ProPetro (NYSE:PUMP) Q4 2025 Earnings call February 18, 2026 09:00 AM ET Company ParticipantsArun Jayaram - Executive DirectorCaleb Weatherl - CFOEddie Kim - VP of Equity ResearchJeff LeBlanc - Director in Equity ResearchJohn Daniel - Founder and PresidentMatt Augustine - VP of Finance and Investor RelationsSam Sledge - CEOStephen Gengaro - Managing DirectorTravis Simmering - PresidentConference Call ParticipantsDerek Podhaizer - Director and Senior Research AnalystScott Gruber - Managing Director and Senio ...

Financial Data and Key Metrics Changes - In Q4 2025, ProPetro generated total revenue of $290 million, a decrease of 1% compared to Q3 2025. Net income was $1 million, or $0.01 per diluted share, compared to a net loss of $2 million, or $0.02 loss per diluted share in Q3 2025 [18] - Adjusted EBITDA totaled $51 million, representing 18% of revenue, and increased by 45% compared to Q3 2025 [19] - Free cash flow for the completions business was $98 million, supported by strong EBITDA performance and reduced completion CapEx [19] Business Line Data and Key Metrics Changes - The legacy completions business continued to generate sustainable free cash flow, demonstrating resilience in a challenging market environment [20] - Capital expenditures incurred during Q4 2025 were $71 million, with $59 million supporting ProPower orders [20] Market Data and Key Metrics Changes - The Permian Basin is currently operating with approximately 70 full-time frac fleets, down from 90-100 fleets a year ago, indicating a significant slowdown in completions activity [4] - The company expects market challenges to persist into 2026, but anticipates attrition among smaller competitors unable to sustain prolonged market weakness [6] Company Strategy and Development Direction - ProPetro plans to allocate capital to its FORCE electric fleet, which has strong demand and commercial leverage, while also refurbishing a portion of its existing Tier IV DGB fleet and investing in fleet automation technology [7][23] - The company aims to deliver at least 750 megawatts by year-end 2028 and 1 gigawatt or more by year-end 2030 for its ProPower business, capitalizing on growing demand for reliable, low-emission power generation solutions [11] Management's Comments on Operating Environment and Future Outlook - Management highlighted the uncertainty in the broader energy markets and the cautious operator mindset due to tariff impacts and OPEC+ production increases affecting commodity prices [4] - The company remains confident in its ability to adapt quickly, rationalize costs, and protect its asset base, which supports margins and competitiveness in the market [5] Other Important Information - ProPetro's strong balance sheet is bolstered by a recent equity offering that provided approximately $163 million in cash, reducing reliance on debt [12] - Total liquidity at the end of Q4 2025 was $205 million, which increased to $325 million by January 31, 2026, primarily due to the equity offering [25][26] Q&A Session Summary Question: Can you expand on the contracting cadence for ProPower in 2026? - Management indicated a portfolio approach and expects a larger share of work to evolve towards non-oil and gas projects, which are often larger and have more favorable time horizons [36] Question: Does the industry have enough frac equipment to return to previous levels? - Management believes it would be a major stretch for the existing pressure pumping market to return to 90-100 fleets, indicating potential tightness in the frac market if demand increases [40][41] Question: How should we think about the mix between financed CapEx and cash CapEx for 2026? - Management stated they have various options for funding their CapEx program, prioritizing cash on the balance sheet and organic cash generation, while also utilizing flexible debt facilities as needed [46] Question: What is the current status of Tier Two fleets and the strategy for direct drive units? - Management confirmed that 2 or 3 Tier Two fleets are currently working and indicated a gradual addition of direct drive units based on customer interest [78][80] Question: How is the demand for power in the oil patch compared to data centers? - Management noted that both markets are growing, with data center demand being much higher, and expressed confidence in participating in both sectors [58]

Financial Data and Key Metrics Changes - BorgWarner reported approximately $14.3 billion in net sales for 2025, an increase of about $200 million year-over-year, supported by a 23% increase in light vehicle e-product sales [4][5] - The adjusted operating margin expanded by 60 basis points to 10.7%, despite a 20 basis points net tariff headwind [5][15] - The company achieved a 14% year-over-year growth in EPS and generated over $1.2 billion in free cash flow, a 66% increase compared to 2024 [5][19] Business Line Data and Key Metrics Changes - Light vehicle e-product sales increased by 23%, contributing significantly to overall sales growth [4][5] - Organic sales growth was approximately 1.6% year-over-year when excluding the decline in the battery and charging system segment [4] - The battery systems business experienced a revenue decline of 35%-40% year-over-year, primarily due to challenges in North America and weaker demand in Europe [40][41] Market Data and Key Metrics Changes - The company expects its light vehicle business, which comprises over 80% of sales, to perform broadly in line with the weighted light vehicle market, which is projected to be flat to down 3% for 2026 [20][22] - The battery business is anticipated to represent a 150 basis point headwind to year-over-year sales growth due to a lack of North American incentives and weaker European demand [21][41] Company Strategy and Development Direction - BorgWarner is focusing on long-term profitable growth by investing in new product developments, including a Turbine Generator System for the data center market [6][10][16] - The company secured a record number of new product awards across its foundational and e-product portfolios, indicating a robust pipeline for future growth [5][16] - The strategic focus includes leveraging core competencies and exploring inorganic opportunities to enhance capabilities and shareholder value [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to expand margins, grow adjusted EPS, and generate strong free cash flow in 2026, despite anticipated declines in markets and battery sales [5][16][27] - The company expects to see top-line benefits from new product launches starting in 2027 and beyond, driven by recent business wins [34][47] - Management acknowledged the challenges in the EV market but remains optimistic about future growth opportunities from new product developments [34][46] Other Important Information - BorgWarner announced a Master Supply Agreement with TurboCell for the Turbine Generator System, expected to generate over $300 million in sales during the first year of production [10][12] - The company has repurchased over $400 million of its stock in the second half of 2025, returning approximately 52% of free cash flow to shareholders [24][25] Q&A Session Summary Question: Can you elaborate on the data center opportunity and its margins? - Management indicated that the $300 million in revenues from the data center business is expected to have a mid-teens incremental conversion margin, consistent with the automotive business [29] Question: What is the size of the recovery in the PowerDrive segment? - Management noted a 100 basis point benefit in the fourth quarter, with expectations for continued growth in light vehicle e-products in the low double digits for 2026 [30][31] Question: What is the outlook for the battery systems business? - The battery systems business is expected to face continued sales headwinds, with management taking actions to minimize losses and adjust the cost structure [40][41] Question: How does the company view its M&A strategy in light of current market conditions? - Management emphasized a disciplined approach to M&A, focusing on acquisitions that leverage core competencies and provide near-term accretion [44][45]

Core Viewpoint - NuScale Power (SMR) is currently overvalued with a high price-to-sales (P/S) ratio compared to its industry peers, raising concerns about its ability to justify such valuations amid near-term challenges [1][4]. Valuation Comparison - NuScale Power's forward 12-month P/S ratio is 33.46X, significantly higher than the Zacks Electronics-Power Generation industry's ratio of 8.39X [1]. - Compared to peers, BWX Technologies, Constellation Energy, and GE Vernova have P/S multiples of 4.89X, 3.48X, and 4.66X, respectively [2]. Expansion Plans and Risks - NuScale Power plans to support up to 6 gigawatts (GW) of new nuclear capacity through partnerships with ENTRA1 and the Tennessee Valley Authority (TVA), involving about 72 small modular reactor modules [5]. - The first plant is expected to begin delivering power around 2030, but the company faces execution risks related to site selection, engineering work, and finalizing power purchase agreements (PPAs) [6]. Financial Performance and Market Sentiment - The company reported revenues of $8.2 million for the third quarter of 2025, while total payments to ENTRA1 could reach several billion dollars before any equipment orders are received [9]. - NuScale Power's stock has declined 54.1% over the past six months, underperforming the industry's decline of 50% [10][8]. Competitive Landscape - NuScale Power faces stiff competition in the nuclear energy sector from companies like Constellation Energy, BWX Technologies, and GE Vernova, which are advancing their own projects and technologies [14]. Technical Indicators - NuScale Power shares have dipped below their 50-day and 200-day moving averages, indicating a bearish trend and potential for continued downward pressure [18]. Conclusion - Given the stretched valuation, execution risks, and competitive pressures, a cautious approach to NuScale Power stock is warranted [21].

Core Viewpoint - NRG Energy, Inc. has completed the acquisition of a portfolio of generation assets and CPower from LS Power, enhancing its ability to provide reliable and affordable energy solutions as demand continues to grow [1][2]. Group 1: Acquisition Details - The acquisition includes 18 natural-gas-fired generation facilities with a total capacity of approximately 13 GW, along with CPower's commercial and industrial virtual power plant (C&I VPP) platform [2]. - This transaction effectively doubles NRG's generation fleet, increasing its total capacity to approximately 25 GW, which will improve affordability and grid reliability across its core markets [2][3]. Group 2: Strategic Implications - Larry Coben, NRG's Chair & CEO, emphasized that the acquisition is a response to the increasing power demand supercycle, allowing NRG to offer a broader range of affordable and resilient solutions for various customer segments, including data centers and households [3]. - The expanded demand response and VPP capabilities will further enhance NRG's ability to serve residential, commercial, and large load customers with dependable power and innovative energy solutions [3]. Group 3: Company Overview - NRG is a leading provider of electricity, natural gas, and smart home solutions, serving eight million customers across North America with a diversified supply strategy and reliable operation of approximately 25 GW of power generation [4]. - The company aims to play a significant role in dependable and competitive energy markets, focusing on creating flexible and affordable solutions for both households and large businesses [4].

Project Overview - China is planning to build the Yaxia Hydropower Project (Lower Yarlung Hydropower Project) at The Great Bend of the Yarlung Tsangpo River, a project considered even more ambitious than the Three Gorges Dam [1][5] - The project aims to dominate hydropower generation, potentially becoming the world's largest individual source of energy [7][8] - Analysts are using social media, state television, and satellite images to understand the project's design due to limited official information [9] Engineering and Design - The project is envisioned as a diversion project, potentially consisting of a series of hydropower stations along the river, including upstream and downstream dams with underground tunnels [9][10] - The scale of the project is considered novel, with engineers potentially doubting the feasibility of building it in such a remote location [12] - The volume of water diverted will be similar to the discharge of a medium-sized river like the Rhine in Europe [11] Power Generation and Capacity - The project is expected to have an installed capacity of 60 gigawatts [8] - The Chinese government estimates the project will generate approximately 300 billion kilowatt hours per year, exceeding the UK's annual usage and about three times more than the Three Gorges Dam generates [8] Environmental and Geopolitical Considerations - The project is located in an earthquake-prone area, requiring tunneling through rising mountains [2] - The project could affect hundreds of millions of lives downstream in neighboring India and Bangladesh, potentially creating tensions over water resources [2] - The Great Bend is characterized by a significant elevation drop of about 2,000 meters (6,562 feet) over a 50 kilometer (31 miles) distance, making it the world's steepest and deepest canyon [5][6][7]

Let's bring in Flex Central CEO Ryan Mallerie. The company operates over 40 data centers in 18 major markets. Ryan, great to speak with you.>> Hey Melissa, thanks for the opportunity to catch up. >> It it sounds like if it does count come down to power and cooling, etc., that there is some question about whether or not all of that money will actually be able to be deployed if the bottleneck is happening at power, at cooling, at water, etc. Yeah, that there is a ton of demand out in the marketplace for this ...

Power generated from fossil fuels rose to the highest in almost 9 months in Germany as cold weather and weak wind levels strain supply. https://t.co/tuQxq4vYjh ...

HOW DO YOU MAKE A RESPONSE TO THAT. HOW DO YOU REACT TO THAT. >> THANK YOU FOR HAVING ME ON YOUR SHOW.FROM OUR PERSPECTIVE, AS INFRASTRUCTURE INVESTORS, WE HAVE A PIECE APPROACH TO INVESTING IN INFRASTRUCTURE ASSETS AND A LONGER TERM TIME HORIZON, AND WE DO BELIEVE THAT A. I. INFRASTRUCTURE IS A SIGNIFICANT INVESTMENT OPPORTUNITY FOR US.NOW, HERE AT CARLYLE WE AREN’T DEVELOPING THESE ASSETS IN ISOLATION. WE HAVE TUNE A MUCH MORE COMPREHENSIVE VIEW, WHERE WE ARE LOOKING ACROSS THE VALUE CHAIN FOR A. I.INFRAS ...

By the end of this year, Pakistan’s cumulative solar imports are expected roughly to match the installed generation capacity of the national power system https://t.co/jwJrhMNOnm ...