Core Viewpoint - The article emphasizes the importance of value investing and highlights ProFrac Holding Corp. (ACDC) as a strong value stock based on its favorable valuation metrics and earnings outlook [2][3][6]. Company Analysis - ProFrac Holding Corp. (ACDC) currently holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating it is among the best value stocks available [3]. - ACDC's price-to-book (P/B) ratio is 1.13, which is attractive compared to the industry average of 2.20. The P/B ratio has fluctuated between 0.73 and 1.25 over the past year, with a median of 0.98 [4]. - The company's price-to-cash flow (P/CF) ratio stands at 4.98, significantly lower than the industry average of 9.26. This ratio has ranged from 2.86 to 5.53 in the past year, with a median of 4.16 [5]. - These valuation metrics suggest that ACDC is likely undervalued at present, supported by a strong earnings outlook [6].

Core Insights - ProFrac Holding Corp. has partnered with Prairie Operating Co. to implement an electric frac fleet in Colorado, featuring 25 advanced 3,000 HHP single E-Pumps for fully electrified hydraulic fracturing and pump down operations [1][2][3] - The initiative aims to enhance operational capabilities while significantly reducing environmental impact, aligning with Colorado's stringent emissions standards [3][5][6] - The fleet will utilize state-of-the-art electric blender units and turbine generators powered by 100% natural gas, marking a shift from conventional diesel-powered operations [4][5] Company Overview - Prairie Operating Co. is an independent energy company focused on the development and acquisition of oil and natural gas resources, primarily in the Denver-Julesburg Basin [7] - ProFrac Holding Corp. is a technology-driven energy services holding company providing hydraulic fracturing and related services to upstream oil and natural gas companies [8]

Financial Performance - Total revenue for the three and nine months ended September 30, 2024, was $575.3 million and $1,736.2 million, representing an increase of $1.1 million and a decrease of $404.7 million from the same periods in 2023[135]. - Net loss attributable to ProFrac Holding Corp. for the three and nine months ended September 30, 2024, was $45.2 million and $110.1 million, reflecting decreases of $26.3 million and $110.3 million from the same periods in 2023, including pretax goodwill impairment charges of $6.8 million and $74.5 million, respectively[135]. - Stimulation services revenues for the three months ended September 30, 2024, increased by $17.6 million, or 4%, while for the nine months, it decreased by $357.9 million, or 19%[137]. - Proppant production revenues for the three and nine months ended September 30, 2024, decreased by $45.6 million and $90.4 million, or 46% and 31%, respectively[138]. - Manufacturing revenues for the three and nine months ended September 30, 2024, increased by $17.7 million and $18.9 million, or 40% and 13%, respectively[139]. Expenses and Impairments - Selling, general and administrative expenses, excluding stock-based compensation, for the three months ended September 30, 2024, increased by $2.6 million, or 5%[147]. - Goodwill impairment charge of $67.7 million was recorded for the three months ended September 30, 2024, due to reduced operating results in the Haynesville Proppant reporting unit[150]. - In Q3 2024, the company reported goodwill impairment charges of $2.4 million and $4.4 million for the Permian Proppant and Eagle Ford Proppant reporting units, respectively, due to reduced operating results[151]. - Total operating expenses for the nine months ended September 30, 2024, were $27.2 million, compared to $17.8 million in the same period of 2023, reflecting an increase in litigation expenses and supply commitment charges[152]. - Interest expense for the nine months ended September 30, 2024, was $117.8 million, consistent with $116.1 million in the same period of 2023[157]. Cash Flow and Liquidity - Cash flows from operating activities decreased to $290.8 million for the nine months ended September 30, 2024, down from $510.8 million in the same period of 2023, primarily due to lower earnings[167]. - As of September 30, 2024, the company had $20.5 million in cash and cash equivalents and $88.7 million available for borrowings, resulting in a total liquidity position of $109.2 million[165]. - The company had $1,205.7 million in long-term debt outstanding as of September 30, 2024, with $171.9 million due within the next twelve months[171]. Capital Expenditures and Commitments - Capital expenditures for the nine months ended September 30, 2024, were $191.8 million, with expectations for full-year expenditures ranging from $150 million to $200 million for maintenance and an additional $100 million for growth initiatives[174][175]. - Purchase commitments as of September 30, 2024, included $5.4 million for 2024 and $55.8 million for 2025 related to minimum sand commitments and hydraulic fracturing equipment components[177]. Acquisitions and Legal Matters - In April 2024, the company acquired all remaining equity interests of BPC for a total purchase consideration of $39.8 million[135]. - In June 2024, the company acquired 100% of AST for $174.0 million in cash and 100% of NRG for $6.0 million in cash[135]. - The company settled multiple patent infringement lawsuits with Halliburton in September 2024, with the financial effects included in the consolidated financial statements[179]. Market Risks - As of September 30, 2024, the company held no derivative instruments that materially increased exposure to market risks[183]. - The company is subject to interest rate risk on its variable-rate debt[183]. - A 1% increase in interest rates on variable-rate debt would increase annual interest payments by approximately $11.1 million[183].

Financial Data and Key Metrics Changes - ProFrac reported revenues of $575 million and adjusted EBITDA of $135 million for Q3 2024, with an adjusted EBITDA margin of 23% [8][36] - Free cash flow was $31 million, a decrease from the previous quarter, primarily due to a muted impact from asset sales [36][37] - Adjusted EBITDA for the Stimulation Services segment was $113 million, reflecting a 5% improvement versus Q2, while the Proppant Production segment saw a 24% sequential decline in revenue to $53 million [38][41] Business Line Data and Key Metrics Changes - Stimulation Services revenues increased to $507 million, with a slight increase in average active fleet count, but pricing pressures partially offset gains [38] - Proppant Production segment's adjusted EBITDA decreased by 33% to $17 million, with a decline in average realized price per ton [42][43] - Manufacturing segment revenues rose by approximately 10% to $62 million, driven by increased fleet activity [44] Market Data and Key Metrics Changes - The market environment was characterized by decreased activity and budget exhaustion, impacting overall performance [25][30] - The Haynesville region experienced subdued drilling and completion activity, negatively affecting ProFrac's assets in that area [19][20] - Competitive pressures in West Texas continued to challenge the Proppant Production segment, impacting both volumes and pricing [41] Company Strategy and Development Direction - ProFrac aims to invest in next-generation equipment, focusing on e-fleets and dual fuel technologies, with approximately three-quarters of active fleets utilizing next-generation technology [15][16][21] - The company is strategically retiring 400,000 horsepower of legacy diesel-burning frac pumps that do not meet reinvestment thresholds [13][22] - ProFrac's integrated model provides a competitive advantage, allowing it to deliver comprehensive solutions and maintain strong customer partnerships [14][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a recovery in activity levels in 2025, particularly in West Texas and South Texas, despite current market challenges [19][21] - The company anticipates further softness in Q4 due to budget exhaustion and seasonality, but expects improved commercial opportunities in 2025 [30][41] - Management highlighted the importance of controlling costs and leveraging efficiencies throughout the value chain to navigate the current market environment [56][58] Other Important Information - ProFrac's internal R&D and manufacturing capabilities are crucial for driving commercial innovation and maintaining fleet quality [10][12] - The company is making strategic investments in power generation capabilities to meet increasing demand for on-demand power at wellheads [17][33] - Total cash and cash equivalents as of September 30 were $26 million, with total liquidity at approximately $109 million [48] Q&A Session Summary Question: Can you share more about your 2025 outlook, particularly in West Texas and South Texas? - Management sees Q1 2025 picking up from Q4 and Q3 levels, with a flat to slightly down year-over-year outlook [53][54] Question: How are you managing the interplay between pricing and cost management? - Management emphasized their vertical integration allows for better control over fixed costs and operating leverage, which is beneficial in the current competitive pricing environment [56][58] Question: What is the expected impact of Dune Express on your business next year? - Management does not anticipate a material impact from Dune Express, citing a highly competitive environment [67] Question: How much uplift in activity do you expect in the Haynesville? - Management indicated uncertainty but expressed hope for increased activity as gas prices rebound, while remaining committed to their market position [72][73]

Revenue and Financial Performance - Total revenue for Q3 2024 was $575.3 million, compared to $579.4 million in Q2 2024[3] - Total revenues for the nine months ended September 30, 2024, were $1,736.2 million, compared to $2,140.9 million for the same period in 2023, reflecting a decrease of 18.9%[27] - Total revenues for the nine months ended September 30, 2024, were $1,736.2 million, compared to $2,140.9 million for the same period in 2023, representing a decrease of 18.9%[30] - Stimulation services revenue for the nine months ended September 30, 2024, was $1,530.0 million, down 18.9% from $1,887.9 million in the same period of 2023[30] - Proppant production revenue for the nine months ended September 30, 2024, was $200.0 million, a decrease of 31.1% from $290.4 million in the same period of 2023[30] Net Loss and Income - Net loss for Q3 2024 was $43.5 million, an improvement from a net loss of $65.6 million in Q2 2024[3] - Net loss attributable to ProFrac Holding Corp. for the nine months ended September 30, 2024, was $110.1 million, compared to a net income of $0.2 million for the same period in 2023[27] - Net income (loss) for the nine months ended Sep. 30, 2024 was $(106.1) million, compared to $37.3 million in the same period of 2023[28] Adjusted EBITDA - Adjusted EBITDA for Q3 2024 was $134.8 million, slightly down from $135.6 million in Q2 2024[3] - The Stimulation Services segment generated $507.1 million in revenue and $112.6 million in Adjusted EBITDA for Q3 2024[7] - The Proppant Production segment generated $52.8 million in revenue and $17.3 million in Adjusted EBITDA for Q3 2024[7] - Adjusted EBITDA for the nine months ended Sep. 30, 2024 was $430.3 million, down from $578.9 million in the same period of 2023[29] - Total adjusted EBITDA for the nine months ended September 30, 2024, was $430.3 million, down 25.7% from $578.9 million in the same period of 2023[30] Cash Flow and Capital Expenditures - Net cash provided by operating activities in Q3 2024 was $98.0 million, compared to $113.5 million in Q2 2024[3] - Capital expenditures in Q3 2024 totaled $70.0 million, approximately flat from the prior quarter[9] - Net cash provided by operating activities for the nine months ended Sep. 30, 2024 was $290.8 million, down from $510.8 million in the same period of 2023[28] - Investment in property, plant & equipment for the nine months ended Sep. 30, 2024 was $191.8 million, compared to $233.9 million in the same period of 2023[28] - Net cash used in investing activities for the nine months ended Sep. 30, 2024 was $351.8 million, compared to $687.4 million in the same period of 2023[28] - Free cash flow for the three months ended September 30, 2024, was $30.9 million, a decrease of 58.2% from $74.0 million in the previous quarter[32] - Investment in property, plant & equipment for the three months ended September 30, 2024, was $70.0 million, up 13.1% from $61.9 million in the previous quarter[32] Debt and Liabilities - Total debt outstanding as of September 30, 2024 was $1.17 billion, with net debt at $1.18 billion[11] - Long-term debt rose to $986.7 million as of September 30, 2024, from $923.5 million as of December 31, 2023, indicating a 6.8% increase[26] - Total current liabilities increased to $714.5 million as of September 30, 2024, from $648.9 million as of December 31, 2023, representing a 10.1% increase[26] - Net debt as of September 30, 2024, was $1,180.2 million, an increase of 9.0% from $1,082.6 million as of December 31, 2023[31] Assets and Receivables - Total assets increased to $3,135.8 million as of September 30, 2024, from $3,070.7 million as of December 31, 2023, representing a growth of 2.1%[25] - Accounts receivable increased to $358.2 million as of September 30, 2024, from $346.1 million as of December 31, 2023, reflecting a 3.5% increase[25] - Cash and cash equivalents remained relatively stable at $25.5 million as of September 30, 2024, compared to $25.3 million as of December 31, 2023[25] Operating Performance - Operating income for the nine months ended September 30, 2024, was a loss of $13.6 million, compared to an income of $180.9 million for the same period in 2023[27] - Selling, general, and administrative expenses for the nine months ended September 30, 2024, were $156.6 million, compared to $186.0 million for the same period in 2023, reflecting a 15.8% decrease[27] - Depreciation, depletion and amortization for the nine months ended Sep. 30, 2024 was $328.9 million, compared to $330.7 million in the same period of 2023[28] - Interest expense, net for the nine months ended Sep. 30, 2024 was $117.8 million, compared to $116.1 million in the same period of 2023[29] - Stock-based compensation for the nine months ended Sep. 30, 2024 was $6.1 million, compared to $27.3 million in the same period of 2023[28] Goodwill Impairment - Goodwill impairment for the nine months ended September 30, 2024, was $74.5 million, compared to no impairment in the same period in 2023[27] - Goodwill impairment for the nine months ended Sep. 30, 2024 was $74.5 million, compared to $0 in the same period of 2023[28] Financing Activities - Net cash provided by (used in) financing activities for the nine months ended Sep. 30, 2024 was $61.2 million, compared to $164.5 million in the same period of 2023[28] Future Outlook - The company expects a recovery in activity in 2025 compared to Q4 2024, particularly in oil-levered regions[6] Equipment and Fleet - Approximately 72% of the company's active fleets include e-fleet or natural gas-capable equipment[5]

Financial Performance - Total revenue for Q3 2024 was $575.3 million, slightly down from $579.4 million in Q2 2024 [2] - Net loss improved to $43.5 million from a loss of $65.6 million in the previous quarter [2] - Adjusted EBITDA was $134.8 million, a slight decrease from $135.6 million in Q2 2024 [2] - Net cash provided by operating activities was $98.0 million, down from $113.5 million in Q2 2024 [2] - Free cash flow for the quarter was $30.9 million [2] Business Segments - The Stimulation Services segment generated revenues of $507.1 million with an Adjusted EBITDA of $112.6 million [6] - The Proppant Production segment had revenues of $52.8 million and an Adjusted EBITDA of $17.3 million [6] - The Manufacturing segment reported revenues of $61.5 million with minimal Adjusted EBITDA of $0.1 million [7] - Other Business Activities generated revenues of $51.3 million and an Adjusted EBITDA of $4.8 million [7] Capital Expenditures and Outlook - Capital expenditures totaled $70 million in Q3 2024, remaining flat compared to the previous quarter [8] - For the full year 2024, capital expenditures are expected to be at the lower end of previous guidance, with maintenance-related expenditures projected at $150 million to $200 million [9] - The company anticipates a decline in pricing and activity in the Stimulation Services segment for Q4 2024 but expects a recovery in 2025 [4] Balance Sheet and Liquidity - Total debt outstanding as of September 30, 2024, was $1.17 billion, with net debt at $1.18 billion [10] - Total cash and cash equivalents were $25.5 million, with $5.0 million related to Flotek and not accessible by the company [10] - The company had $109.2 million of liquidity, including approximately $20.5 million in cash and cash equivalents [11] Operational Efficiency - The company set new operating efficiency records per active fleet, demonstrating strong performance despite a challenging market [3] - Approximately 72% of active fleets include electric or natural gas-capable equipment, indicating a focus on integrated and efficient solutions [4]

Company Overview - ProFrac Holding Corp. is expected to report a quarterly loss of $0.14 per share, reflecting a year-over-year decline of 55.6% [3] - Revenues are anticipated to be $538.55 million, down 6.2% from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for November 5, 2024, and could influence stock movement depending on whether the results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised down by 2166.67% over the last 30 days, indicating a significant reassessment by analysts [4] Earnings Surprise Prediction - The Most Accurate Estimate for ProFrac is the same as the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [10] - The stock currently holds a Zacks Rank of 5 (Strong Sell), complicating predictions of an earnings beat [10][11] Historical Performance - In the last reported quarter, ProFrac was expected to post earnings of $0.14 per share but only achieved $0.02, resulting in a surprise of -85.71% [12] - The company has not beaten consensus EPS estimates in any of the last four quarters [13] Industry Context - In the Zacks Alternative Energy - Other industry, Crescent Energy is expected to post earnings of $0.28 per share for the same quarter, indicating a year-over-year change of -20% [17] - Crescent Energy's revenue is projected to be $802.14 million, up 24.9% from the previous year [17]

Core Viewpoint - ProFrac Holding Corp. will report its third quarter 2024 financial results on November 5, 2024, with a live conference call available for stakeholders [1]. Group 1: Company Overview - ProFrac Holding Corp. is a technology-focused, vertically integrated energy services holding company that provides hydraulic fracturing, proppant production, and related services to upstream oil and natural gas companies in North America [2]. - The company operates through three business segments: stimulation services, proppant production, and manufacturing [2]. Group 2: Financial Reporting Details - The financial results will be announced prior to a conference call scheduled for November 5, 2024, at 11:00 a.m. Eastern / 10:00 a.m. Central [1]. - Stakeholders can access the call via phone or live over the Internet, with a replay available until November 12, 2024 [1].

Group 1 - ProFrac Holding Corp. (ACDC) is experiencing significant activity in the options market, particularly with the Nov 15, 2024 $2.5 Call showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - ProFrac Holding currently holds a Zacks Rank 5 (Strong Sell) in the Alternative Energy - Other industry, which is in the bottom 31% of the Zacks Industry Rank, with recent earnings estimates being revised downward from 17 cents to 8 cents per share [3] Group 2 - The high implied volatility surrounding ProFrac Holding may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4]

Investment Thesis - ProFrac Holding is experiencing resilient and growing cash flows despite hitting relative all-time lows, with a sequential growth of 187% in free cash flow for Q2 2024, leading to a buy rating for shares [1] Company Overview - ProFrac Holding is a vertically integrated energy services company providing hydraulic fracturing and complementary services to upstream oil and gas companies, with 87% of revenues coming from Stimulation Services [2] Market Dynamics - The company's revenues are cyclical and directly linked to oil and gas demand, with increased drilling activity leading to higher revenues and pricing power [3] - ProFrac has made several acquisitions to enhance its service offerings and vertical integration, positioning itself as a low-cost operator in the fracking industry [4] Financial Performance - In Q2 2024, ProFrac generated $74 million in free cash flow, demonstrating its ability to navigate market challenges despite a weak natural gas market [5] - The company expects to maintain a minimum revenue of $2 billion going forward, with a conservative estimate of $140 million in annual free cash flow based on current performance [6] Valuation - The stock is considered undervalued with a fair value estimate of $9, based on free cash flow projections and a low price-to-sales ratio of 0.46 compared to the sector median of 1.37 [6] Strategic Positioning - ProFrac's acquisitions and vertical integration strategy enhance its competitive edge, allowing it to offer a full-service solution to E&P companies and improve economies of scale [4]