Ranger Energy Services, Inc. Class A

Good morning, and welcome to Ranger Energy Services' second quarter 2026 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 2. Please note, this event is being recorded. I would now like to turn the conference over to Joe Mease, Vice President of Finance. Please go ahead.

Good morning, and thank you for joining Ranger Energy Services' second quarter 2026 earnings conference call. Before we begin, Ranger has issued a press release outlining our operational and financial performance for the quarter ended June 30th 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. Factors that could cause actual results to differ include but are not limited to changes in crude oil and natural gas prices, customer activity levels, operating risks, competitive pressures, weather conditions, integration risks related to acquisitions, and other risks described in our filings with the Securities and Exchange Commission. Further, please note that non-GAAP financial measures will be referenced during this call. A full reconciliation of GAAP to non-GAAP measurements is available in our latest quarterly earnings release and conference call presentation. Joining me on the call today are Stuart Bodden, our Chief Executive Officer, and Melissa Cougle, our Chief Financial Officer. Following their remarks, we'll open the call for Q&A. And with that, I'll turn it over to Stuart.

Thank you, Joe, and good morning, everyone. We appreciate you being with us today for Ranger's second quarter 2026 results. I'll take a few minutes to review where we are strategically and operationally and share some high level financial context. Melissa will then walk through the more detailed P&L, cashflow and balance sheet results. Overall, Ranger's second quarter performance reinforced the earnings power we believed we could achieve following the AWS acquisition. The integration of AWS continues to build momentum and the business is performing well. We were pleased to see the team's dedication and hard work translate into meaningful sequential improvement in both revenue and EBITDA. Activity levels were strong, as anticipated, and market sentiment continued to improve modestly throughout the quarter. Going forward, we remain focused on converting that momentum into sustained operating consistency, stronger execution across the combined footprint, and taking advantage of cross-selling opportunities. As always, our teams in the field remain focused on executing safely, reliably, and efficiently for our customers. Ranger once again delivered sequential top-line growth across our core segments with a total revenue of $176.5 million, up 10.9% sequentially. Ranger generated adjusted EBITDA of $28.6 million, representing a 16.2% EBITDA margin which expanded 160 basis points quarter over quarter. We have now passed a key milestone of generating an annualized adjusted EBITDA run rate in excess of $100 million, consistent with the target we first shared with investors after the AWS acquisition. We continue to believe adjusted EBITDA for 2026 will exceed $100 million, with Q3 expected to be similarly strong as Q2, before typical potential softening in Q4 due to holiday and weather impacts. Let me put the headline results in the context of what we are seeing in the market. At the start of the year, the U.S. on-tour market was relatively muted, with activity expectations broadly consistent with 2025, stable to slightly lower. During the second quarter, we saw a modest increase in workover and maintenance activity supported by normal seasonal strength from longer summer days and more favorable weather. Those trends played out as expected across Ranger's broader portfolio. With a business model heavily weighted toward production-focused work, Ranger remains the best in class at delivering cost-efficient, high-quality work over an intervention services on existing wells. In a market where customers continue to exercise capital discipline, demand for our fleet has remained strong. Providing some comments on each of our segments, our high spec rig segment had a strong second quarter with revenue increasing 4%, supported by increased rig hours quarter over quarter and a modest rate uplift on the back of fuel surcharges passed along to customers early in the quarter to offset increases in our fuel costs. The third quarter is traditionally our strongest quarter of the year, and we are forecasting slight increases in the top line with margins expected to improve closer towards 20%, as has traditionally been the case in our high spec rig segment. In our ancillary service lines, we saw standout performance from our coil tubing service line during the quarter with good growth in our plugging and abandonment and torrent service lines as well. With all three service lines, growing by 20% or more quarter over quarter on the top line. Performance within the other service lines was somewhat inconsistent, and we are focused on finding better opportunities to nurture and grow these businesses in the future. Contribution from our wireline segment this quarter was exceptionally strong. We made changes to the leadership team a little less than a year ago, and the entire wireline team's effort over the past several months is showing real results. The team secured several contracts earlier this year that drove much of the outperformance, and it was encouraging to see profitability materialize for the wireline segment. As we look ahead, the contract awards that drove these results have concluded, and while our long-term outlook for wireline is favorable, we expect to back half the year to experience reduced EBITDA margins, potentially back to single digits, and a softer top line. The key themes driving our operational performance haven't changed. We remain singularly focused on a few key areas this year. First, we always prioritize safety and service execution. Our operational teams continue to deliver work safely and on schedule, which is why we maintain the strongest relationships with the largest E&P operators in the U.S. land market. The customers value our safety-forward culture and focus on ensuring asset reliability and crew competency, which positions us well as activity continues to pick up in the future. Second, we achieved a significant milestone last year with the acquisition of American Well Services, and we remain focused on fully completing the integration and capturing synergies. In our second full quarter post-acquisition, we continued to improve the legacy business advanced cross-selling opportunities, standardized billing protocols, and drive toward full utilization, greater consistency, and growth in adjacent service lines across the Ranger footprint. We also continue to make meaningful progress on the rollout of our Echo fleet. The construction of our fleet of next-generation hybrid electric work-over rigs remains on schedule. The first two rigs contracted under our award announced at the start of the year are presently undergoing field testing and are expected to be operational by the end of the third quarter. Recently, we also announced that one of our core customers, Chevron, is committing to three additional ECHO rigs. The vote of confidence in ECHO's capabilities and this continued partnership is something we take great pride in at Ranger. ECHO remains a differentiated asset in the market, delivering enhanced safety, lower fuel consumption and emissions, and improved operating efficiency. We continue to see market signs that echo adoption will accelerate in the future and provide for further differentiation of Ranger services. Finally, Ranger began a journey to prove our cash flow generation potential over three years ago, and we continue to be focused on allocating capital where it has the potential to create maximum value for our shareholders while maintaining unparalleled balance sheet strength as a small-cap energy services player. This quarter, we deployed nearly $4.5 million of excess cash into share repurchases of 282,900 shares, and we have now repurchased 4.6 million shares for a total of $52.1 million since mid-2023, while at the same time declaring our standard quarterly dividend. Deploying cash flows strategically whether towards share repurchases or towards acquisitions like AWS, we feel our approach to managing capital deployment is as much a strategic advantage as our echo fleet. Ranger is as strong as ever and continues to create value for shareholders, customers, and employees. We are positioning the company for long-term value creation and we are increasingly optimistic about the growth opportunities ahead. Whether supporting market expansion tied to U.S. energy independence, and the build out of data centers and computing power, pursuing value accretive acquisitions, expanding our differentiated echo rig fleet or strategically repurchasing shares in the open market. Ranger is setting a differentiated path for continued growth and strong performance. With that, I'll turn over the call to Melissa for a few remarks on the financial performance specifics.