate Our Operations
We use Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, all non-GAAP measures, to evaluate and analyze the operating performance of our businesses.
These measures should not be considered in isolation or as a substitute for performance or liquidity measures prepared in accordance with GAAP. Management believes that presenting these non-GAAP measures, other than free cash flow, enables investors to compare the operating performance of our core business consistently over various time periods, without regard to acquisition related employment costs and changes in our accounting for purchases of wireline cables, and in the case of Adjusted EBITDA and Adjusted EBITDA margin, without regard to changes in our capital structure. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating RPC's liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating
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Table of Contents
RPC, INC. AND SUBSIDIARIES
activities as a measure of our liquidity. Additionally, RPC’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our Condensed Consolidated Statements of Cash Flows.
A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
See Non-GAAP Financial Measures below for a reconciliation of EBITDA and Adjusted EBITDA to net income, and Adjusted EBITDA margin to net income margin, the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of Free Cash Flow to Operating Cash Flow, the most directly comparable financial measure calculated and presented in accordance with GAAP.
Results of Operations
Three months ended
March 31,
2026
2025
(in thousands, except for percentages)
Revenues by business segment:
Technical
$
434,282
$
311,844
Support
20,473
21,033
Total revenue
454,755
332,877
Cost of revenues (exclusive of depreciation and amortization shown separately below)
355,585
243,895
Selling, general and administrative expenses
48,207
42,499
Acquisition related employment costs
7,292
—
Depreciation and amortization
42,854
35,623
Gain on disposition of assets
(1,803)
(1,526)
Other income, net
(749)
(885)
Interest expense
830
131
Interest income
(1,770)
(3,395)
Income tax provision
3,454
4,505
Net income
$
855
$
12,030
Net income margin
0.2%
3.6%
Net cash provided by operating activities
$
31,173
$
39,865
Non-GAAP Financial Measures
Adjusted EBITDA
$
53,515
$
48,894
Adjusted EBITDA margin
11.8%
14.7%
Free cash flow
$
(932)
$
7,595
THREE MONTHS ENDED MARCH 31, 2026, COMPARED TO THREE MONTHS ENDED MARCH 31, 2025
Revenues. Revenues of $454.8 million for the three months ended March 31, 2026, increased 36.6% compared to the three months ended March 31, 2025. The increase in revenues was primarily due to revenues of $97.8 million from Pintail, which was acquired during the second quarter of 2025, coupled with revenue increases in pressure pumping, downhole tools and coiled tubing. The pressure pumping market remains highly competitive. Management believes the industry continues to be over-supplied and efficiency gains are contributing to excess capacity in the industry. These challenges have impacted activity levels, asset utilization, and pricing. International revenues represented 1.5% of total revenues in the first quarter of 2026 compared to 2.4% in the same period of the prior year. We believe that international revenues will continue to be less than 10% of RPC’s consolidated revenues in the foreseeable future.
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RPC, INC. AND SUBSIDIARIES
During the first quarter of 2026, the average price of oil was 1.9% lower and the average price of natural gas was 16.2% higher, both compared to the same period in the prior year. The average domestic rig count (Source: Baker Hughes, Inc.) for the three months ended March 31, 2026, was 6.8% lower than in the same period in 2025.
The Technical Services segment revenues for the first quarter of 2026 increased by 39.3% compared to the same period of the prior year due primarily to the acquisition of Pintail, coupled with an increase in pressure pumping, downhole tools and coiled tubing revenues. Support Services segment revenues for the first quarter of 2026 decreased by 2.7% compared to the same period in the prior year, primarily due to lower pricing within rental tools.
Technical Services reported operating income was $16.0 million during the first quarter of 2026 compared to operating income of $14.0 million in the first quarter of 2025. The increase in Technical Services operating income was primarily due to an increase in downhole tool activity, partially offset by an overall weaker pricing environment and unfavorable pressure pumping job mix. The first quarter of 2026 includes operating results of Pintail. Support Services segment revenues for the first quarter of 2026 decreased by 2.7% compared to the same period in the prior year, primarily due to lower activity levels within rental tools. Support Services reported operating income of $401 thousand for the first quarter of 2026 compared to operating income of $2.7 million for the first quarter of 2025. First quarter 2026 Support Services operating income decreased by $2.3 million compared to the first quarter of the prior year due to lower pricing in rental tools and job mix.
Cost of revenues. Cost of revenues increased 45.8% to $355.6 million for the three months ended March 31, 2026, compared to $243.9 million for the three months ended March 31, 2025, primarily due to costs from Pintail, which was acquired during the second quarter of 2025, coupled with increases in expenses consistent with higher activity levels. In accordance with Staff Accounting Bulletin (SAB) Topic 11.B, cost of revenues presented on the Consolidated Statements of Operations excludes depreciation and amortization totaling $37.1 million for the first quarter of 2026 compared to $32.4 million for the first quarter of 2025.
Selling, general and administrative expenses. Selling, general and administrative expenses increased to $48.2 million for the three months ended March 31, 2026, compared to $42.5 million for the three months ended March 31, 2025, primarily due to an increase in variable expenses consistent with higher activity levels, coupled with expenses from Pintail, which was acquired during the second quarter of 2025.
Acquisition related employment costs. Acquisition related employment costs of $7.3 million represent non-cash accounting adjustments related to the Pintail acquisition costs that are contingent upon continued employment of certain Pintail employees.
Depreciation and amortization. Depreciation and amortization increased 20.3% to $42.9 million for the three months ended March 31, 2026, compared to $35.6 million for the three months ended March 31, 2025. Depreciation and amortization increased due to additional fixed assets and intangibles related to the Pintail acquisition, coupled with capital expenditures in the past year.
Gain on disposition of assets, net. Gain on disposition of assets, net was $1.8 million for the three months ended March 31, 2026, compared to $1.5 million for the three months ended March 31, 2025. The gain on disposition of assets, net is generally compris
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Presentation
The following discussion should be read in conjunction with Selected Financial Data and the consolidated financial statements included elsewhere in this document. See also Forward-Looking Statements on page 3. Discussions of year-to-year comparisons of 2024 and 2023 items that are not included in this Form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 on our Annual report on Form 10-K for the year ended December 31, 2024, which Item is incorporated herein by reference.
Overview
RPC, Inc. provides a broad range of specialized OFS primarily to independent and major oilfield companies engaged in exploration, production and development of oil and gas properties throughout the United States, including the southwest, mid-continent, Gulf of America, Rocky Mountain and Appalachian regions, and in selected international markets. The Company’s revenues and profits are generated by providing equipment and services to customers who operate oil and gas properties and invest capital to drill new wells and enhance production or perform maintenance on existing wells.
Several key trends discussed above in Item 1., Business, were key drivers of the Company’s results in 2025:
●
Generally lower industry activity, including a 6.3% decline in the rig count.
●
Lower oil prices, which limits the profit incentive for our customers to use our (and our competitors) oilfield services, including pressure pumping and other ancillary product and service offerings.
●
Continued efficiencies of oilfield equipment allowing the industry to extract the same or more hydrocarbons with the same or fewer assets. This has resulted in an oversupply of OFS capacity in the market and led to increased price competition.
●
Trend toward client preference for lower emissions equipment, typically dual fuel or electric assets; the Company has multiple Tier 4 dual fuel frac fleets which have maintained stronger utilization than legacy Tier 2 assets. The Company does not currently offer electric frac fleets.
●
E&P consolidation (See section titled Industry Overview and Key Themes in Item 1., Business, for more detail) has resulted in the loss of some customers.
●
The Pintail acquisition described in more detail below.
These and other key trends we expect to impact our future results, including expected ongoing consolidation of OFS as well as E&P companies, expected reduction in volatility of rig counts due to increase in capital discipline in E&P, ongoing geopolitical uncertainties, expectations for increased energy consumption due to the rise of AI, general oversupply of OFS capacity, particularly in pressure pumping, creating a high level of price competition, trend for larger E&Ps to seek out OFS partners who can provide larger scale and newer technology options, a favorable long-term outlook for natural gas demand, potential increases to cost of materials due to tariffs, and our strategy to diversify our service lines are discussed in more detail above under “Item 1, Business Technical Services Segment”; “Industry Overview & Key Themes”; “ Competition”; and “Strategy” above, which are incorporated by reference in this Management’s Discussion and Analysis.
Revenues during 2025 totaled $1.6 billion, an increase of 15.0% compared to 2024. The increase in revenues was primarily due to revenues from recently acquired Pintail of $295.8 million, partially offset by lower pressure pumping activity levels compared to the prior year.
Operating income for 2025 was $44.7 million, a 54.1% decrease compared to the prior year.
Net income for 2025 was $32.1 million, or $0.15 earnings per share compared to net income of $91.4 million, or $0.43 earnings per share in 2024.
Cash flows from operating activities decreased to $201.3 million in 2025 compared to $349.4 million in 2024. During 2025, capital expenditures totaled $148.4 million primarily for capitalized maintenance and upgrades of our existing equipment, coupled with ERP and other IT system upgrades.
As of December 31, 2025, there were no outstanding borrowings under our credit facility.
25
Pintail Acquisition
As described in more detail in the notes to financial statements, on April 1, 2025, we completed our acquisition of Pintail Alternative Energy, L.L.C. ("Pintail”). Under the acquisition agreement, the consideration for the transaction consisted of: (i) $170 million in cash ("the Closing Cash”), subject to certain adjustments (ii) $25 million of RPC common stock (pursuant to which 4,545,454 shares were issued) (the “Stock Consideration”), and (iii) $50 million in the form of a secured note payable to Houston LP (the "Seller Note”). For further information, see “Acquisition related employment costs” and “Cash Requirements” below.
How We Evaluate Our Operations
We use Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, all non-GAAP measures, to evaluate and analyze the operating performance of our businesses.
We believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow are important indicators of performance. Adjusted EBITDA is defined as EBITDA, adjusted for unusual (income)/expenses. Adjusted EBITDA margin reflects Adjusted EBITDA as a percentage of revenues. Management believes that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin enable investors to compare the operating performance of our core business consistently over various time periods without regard to changes in our capital structure. Management believes that Free cash flow, which measures our ability to generate needed cash from business operations, is an important financial measure for evaluating RPC’s financial condition. Our definition of Free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, since the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income/(loss), operating income/(loss), and related margins, or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Similarly, Free cash flow should be considered in addition to, rather than as a substitute for GAAP presentation of net cash provided by operating activities, as a measure of our financial condition.
See “Non-GAAP Financial Measures” below for a reconciliation of EBITDA and Adjusted EBITDA to net income, and Adjusted EBITDA margin to net income margin, the most directly comparable financial measure calculated and presented in accordance with GAAP and a reconciliation of Free Cash Flow to Operating Cash Flow, the most directly comparable financial measure calculated and presented in accordance with GAAP.
26
Results of Operations
2025
2024
2023
(in thousands, except for percentages)
Revenues by business segment:
Technical
$
1,536,048
$
1,326,005
$
1,516,137
Support
90,518
88,994
101,337
Total revenue
$
1,626,566
$
1,414,999
$
1,617,474
Cost of revenues (exclusive of depreciation and amortization shown separately below)
$
1,232,882
$
1,036,648
$
1,089,519
Selling, general and administrative expenses
175,639
156,437
165,940
Acquisition related employment costs
20,312
—
—
Pension settlement charges
—
—
18,286
Depreciation and amortization
161,193
132,575
108,123
Gain on disposition of assets
(8,192)
(8,199)
(9,344)
Other income, net
(6,431)
(2,854)
(3,035)
Interest expense
3,029
724
341
Interest income
(8,415)
(13,134)
(8,599)
Income tax provision
24,469
21,358
61,130
Net income
$
32,080
$
91,444
$
195,113
Net income margin
2.0%
6.5%
12.1%
Net cash provided by operating activities
$
201,331
$
349,386
$
394,763
Non-GAAP Financial Measures
Adjusted EBITDA
$
232,668
$
232,967
$
374,394
Adjusted EBITDA margin
14.3%
16.5%
23.1%
Free cash flow
$
52,924
$
129,456
$
213,758
Year Ended December 31, 2025, Compared to Year Ended December 31, 2024
Revenues. Revenues of $1.6 billion for 2025 increased 15.0% compared to 2024, with both Technical Services segment and Support Services segment revenues increasing. The increase in revenues was primarily due to revenues from recently acquired Pintail of $295.8 million, partially offset by lower pressure pumping activity levels compared to the prior year. The pressure pumping market remains highly competitive. Management believes the industry continues to be over-supplied and efficiency gains are consistently adding pump hour capacity to the industry. These challenges, as well as a declining rig count, have impacted activity, asset utilization, and pricing.
Technical Services segment revenues of $1.5 billion for 2025 increased 15.8% compared to the prior year. The increase in Technical Services revenue was due primarily to results from recently acquired Pintail, partially offset by a decrease in pressure pumping revenues. Technical Services reported operating income of $68.0 million during 2025 compared to operating income of $89.1 million in 2024. The decrease in Technical Services operating income was primarily due to lower pricing coupled with decreased activity in pressure pumping and several other service lines. Support Services segment revenues for 2025 increased by 1.7% compared to 2024, primarily due to higher activity levels within rental tools. Support Services reported operating income of $13.6 million for 2025 compared to operating income of $15.8 million for 2024. Support Services operating income for 2025 decreased by $2.2 million compared to 2024, due to lower pricing within rental tools.
Cost of revenues. Cost of revenues increased 18.9% to $1.2 billion for 2025 compared to the prior year. Cost of revenues increased primarily due to costs from recently acquired Pintail. Excluding results from Pintail, cost of revenues decreased in line with revenues primarily due to a decrease in expenses consistent with lower activity levels, such as materials and supplies, fleet and transportation and maintenance and repairs expenses. In accordance with Staff Accounting Bulletin (SAB) Topic 11.B, cost of revenues presented on the Consolidated Statements of Operations excludes depreciation and amortization totaling $141.2 million for 2025 compared to $120.6 million in the prior year.
Selling, general and administrative expenses. Selling, general and administrative expenses increased to $175.6 million in 2025 compared to $156.4 million in the prior year. The increase was primarily due to an increase in employment related costs coupled with acquisition related costs and expenses from recently acquired Pintail.
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Acquisition related employment costs. Acquisition related employment costs of $20.3 million represent certain accounting adjustments related to portions of the Pintail acquisition consideration that are contingent upon continued employment. This includes amortized portions of the Stock Consideration and the Redistribution Payments which are non-cash in nature, as well as the acquisition-related employment obligation asset representing 50% of the Seller Note. See note to the consolidated financial statements titled “Acquisition” for additional information related to these costs.
Depreciation and amortization. Depreciation and amortization increased 21.6% to $161.2 million in 2025, compared to $132.6 million in 2024. Depreciation and amortization increased due to additional fixed assets and intangibles related to the Pintail acquisition, coupled with capital expenditures in the past year.
Gain on disposition of assets, net. Gain on disposition of assets, net was $8.2 million in 2025, consistent with the gain on disposition of assets, net of $8.2 million in 2024. The gain on disposition of assets, net is generally comprised of gains and losses related to various property and equipment dispositions or sales to customers of lost or damaged rental equipment.
Other income, net. Other income, net was $6.4 million in 2025 compared to other income, net of $2.9 million in the prior year. Other income recorded during 2025 included a property insurance recovery of approximately $2.5 million.
Interest expense and interest income. Interest expense was $3.0 million in 2025 compared to $724 thousand in the prior year. Interest expense increased primarily due to interest on the Seller Note issued in conjunction with the Pintail acquisition. See “Cash Requirements” below and Note to the consolidated financial statements titled Acquisition for more information regarding the Seller Note. Interest expense includes interest on the Seller Note, facility fees on the unused portion of the credit facility and the amortization of loan costs. Interest income decreased to $8.4 million compared to $13.1 million in the prior year primarily due to a lower average cash balance, primarily due to the acquisition of Pintail on April 1, 2025 and a decrease in net cash provided by operating activities.
Income tax provision. Income tax provision was $24.5 million during 2025, compared to $21.4 million tax provision in the prior year. The effective provision rate was 43.3% for 2025, compared to an 18.9% effective provision rate for the prior year. The increase in the effective tax rate in 2025 compared to the prior year is due to the significant impact of detrimental permanent and discrete adjustments on a lower pretax income.
Net income, net income margin and diluted earnings per share. Net income was $32.1 million in 2025, or $0.15 diluted earnings per share, compared to net income of $91.4 million in 2024, or $0.43 diluted earnings per share. Net income margin was 2.0% for 2025, compared to 6.5% in 2024.
Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA was $232.7 million, and Adjusted EBITDA margin was 14.3% in 2025 compared to $233.0 million and 16.5% in 2024.
Cash provided by operating activities and Free cash flow. Cash provided by operating activities decreased to $201.3 million in 2025, from $349.4 million in 2024 primarily due to a decrease in net income, coupled with unfavorable changes in working capital. Free cash flow decreased to $52.9 million in 2025, from $129.5 million in 2024 primarily due to a decrease in cash provided by operating activities, partially offset by lower capital expenditures.
Non-GAAP Financial Measures
Reconciliation of GAAP and non-GAAP Financial Measures
Disclosed above are non-GAAP financial measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and Free cash flow. These measures should not be considered in isolation or as a substitute for performance or liquidity measures prepared in accordance with GAAP.
A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
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Set forth below are reconciliations of these non-GAAP measures with their most directly comparable GAAP measures.
(In thousands) (Unaudited)
2025
2024
2023
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Net income
$
32,080
$
91,444
$
195,113
Adjustments:
Add: Income tax provision
24,469
21,358
61,130
Add: Interest expense
3,029
724
341
Add: Depreciation and amortization
161,193
132,575
108,123
Less: Interest income
8,415
13,134
8,599
EBITDA
212,356
232,967
356,108
Add: Acquisition related employment costs
20,312
—
—
Add: Pension settlement charges
—
—
18,286
Adjusted EBITDA
$
232,668
$
232,967
$
374,394
Revenues
$
1,626,566
$
1,414,999
$
1,617,474
Net income margin(1)
2.0%
6.5%
12.1%
Adjusted EBITDA margin(1)
14.3%
16.5%
23.1%
(1) Net income margin is calculated as net income divided by revenues. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenues.
(Unaudited)
Twelve months ended December 31,
(In thousands)
2025
2024
Reconciliation of Operating Cash Flow to Free Cash Flow
Net cash provided by operating activities
$
201,331
$
349,386
Capital expenditures
(148,407)
(219,930)
Free cash flow
$
52,924
$
129,456
Liquidity and Capital Resources
Cash and Cash Flows
The Company’s cash and cash equivalents were $210.0 million as of December 31, 2025, $326.0 million as of December 31, 2024, and $223.3 million as of December 31, 2023.
Years ended December 31,
2025
2024
(In thousands)
Net cash provided by operating activities
$
201,331
$
349,386
Net cash used for investing activities
(273,697)
(201,551)
Net cash used for financing activities
$
(43,635)
$
(45,170)
Cash provided by operating activities for the year ended December 31, 2025, decreased by $148.1 million compared to the year ended December 31, 2024, primarily due to a decrease in net income, coupled with unfavorable changes in working capital. Change in working capital was a use of cash of $37.4 million during 2025, compared to a $116.7 million source of cash in the same period last year. The most significant working capital related cash flow during 2025 was a cash use of $32.1 million due to a decrease in unearned revenue due to the satisfaction of performance obligations that were associated with a customer cash prepayment we received in the fourth quarter of 2024. The changes in accounts receivable, accounts payable and the other components were mainly due to the timing of payments and receipts. Working capital in the prior year was impacted favorably by the receipt of a $52.8 million federal income tax refund.
Cash used for investing activities for 2025 increased by $72.1 million compared to 2024, primarily due to cash used to fund the acquisition of Pintail, partially offset by a decrease in capital expenditures. Capital expenditures were $148.4 million for the year ended December 31, 2025, compared to $219.9 million for the year ended December 31, 2024. In the prior year, the Company had expenditures for components of a new Tier 4 dual fuel pressure pumping fleet.
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Cash used for financing activities for 2025 decreased by $1.6 million primarily due to a decrease in repurchases of the Company’s common shares in the open market, partially offset by the repayment of debt assumed at acquisition of Pintail. The Company paid $35.1 million in dividends and repurchased $2.9 million of common stock in 2025 compared to $34.4 million in dividends paid and $9.9 million of common stock repurchased in 2024.
Financial Condition and Liquidity
The Company’s financial condition remains strong. We believe the liquidity provided by our existing cash and cash equivalents and our overall strong capitalization is sufficient to meet our requirements for at least the next twelve months. Our material cash requirements, including commitments for capital expenditures, as of the end of the latest fiscal period, are set forth below under “Cash Requirements.” The Company’s decisions about the amount of cash to be used for investing and financing activities are influenced by our capital position, and the expected amount of cash to be provided by operations. RPC does not expect to utilize our revolving credit facility to meet these liquidity requirements in the near term.
The Company currently has a $100.0 million revolving credit facility that matures in June 2027. The facility contains customary terms and conditions, including restrictions on indebtedness, dividend payments, business combinations and other related items. The revolving credit facility includes a full and unconditional guarantee by the Company's 100% owned domestic subsidiaries whose assets equal substantially all of the consolidated assets of the Company and its subsidiaries. Certain of the Company’s minor subsidiaries are not guarantors. The Credit Agreement’s maturity date is June 22, 2027, and the interest rate is based on Term Secured Overnight Financing Rate (Term SOFR). In addition, the terms of the agreement have a 1.00% per annum floor for Base Rate borrowings and permits the issuance of letters of credit in currencies other than U.S. dollars. As of December 31, 2025, RPC had no outstanding borrowings under the revolving credit facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaled $18.2 million; therefore, a total of $81.8 million of the facility was available. The Company is currently in compliance with the credit facility financial covenants. For additional information with respect to RPC’s facility, see note to the consolidated financial statements titled Notes Payable.
The Company has a shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (SEC) that expires on May 5, 2028, which permits it to offer common stock, preferred stock, warrants, rights, depositary shares, purchase contracts and units containing two or more of the foregoing, in one or more offerings in an aggregate amount of up to $300 million. The Form S-3 is intended to provide us the flexibility to conduct registered sales of our securities, subject to market conditions and our future capital needs.
During 2025, RPC implemented the provisions of Public Law 119-21, commonly referred to as the One Big, Beautiful Bill Act ("OBBBA”), which resulted in a lower tax obligation due to the 100% bonus depreciation on capital expenditures placed in service after January 19, 2025 and immediate expensing of all domestic research and development costs, that were previously amortized over five years. Implementation of the OBBBA provisions did not have an impact on our effective rate or the Income tax provision in our Consolidated Statements of Operations for the year ended December 31, 2025.
Material Cash Requirements
The Company currently expects capital expenditures to be between $150 million and $180 million in 2026. We expect 2026 capital expenditures to be directed towards capitalized maintenance of our existing equipment and selected growth opportunities as well as the upgrade to our ERP and supply chain systems.
During 2025, the Company continued its multi-year systems transformation program to upgrade its ERP and supply chain systems and began capitalizing some costs associated with ERP implementation. We plan to continue the ERP implementation through a phased approach.
As noted above, the Company issued the Seller Note in connection with the Pintail Acquisition. The Seller Note matures on April 1, 2028, and provides for annual principal payments on the anniversary dates of the acquisition. The first principal payment of $20 million is due on April 1, 2026. Interest on the Seller Note accrues at a variable rate equal to the SOFR for the applicable interest period, plus 2.0% per annum, or where applicable, at a specified default rate. For the full year ended December 31, 2025, interest payments paid on the Seller Note totaled approximately $2.4 million. The Seller Note provides for principal reduction or cancellation upon certain events related to the employment of one of the sellers.
As noted above, as of December 31, 2025, letters of credit outstanding relating to self-insurance programs and contract bids totaled $18.2 million.
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The Company has total operating and finance lease commitments of approximately $27.4 million, of which approximately $10.3 million matures during 2026. See the note to consolidated financial statements titled “Leases” for more information.
The Company has ongoing sales and use tax audits in various jurisdictions subject to varying interpretations of statutes. The Company has recorded the exposure from these audits to the extent issues are resolved or are probable and reasonably estimable. These audits involve issues that could result in unfavorable outcomes that cannot be currently estimated.
The Company has a stock buyback program to repurchase up to 49,578,125 shares in the open market, including an additional 8,000,000 shares authorized for repurchase by the Board of Directors in 2023. There were no shares repurchased on the open market during 2025, and 12,768,870 shares remained available to be repurchased under the current authorization as of December 31, 2025. The Company may repurchase outstanding common shares periodically based on market conditions and our capital allocation strategies. The stock buyback program does not have a predetermined expiration date. For additional information with respect to RPC’s stock buyback program, see note to the consolidated financial statements titled Cash Paid for Common Stock Purchased and Retired.
On January 27, 2026, the Board of Directors declared a regular quarterly cash dividend of $0.04 per share payable March 10, 2026, to common stockholders of record at the close of business on February 10, 2026. The Company expects to continue to pay cash dividends to common stockholders, subject to industry conditions and RPC’s earnings, financial condition, and other relevant factors.
Management expects to fund the foregoing obligations primarily from operating cash flows and existing cash, with the revolving credit facility providing added flexibility if needed.
Inflation
The Company purchases its equipment and materials from suppliers who provide competitive prices and employ skilled workers from competitive labor markets. If inflation in the general economy increases, the Company’s costs for equipment, materials and labor could increase as well. In addition, increases in activity in the domestic oilfield can cause upward wage pressures in the labor markets from which it hires employees, especially if employment in the general economy increases. Also, activity increases can cause supply disruptions and higher costs of certain materials and key equipment components used to provide services to the Company’s customers. In recent years, the price of labor and raw materials increased while labor shortages caused by the departure of skilled labor from the domestic oilfield industry in prior years. The cost increases have moderated but remain high by historical standards. Additionally, tariffs can impact the absolute costs of materials, as well as cause shifts in production to more domestic production adding inflationary pressures to domestic suppliers. Though the ultimate impact is uncertain, the Company does not currently expect tariffs on goods imported into the U.S. to result in materially higher costs of equipment.
Outlook
The current and projected prices of oil, natural gas and natural gas liquids are important catalysts for U.S. domestic drilling activity and can be impacted by economic and policy developments as well as geopolitical disruptions. RPC believes that oil prices currently remain at levels sufficient to continue drilling and completion activities, however the recent fluctuations of oil prices and potential further volatility could result in the Company’s customers opting to delay completion activity. Long-term, projected higher demand for oil and natural gas should drive increased activity in most of the basins in which RPC operates.
We continue to monitor the supply and demand for our services and the competitive environment, including trends such as increasing customer preferences for more efficient equipment. Increased efficiencies in recent years of oilfield completion services and equipment, particularly in pressure pumping, has inherently contributed to oversupply in the Oilfield Services (OFS) market. We believe that competition will remain intense.
For additional discussion about trends that we expect to impact our results in the future, see “Overview” and “Item 1, Business,” above.
Contractual Obligations
The Company’s obligations and commitments that require future payments include certain non-cancelable leases, purchase obligations, amounts related to the usage of corporate aircraft, ongoing ERP implementation, letters of credit, the Seller Note and
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other long-term liabilities. We expect to fund these obligations primarily through cash generated from our operations. See note titled “Leases” in the Notes to consolidated financial statements for additional details.
Off Balance Sheet Arrangements
The Company does not have any material off balance sheet arrangements.
Related Party Transactions
See note titled “Related Party Transactions” in the Notes to consolidated financial statements for a description of related party transactions.
Critical Accounting Estimates
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require significant judgment by management in selecting the appropriate assumptions for calculating accounting estimates. These judgments are based on our historical experience, terms of existing contracts, trends in the industry, and information available from other outside sources, as appropriate. Senior management has discussed the development, selection and disclosure of its critical accounting estimates requiring significant judgments and estimates with the Audit Committee of our Board of Directors. The Company believes the following critical accounting estimates involve estimates that require a higher degree of judgment and complexity:
Credit loss allowance for accounts receivable — Substantially all of the Company’s receivables are due from oil and gas E&Ps in the United States, selected international locations and foreign, nationally owned oil companies. Our credit loss allowance is determined using a combination of factors to estimate the risk of uncollectibility so that our receivables are appropriately stated. Our established credit evaluation procedures seek to minimize the amount of business we conduct with higher risk customers. Our customers’ ability to pay is directly related to their ability to generate cash flow on their projects and is significantly affected by the volatility in the price of oil and natural gas. Credit loss allowance for accounts receivable is recorded in selling, general and administrative expenses. Accounts are written off against the allowance when the Company determines that amounts are uncollectible, and recoveries of amounts previously written off are recorded when collected. Significant recoveries will generally reduce the required provision in the period of recovery, thereby causing credit loss allowance to fluctuate significantly from period to period. Recoveries were insignificant in 2025, 2024 and 2023. We record specific provisions when we become aware of a customer's inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer's operating results or financial position. If circumstances related to a customer change, our estimate of the realizability of the receivable would be further adjusted, either upward or downward.
The estimated credit loss allowance is based on our evaluation of the overall trends in the oil and gas industry, financial condition of our customers, our historical write-off experience, current economic conditions, and in the case of international customers, our judgments about the economic and political environment of the related country and region. In addition to reserves established for specific customers, we establish general reserves by using different percentages depending on the age of the receivables which we adjust periodically based on management’s judgment and the economic strength of our customers. The net credit loss allowance as a percentage of revenues ranged from 0.4% to 0.8% over the last three years. Increasing or decreasing the estimated general reserve percentage by 0.50 percentage points as of December 31, 2025, would have resulted in a change of approximately $1.3 million in the recorded provision for current expected credit losses.
Insurance expenses — RPC self-insures certain risks related to general liability, workers’ compensation, vehicle, property, and employee health insurance costs, up to policy-specified deductible limits. For employee health insurance, RPC maintains stop-loss coverage to limit its financial exposure on high-cost claims. The estimated cost of claims under these self-insurance programs is accrued as incurred, though actual settlement may occur in future periods. These estimates may be adjusted over time based on claim developments. Any portion of outstanding claims expected to be paid beyond one year is classified as long-term accrued insurance expenses. These claims are monitored, and the cost estimates are revised as developments occur relating to such claims. The Company has retained an independent third-party actuary to assist in the calculation of a range of exposure for these claims using various actuarial methods including paid and incurred loss development, paid and incurred Bornhuetter-Ferguson, case outstanding loss development and expected loss. As of December 31, 2025, the Company estimates the range of exposure to be from $19.1 million to $26.7 million. The Company has recorded liabilities as of December 31, 2025, of $22.8 million, which represents management’s best estimate of probable loss.
Long-lived assets including goodwill — RPC carries a variety of long-lived assets on its balance sheet including property, plant and equipment and goodwill. Impairment is the condition that exists when the carrying amount of a long-lived asset exceeds its fair value. Goodwill is the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities
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assumed. The Company conducts impairment tests on goodwill annually during the fourth quarter, or more frequently if events or changes in circumstances indicate an impairment may exist. The Company completes either a qualitative or quantitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Assessment of goodwill impairment is conducted at the level of each reporting unit. Technical Services and Support Services, comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. The fair value of each reporting unit is estimated using an income approach and a market approach. The income approach uses discounted cash flow analysis based on management’s short-term and long-term forecast of operating performance. This analysis includes significant assumptions regarding discount rates, revenue growth rates, expected profitability margins, forecasted capital expenditures and the timing of expected future cash flows based on market conditions. If the estimated fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is measured and recorded.
In addition, the Company conducts impairment tests on long-lived assets, other than goodwill, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For the impairment testing on long-lived assets, other than goodwill, a long-lived asset is grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset group are compared to its carrying amount. If the undiscounted cash flows are less than the asset group’s carrying amount, then the Company is required to determine the asset group's fair value by using a discounted cash flow analysis. This analysis is based on estimates such as management’s short-term and long-term forecast of operating performance, including revenue growth rates and expected profitability margins, estimates of the remaining useful life and service potential of the assets within the asset group, and a discount rate based on weighted average cost of capital. An impairment loss is measured and recorded as the amount by which the asset group's carrying amount exceeds its fair value.
Acquisition of business — In accounting for our acquisitions, we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires assets acquired and the liabilities assumed to be recognized at the acquisition date fair values, separately from goodwill. The excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed, is recorded as goodwill. The Company uses its best estimates and assumptions to accurately value assets acquired, and liabilities assumed at the acquisition date as well as any contingent consideration, where applicable. However, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, the Company may have to record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statements of Operations.
Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, pre-acquisition contingencies and any contingent consideration, where applicable. Although management believes that the assumptions and estimates the Company has made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.
As part of the acquisition of Pintail, the Company recognized customer relationships as an identifiable intangible asset. The fair value of customer relationships was estimated using the multi-period excess earnings method. The valuation of customer relationships involves certain key assumptions including estimated customer attrition rate and required returns on contributory assets. These assumptions involve significant judgment about customer retention patterns and the risk profile of the acquired business. Changes in these assumptions could materially affect the fair value assigned to the customer relationships and the related amortization expense in future periods. See Note titled “Acquisition” in the Notes to Consolidated Financial Statements.
Impact of Recent Accounting Pronouncements
See note titled “Significant Accounting Policies” in the Notes to the consolidated financial statements, which is incorporated herein by reference for a description of recent accounting standards, including the expected dates of adoption and estimated effects on results of operations and financial condition.
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