Flotek Industries, Inc. Q1 FY2026 earnings call

• Flowtech further positioned its industrialized pivot and transformational growth storyline in Q1 2026. • Data analytics segment grew exponentially with 295% growth in Q1 2026 vs Q1 2025, chemistry technologies revenue increased 13%. • Company total revenue grew 27% year-over-year, gross profit climbed 25% vs Q1 2025, total company adjusted EBITDA grew 44% year-over-year. • Data analytics accounted for 50% of the company gross profit vs 8% in prior year quarter. • Flowtech's expect analyzer was named product of the year. • Discussed progress in data analytics segment including service revenue growth, wins in power services and digital valuation, and deployment in disaster recovery power services contract. • Chemistry technology segment delivered 13% increase in total revenue in Q1 2026 despite challenges, opportunities leveraging convergence of prescriptive chemistry management and data services moving to forefront.

Data analytics segment: Service revenue grew 785% in Q1 2026 vs Q1 2025, service revenue accounted for 82% of DA revenue, first quarter DA gross profit margin was 75%, data analytics segment revenue represented 15% of total company revenue. Chemistry technologies: Revenue increased 13% despite challenges, external customer chemistry revenue declined 33% year-over-year but was flat sequentially, expected to increase in Q2.

• Estimating total revenue in a range of $270 to $290 million and adjusted EBITDA in a range of $36 to $41 million for 2026. • Expecting sequential growth in data analytics during the second quarter due to disaster recovery power services contract. • Anticipating external chemistry revenue to increase in Q2 amid improving customer engagement. • Believing 2026 is shaping up to be a significant year with potential for continued growth while maintaining disciplined balance sheet and low leverage. • Midpoint of 2026 adjusted EBITDA guidance implies leverage ratio of approximately one times based on net debt outstanding as of March 31st.

• Ongoing geopolitical and macroeconomic dynamics within the sector, such as the situation in Iran having impactful and potentially long-term implications on global supply and energy security. • Operational and supply chain risks to international operations amid ongoing conflicts in the Eastern Hemisphere. • Uncertainties related to forward-looking statements where actual results could differ materially from projections. • Impact of factors like weather, normal repair and maintenance cycles, and logistics delays on business performance.

Q: Hey, good morning, guys. I wanted to start first, Ryan, the data point to get to 50% of your units on Fractalase is impressive...

A: Yeah, Jeff, that's a great question. Will, I'll try to give you some pretty tangible color on how our approach to that is...

Q: Good morning. Congratulations on all the progress. Just following up on the 200 megawatt pipeline you just talked about, how does the cadence of the quotes in that market work?...

A: Yeah, you know, I would say definitely if you look at the fact that when we just talked a – A few weeks ago, those numbers had more than doubled on issued POs and contracted delivery and what's been put in the field...

Q: Thanks for taking my call. Hi, Jerry. I wanted to talk about, obviously, digital analytics. Digital analytics, great opportunity, lots of opportunities starting to emerge. As you're looking at the playing field, I mean, What do you need to maybe solidify some of these orders, get the product out there a little bit further, maybe some of the choke points?...

A: Yeah so we if we can we kind of got to break it down again we look at let's just talk power services components yeah we got to kind of break it down in the phases of measurement plus conditioning and then control and distribution...

Q: Thank you for taking my call. On the gross margins coming in at 22.2%, I think the DNA is already at 50% of gross profit. As the shortfall penalty mechanism kind of resets through 2026 and DA shares continue to grow, how should we think about the pace of gross margin expansion?...

A: I'll let Vaughn comment a couple more around just the hard numbers. I think one thing that's going to impact us is we continue to see overall gross margin improvement, even with reductions of what we've seen with the OSP...

Q: Hello, guys. Can you hear me? Okay, good morning. Thank you for taking my call. On the Q1 deck, you flagged the EPA flare monitoring enforcement as a kind of rollback. Given that Baracal was generating around $2.5 million at around 60% gross margin in 25, how much of that demand has deteriorated from what you originally expected?...

A: Yeah, so I think that there's no doubt. It's been a slight bit. of softness to it here domestically. Now, again, we do have a fleet that's staying relatively busy, but I think in terms of it being a rapid growth mechanism domestically, It's been slowed a bit.