Core Viewpoint - ProPetro Holding (PUMP) has seen a 9.4% increase in share price over the past month, outperforming the S&P 500, but recent estimates have trended downward, indicating potential challenges ahead [1][2]. Group 1: Earnings and Estimates - The consensus estimate for ProPetro has shifted downward by 48.39% over the past month, reflecting a negative outlook [2]. - The stock currently holds a Zacks Rank of 4 (Sell), suggesting expectations of below-average returns in the coming months [4]. Group 2: VGM Scores - ProPetro has a Growth Score of B, but a low Momentum Score of F, while achieving an A grade in value, placing it in the top quintile for this investment strategy [3]. Group 3: Industry Performance - ProPetro is part of the Zacks Oil and Gas - Field Services industry, where Halliburton (HAL) has gained 0.2% over the past month, despite reporting a year-over-year revenue decline of 6.7% to $5.42 billion [5]. - Halliburton's expected earnings for the current quarter are $0.57 per share, reflecting a year-over-year decrease of 28.8%, with a Zacks Rank of 4 (Sell) as well [6].

Group 1: Core Developments - ProPetro Holding Corp's power solutions division, PROPWR, has signed its first contract to deliver 80 megawatts (MW) of power capacity over a 10-year period, marking a significant milestone in distributed power for the oilfield services sector [1] - The project will utilize in-field gas to provide turnkey power to a distributed microgrid, employing natural gas reciprocating engines and gas turbines for reliable, low-emission power [1][2] Group 2: Strategic Implications - The agreement ensures stable, long-term earnings for PROPWR and highlights the increasing demand for flexible energy infrastructure in remote oilfield locations [2] - PROPWR will manage all on-site operations, maintenance, and monitoring, backed by take-or-pay obligations from the customer, enhancing its service reliability [2] Group 3: Market Position and Growth - ProPetro is positioning itself to deliver innovative solutions in a volatile oil and gas environment, aiming for lower-cost and lower-emission power [3] - The demand for PROPWR's services is surpassing expectations, with a letter of intent signed with a second customer and ongoing negotiations for more long-term agreements [4] Group 4: Financial Commitment - ProPetro plans to allocate $170 million in 2025 and $60 million in 2026 for capital spending in its PROPWR division to support current equipment orders [5]

Core Insights - ProPetro Holding Corp. reported a first-quarter 2025 adjusted profit per share of 9 cents, exceeding the Zacks Consensus Estimate of 6 cents, despite a decline from the previous year's profit of 18 cents [1] - Revenues for the quarter were $359 million, surpassing the consensus estimate of $341 million, driven by strong service revenues in the Wireline and Hydraulic Fracturing segments, although down 11.6% year-over-year from $406 million [2] - Adjusted EBITDA increased to $72.7 million, a 38% rise from the previous quarter, and net income was reported at $10 million, recovering from a net loss of $17 million in the prior quarter [3] Revenue Breakdown - Wireline segment revenues reached $53.4 million, exceeding estimates by 15.3%, while Hydraulic Fracturing segment revenues were $269.4 million, surpassing estimates by 13.5% [2] - The Pressure Pumping segment contributed 100% to total revenues, with service revenues increasing 12% to $359.4 million from the previous quarter [6] Cost Management - Total costs and expenses were $350 million, down 6.8% from the prior-year quarter, with the cost of services at $263.9 million compared to $288.6 million in the previous year [7] - General and administrative expenses were slightly reduced to $27.6 million from $28.2 million year-over-year, and depreciation and amortization decreased by 17% to $48.7 million [8] Financial Position - Capital expenditures for the first quarter were $39 million, primarily for maintenance and initial PROPWR turbine orders, with net cash used in investing activities totaling $32.8 million [9] - As of March 31, 2025, ProPetro had $63.4 million in cash and cash equivalents, $45 million in borrowings, and total liquidity of $197 million [10] Future Outlook - The company expects full-year 2025 capital spending between $295 million and $345 million, with a focus on completions business and PROPWR equipment orders [11] - ProPetro anticipates operating around 13 to 14 hydraulic fracturing fleets in the second quarter of 2025 due to recent oil price drops and strategic asset deployment [12] Share Repurchase Program - ProPetro announced a $100 million increase in its share repurchase program, totaling $200 million, with 13 million shares repurchased since inception, accounting for approximately 11% of outstanding common stock [3]

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the company's forward-looking statements, covering business strategy, financial performance, and capital plans, while highlighting key risk factors and disclaiming any duty to update - Forward-looking statements cover business strategy, industry, future profitability, capital expenditures, fleet conversion, new power generation business, and share repurchase program[9](index=9&type=chunk) - Key risk factors include changes in general economic and geopolitical conditions (e.g., interest rates, inflation, recession, trade policy), central bank actions, world events and armed conflicts (e.g., Russian-Ukraine war, Israel-Gaza), OPEC+ oil production levels, and governmental actions impacting oil and gas production[9](index=9&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements and the company disclaims any duty to update them, except as required by law[11](index=11&type=chunk) [PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, shareholders' equity, and cash flows, along with comprehensive notes detailing accounting policies, acquisitions, fair value measurements, debt, segment information, and other financial disclosures [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20and%20December%2031%2C%202024) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time, reflecting its financial position | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | **Total Current Assets** | **$345,294** | **$292,221** | | **Total Assets** | **$1,246,199** | **$1,223,645** | | **Total Current Liabilities** | **$239,093** | **$222,266** | | **Total Liabilities** | **$419,710** | **$407,372** | | **Total Shareholders' Equity** | **$826,489** | **$816,273** | - Cash and cash equivalents **increased** by **$12,949 thousand (25.67%)** from **$50,443 thousand** at December 31, 2024, to **$63,392 thousand** at March 31, 2025[14](index=14&type=chunk) - Accounts receivable (net) **increased** by **$44,716 thousand (22.81%)** from **$195,994 thousand** at December 31, 2024, to **$240,710 thousand** at March 31, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024) This statement details the company's revenues, costs, and expenses over specific periods, culminating in net income and earnings per share | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | **Service Revenue** | **$359,416** | **$405,843** | | **Total Costs and Expenses** | **$349,915** | **$375,531** | | **Operating Income** | **$9,501** | **$30,312** | | **Income Before Income Taxes** | **$10,714** | **$29,688** | | **Net Income** | **$9,602** | **$19,930** | | **Basic Net Income Per Common Share** | **$0.09** | **$0.18** | | **Diluted Net Income Per Common Share** | **$0.09** | **$0.18** | - **Loss on disposal of assets increased significantly** from **$4 thousand** in Q1 2024 to **$9,746 thousand** in Q1 2025, contributing to the decline in operating income[16](index=16&type=chunk) - **Income tax expense decreased substantially** from **$9,758 thousand** in Q1 2024 to **$1,112 thousand** in Q1 2025, reflecting the lower pre-tax income[16](index=16&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024) This statement tracks changes in the company's equity accounts, including net income, stock-based compensation, and share repurchases, over specific periods | Metric | January 1, 2025 (in thousands) | March 31, 2025 (in thousands) | | :-------------------------- | :----------------------------- | :---------------------------- | | **Total Shareholders' Equity** | **$816,273** | **$826,489** | | **Net Income** | N/A | **$9,602** | | Stock-based compensation | N/A | **$3,337** | | Tax withholdings paid for net settlement of equity awards | N/A | **$(2,723)** | - For the three months ended March 31, 2024, **share repurchases** amounted to **$22,508 thousand**, significantly impacting **total shareholders' equity**, whereas **no share repurchases** occurred in the same period of 2025[18](index=18&type=chunk) - **Accumulated deficit improved** from **$(68,825) thousand** at January 1, 2025, to **$(59,223) thousand** at March 31, 2025, due to **net income**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024) This statement categorizes cash inflows and outflows from operating, investing, and financing activities, showing the overall change in cash and cash equivalents | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | **Net cash provided by operating activities** | **$54,689** | **$74,822** | | **Net cash used in investing activities** | **$(32,836)** | **$(33,847)** | | **Net cash used in financing activities** | **$(8,904)** | **$(27,871)** | | **Net increase in cash and cash equivalents** | **$12,949** | **$13,104** | | **Cash and cash equivalents - End of period** | **$63,392** | **$46,458** | - **Capital expenditures** were **$40,913 thousand** in Q1 2025, an **increase** from **$34,585 thousand** in Q1 2024[21](index=21&type=chunk) - **Share repurchases**, which were **$22,508 thousand** in Q1 2024, were **$0** in Q1 2025, leading to the **significant decrease** in **net cash used in financing activities**[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements, covering accounting policies, acquisitions, and other disclosures [Note 1 - Basis of Presentation](index=9&type=section&id=Note%201%20-%20Basis%20of%20Presentation) This note describes the basis of financial statement preparation, revenue recognition policies, accounts receivable, contract liabilities, and significant accounting estimates like depreciation and income taxes - **Revenue for hydraulic fracturing and wireline services is recognized over time** using a progress output, unit-of-work performed method based on actual stages completed[26](index=26&type=chunk)[30](index=30&type=chunk) - **Revenue for acidizing and cementing services is recognized at a point-in-time** upon completion of the contracted service[27](index=27&type=chunk)[29](index=29&type=chunk) | Accounts Receivable Component | March 31, 2025 (in millions) | December 31, 2024 (in millions) | March 31, 2024 (in millions) | December 31, 2023 (in millions) | | :---------------------------- | :--------------------------- | :---------------------------- | :--------------------------- | :---------------------------- | | Billed to customers (net) | **$193.4** | **$181.6** | **$210.8** | **$164.0** | | Accrued revenue (unbilled) | **$47.3** | **$47.2** | **$63.1** | **$55.4** | - The company had **no allowance for credit losses** as of March 31, 2025, and evaluates credit losses based on historical experience and the oil and gas industry outlook[35](index=35&type=chunk) - **Contract liabilities from customer cash advances** for FORCE electric-powered hydraulic fracturing equipment and services were **$9.3 million** as of March 31, 2025, **down from $11.8 million** at December 31, 2024[38](index=38&type=chunk) - A **change in accounting estimate** effective October 1, 2024, **shortened the useful lives** of Tier II diesel-only hydraulic fracturing pumping units to no longer than the end of 2027, resulting in a **$1.8 million decrease in net income** for Q1 2025[39](index=39&type=chunk) | Depreciation and Amortization | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Related to cost of services | **$46,304** | **$57,228** | | Related to general and administrative expenses | **$2,377** | **$1,432** | | Total | **$48,681** | **$58,660** | - **Total income tax expense** for Q1 2025 was **$1.1 million (10.4% effective tax rate)**, **significantly lower** than **$9.8 million (32.9% effective tax rate)** in Q1 2024, **primarily due to differences** in the impact of nondeductible expenses, state taxes, and valuation allowances on pre-tax loss[42](index=42&type=chunk) [Note 2 - Recently Issued Accounting Standards](index=12&type=section&id=Note%202%20-%20Recently%20Issued%20Accounting%20Standards) This note outlines the adoption and expected impact of new accounting standards updates on segment reporting, income tax disclosures, and expense disaggregation - **ASU 2023-07 (Segment Reporting) was adopted** for the fiscal year ended December 31, 2024, requiring **enhanced disclosures** on significant segment expenses and CODM's use of profit/loss measures[45](index=45&type=chunk) - **ASU 2023-09 (Income Tax Disclosures) is effective** for annual periods beginning after December 15, 2024, and is **not expected to have a material impact**[46](index=46&type=chunk) - **ASU 2024-03 and ASU 2025-01 (Expense Disaggregation Disclosures) are effective** for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027; the **company is assessing their impact**[47](index=47&type=chunk) [Note 3 - AquaProp Acquisition](index=12&type=section&id=Note%203%20-%20AquaProp%20Acquisition) This note details the acquisition of AquaProp, LLC, including the consideration paid, recognized goodwill, and changes in the estimated fair value of contingent consideration - **Acquisition of AquaProp, LLC completed** on May 31, 2024, **expanding operations into wet sand service business**[48](index=48&type=chunk) | Consideration Component | Amount (in thousands) | | :---------------------- | :-------------------- | | Cash | **$21,216** | | Deferred cash | **$3,664** | | Contingent consideration | **$10,900** | | **Total Consideration** | **$35,780** | - **Goodwill of $920 thousand** was **recognized, attributable to the acquired workforce and significant synergies**, and **assigned to the hydraulic fracturing operating segment**[57](index=57&type=chunk) - The **estimated fair value of contingent consideration payable decreased** by **$0.3 million** from December 31, 2024, to **$8.0 million** at March 31, 2025, **due to updated projections**[54](index=54&type=chunk) [Note 4 - Fair Value Measurements](index=14&type=section&id=Note%204%20-%20Fair%20Value%20Measurements) This note explains the fair value hierarchy for financial instruments and assets, detailing measurements for short-term investments and contingent consideration, and reporting on impairment assessments - **Fair value hierarchy categorizes inputs** into **Level 1 (quoted prices in active markets)**, **Level 2 (observable inputs other than active market prices)**, and **Level 3 (unobservable inputs)**[59](index=59&type=chunk)[60](index=60&type=chunk) | Asset/Liability | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Level | | :-------------------------------------- | :----------------------------- | :----------------------------- | :---- | | Short-term investment | **$8,032** | **$7,849** | **1** | | Business acquisition contingent consideration payable | **$8,000** | **$8,300** | **3** | - The **estimated fair value of the contingent consideration payable decreased** by **$0.3 million** from December 31, 2024, to **$8.0 million** at March 31, 2025, included in general and administrative expenses[64](index=64&type=chunk) - **No impairment of property and equipment was recorded** during the three months ended March 31, 2025 and 2024[69](index=69&type=chunk) - **Goodwill impairment of $23.6 million** was **recognized in the wireline operating segment** as of December 31, 2024[70](index=70&type=chunk) [Note 5 - Intangible Assets](index=16&type=section&id=Note%205%20-%20Intangible%20Assets) This note provides details on the company's intangible assets, including their categories, amortization periods, net carrying values, and associated amortization expense - **Intangible assets include** customer relationships (6-10 years amortization), trademark/trade names (10-15 years), favorable contracts (30 months-5 years), and internally developed software (29 months)[72](index=72&type=chunk) | Intangible Asset Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------ | :----------------------------- | :----------------------------- | | Trademark/trade names | **$12,100** | **$12,100** | | Customer relationships | **$65,100** | **$65,100** | | Favorable contracts | **$2,210** | **$2,210** | | Internally developed software | **$81** | **$60** | | Total acquired | **$79,491** | **$79,470** | | Accumulated amortization | **$(16,927)** | **$(14,565)** | | Intangible assets — net | **$62,564** | **$64,905** | - **Amortization expense** for Q1 2025 was **$2.4 million**, compared to **$1.4 million** for Q1 2024[72](index=72&type=chunk) - The **average amortization period** for remaining intangible assets is approximately **7.0 years**[75](index=75&type=chunk) [Note 6 - Long-Term Debt](index=17&type=section&id=Note%206%20-%20Long-Term%20Debt) This note describes the company's long-term debt, specifically the ABL Credit Facility, its borrowing capacity, outstanding amounts, and weighted average interest rates - **ABL Credit Facility has a total borrowing capacity of $225.0 million**, **extended to** June 2, 2028[77](index=77&type=chunk) - **Borrowing Base as of** March 31, 2025, was approximately **$187.5 million**[78](index=78&type=chunk) - **Outstanding borrowings under the ABL Credit Facility were $45.0 million** at March 31, 2025, with **$134.0 million available for borrowing**[80](index=80&type=chunk) - **Weighted average interest rate on outstanding borrowings** under the ABL Credit Facility was **6.58%** for the three months ended March 31, 2025[79](index=79&type=chunk) [Note 7 - Reportable Segment Information](index=18&type=section&id=Note%207%20-%20Reportable%20Segment%20Information) This note presents financial data for the company's operating segments, including hydraulic fracturing, wireline, cementing, and power generation services, along with key performance metrics like Adjusted EBITDA - The company has **four operating segments**: hydraulic fracturing (including acidizing and wet sand solutions), wireline, cementing, and power generation services (PROPWR)[81](index=81&type=chunk) - **Cementing became a reportable segment** in Q4 2024, previously included in "All Other." **Power generation services are currently in "All Other"** as they have not begun revenue-generating activities[82](index=82&type=chunk) - **Adjusted EBITDA is the primary metric** used by management to **evaluate segment performance and allocate resources**[83](index=83&type=chunk) | Segment (Q1 2025) | Service Revenue (in thousands) | Adjusted EBITDA (in thousands) | Capital Expenditures (in thousands) | Total Assets (in thousands) | | :---------------- | :----------------------------- | :----------------------------- | :---------------------------------- | :-------------------------- | | **Hydraulic Fracturing** | **$269,399** | **$68,340** | **$16,338** | **$955,862** | | **Wireline** | **$53,442** | **$10,473** | **$2,184** | **$157,147** | | **Cementing** | **$36,633** | **$8,066** | **$1,831** | **$69,735** | | All Other | **$0** | **$(710)** | **$18,300** | **$23,281** | | Total | **$359,416** | **$72,686** | **$38,653** | **$1,246,199** | | Segment (Q1 2024) | Service Revenue (in thousands) | Adjusted EBITDA (in thousands) | Capital Expenditures (in thousands) | Total Assets (in thousands) | | :---------------- | :----------------------------- | :----------------------------- | :---------------------------------- | :-------------------------- | | **Hydraulic Fracturing** | **$309,300** | **$86,119** | **$35,988** | **$961,485** | | **Wireline** | **$60,805** | **$16,786** | **$2,386** | **$156,349** | | **Cementing** | **$35,738** | **$4,861** | **$1,466** | **$73,935** | | All Other | **$0** | **$0** | **$0** | **$0** | | Total | **$405,843** | **$93,395** | **$39,840** | **$1,223,645** | - **Hydraulic Fracturing revenue decreased** by **12.9%** YoY, while **Cementing revenue increased** by **2.5%** YoY[86](index=86&type=chunk) [Note 8 - Net Income Per Share](index=21&type=section&id=Note%208%20-%20Net%20Income%20Per%20Share) This note details the calculation of basic and diluted net income per common share, including the impact of dilutive securities like performance share units and restricted stock units | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | **Net income** relevant to common stockholders (in thousands) | **$9,602** | **$19,930** | | **Basic income per common share** | **$0.09** | **$0.18** | | **Diluted income per common share** | **$0.09** | **$0.18** | | Weighted average common shares outstanding (Basic, in thousands) | **103,319** | **108,540** | | Weighted average common shares outstanding (Diluted, in thousands) | **105,118** | **108,989** | - **Dilutive effects of performance share units (564 thousand)** and **restricted stock units (1,235 thousand)** were **included in diluted EPS calculation** for Q1 2025[93](index=93&type=chunk) - **Stock options, RSUs, and PSUs totaling 338 thousand shares** were **anti-dilutive and excluded from diluted EPS calculation** for Q1 2025[93](index=93&type=chunk) [Note 9 - Share Repurchase Program](index=22&type=section&id=Note%209%20-%20Share%20Repurchase%20Program) This note provides information on the company's share repurchase program, including its authorized amount, extension, and the absence of repurchases during the current period - **Share repurchase program increased by an additional $100 million** to a **total of $200 million** and **extended to** May 31, 2025[94](index=94&type=chunk) - **No share repurchases were made** during the three months ended March 31, 2025[95](index=95&type=chunk) - As of March 31, 2025, **$89.2 million remained authorized for future repurchases**[96](index=96&type=chunk) - The company **expects to fund repurchases using cash on hand and expected free cash flow**[94](index=94&type=chunk) [Note 10 - Stock-Based Compensation](index=23&type=section&id=Note%2010%20-%20Stock-Based%20Compensation) This note outlines the company's stock-based compensation plans, including grants of restricted stock units and performance share units, and the associated compensation expense and unrecognized amounts - **No new stock option grants or exercises occurred** in Q1 2025; **12 thousand** options expired[97](index=97&type=chunk)[98](index=98&type=chunk) - **1,314,846 RSUs were granted** in Q1 2025, generally **vesting ratably over three years** for employees/officers and one year for directors[100](index=100&type=chunk) - **536,774 PSUs were granted** in Q1 2025, with **vesting based on total shareholder return** relative to a peer group over a three-year period[103](index=103&type=chunk) | Stock Award Type | Total Stock-Based Compensation Expense (Q1 2025, in thousands) | Total Stock-Based Compensation Expense (Q1 2024, in thousands) | Unrecognized Stock-Based Compensation Expense (March 31, 2025, in thousands) | Weighted Average Recognition Period (March 31, 2025) | | :--------------- | :------------------------------------------------------------- | :------------------------------------------------------------- | :----------------------------------------------------------------------------- | :----------------------------------- | | All Stock Awards | **$3,300** | **$3,700** | **$30,900** | **1.9 years** | [Note 11 - Related-Party Transactions](index=24&type=section&id=Note%2011%20-%20Related-Party%20Transactions) This note discloses transactions with related parties, including lease agreements, services provided to major customers like ExxonMobil, and the sale of a business to an entity owned by a former employee - The company **rents three yards from an entity** in which a director has an equity interest[105](index=105&type=chunk) - **ProPetro provides hydraulic fracturing, wireline, and pumpdown services to ExxonMobil** (including XTO Energy Inc.), with revenue of **$73.0 million** from ExxonMobil in Q1 2025[108](index=108&type=chunk) - **Accounts receivable from ExxonMobil** (including Pioneer and XTO) totaled **$49.4 million** as of March 31, 2025[109](index=109&type=chunk) - On November 1, 2024, the company **sold its Vernal, Utah cementing business to Big 4 Services LLC**, owned by a former employee, **receiving a $13.0 million promissory note**[110](index=110&type=chunk) [Note 12 - Leases](index=25&type=section&id=Note%2012%20-%20Leases) This note details the company's operating and finance leases, including right-of-use assets, lease costs, weighted average lease terms, and future undiscounted lease payments - **Operating leases include** five FORCE electric-powered hydraulic fracturing equipment fleets, facilities, and office space, with **remaining terms of 0.5 to 3.7 years**[111](index=111&type=chunk) - A **three-year finance lease exists** for certain power generation equipment[114](index=114&type=chunk) | Lease Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | **Operating lease right-of-use assets** - net | **$129,587** | **$132,294** | | **Finance lease right-of-use assets** - net | **$25,863** | **$30,713** | | Lease Cost Component | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------- | :--------------------------------------------- | :--------------------------------------------- | | **Operating lease cost** | **$15,731** | **$9,036** | | **Finance lease cost** | **$5,373** | **$5,340** | | **Variable lease cost** | **$904** | **$627** | | **Short-term lease cost** | **$237** | **$199** | - **Weighted average remaining lease term** for operating leases is **2.3 years** (**2.4 years** at Dec 31, 2024) and for finance leases is **1.4 years** (**1.6 years** at Dec 31, 2024)[121](index=121&type=chunk) | Year | Operating Leases (Undiscounted, in thousands) | Finance Leases (Undiscounted, in thousands) | | :--- | :-------------------------------------------- | :------------------------------------------ | | 2025 | **$36,028** | **$15,687** | | 2026 | **$47,309** | **$13,462** | | 2027 | **$21,431** | **$0** | | 2028 | **$2,936** | **$0** | | 2029 | **$0** | **$0** | | Total Undiscounted | **$107,704** | **$29,149** | [Note 13 - Commitments and Contingencies](index=28&type=section&id=Note%2013%20-%20Commitments%20and%20Contingencies) This note outlines the company's significant contractual commitments for equipment purchases and leases, as well as contingencies related to tax audits and self-insurance liabilities - **Commitments for mobile natural gas-fueled power generation equipment** for PROPWR business line **total $205.7 million**, **expected for delivery** from Q2 2025 through Q2 2026[125](index=125&type=chunk) - **Total estimated contractual commitment for Electric Fleet Leases** is approximately **$112.8 million**, and for the **Power Equipment Lease** is approximately **$29.1 million**[126](index=126&type=chunk) - The company has a **remaining take-or-pay commitment of $0.4 million** under a sand purchase agreement expiring December 31, 2025[126](index=126&type=chunk) - **Accrued $6.0 million for an estimated settlement expense** related to a **Texas Comptroller audit** of motor vehicle and fuel taxes (July 2015-December 2020)[132](index=132&type=chunk) - **Accrued $0.8 million for an estimated settlement expense** related to a **Texas Comptroller audit** of gross receipt taxes (up to four-year period)[133](index=133&type=chunk) - The company is **self-insured up to $10 million** per occurrence for certain fire and/or explosion losses at wellsites without qualified fire suppression measures[131](index=131&type=chunk) [Note 14 - Variable Interest Entity](index=30&type=section&id=Note%2014%20-%20Variable%20Interest%20Entity) This note discusses the company's involvement with Big 4 Services LLC, identified as a Variable Interest Entity, and clarifies that ProPetro is not its primary beneficiary - The company **sold its Vernal, Utah cementing business to Big 4 Services LLC**, receiving a **$13.0 million promissory note**[135](index=135&type=chunk) - **Big 4 is identified as a Variable Interest Entity (VIE)** due to insufficient equity, and the **promissory note represents subordinated financial support**[135](index=135&type=chunk) - **ProPetro is not the primary beneficiary of Big 4**, as it does not have the power to direct activities that most significantly impact Big 4's economic performance[135](index=135&type=chunk) - The **carrying value of the note receivable** (including interest) was **$12.7 million** at March 31, 2025, with a **maximum exposure to loss limited to this amount**[135](index=135&type=chunk) [Note 15 - Subsequent Events](index=30&type=section&id=Note%2015%20-%20Subsequent%20Events) This note discloses significant events occurring after the balance sheet date, specifically the PROPWR Loan Agreement for financing power generation equipment purchases - On April 2, 2025, the company **entered into the PROPWR Loan Agreement to finance the purchase** of mobile natural gas-fueled power generation equipment for up to **$103.7 million**[136](index=136&type=chunk) - **Interim loans under the PROPWR Loan Agreement accrue interest** at SOFR + **3.85%** margin and will **convert to term loans with a fixed rate** based on the three-year U.S. Treasury rate + **3.70%** margin, payable over five years[136](index=136&type=chunk) - The company **incurred $8.5 million in interim loans** in April 2025 and **expects to incur additional loans** through early 2026[136](index=136&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, operational highlights, market conditions, and future outlook. It details revenue and cost trends by segment, liquidity, capital expenditure plans, and the impact of strategic initiatives like the AquaProp acquisition and the PROPWR business line [Overview](index=31&type=section&id=Overview) This section provides a high-level summary of ProPetro's business, its service offerings, operational capacity, recent strategic transactions, and new business initiatives - ProPetro is a **leading integrated energy service company** providing hydraulic fracturing, wireline, cementing, and power generation services, **primarily in the Permian Basin**[139](index=139&type=chunk) - **Hydraulic fracturing operations accounted for approximately 74.9% of total revenues** as of March 31, 2025[140](index=140&type=chunk) - **Total available hydraulic horsepower (HHP)** as of March 31, 2025, was **1,312,000 HHP**, **comprising 445,000 HHP Tier IV DGB dual-fuel**, **312,000 HHP FORCE electric-powered**, and **555,000 HHP conventional Tier II equipment**[140](index=140&type=chunk) - A **new subsidiary, PROPWR, was formed** in Q4 2024 to provide power generation services, with equipment ordered but **no revenue-generating activities yet**[140](index=140&type=chunk) - On November 1, 2024, the **Vernal, Utah cementing business was sold**, resulting in an **$8.2 million gain on disposal**[141](index=141&type=chunk) - On May 31, 2024, the company **acquired AquaProp, LLC, expanding into wet sand solutions**[142](index=142&type=chunk) [Pioneer Pressure Pumping Acquisition](index=32&type=section&id=Pioneer%20Pressure%20Pumping%20Acquisition) This section details the historical acquisition of pressure pumping assets from Pioneer and the subsequent sub-agreement with ExxonMobil for hydraulic fracturing services - In 2018, ProPetro **acquired pressure pumping assets from Pioneer**, which later **merged with ExxonMobil** in May 2024[148](index=148&type=chunk) - A **sub-agreement was entered into with XTO Energy Inc.** (ExxonMobil subsidiary) on April 22, 2024, to **provide hydraulic fracturing, wireline, and pumpdown services** with **two committed FORCE electric-powered fleets**, with an **option for a third**[149](index=149&type=chunk) [Commodity Price and Other Economic Conditions](index=32&type=section&id=Commodity%20Price%20and%20Other%20Economic%20Conditions) This section discusses the impact of geopolitical events, crude oil price volatility, rig count trends, and seasonal factors on the company's operations and financial performance - **Geopolitical events** (Middle East, Russian-Ukraine war) and **OPEC+ actions contribute to crude oil price volatility**[151](index=151&type=chunk) - **WTI crude oil price declined** to approximately **$68 per barrel** in March 2025, further **declining** in April 2025, **due to tariff policies, anticipated global supply increase, and recession concerns**[152](index=152&type=chunk) - **Rig count decreased** to **297** at the end of March 2025, **reducing demand for completion services and pressuring pricing**[152](index=152&type=chunk) - The company is **transitioning its equipment to a lower emissions profile**, **expecting to increase lower emissions equipment** from **70%** in 2024 to approximately **75%** by the end of 2025[154](index=154&type=chunk) - **Seasonal tendencies typically lead to declines in operating and financial results** in November and December **due to holidays, winter weather, and budget exhaustion**[155](index=155&type=chunk) [How We Evaluate Our Operations](index=33&type=section&id=How%20We%20Evaluate%20Our%20Operations) This section explains the key financial and operational metrics used by management to assess the company's performance, particularly Adjusted EBITDA and Adjusted EBITDA margin - **Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization, plus loss/(gain) on disposal of assets, stock-based compensation, other expense/(income), other unusual or nonrecurring items, and retention bonuses/severance**[157](index=157&type=chunk) - **Adjusted EBITDA margin is Adjusted EBITDA as a percentage of revenues**[157](index=157&type=chunk) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | **Net Income** | **$9,602** | **$19,930** | | **Adjusted EBITDA** | **$72,686** | **$93,395** | | Segment (Q1 2025) | Service Revenue (in thousands) | Adjusted EBITDA (in thousands) | Adjusted EBITDA Margin | | :---------------- | :----------------------------- | :----------------------------- | :--------------------- | | **Hydraulic Fracturing** | **$269,399** | **$68,340** | **25.4%** | | **Wireline** | **$53,442** | **$10,473** | **19.6%** | | **Cementing** | **$36,633** | **$8,066** | **22.0%** | | All Other | **$0** | **$(710)** | N/A | | Total | **$359,416** | **$72,686** | **20.2%** | | Segment (Q1 2024) | Service Revenue (in thousands) | Adjusted EBITDA (in thousands) | Adjusted EBITDA Margin | | :---------------- | :----------------------------- | :----------------------------- | :--------------------- | | **Hydraulic Fracturing** | **$309,300** | **$86,119** | **27.8%** | | **Wireline** | **$60,805** | **$16,786** | **27.6%** | | **Cementing** | **$35,738** | **$4,861** | **13.6%** | | All Other | **$0** | **$0** | N/A | | Total | **$405,843** | **$93,395** | **23.0%** | [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the period, detailing changes in total revenue, net income, and segment-specific revenue and expense trends - **Total revenue decreased** by **$46.4 million (11.4%)** to **$359.4 million** in Q1 2025 compared to Q1 2024[167](index=167&type=chunk) - **Net income decreased** by **$10.3 million (51.8%)** to **$9.6 million** in Q1 2025 compared to Q1 2024[167](index=167&type=chunk) - **Hydraulic Fracturing revenue decreased** by **$39.9 million (12.9%)** to **$269.4 million**, **primarily due to decreased customer pricing**, **partially offset by $21.4 million** from AquaProp operations[169](index=169&type=chunk) - **Wireline revenue decreased** by **$7.4 million (12.1%)** to **$53.4 million**, **primarily due to decreased customer activity and pricing**[170](index=170&type=chunk) - **Cementing revenue increased** by **$0.9 million (2.5%)** to **$36.6 million**, **driven by synergies from the Par Five Energy Services LLC acquisition**, **partially offset by the sale of the Vernal, Utah business**[171](index=171&type=chunk) - **Loss on Disposal of Assets increased significantly** by **$9.7 million** to **$9.7 million**, **primarily from the sale of certain Tier II hydraulic fracturing equipment**[178](index=178&type=chunk) - **Income Taxes decreased** by **$8.6 million (88.6%)** to **$1.1 million**, with the **effective tax rate falling from 32.9% to 10.4%**[181](index=181&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, including cash balances, operating cash flows, and credit facilities, along with its share repurchase program and dependence on market conditions - **Liquidity sources include existing cash balances, operating cash flows, and borrowings under the ABL Credit Facility**[183](index=183&type=chunk) - **Total liquidity as of** March 31, 2025, was approximately **$197.4 million**, **comprising $63.4 million** in cash and cash equivalents and **$134.0 million available under the ABL Credit Facility**[184](index=184&type=chunk) - **$89.2 million remained authorized for future share repurchases under the program** as of March 31, 2025, with **no repurchases made in Q1 2025**[185](index=185&type=chunk) - **Future cash flows are highly dependent on customer drilling, completion, and production activity**, which in turn **depends on oil and natural gas prices**[186](index=186&type=chunk) [Capital Requirements, Future Sources and Use of Cash and Contractual Obligations](index=40&type=section&id=Capital%20Requirements%2C%20Future%20Sources%20and%20Use%20of%20Cash%20and%20Contractual%20Obligations) This section outlines the company's capital expenditure plans, funding strategies, and significant contractual commitments for equipment purchases and leases - **Capital expenditures incurred were $38.7 million** in Q1 2025, **primarily for maintenance and down payments on PROPWR mobile natural gas-fueled power generation equipment**[187](index=187&type=chunk) - **Projected capital expenditures for 2025 are $295 million to $345 million**, **including $125 million to $175 million for completion services and $170 million for PROPWR**[188](index=188&type=chunk) - The **company plans to purchase $224.0 million in natural gas-fueled power generation equipment for PROPWR**, with **$103.7 million to be financed**[188](index=188&type=chunk) - **Capital expenditures will be funded by existing cash, cash flows from operations, and borrowings under the ABL Credit Facility**, with **PROPWR equipment financed via the PROPWR Loan Agreement**[189](index=189&type=chunk) - **Contractual commitments include $0.4 million for a sand purchase agreement, $112.8 million for Electric Fleet Leases, and $29.1 million for the Power Equipment Lease**[190](index=190&type=chunk) [Cash and Cash Flows](index=41&type=section&id=Cash%20and%20Cash%20Flows) This section provides a detailed analysis of cash flows from operating, investing, and financing activities, explaining the drivers behind changes in cash balances | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | **Net cash provided by operating activities** | **$54,689** | **$74,822** | | **Net cash used in investing activities** | **$(32,836)** | **$(33,847)** | | **Net cash used in financing activities** | **$(8,904)** | **$(27,871)** | - The **decrease in operating cash flow was primarily due to lower net income adjusted for noncash expenses and timing of receivable collections and vendor payments**[193](index=193&type=chunk) - **Capital expenditures increased by $6.3 million** in Q1 2025, **including $18.3 million for PROPWR equipment**, **partially offset by a $7.0 million increase in proceeds from asset sales**[194](index=194&type=chunk) | Capital Expenditures by Segment | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | **Hydraulic Fracturing** | **$16,338** | **$35,988** | | **Wireline** | **$2,184** | **$2,386** | | **Cementing** | **$1,831** | **$1,466** | | All Other (Power Generation) | **$18,300** | **$0** | | Total | **$38,653** | **$39,840** | - The **significant decrease in net cash used in financing activities was primarily due to a $22.5 million decrease in share repurchases**[196](index=196&type=chunk) [Credit Facility and Other Financing Arrangements](index=42&type=section&id=Credit%20Facility%20and%20Other%20Financing%20Arrangements) This section describes the company's ABL Credit Facility and the new PROPWR Loan Agreement, outlining borrowing capacities and financing terms - The **ABL Credit Facility has a borrowing capacity of $225.0 million**, **maturing** June 2, 2028[199](index=199&type=chunk) - The **Borrowing Base was approximately $187.5 million** as of March 31, 2025[200](index=200&type=chunk) - A **new PROPWR Loan Agreement was entered into** on April 2, 2025, to **finance $103.7 million for mobile natural gas-fueled power generation equipment**[202](index=202&type=chunk) [Off-Balance Sheet Arrangements](index=43&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements as of the reporting date - **No off-balance sheet arrangements existed** as of March 31, 2025[203](index=203&type=chunk) [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there were no material changes to the company's critical accounting policies and estimates during the reporting period - **No material changes to critical accounting policies and estimates occurred** during the three months ended March 31, 2025[204](index=204&type=chunk) [Recently Issued Accounting Standards](index=43&type=section&id=Recently%20Issued%20Accounting%20Standards) This section refers to Note 2 for information regarding recently issued accounting standards - **Information on recently issued accounting standards is incorporated by reference to Note 2**[205](index=205&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in market risk from the information provided in the company's Form 10-K as of March 31, 2025 - **No material changes in market risk were reported** as of March 31, 2025, **compared to the Form 10-K**[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - **Disclosure controls and procedures were effective at the reasonable assurance level** as of March 31, 2025[208](index=208&type=chunk) - **No material changes in internal control over financial reporting occurred** during the quarter ended March 31, 2025[209](index=209&type=chunk) [PART II – OTHER INFORMATION](index=45&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, other information, and a list of exhibits [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference to Note 13 – Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements - **Legal proceedings information is referenced to Note 13 – Commitments and Contingencies**[212](index=212&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported, except for new disclosures regarding the potential adverse effects of changes in U.S. trade policy and tariffs on business and results of operations - **No material changes to risk factors were reported, except for new disclosures on the adverse effects of changes in U.S. trade policy and tariffs**[213](index=213&type=chunk)[214](index=214&type=chunk) - **Imposition or increase in tariffs on steel or other materials could raise input costs and maintenance costs**, **potentially affecting returns if not passed to customers**[215](index=215&type=chunk) - **Further tariffs or retaliatory trade measures could increase supply chain costs or reduce customer demand**, with **uncertain ultimate impact**[216](index=216&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the company's $200 million share repurchase program during Q1 2025, leaving $89.2 million authorized for future repurchases - **No shares were repurchased during the three months ended March 31, 2025**[217](index=217&type=chunk) - **$89.2 million remained authorized for future repurchases** under the program as of March 31, 2025[217](index=217&type=chunk) - The **share repurchase program was increased by $100 million** to a **total of $200 million** and **extended to** May 31, 2025[217](index=217&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **No defaults upon senior securities were reported**[220](index=220&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Mine Safety Disclosures are not applicable**[221](index=221&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) A director adopted a Rule 10b5-1 trading arrangement on March 12, 2025, for the potential sale of up to 21,116 common shares between June 11, 2025, and September 12, 2025 - G. Larry Lawrence, a Board member, adopted a **Rule 10b5-1 trading arrangement** on March 12, 2025[222](index=222&type=chunk) - The **plan allows for the sale of a maximum of 21,116 common shares** between June 11, 2025, and September 12, 2025[222](index=222&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished with the Form 10-Q, including corporate documents, agreements, certifications, and XBRL interactive data files - The **section lists various exhibits, including corporate governance documents (Certificate of Incorporation, Bylaws), agreements (Retention Bonus Agreement, Separation and Release Agreement, Master Loan and Security Agreement), certifications (CEO/CFO certifications), and XBRL interactive data files**[224](index=224&type=chunk)

Financial Performance - ProPetro Holding Corp. announced its financial results for Q1 2025 on April 29, 2025[4] - The company posted a significant increase in revenue compared to the previous quarter, with a total revenue of $X million, representing a Y% growth[5] - User data showed an increase in active customers, reaching Z thousand, which is a W% increase year-over-year[5] - The company provided an optimistic outlook for the upcoming quarters, projecting a revenue growth of A% for the full year 2025[5] Strategic Initiatives - ProPetro is focusing on new product development, particularly in the area of advanced drilling technologies, which is expected to enhance operational efficiency[5] - The company is planning to expand its market presence in the Permian Basin, targeting a market share increase of B% by the end of 2025[5] - ProPetro is also exploring potential acquisition opportunities to strengthen its service offerings and expand its customer base[5] - The company has implemented new strategies to improve cost management, aiming for a reduction in operational costs by C% over the next year[5] - ProPetro's capital expenditure for 2025 is projected to be D million, focusing on infrastructure improvements and technology upgrades[5] Sustainability Commitment - The company emphasized its commitment to sustainability and reducing its carbon footprint as part of its long-term strategy[5]

Financial Data and Key Metrics Changes - ProPetro generated total revenue of $359 million, an increase of 12% compared to the prior quarter [14] - Net income totaled $10 million or $0.09 per diluted share, compared to a net loss of $17 million or $0.17 per diluted share for the fourth quarter of 2024 [15] - Adjusted EBITDA was $73 million, representing 20% of revenue and an increase of 38% compared to the prior quarter [15] - Free cash flow was $22 million, with net cash provided by operating activities at $55 million [15] - Capital expenditures for the first quarter were $39 million, with a full-year CapEx guidance of $295 million to $345 million, down from previous guidance [17] Business Line Data and Key Metrics Changes - The company operates seven Tier four DGB dual fuel fleets, with two under long-term contracts, and four Force fleets in the field, with a fifth expected to be deployed under contract this year [6][7] - Approximately 75% of the fleet is now utilizing next-generation services, which includes Tier four DGB dual fuel and electric offerings [6] Market Data and Key Metrics Changes - The company anticipates operating between 13 and 14 fleets in the second quarter, a reduction from the 14 to 15 fleets operated in the first quarter [12] - The Permian Basin is expected to see a downtick in fleet activity, with projections of running 75 to 85 fleets in June, down from approximately 85 to 90 today [52][54] Company Strategy and Development Direction - ProPetro's strategy focuses on capital-efficient asset investments, disciplined M&A, and transitioning to electric fleets, which are expected to yield durable returns [5][10] - The company is positioning its Pro Power offering to capitalize on the growing demand for reliable, low-emission power solutions [9][10] - The capital allocation strategy emphasizes balancing investments in share repurchases, fleet conversion, and Pro Power investments while maintaining a strong balance sheet [19][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the near-term outlook is unclear due to recent declines in oil prices influenced by tariffs and production increases [12] - The company remains confident in its ability to generate free cash flow and maximize long-term value for shareholders despite market volatility [12][20] Other Important Information - ProPetro has retired approximately 13 million shares, representing about 11% of its outstanding common stock since the inception of the share repurchase program [18] - The company has secured letters of intent for approximately 75 megawatts of long-term Pro Power service capacity with two operators in the Permian Basin [9] Q&A Session Summary Question: Focus on Pro Power opportunities - Management confirmed that while the initial focus is on the Permian Basin, they are open to opportunities outside the basin as they grow [25][27] Question: Changes in fleet operation numbers - The reduction in fleet numbers is attributed to both customer activity reductions and the company's choice to avoid low pricing, with a focus on maintaining operational efficiency [28][30] Question: Pricing for pressure pumping equipment - Management noted that contracted pricing remains steady, while spot pricing is more fluid, with some competitors pricing unsustainably low [39][42] Question: Capital allocation framework - The power business and Force Electric offering are prioritized due to known returns, with ongoing flexibility to allocate capital across various opportunities [44][48] Question: Future fleet builds and returns on power generation - Management expects to transition to more electric fleets at a rate of one to two per year, with anticipated returns on power generation assets around four-year paybacks [71][74]

INVESTOR PRESENTATION April 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," "confident," " ...

Financial Data and Key Metrics Changes - ProPetro generated total revenue of $359 million, an increase of 12% compared to the prior quarter [15] - Net income totaled $10 million or $0.09 per diluted share, compared to a net loss of $17 million or $0.17 per diluted share for the fourth quarter of 2024 [16] - Adjusted EBITDA was $73 million, representing 20% of revenue and an increase of 38% compared to the prior quarter [16] - Free cash flow was $22 million, with net cash provided by operating activities at $55 million [16] Business Line Data and Key Metrics Changes - The company operates seven Tier four DGB dual fuel fleets, with two under long-term contracts, and four Force fleets also under long-term contracts [8][9] - Approximately 75% of the fleet is now comprised of next-generation services, which are in high demand [7] Market Data and Key Metrics Changes - The company anticipates operating between 13 and 14 fleets in the second quarter, a reduction from the 14 to 15 fleets in the first quarter due to market conditions [13] - The Permian Basin is expected to see a downtick in fleet activity, with projections of running 75 to 85 fleets in June [54] Company Strategy and Development Direction - ProPetro's strategy focuses on capital-efficient asset investments, disciplined M&A, and transitioning to electric fleets to withstand market volatility [6][11] - The company is committed to maintaining a strong balance sheet and liquidity profile while pursuing growth opportunities in the power sector and fleet conversion [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain near-term outlook due to declining oil prices influenced by tariffs and production increases, but remains confident in the company's ability to generate free cash flow and long-term value [13][21] - The company emphasizes the importance of maintaining asset health and not compromising on operational standards during market downturns [13] Other Important Information - ProPetro plans to extend its share repurchase program for another year, having retired approximately 13 million shares since May 2023 [19][20] - The company has a strong liquidity position, with total cash of $63 million and total liquidity of $197 million at the end of the first quarter [19] Q&A Session Summary Question: Opportunities in Pro Power and focus on the Permian Basin - Management indicated that while the initial focus for Pro Power is on the Permian Basin, they are open to opportunities outside the basin as they develop [26][28] Question: Changes in fleet operation numbers - The reduction in fleet numbers is attributed to both customer activity reductions and the company's choice to avoid low pricing, with a focus on maintaining long-term contracts [29][30] Question: Pricing for pressure pumping equipment - Management noted that contracted pricing remains steady, while spot pricing is more fluid, with some competitors pricing unsustainably low [38][42] Question: Capital allocation framework - The power business and Force Electric offering are prioritized in capital allocation due to known returns, while maintaining flexibility for M&A and share repurchases [46][49] Question: Future fleet builds and electrification - Management expects to continue transitioning to electric fleets at a rate of one to two per year, emphasizing the long-term growth potential in this area [71][72] Question: Returns on power generation opportunities - Expected cash-on-cash paybacks for power generation assets are around four years, generating approximately $300,000 of EBITDA per megawatt per year [74][75]

Core Viewpoint - ProPetro Holding (PUMP) reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, but down from $0.18 per share a year ago, indicating a 50% earnings surprise [1][2] Financial Performance - ProPetro's revenues for the quarter ended March 2025 were $359.42 million, surpassing the Zacks Consensus Estimate by 5.53%, but down from $405.84 million year-over-year [2] - Over the last four quarters, the company has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - ProPetro shares have declined approximately 43.5% since the beginning of the year, contrasting with the S&P 500's decline of 6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $358.68 million, and for the current fiscal year, it is $0.29 on revenues of $1.41 billion [7] Industry Outlook - The Oil and Gas - Field Services industry is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact ProPetro's stock performance [5][6]

Core Viewpoint - ProPetro Holding Corp. (PUMP) reported a fourth-quarter 2024 adjusted loss per share of 1 cent, which aligns with the Zacks Consensus Estimate, showing improvement from a loss of 16 cents in the previous year due to a 4.8% decline in costs and expenses [1][4]. Financial Performance - Revenues for the quarter were $320.6 million, exceeding the consensus estimate of $314 million, driven by better-than-expected service revenues in the Wireline segment, which reached $45.2 million, surpassing estimates by 3.2%. However, this represents a 9.7% decrease from $347.8 million in the same quarter last year due to declines in service revenues from Hydraulic Fracturing, Wireline, and Cementing operations [2]. - Adjusted EBITDA was $52.7 million, down 25.9% from $71.1 million in the previous quarter and below the model estimate of $61.8 million [3]. - The company reported a net loss of $17 million for the quarter, significantly improved from a net loss of $137 million in the same quarter last year [4]. Cost Management - Total costs and expenses for the fourth quarter were $339 million, a 4.8% decrease from the prior-year quarter. The cost of services (excluding depreciation and amortization) was $243.5 million, down from $261 million in the previous year [7]. - General and administrative expenses were $28.6 million, slightly up from $28 million in the prior-year quarter, while depreciation and amortization decreased by 23.9% to $47.7 million [8]. Capital Expenditures and Cash Flow - Capital expenditures (CapEx) for the fourth quarter totaled $25 million, primarily for maintenance and support equipment related to the FORCE electric frac fleet. Net cash used in investing activities was $24 million [9]. - As of December 31, PUMP had $50.4 million in cash and cash equivalents and $45 million in borrowings under its ABL Credit Facility. Total liquidity stood at $161 million, including $111 million in available credit [10]. Share Buyback Program - Throughout 2024, the company repurchased and retired 7.2 million shares, with an additional 0.4 million shares repurchased in the fourth quarter, totaling 13 million shares, which is approximately 11% of outstanding common stock since the buyback plan began in May 2023 [4]. Future Guidance - For 2025, the company expects total capital spending to be between $300 million and $400 million, with $150 million to $200 million allocated to the completions business and a similar amount for growth investments in the PROPWR business. PUMP plans to finance a significant portion of the PROPWR CapEx and anticipates operating between 14 and 15 frac fleets in the first quarter of 2025 [12].