Ranger Energy Services, Inc. Q3 FY2024 earnings call

• Ranger's financial performance has been resilient despite challenging market conditions, delivering the second best quarterly results in company history with sales of $153 million and adjusted EBITDA of $25.1 million. - High Specification Rigs set a quarterly revenue record, Ancillary Services (coiled tubing, Torrent) achieved near-record results. - Wireline showed positive rebound, indicating production-focused model's potential. - Seasonality expected to affect Q4, but core customer demand remains strong for 2025. - Focus on partnerships, quality assets, and production has allowed growth with high-quality customers.

High Specification Rigs: Achieved a record quarter with revenues of $86.7 million and adjusted EBITDA of $19.2 million, contributing ~56.7% to total revenue of $153 million, with gross margins of 22%. Ancillary Services: Generated revenues of $36 million, adjusted EBITDA of $8.8 million, contributing ~23.5% to total revenue, with coiled tubing revenue up 33% quarter-over-quarter and Torrent gas processing showing exceptional growth. Wireline: Showed positive rebound with revenue of $30.3 million, adjusted EBITDA of $2.7 million, indicating future earnings potential.

• Q4 expected to be affected by seasonality, but core customer demand strong. - Confident in robust 2025 for High Specification Rigs, with Ancillary Services poised for growth. - Wireline expected to stabilize and improve in 2025 as spring approaches. - Anticipate year-over-year growth in 2025 across segments.

• Seasonality impacts on business performance. - Market uncertainties affecting operational results. - Lead time issues for growth CapEx equipment, with some items having six-plus month lead times.

Q: How is Ranger growing market share in a slowing market?

A: Stuart mentions partnerships with best customers, production focus reducing impact of broader market challenges like fueling/frac efficiencies.

Q: What gives confidence in 2025 growth?

A: Stuart states confidence across service lines, including improvement in Wireline expected in spring, strong performance in P&A, coiled tubing, and Torrent.

Q: Where would growth CapEx be allocated in 2025?

A: Stuart says most growth CapEx likely around well service rigs and related equipment to meet customer demand for complete packages, noting lead time issues for some equipment.