Ranger Energy Services, Inc. Class A

Good morning and welcome to Ranger Energy Services' fourth quarter and full year 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. please note this event is being recorded. I would now like to turn the conference over to Joe Meese, Vice President, Finance. Please go ahead.

Good morning and welcome to Ranger Energy Services' fourth quarter and full year 2025 earnings conference call. We appreciate you joining us today. Before we begin, Ranger has issued a press release outlining our operational and financial performance. The press release and accompanying presentation materials are available in the investor relations section of our website at www.rangerenergy.com. Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OUR FORWARD-LOOKING STATEMENTS. FURTHER, PLEASE NOTE THAT NON-GAP FINANCIAL MEASURES WILL BE REFERENCED DURING THIS CALL. A FULL RECONCILIATION OF GAP TO NON-GAP MEASUREMENTS IS AVAILABLE IN OUR LATEST QUARTERLY EARNINGS RELEASE AND CONFERENCE CALL PRESENTATION. JOINING ME TODAY ARE STEWART BODEN, OUR CHIEF EXECUTIVE OFFICER, AND MELISSA KUGL, OUR CHIEF FINANCIAL OFFICER. Stuart will begin with a strategic and operational overview outlining our accomplishments in 2025 and provide an outlook for Ranger for 2026. Melissa will then walk through a financial summary of the results for Ranger's fourth quarter and fiscal year. Following their remarks, we'll open the call for Q&A. With that, I'll turn it over to Stuart.

Thanks, Joe, and good morning, everyone. I appreciate all of you joining us today. to discuss our fourth quarter and full year 2025 results. I'll spend some time walking through our operational performance during the quarter, highlight the strategic milestones we achieved in 2025, and then talk more broadly about the trajectory we see for the business as we move into 2026. Let me start with an overview of the year. We posted total company revenue of $547 million with adjusted EBITDA of $73.2 million. I'm pleased with how the organization executed throughout 2025, particularly against the backdrop of a market environment that required discipline, adaptability, and continued focus on operational performance. Across the board, our teams delivered consistent execution in the field, maintained strong alignment with the customers, and supported the integration of new assets and capabilities that will position Ranger well for the long term. In the fourth quarter specifically, activity levels were generally consistent with our expectations. The market continued to reflect the same characteristics we've spoken about over the past several quarters. Relatively stable demand, customers focused on high quality service execution, and a continued emphasis on efficiency and cost management. Against that backdrop, Ranger continued to perform well. Our well service operations, wireline offerings, and ancillary services demonstrated solid utilization and maintained the margin profile we had built through disciplined pricing, cost control, and operational efficiency. Let me turn now to a few of the strategic initiatives that shaped the year. starting with the American Wealth Services acquisition. We completed this transaction with a strategic intent to broaden our footprint, enhance scale, and strengthen our service offerings in the Permian Basin. I'm pleased to report that the integration is progressing well. Our focus during the fourth quarter and continuing into early 2026 has been on ensuring that the combined operations function cohesively, that our teams remain aligned with the expectations we established at the outset, and that our shared best practices are implemented efficiently. All of these areas have integration milestones that are on track and being achieved. The operational overlap continues to progress well, and we see nothing approximately 120 days into our combination that would derail our long-term synergy plans. We've maintained transparency with our teams and customers and we've ensured continuity of service while beginning the process of capturing efficiencies that the combined platform enables. The AWS team has been collaborative, and their operational culture aligns well with Ranger's emphasis on safety, efficiency, and reliability. The acquisition also strengthens our customer reach and enhances our competitive position. We are solidifying relationships with operators who value scale, responsiveness, and the ability to execute consistently. We continue to see opportunities to drive incremental value from this combination as we move through 2026, and we are encouraged by early results. The other strategic initiative that saw meaningful progress in 2025 was our echo rig program, which has been one of the most exciting internal developments in our history. As many of you know, ECHO represents a significant advancement in well service technology, one that reduces emissions while also delivering greater overall control and safety on location. As we rolled out our first two ECHO rigs in 2025, we continued to validate the platform's performance with customers, and the feedback has been very reassuring. As one example of the efficiencies of our ECHO rigs, in the first 450 hours of deployment last year, One of our echo rigs used less than 22 hours of generator power, with the balance coming from the onboard battery system being recharged through the regenerative capabilities of the rig. At the beginning of this year, we signed a contract for 15 echo rigs to be built with a key operator in the lower 48. This contract reflects a few important themes. First, customer interest remains strong. Operators are increasingly looking for ways to improve operational efficiency and safety on site while also reducing emissions. ECHO directly addresses those needs and provides a flexible platform that can work independently or leverage infield or pole power. Second, the platform is beginning to demonstrate real measurable value. We have worked to quickly address any issues identified and are starting to quantify the operational efficiencies produced. The theme we continue to hear from operators is that the Echo platform is differentiated. We're still early in the broader adoption curve, but the pace is accelerating, faster than what we initially expected when we launched Echo. The pipeline of interest remains robust, and as customers gain more experience with this technology, we expect those conversations will continue to mature. Echo is one of the most meaningful strategic investments we have made as a company. and we are excited about the momentum it continues to generate heading into 2026. Outside of the accomplishments on the growth side with AWS and ECHO, our legacy core Ranger businesses have continued to perform well despite the headwinds that were present through most of 2025. Our high-spec rig fleet continue to benefit from operational consistency, steady workload, and disciplined labor management, areas that have long been strengths for Ranger. with holiday scheduling at year end showing more resiliency than expected. Although our ancillary services segment performed well as a whole, the situation was more nuanced with some service lines finding new growth avenues and efficiencies in the fourth quarter, while others contended with white space. Finally, our wireline services continue to navigate a challenged business environment in the fourth quarter. That said, we have seen recent signs of improvement and experienced a couple of key customer rewards. We also maintained our commitment to capital discipline throughout the year and deployed capital in a balanced and deliberate manner, investing in opportunities that support our strategic goals while maintaining flexibility on the balance sheet. As Melissa will discuss in more detail later, our free cash flow generation allows us to both pursue growth opportunities and return meaningful capital to shareholders. In 2025, we used approximately $40 million of our free cash flow towards the purchase of American Wealth Services, while also repurchasing nearly 1 million of our own shares last year, which represents almost 5% of shares outstanding. This disciplined approach to capital deployment positions us well as we move into 2026, where we expect to continue generating healthy levels of cash, while also supporting the rollout of our Echo Fleet and completing the integration of AWS. Let me now touch briefly on the broader 2026 outlook. We expect the operating environment to remain generally stable and similar to 2025 from an activity level standpoint, making 2026 a year of execution and strategic evaluation. We will continue to integrate American Wealth Services, support our teams in the field, advance the rollout of the ECHO platform, and explore opportunities to strengthen our service offerings where it aligns with our capabilities and our financial strategy. We will stay focused on the fundamentals, safety, efficiency, cost control, and customer service, and we'll continue to make decisions that support long-term shareholder value. Despite expectations for a relatively flat 2026, there is reason to be excited about the future looking to 2027 and beyond. Our pro forma financial profile with the AWS acquisition gives us an annual EBITDA generation opportunity of more than $100 million in 2026, with room far beyond in a supportive macro environment when commodity supply begins to tighten. By the middle of 2027, we expect to have 15 new echo rigs operating in the lower 48, and we believe more contracts for further rig deployments will be underway, providing for an ever more differentiated service offering with best-in-class assets. Over the next 18 to 24 months, we believe the U.S. onshore market will see activity improvement and Ranger will be ready with high quality assets to be deployed. Both oil and gas markets are seeing more incremental support than expected this year, even before geopolitical developments in the past seven days. Whether taking a near, medium, or long-term view, we will remain disciplined in our deployment of capital, ensuring long-term value creation. Before I hand things over to Melissa, I WANT TO AGAIN THANK THE ENTIRE RANGER TEAM FOR THEIR HARD WORK AND COMMITMENT THROUGHOUT 2025. THE COMPANY DELIVERED SOLID RESULTS THROUGH CONSISTENT EXECUTION, LIFEFUL DECISION MAKING AND STRONG DISCIPLINE AT EVERY LEVEL OF THE ORGANIZATION. WE HAVE MOMENTUM ENTERING 2026 AND WE ARE CONFIDENT IN OUR ABILITY TO CONTINUE BUILDING ON THAT FOUNDATION. OUR FIELD PERSONNEL CONTINUE TO BE THE HEARTBEAT OF THIS ORGANIZATION AND THROUGHOUT 2025 Our crews delivered safe, reliable, and efficient work for our customers in a variety of operating conditions. And their commitment is evident in the trust we continue to earn from operators across all service lines. As we've said before, Ranger differentiates itself through execution, and our teams continue to validate that every day. With that, I'll turn the call over to Melissa to walk through our financial results.