Ranger Energy Services ((RNGR)) has held its Q4 earnings call. Read on for the main highlights of the call.
Ranger Energy Services, Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company showcased strong financial and operational performance in 2024, particularly in high-spec rigs and ancillary services. While the wireline segment faced difficulties and adverse weather conditions affected early 2025, the overall outlook remains optimistic due to strategic dividend increases and financial flexibility.
Strong Year-End Performance
Ranger Energy Services concluded 2024 with impressive results, marked by exceptional operational execution and disciplined cost management. The company reported a revenue of $143.1 million and an adjusted EBITDA of $21.9 million, achieving a record profitability margin of 15.3% for the fourth quarter. This performance underscores the company’s effective capital allocation strategies.
Dividend Increase
In a move that reflects confidence in its business stability, Ranger Energy Services announced an increase in its regular quarterly dividend from $0.05 to $0.06 per share. This decision underscores the company’s commitment to enhancing shareholder returns and showcases its robust financial health.
High-Spec Rigs Business Success
The high-spec rigs segment of Ranger Energy Services achieved remarkable success, setting a quarterly revenue record of $87 million and an adjusted EBITDA of $19 million, a 21% increase over the previous year. For the full year, this segment reported revenues of $336.1 million and an adjusted EBITDA of $70.5 million, reflecting significant year-over-year growth.
Ancillary Services Growth
Ancillary services experienced a stellar year, generating revenue of $124.8 million and an adjusted EBITDA of $26.6 million, marking increases of 1% and 18% respectively from the previous year. This growth was driven by the plug-in abandonment, rentals, and Torrent service lines, highlighting the segment’s expanding market presence.
Strong Balance Sheet
Ranger Energy Services ended the year with a robust balance sheet, boasting $40.9 million in cash and zero long-term debt. This financial flexibility positions the company well to seize strategic opportunities and reinforces its stability in a competitive market.
Wireline Segment Challenges
The wireline segment faced significant challenges in 2024, with revenue dropping by nearly half and margins falling to single digits due to decreased demand and pricing pressures. The fourth quarter saw a 26% decline in revenue compared to the previous quarter, resulting in a breakeven margin.
Revenue Decline
Overall, Ranger Energy Services reported a full-year revenue of $571.1 million, a 10% decrease from the previous year. This decline was primarily attributed to reduced activity levels and challenges in the wireline completions market.
Weather Impact on 2025 Start
The start of 2025 was adversely affected by two polar vortex events, significantly reducing activity levels in January and February. This weather impact makes it unlikely for the company to achieve a total EBITDA of $20 million in the first quarter.
Guidance for 2025
Looking ahead, Ranger Energy Services anticipates stable activity levels in 2025, with modest growth expected in high-spec rigs and ancillary services. However, wireline revenues may see a slight decline. The company plans to maintain maintenance CapEx at 4-6% of revenue, emphasizing disciplined capital allocation and a focus on shareholder returns, including a 20% increase in the regular quarterly dividend.
In conclusion, Ranger Energy Services’ earnings call highlighted a strong performance in 2024, with positive developments in high-spec rigs and ancillary services. Despite challenges in the wireline segment and weather-related setbacks in early 2025, the company remains optimistic about its future, supported by strategic financial decisions and a commitment to shareholder value.