ProFrac Holding Corp. Q2 FY2025 earnings call

• Market Dynamics: Q2 performance aligned with earlier outlook; market conditions improved post-Q2 exit with firmer commodity prices and increased crew activity. - Core Competitives: Vertically integrated manufacturing, asset management platform, ProPilot technology, proppant production opportunities in Haynesville and South Texas. - Strategic Initiatives: Partnership with Flotek unlocked value, power generation strategy targeting data center market, asset management program delivering operational improvements, Flotek transaction details including ownership and financial benefits. - Financials: Q2 revenues $502M, adjusted EBITDA $79M, free cash flow $54M; compared to Q1 revenues $600M, adjusted EBITDA $130M, free cash flow negative $14M.

Stimulation Services: Revenues declined to $432 million in Q2 from $525 million in Q1; adjusted EBITDA fell to $51 million from $105 million in Q1, with a margin of 12% vs 20% in prior quarter. Proppant Production: Revenues were $78 million in Q2 vs $67 million in Q1; adjusted EBITDA was $15 million vs $18 million in Q1, with volumes declining in Q2 but expected to stabilize in Q3. Manufacturing: Revenues were $56 million in Q2 vs $66 million in Q1; nearly $4 million sequential increase in external sales drove adjusted EBITDA improvement of over $3 million.

• Revised annual CapEx guidance to $175 million to $225 million. - Strategic steps to enhance liquidity, including issuance of $20 million in additional 2029 senior notes, $30 million reduction in quarterly amortization payments via Alpine term loan amendment, and deferral of net leverage ratio test. - Intention to use free cash flow to deleverage.

• Market volatility impacting activity levels. - Dependence on commodity price movements. - Execution risks related to strategic initiatives and partnerships.

Q: John Matthew Daniel asked about increasing customer engagement around 2026 and activity rebound context.

A: Matt Wilks responded that there's more customer engagement around 2026 programs, activity has increased from June lows, with improvement across gas and oil, though Permian saw less increase compared to gas.