ProFrac (ACDC) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance Overview Executive Summary ProFrac's Q2 2025 results faced market headwinds, but operational excellence improved capital efficiency, exceeding Adjusted EBITDA less capital expenditures, with fleet redeployment and positive 2026 outlook - Q2 performance reflected market headwinds following a sharp decline in commodity prices in early April[4] - Operational excellence initiatives, particularly asset management programs, continuously improved capital efficiency and optimized capital investments[4] - Adjusted EBITDA less capital expenditures exceeded expectations, with the company maintaining an industry-leading position in this metric[4] - Since the end of Q2, a portion of the fleet has returned to work, and frac calendar utilization has improved from recent lows[4] Key Financial Highlights The company experienced a sequential decline in total revenue and Adjusted EBITDA in Q2 2025, with a significant net loss expansion, yet net cash flow from operating activities and free cash flow both substantially increased, while capital expenditures decreased Key Financial Data for Q2 2025 (vs. Q1) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------------------- | :------------- | :------------- | :--------- | | Total Revenue | $502 million | $600 million | ↓ $98 million | | Net Loss | $104 million | $15 million | ↑ $89 million | | Adjusted EBITDA | $79 million | $130 million | ↓ $51 million | | Adjusted EBITDA as % of Revenue | 16% | 22% | ↓ 6 percentage points | | Net Cash Provided by Operating Activities | $100 million | $39 million | ↑ $61 million | | Capital Expenditures | $47 million | $53 million | ↓ $6 million | | Free Cash Flow | $54 million | $(14) million | ↑ $68 million | Strategic Initiatives and Business Outlook The company continues to deploy the ProPilot automated frac system, deepen its partnership with Flotek for gas quality and asset integrity management, and enhance financial flexibility through debt refinancing, while Q3 outlook anticipates a sequential decline in frac services but stable proppant production - The ProPilot automated frac system has been deployed to all active fleets, aiming for transformative improvements in frac operations[5] - Collaboration with Flotek provides ownership exposure to a highly scalable gas quality and asset integrity management business[5] - Financial flexibility was enhanced through targeted debt refinancing measures, providing incremental liquidity[5] - Active fleet count in the stimulation services segment bottomed out in late June to early July, with incremental fleets redeployed as of July 31, but Q3 performance is expected to decline sequentially[7] - The proppant production segment anticipates sales volumes to be flat with Q2 levels, with efficiency gains expected to maintain profitability similar to Q2[8] Consolidated Financial Performance Consolidated Statements of Operations In Q2 2025, the company experienced a significant sequential decline in total revenue, leading to an expanded operating loss and a substantial increase in net loss, with both revenue and net income declining compared to the prior year period Key Data from Consolidated Statements of Operations | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :------------- | :------------- | :------------- | :------------- | :------------- | | Total Revenue | $501.9 million | $600.3 million | $579.4 million | $1,102.2 million | $1,160.9 million | | Operating Income (Loss) | $(54.3) million | $16.0 million | $(49.2) million | $(38.3) million | $(9.3) million | | Net Income (Loss) | $(103.5) million | $(15.4) million | $(65.6) million | $(118.9) million | $(62.6) million | Consolidated Balance Sheets As of June 30, 2025, the company's total assets and total liabilities both decreased compared to the end of 2024, with cash and cash equivalents increasing but the accumulated deficit expanding Key Data from Consolidated Balance Sheets | Metric | June 30, 2025 | Dec 31, 2024 | | :----------------------- | :------------- | :------------- | | Total Assets | $2,830.7 million | $2,988.1 million | | Total Liabilities | $1,812.4 million | $1,848.5 million | | Cash and Cash Equivalents | $26.0 million | $14.8 million | | Accumulated Deficit | $(361.9) million | $(235.9) million | Consolidated Statements of Cash Flows In Q2 2025, cash flow from operating activities significantly increased, while investing activities continued to be a net cash outflow, and financing activities shifted from a net inflow in Q1 to a net outflow Key Data from Consolidated Statements of Cash Flows | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :------------- | :------------- | :------------- | :------------- | :------------- | | Net Cash Provided by Operating Activities | $100.4 million | $38.7 million | $113.5 million | $139.1 million | $192.6 million | | Net Cash Used in Investing Activities | $(46.2) million | $(51.7) million | $(231.5) million | $(97.9) million | $(284.8) million | | Net Cash Provided by (Used in) Financing Activities | $(44.2) million | $14.2 million | $113.7 million | $(30.0) million | $90.9 million | Business Segment Information Stimulation Services The Stimulation Services segment experienced a significant sequential decline in both revenue and Adjusted EBITDA in Q2 2025, leading to a substantial contraction in profit margin Stimulation Services Segment Performance (Sequential) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :---------------- | :------------- | :------------- | :--------- | | Revenue | $432 million | $525 million | ↓ $93 million | | Adjusted EBITDA | $51 million | $105 million | ↓ $54 million | | Profit Margin | 12% | 20% | ↓ 8 percentage points | Proppant Production The Proppant Production segment saw sequential revenue growth in Q2 2025, but Adjusted EBITDA decreased, resulting in margin contraction, with approximately 58% of its revenue from intercompany transactions Proppant Production Segment Performance (Sequential) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :---------------- | :------------- | :------------- | :--------- | | Revenue | $78 million | $67 million | ↑ $11 million | | Adjusted EBITDA | $15 million | $18 million | ↓ $3 million | | Profit Margin | 19% | 27% | ↓ 8 percentage points | | Intercompany Revenue Share | 58% | N/A | N/A | Manufacturing The Manufacturing segment experienced a sequential revenue decline in Q2 2025, but Adjusted EBITDA significantly increased, leading to a substantial improvement in profit margin, with approximately 78% of its revenue from intercompany transactions Manufacturing Segment Performance (Sequential) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :---------------- | :------------- | :------------- | :--------- | | Revenue | $56 million | $66 million | ↓ $10 million | | Adjusted EBITDA | $7 million | $4 million | ↑ $3 million | | Profit Margin | 13% | 6% | ↑ 7 percentage points | | Intercompany Revenue Share | 78% | N/A | N/A | Other Business Activities The Other Business Activities segment saw a slight sequential revenue increase in Q2 2025, with stable Adjusted EBITDA and a minor decrease in profit margin, including performance from Flotek Industries and Livewire Power Other Business Activities Segment Performance (Sequential) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :---------------- | :------------- | :------------- | :--------- | | Revenue | $65 million | $62 million | ↑ $3 million | | Adjusted EBITDA | $8 million | $8 million | ↔ $0 million | | Profit Margin | 12% | 13% | ↓ 1 percentage point | - Other business activities include the performance of Flotek Industries and Livewire Power[12] Capital Structure, Liquidity and Free Cash Flow Capital Expenditures and Allocation Cash capital expenditures decreased sequentially in Q2 2025, and the company raised its full-year 2025 capital expenditure guidance, primarily for frac fleet maintenance, selective growth, and Alpine mine improvements Capital Expenditures (Sequential) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------- | :------------- | :------------- | :--------- | | Cash Capital Expenditures | $47 million | $53 million | ↓ $6 million | - The company expects 2025 capital expenditures to be approximately $175 million to $225 million, primarily for frac fleet maintenance, selective growth, and quality and throughput improvements at the Alpine mine[14] Balance Sheet and Liquidity Position As of June 30, 2025, the company maintained high total and net debt levels, with increased cash and cash equivalents, and total liquidity of $108 million, including cash and available asset-backed credit facility Debt and Liquidity (Period End) | Metric | June 30, 2025 | Dec 31, 2024 | | :----------------------- | :------------- | :------------- | | Total Debt | $108.42 million | $110.9 million | | Total Principal Debt | $111.0 million | $113.89 million | | Net Debt | $108.4 million | $112.41 million | | Cash and Cash Equivalents | $26 million | $14.8 million | | Total Liquidity | $108 million | N/A | - Total liquidity includes approximately $21 million in cash and cash equivalents (excluding Flotek) and $87 million in available asset-backed credit facility[16] Free Cash Flow Generation The company generated $54 million in free cash flow in Q2 2025, a significant improvement from the negative value in Q1 Free Cash Flow (Sequential) | Metric | Q2 2025 | Q1 2025 | Sequential Change | | :----------- | :------------- | :------------- | :--------- | | Free Cash Flow | $54.4 million | $(13.6) million | ↑ $68.0 million | Corporate Information and Disclosures About ProFrac Holding Corp. ProFrac Holding Corp. is a technology-driven, vertically integrated energy services holding company providing hydraulic fracturing, proppant production, related completion services, and supplementary products to North American unconventional oil and gas E&P companies - ProFrac Holding Corp. is a technology-driven, vertically integrated energy services holding company[18] - Core businesses include hydraulic fracturing, proppant production, related completion services, and supplementary products and services[18] - Operates through three business segments: Stimulation Services, Proppant Production, and Manufacturing, along with Other Business Activities[18] Non-GAAP Financial Measures This report defines and explains non-GAAP financial measures such as Adjusted EBITDA, Free Cash Flow, and Net Debt, used by management and investors to assess financial performance and liquidity, noting their limitations as non-substitutes for GAAP measures - Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, income taxes, depreciation and amortization, gain or loss on asset disposals, stock-based compensation, and other items[23] - Free Cash Flow is defined as net cash provided by operating activities less investments in property, plant, and equipment, plus proceeds from asset sales[23] - Net Debt is defined as total debt plus unamortized debt discounts, premiums, and issuance costs, less cash and cash equivalents[26] - These non-GAAP measures are supplementary and should not be considered substitutes for GAAP financial measures, and may not be comparable to similarly titled measures used by other companies[22][24][25] Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements about future events or financial performance, based on current assumptions but subject to risks and uncertainties that may cause actual results to differ materially, with no obligation to update unless legally required - Forward-looking statements involve future events or the company's future financial or operating performance, often accompanied by words such as "may," "should," and "expect"[20] - Actual results may differ materially from forward-looking statements due to various risks and uncertainties, including acquisition benefits, market conditions, capital requirements, industry fluctuations, and economic conditions[20] - Readers should not place undue reliance on forward-looking statements, and the company undertakes no obligation to update them unless required by law[21] Conference Call Information ProFrac has scheduled a conference call for Thursday, August 7, 2025, at 11:00 AM ET / 10:00 AM CT to discuss results, with a webcast archive available on the company's investor relations website for 90 days - The conference call is scheduled for Thursday, August 7, 2025, at 11:00 AM ET / 10:00 AM CT[17] - An archive of the webcast will be available for 90 days shortly after the call in the IR Calendar section of ProFrac's investor relations website[17]