Core Insights - ProPetro Holding Corp. (PUMP) reported a second-quarter 2025 adjusted loss per share of 7 cents, missing the Zacks Consensus Estimate of a profit of 3 cents, primarily due to weak pricing and reduced activity [1] - Revenues totaled $326.2 million, slightly below the consensus mark of $327 million, and down 8.6% from the prior-year quarter's $357 million, attributed to lower service revenues in the Cementing segment [2] - Adjusted EBITDA was $49.6 million, down 31.8% from $72.7 million in the previous quarter, and also missed the model estimate of $61.1 million [3] Revenue and Segment Performance - The Pressure Pumping segment contributed 100% to total revenues, with service revenues decreasing 8.6% to $326.2 million from the prior-year quarter, but slightly above the estimate of $325.4 million [6] - The Cementing segment's service revenues totaled $32.4 million, down 3% from the consensus estimate [2] Costs and Financial Position - Total costs and expenses were $329.3 million, down 7.9% from the prior-year quarter but exceeding the prediction of $322.2 million [7] - Cash and cash equivalents stood at $74.8 million, with total liquidity of $178 million, including $103 million in available credit [8] Capital Expenditures and Investments - The company spent $73 million on capital projects in Q2, with $43 million allocated to PROPWR equipment development [9][10] - Full-year 2025 capital expenditures are expected to be between $270 million and $310 million, indicating a reduction at the midpoint compared to previous guidance [12] Operational Outlook - The company anticipates operating 10 to 11 hydraulic fracturing fleets in Q3, down from 13 to 14 due to market conditions [10][13] - ProPetro expects to secure long-term agreements for all currently ordered PROPWR equipment (220 megawatts) by the end of 2025 [14]

[PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended June 30, 2025, detailing balance sheets, operations, cash flows, and notes on significant financial events [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased slightly to **$1,229.1 million**, driven by higher cash, while total liabilities decreased and shareholders' equity rose Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $327,463 | $292,221 | | Cash and cash equivalents | $74,840 | $50,443 | | **Total Assets** | **$1,229,147** | **$1,223,645** | | **Total Current Liabilities** | $231,050 | $222,266 | | **Total Liabilities** | **$405,174** | **$407,372** | | **Total Shareholders' Equity** | **$823,973** | **$816,273** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a **net loss of $7.2 million** on **$326.2 million** revenue for Q2 2025, with six-month net income significantly declining to **$2.4 million** on reduced revenues Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Service Revenue | $326,151 | $357,021 | $685,567 | $762,864 | | Operating (Loss) Income | $(3,167) | $(533) | $6,334 | $29,779 | | Net (Loss) Income | $(7,155) | $(3,660) | $2,447 | $16,270 | | Diluted EPS | $(0.07) | $(0.03) | $0.02 | $0.15 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$108.9 million** for H1 2025, while cash used in investing and financing activities also declined, resulting in a **$24.4 million** increase in the cash balance Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $108,903 | $179,763 | | Net cash used in investing activities | $(68,524) | $(90,923) | | Net cash used in financing activities | $(15,982) | $(55,308) | | **Net increase in cash** | **$24,397** | **$33,532** | | **Cash at end of period** | **$74,840** | **$66,886** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail key accounting policies, significant changes in estimates, new financing arrangements, segment performance, capital commitments, and related-party transactions - The company shortened the remaining useful lives of its Tier II diesel-only hydraulic fracturing units to no longer than the end of 2027, resulting in a **$1.6 million** decrease in net income for the six months ended June 30, 2025[37](index=37&type=chunk) - On April 2, 2025, the company entered into a financing arrangement for up to **$103.7 million** to support the purchase of mobile natural gas-fueled power generation equipment for its new PROPWR business line[78](index=78&type=chunk) - The company has commitments to purchase power generation equipment with a total remaining commitment of approximately **$181.6 million** (**$84.8 million** financed and **$96.8 million** with other manufacturers)[129](index=129&type=chunk) - Revenue from services provided to ExxonMobil (including its subsidiaries Pioneer and XTO) totaled **$144.2 million** for the six months ended June 30, 2025, representing approximately **21%** of total revenue[112](index=112&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's decreased revenue and profitability for Q2 and H1 2025 due to lower pricing and activity, alongside strategic investments in lower-emissions equipment and solid liquidity [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Total revenue decreased by **8.6%** in Q2 2025 to **$326.2 million**, leading to a wider net loss and a **24.9%** decline in Adjusted EBITDA, with similar trends for the six-month period Q2 2025 vs Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $326,151 | $357,021 | (8.6)% | | Cost of Services | $253,173 | $265,845 | (4.8)% | | Net Loss | $(7,155) | $(3,660) | (95.5)% | | Adjusted EBITDA | $49,607 | $66,062 | (24.9)% | - The Hydraulic Fracturing segment's revenue decreased by **$25.9 million** (**9.5%**) in Q2 2025 compared to Q2 2024, driven by lower customer pricing and activity, despite a **$17.4 million** revenue contribution from the AquaProp acquisition[174](index=174&type=chunk) H1 2025 vs H1 2024 Performance (in thousands) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $685,567 | $762,864 | (10.1)% | | Net Income | $2,447 | $16,270 | (85.0)% | | Adjusted EBITDA | $122,293 | $159,456 | (23.3)% | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, total liquidity stood at **$178.1 million**, with projected 2025 capital expenditures of **$270 million to $310 million** largely for the PROPWR business, and an extended share repurchase program - Total liquidity as of June 30, 2025, was approximately **$178.1 million**, comprising **$74.8 million** in cash and **$103.3 million** of availability under the ABL Credit Facility[204](index=204&type=chunk) - The 2025 capital expenditure budget is projected to be **$270 million to $310 million**, including approximately **$170 million** for the PROPWR business and **$100 million to $140 million** for the completion services business[208](index=208&type=chunk) - The share repurchase program was extended, permitting up to **$200 million** in repurchases through December 31, 2026 As of June 30, 2025, **$89.2 million** remained authorized, with no repurchases made during the quarter[205](index=205&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of June 30, 2025, there were no material changes in market risk from the disclosures in the company's 2024 Form 10-K[225](index=225&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[227](index=227&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[228](index=228&type=chunk) [PART II – OTHER INFORMATION](index=53&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 13 for legal matters, stating that while involved in routine claims, no pending proceedings are expected to materially adversely affect its financial position - The company is subject to routine tax audits by the Texas Comptroller and has accrued estimated settlement expenses of **$6.0 million** for motor vehicle fuel taxes and **$0.8 million** for gross receipt taxes[136](index=136&type=chunk)[137](index=137&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor highlights potential adverse effects from changes in U.S. trade policy, including tariffs that could increase input costs if not passed on to customers - A new risk factor was added regarding the potential adverse effects of changes in U.S. trade policy, including tariffs on steel and other imports[233](index=233&type=chunk) - Increased tariffs could raise material input costs and asset maintenance costs, which may adversely affect returns on investment if not passed on to customers[234](index=234&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the share repurchase program, noting no repurchases in Q2 2025, with the program extended through 2026 and **$89.2 million** remaining authorized Share Repurchase Activity for Q2 2025 | Period | Total Shares Purchased | Average Price Paid | Dollar Value Remaining | | :--- | :--- | :--- | :--- | | April 2025 | 0 | $0.00 | $89,152,858 | | May 2025 | 0 | $0.00 | $89,152,858 | | June 2025 | 0 | $0.00 | $89,152,858 | | **Total** | **0** | **$0.00** | **$89,152,858** | [Other Information](index=54&type=section&id=Item%205.%20Other%20Information) During Q2 2025, no director or officer of the Company adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements[240](index=240&type=chunk)

[Q2 2025 Financial and Operational Results](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Results) This section details ProPetro's Q2 2025 financial and operational performance, highlighting revenue decline, net loss, strategic capital allocation, and a revised outlook amidst a challenging market [Management Commentary and Market Overview](index=1&type=section&id=Management%20Commentary%20and%20Market%20Overview) Management described Q2 2025 as a challenging quarter where the company maintained stability by focusing on cost control and its capital-light strategy - The company faced a challenging quarter but maintained financial stability through a capital-light investment strategy and cost control[3](index=3&type=chunk) - The Permian Basin completions market is facing challenges, with active frac fleet counts estimated to have dropped from approximately **90-100 at the start of the year to around 70**[4](index=4&type=chunk) - ProPetro has chosen to idle certain fleets rather than operate them at sub-economic levels, preserving assets for more favorable market conditions[4](index=4&type=chunk) - The company's strengths, including low debt, strategic M&A, PROPWR growth, and the FORCE® electric fleet, provide a strong foundation to withstand market turbulence[4](index=4&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) ProPetro reported a 9% sequential decrease in revenue to $326 million for Q2 2025, primarily due to lower utilization and weather impacts Q2 2025 Key Financial Metrics (vs. Q1 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $326 million | $359 million | -9% | | **Net (Loss) Income** | ($7 million) | $10 million | - | | **(Loss) Income per Diluted Share** | ($0.07) | $0.09 | - | | **Adjusted EBITDA** | $50 million | $73 million | -32% | - The decrease in revenue was largely attributed to lower utilization and adverse weather impacts across all service lines[5](index=5&type=chunk) - General and administrative (G&A) expense was flat at **$28 million** compared to the first quarter of 2025[7](index=7&type=chunk) [Capital Management and Shareholder Returns](index=2&type=section&id=Capital%20Management%20and%20Shareholder%20Returns) As of June 30, 2025, ProPetro maintained a solid liquidity position of $178 million - Total liquidity at the end of Q2 2025 was **$178 million**, consisting of **$75 million in cash** and **$103 million** available under its ABL Credit Facility[13](index=13&type=chunk) - Capital expenditures incurred were **$73 million**, with **$30 million** for completions business maintenance and **$43 million** supporting PROPWR orders[14](index=14&type=chunk) - The company extended its **$200 million** share repurchase program to December 2026, with no shares repurchased in Q2 2025 to prioritize the PROPWR business launch[10](index=10&type=chunk) [Business Segment and Strategic Updates](index=2&type=section&id=Business%20Segment%20and%20Strategic%20Updates) The company highlighted significant progress in its PROPWR power generation business, securing an inaugural 10-year contract for 80 megawatts of capacity - Secured an inaugural **10-year contract** for **80 megawatts** of PROPWR® service capacity with a Permian-focused E&P operator[6](index=6&type=chunk)[11](index=11&type=chunk) - The company has approximately **220 megawatts** of power generation equipment on order, with deliveries expected to be completed by mid-year 2026[11](index=11&type=chunk) - Management is confident it will secure long-term agreements for all **220 megawatts** of currently ordered equipment by the end of 2025[12](index=12&type=chunk) - Over **50%** of ProPetro's active hydraulic horsepower is now under long-term contracts[6](index=6&type=chunk) [Outlook and Guidance](index=3&type=section&id=Outlook%20and%20Guidance) Reflecting decreased market activity, ProPetro has lowered its full-year 2025 capital expenditure guidance to a range of $270 million to $310 million - Full-year 2025 capital expenditures guidance has been lowered to between **$270 million and $310 million**, down **9%** at the midpoint from prior guidance[16](index=16&type=chunk) - The company anticipates operating an average of **10 to 11 active hydraulic fracturing fleets** in Q3 2025, a decrease from **13 to 14 active fleets** in Q2 2025[17](index=17&type=chunk) - Management believes market cycles create opportunities and that ProPetro is well-positioned to emerge stronger due to its disciplined approach, next-generation technology, and strong balance sheet, while smaller competitors may struggle[18](index=18&type=chunk)[19](index=19&type=chunk) [Financial Statements and Reconciliations](index=5&type=section&id=Financial%20Statements%20and%20Reconciliations) This section presents ProPetro's unaudited condensed consolidated financial statements, including statements of operations, balance sheets, cash flows, and reconciliations of non-GAAP financial measures for Q2 2025 [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The unaudited statement of operations for the three months ended June 30, 2025, shows total revenues of $326.2 million and a net loss of $7.2 million Condensed Consolidated Statements of Operations (Unaudited, In thousands) | | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | **Service Revenue** | $326,151 | $359,416 | $357,021 | | **Operating (Loss) Income** | ($3,167) | $9,501 | ($533) | | **Net (Loss) Income** | ($7,155) | $9,602 | ($3,660) | | **Diluted (Loss) Income Per Share** | ($0.07) | $0.09 | ($0.03) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, ProPetro's balance sheet shows total assets of $1.229 billion, a slight increase from $1.224 billion at year-end 2024 Condensed Consolidated Balance Sheet Highlights (Unaudited, In thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $74,840 | $50,443 | | **Total current assets** | $327,463 | $292,221 | | **Total Assets** | $1,229,147 | $1,223,645 | | **Total current liabilities** | $231,050 | $222,266 | | **Total Liabilities** | $405,174 | $407,372 | | **Total Shareholders' Equity** | $823,973 | $816,273 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $108.9 million, resulting in a net increase in cash and cash equivalents of $24.4 million Condensed Consolidated Statement of Cash Flows Highlights (Unaudited, In thousands, Six Months Ended June 30) | | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $108,903 | $179,763 | | **Net cash used in investing activities** | ($68,524) | ($90,923) | | **Net cash used in financing activities** | ($15,982) | ($55,308) | | **Net increase in cash and cash equivalents** | $24,397 | $33,532 | | **Cash and cash equivalents - End of period** | $74,840 | $66,886 | [Segment Information and Non-GAAP Reconciliations](index=8&type=section&id=Segment%20Information%20and%20Non-GAAP%20Reconciliations) The Hydraulic Fracturing segment remains the largest contributor to revenue, generating $245.7 million in Q2 2025, with Adjusted EBITDA of $49.6 million Q2 2025 Service Revenue by Segment (In thousands) | Segment | Service Revenue | Adjusted EBITDA | | :--- | :--- | :--- | | **Hydraulic Fracturing** | $245,741 | $51,983 | | **Wireline** | $47,995 | $7,855 | | **Cementing** | $32,443 | $4,651 | Reconciliation of Net (Loss) Income to Adjusted EBITDA (In thousands) | | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | **Net (loss) income** | ($7,155) | $9,602 | | **Adjustments** | ... | ... | | **Adjusted EBITDA** | $49,607 | $72,686 | Reconciliation to Free Cash Flow for Completions Business (In thousands) | | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | **Net Cash provided by Operating Activities** | $54,214 | $54,689 | | **Net Cash used in Investing Activities** | ($35,688) | ($32,836) | | **Free Cash Flow** | $18,526 | $21,853 | | **PROPWR Adjustments** | ... | ... | | **Free Cash Flow for Completions Business** | $26,206 | $40,681 |

Core Insights - ProPetro Holding (PUMP) reported revenue of $326.15 million for Q2 2025, reflecting an 8.7% year-over-year decline and a surprise of -0.36% compared to the Zacks Consensus Estimate of $327.33 million [1] - The company posted an EPS of -$0.07, which is a decline from -$0.03 a year ago, resulting in an EPS surprise of -333.33% against the consensus estimate of $0.03 [1] Revenue Breakdown - Hydraulic Fracturing service revenue was $245.74 million, slightly above the average estimate of $242.61 million, but down 9.5% year-over-year [4] - Wireline service revenue reached $48 million, close to the average estimate of $48.5 million, with a year-over-year decline of 2.5% [4] - Cementing revenue was reported at $32.44 million, below the average estimate of $35.42 million [4] Adjusted EBITDA Performance - Adjusted EBITDA for Wireline was $7.86 million, below the average estimate of $8.79 million [4] - Adjusted EBITDA for Hydraulic Fracturing was $51.98 million, compared to the average estimate of $57.58 million [4] - Adjusted EBITDA for Cementing was $4.65 million, below the average estimate of $6.85 million [4] Stock Performance - ProPetro's shares returned +2.1% over the past month, while the Zacks S&P 500 composite increased by +3.4% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - ProPetro generated total revenue of $326 million, a decrease of 9% compared to the prior quarter [19] - The net loss totaled $7 million, or $0.07 loss per diluted share, compared to net income of $10 million, or $0.09 income per diluted share for the previous year [19] - Adjusted EBITDA totaled $50 million, representing 15% of revenue, and decreased 32% compared to the prior quarter [19] - Free cash flow for the completions business was $26 million, demonstrating sustainable cash generation despite market challenges [20] Business Line Data and Key Metrics Changes - The legacy completions business continues to generate sustainable free cash flow, supported by ongoing cost optimization and targeted capital programs [8] - Utilization across all segments was down due to macro impacts, including lower commodity prices and weather downtime [16] - Capital expenditures incurred were $73 million, with $30 million primarily supporting maintenance in the completions business and $43 million supporting Pro Power orders [20] Market Data and Key Metrics Changes - The Permian frac fleet counts are likely approaching 70, down from approximately 90 to 100 fleets operating at the start of the year [9] - Increased market uncertainty driven by tariffs and rising OPEC plus production has resulted in more idle capacity than anticipated [9] - The company expects to operate an average of 10 to 11 fleets in the third quarter, with the possibility of running fewer fleets in the fourth quarter [17] Company Strategy and Development Direction - ProPetro's strategy focuses on capital discipline and efficiency, emphasizing capital light assets and disciplined investments [8] - The company is transitioning from Tier two diesel equipment to Force electric equipment due to high demand and successful contracts [12] - Pro Power is a new initiative aimed at providing power generation capacity, with a significant contract already secured [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current market challenges and highlighted the company's strong balance sheet and low debt [10] - The outlook for the second half of the year remains uncertain due to ongoing market volatility, but management believes the company is well-positioned for future opportunities [17][18] - Management anticipates a reduction in activity in the third quarter, particularly with conventional equipment, but remains optimistic about long-term growth [17] Other Important Information - As of June 30, 2025, total cash was $75 million, and total liquidity was $178 million [22] - The company extended its $200 million share repurchase program to December 2026, having repurchased 13 million shares since its inception [22] Q&A Session Summary Question: How much of an overhang do you think this will be on the Permian Basin? - Management indicated that the looseness in the market is likely to persist into 2026, but they are well-positioned to capitalize on future recovery [29] Question: Any thoughts around continuing with the current equipment orders? - Management expressed satisfaction with the flexibility of the current equipment and indicated a focus on oil and gas for now, with exploratory conversations about non-oil and gas opportunities [30][35] Question: How should we think about the trajectory for Q4? - Management noted that while historical trends show a decline, the current market conditions make it difficult to predict, and they are being conservative in their outlook [38][42] Question: Does power demand suggest a disconnect from drilling and completions activity? - Management confirmed that power demand is primarily tied to production and midstream activities, which remain stable despite drilling and completions volatility [45] Question: What is the stability of pricing given long-term contracts? - Management stated that contracts have semi-annual adjustments resulting in low single-digit changes, indicating stable pricing [72]

Core Insights - The competition between Flotek Industries (FTK) and ProPetro Holding Corp. (PUMP) highlights their efforts to adapt to a changing energy landscape while seeking more stable income streams [1][2] Flotek Industries (FTK) - FTK is focusing on building recurring, high-margin revenue streams, exemplified by its deal with ProFrac Holding Corp. ACDC, which is expected to generate $14 million in EBITDA in 2025 and potentially $27 million in 2026 [3] - The company is innovating in "custody transfer automation" with its JP3 XSPCT Analyzer, which has already identified millions in underpayments, leading to reliable, high-profit income through monthly contracts [4] - FTK has shown strong financial execution with 10 consecutive quarters of EBITDA improvement, achieving a 93% year-over-year growth in adjusted EBITDA in Q1 2025 [5] - FTK shares have surged 174% over the past year, reflecting investor optimism around its strategic shift and recurring revenue model [8][10] - FTK trades at a forward sales multiple of 1.59X, indicating stronger growth expectations compared to PUMP's 0.49X [12] - The Zacks Consensus Estimate for FTK's 2025 EPS anticipates an 85% year-over-year gain, with an additional 41% expected in 2026 [13] ProPetro Holding Corp. (PUMP) - PUMP is expanding beyond its traditional pressure pumping business with the launch of its PROPWR division, which aims to provide industrial power and plans to invest $230 million by 2026 [6] - A 10-year contract to supply 80 megawatts of power in the Permian Basin is expected to stabilize cash flow for PUMP [6] - PUMP is updating its equipment, with 75% of its equipment running on cleaner systems in early 2025, which aligns with environmental goals and helps mitigate short-term market volatility [7] - PUMP shares have declined nearly 30% over the past year, reflecting market concerns regarding capital intensity and macro volatility [8][10] - PUMP's 2025 EPS is projected to drop 104%, with a potential rebound of 365% in 2026 as PROPWR scales [14] - PUMP's lower valuation at 0.49X forward sales suggests investor caution regarding its execution risks and capital needs [12] Conclusion - FTK appears better positioned due to its recurring revenue growth, proven EBITDA momentum, and lower capital intensity, while PUMP's long-term potential is clouded by significant investment requirements and reliance on the Permian Basin [17]

INVESTOR PRESENTATION July 2025 Forward-Looking Statements Except for historical information contained herein, the statements and information in this presentation, including the oral statements made in connection herewith, are forward- looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "may," "could," "confi ...

Core Insights - ProPetro (NYSE: PUMP) provides complementary services to upstream exploration and production (E&P) companies exclusively within the Permian Basin, indicating a focused operational strategy in a key oil-producing region [1] - The activity in the Permian Basin is closely tied to oil prices, suggesting that fluctuations in oil prices will directly impact ProPetro's business performance [1] - ProPetro is transitioning to electric fleets, which is expected to reduce sustaining capital expenditures (capex), indicating a strategic move towards more sustainable and cost-effective operations [1]

ProPetro (PUMP) FY Conference Summary Company Overview - ProPetro is a pure play service company operating exclusively in the Permian Basin, focusing on hydraulic fracturing, cementing, wireline services, and power generation through its new startup, Pro Power [1][2][9] Financial Performance - In Q1, ProPetro reported revenues of $359 million, EBITDA of $73 million, and free cash flow of $22 million. Excluding capital investments in Pro Power, free cash flow exceeded $50 million for the quarter [3][6] - The company has invested over $1 billion since 2022 to refresh its assets and diversify its service offerings [1][3] Strategic Initiatives - ProPetro has secured long-term contracts, with over 50% of its fleet under such agreements, including a recent ten-year contract [2][3] - The company is transitioning to more gas-burning and electric equipment, which is expected to reduce operational costs and emissions [5][56] - Pro Power aims to capture the growing demand for power generation in the Permian Basin, with an anticipated load growth of about 4 gigawatts over the next five to seven years [25][26] Market Position and Growth Potential - ProPetro's market presence has grown despite declining rig counts, indicating operational excellence and market share growth [11][12] - The company is focused on capital discipline and generating strong free cash flow, which is expected to lead to a re-rating of its valuation in the market [17][18] - ProPetro's electric equipment is positioned as best-in-class in the Permian Basin, with high efficiency and low maintenance costs [21][22] M&A Activity - Recent acquisitions, including Silvertip and Aqua Prop, have enhanced ProPetro's operational leverage and free cash flow generation capabilities [13][14] - The company is exploring further M&A opportunities to expand its presence in other basins, although it currently focuses on the Permian Basin [10][12] Capital Allocation Strategy - ProPetro has shifted its capital allocation strategy towards investing in Pro Power, moving away from share repurchases, although it has repurchased 111 million shares since May 2023 [16][62] - The company is cautious about leveraging debt, aiming to maintain a strong balance sheet while funding growth initiatives [61][64] Industry Context - The oilfield service sector is healthier than in previous cycles, with improved capital discipline among companies and customers [7][17] - ProPetro's transition to electric and gas-burning equipment aligns with industry trends towards lower emissions and operational efficiency [56][58] Conclusion - ProPetro is well-positioned for growth in the Permian Basin, leveraging its strong financial performance, strategic initiatives in power generation, and a disciplined approach to capital allocation [32][65]

Summary of ProPetro Conference Call Company Overview - **Company**: ProPetro Holding Corp - **Industry**: Oilfield Services, specifically focused on the Permian Basin - **Headquarters**: Midland, Texas - **Ticker Symbol**: PUMP Key Points and Arguments 1. **Strong Financial Performance**: ProPetro reported a revenue of $73 million and EBITDA of $22 million in Q1, with a strong free cash flow of $22 million for the quarter, which could exceed $50 million when excluding capital investments in new ventures [3][4][7] 2. **Investment in Technology**: The company has invested over $1 billion since 2022 to refresh assets and diversify service offerings, including the launch of Pro Power, a power generation startup [1][2] 3. **Long-term Contracts**: Over 50% of the current fleet operates under long-term agreements, including a recent ten-year contract for Pro Power, indicating a stable revenue stream [3][25] 4. **Transition to Lower Emission Equipment**: ProPetro is innovating to meet the demand for lower emission solutions by transitioning to gas-burning and electric fleets, which are more efficient and cost-effective for clients [6][56] 5. **Market Position**: The company maintains a strong market presence in the Permian Basin, which accounts for over 40% of U.S. oil production, and is exploring opportunities in other basins through M&A [10][11] 6. **M&A Strategy**: Recent acquisitions have been capital-light and accretive, enhancing operational leverage and free cash flow generation [14][15] 7. **Electric Equipment Deployment**: ProPetro has deployed electric equipment that has shown high efficiency and low maintenance costs, with plans to expand this fleet [23][24] 8. **Pro Power Growth Potential**: The Pro Power initiative is expected to capture significant market share in the power generation sector, with projected load growth of about 4 gigawatts in the Permian Basin over the next five to seven years [26][30] 9. **Competitive Advantage**: The company has established strong relationships with equipment manufacturers, ensuring timely access to necessary technology and equipment [51][49] 10. **Capital Allocation Strategy**: ProPetro has pivoted from share repurchases to investing in Pro Power, indicating a focus on long-term growth and sustainability [17][54] Additional Important Insights - **Market Dynamics**: The oilfield service space is healthier than in previous cycles, with improved capital discipline among peers and customers [9][18] - **Future Opportunities**: ProPetro is exploring data center power supply opportunities, leveraging existing relationships in the oil and gas sector [40][42] - **Environmental Considerations**: The shift to electric and gas-burning equipment is not solely driven by regulations but also by cost efficiencies for operators [55][56] - **Long-term Contracts**: The company is focusing on securing long-term contracts to ensure stable revenue and mitigate market volatility [34][35] This summary encapsulates the key points discussed during the ProPetro conference call, highlighting the company's strategic direction, financial performance, and market opportunities.