RNGR · 10-Q · 2026Q1 · Full report

Gross Margin Drivers

Ranger Energy Services, Inc. · 2026-04-28 · Importance 48 · Surprise 40

Cost of services (exclusive of depreciation and amortization) for Q1 2026 increased $15.2 million, or 13%, to $130.6 million from $115.4 million, while cost of services as a percent of revenue improved to 82% from 85% year-over-year. High Specification Rigs cost of services rose $15.3 million to $85.4 million, driven by $6.5 million of higher employee labor and $2.4 million of higher repair and maintenance and inclusion of $21.6 million of AWS-related costs, with cost of services remaining 80% of the segment's revenue. Wireline Services cost declined $9.6 million to $10.7 million, reducing cost as a percent of Wireline revenue from 118% to 101% due to reorganization of the completion service line. Processing Solutions and Ancillary Services cost of services rose $9.5 million to $34.5 million, including $11.3 million of costs from AWS, leaving the segment cost ratio steady at 82%.

Key facts

• High Specification Rigs cost of services included $21.6 million of costs related to the AWS acquisition for the three months ended March 31, 2026.
• High Specification Rigs cost of services increased by $15.3 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 and included increases of $6.5 million in employee labor and $2.4 million in repair and maintenance costs.
• Wireline Services cost of services as a percentage of revenue decreased from 118% for the three months ended March 31, 2025 to 101% for the three months ended March 31, 2026.
• As a percentage of revenue, High Specification Rigs cost of services was 80% for the three months ended March 31, 2026, consistent with 80% for the three months ended March 31, 2025.
• As a percentage of Processing Solutions and Ancillary Services revenue, cost of services was 82% for both the three months ended March 31, 2026 and March 31, 2025.

Impact estimates