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]

Financial Performance & Strategy - ProPetro's Q2 2025 revenue was $326 million[14], while Adjusted EBITDA was $50 million[14] and Free Cash Flow for Completions Business was $26 million[14] - The company's Q1 2025 revenue was $359 million[24], with Adjusted EBITDA at $73 million[24] and Free Cash Flow for Completions Business at $41 million[24] - ProPetro has invested over $1 billion since 2022 in asset refreshment, new technology, and service diversification[11] - The company is executing a $200 million share repurchase program, with $111 million already repurchased and $89 million remaining[31] Operational Highlights & Market Position - ProPetro is a leading energy services provider in the Permian Basin, with 100% of its revenue coming from this region[21] - Hydraulic fracturing accounted for 75% of the company's Q2 2025 revenue mix by service line[17] - The company has retired 13 million shares, representing 11% of outstanding shares, since the program's inception through June 30, 2025[34] PROPWR Business & Future Growth - ProPetro has secured an inaugural 10-year contract for its PROPWR business in Q2 2025, committing 80 megawatts of power generation capacity[68] - The company anticipates securing long-term contracts for all ~220 megawatts of ordered PROPWR equipment by the end of 2025[68] - ProPetro anticipates approximately 2.5 GW of demand for electric frac fleets by 2030 in the Permian Basin[67]

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.