Liberty Energy Inc. Q2 FY2025 earnings call

• Liberty delivered strong second quarter results with revenue and adjusted EBITDA increasing sequentially amidst industry challenges. - The team drove record efficiencies and increased utilization, offsetting pricing headwinds. - Progressed with digiPrime enhancement, having 2 variable speed units in field with over 1,700 hours of testing. - Completed field trial of industry's first last mile sand slurry system, expected to reduce costs and emissions. - Announced strategic alliances for power facilities in Pennsylvania and Colorado, and collaboration with Oklo for next-gen power solutions. - Leveraged integrated suite of completion products and services to stay agile in dynamic markets.

In the second quarter of 2025, Liberty Energy reported revenue of $1 billion, which was a 7% sequential increase compared to the prior quarter's $977 million. Adjusted EBITDA was $181 million, an 8% sequential rise from the prior quarter's $168 million. The power business is part of the overall operations, but specific segment revenue contribution details weren't deeply broken down in the transcript beyond the overall financials.

• Expect Q3 revenue and EBITDA to soften sequentially due to market pricing headwinds. - Withdrew full year EBITDA target range provided in January. - Total capital expenditures for 2025 now expected to be approximately $575 million, $75 million less than planned, with roughly even distribution between reduced completions CapEx and delays in power generation delivery. - Ended Q2 with cash balance of $20 million, net debt of $140 million, and total liquidity of $276 million.

• Macroeconomic uncertainty and energy sector volatility pose risks. - Pricing headwinds due to market softness and competitor responses. - Potential delays in power generation delivery and execution of strategic alliances. - Uncertainty in completions CapEx planning as market conditions evolve.

Q: When we think about the power generation side of the business, can you talk about the current supply chain for incremental capacity and potential for asset contraction over the next couple of quarters?

A: On supply chain, there's incremental capacity available, could significantly expand order book for 2026. Deploying power generation assets this fall with 3 sites, expecting generation in 2026.

Q: Can you provide more color on the revenue trajectory and EBITDA trajectory in 3Q and early look for 4Q?

A: Expect activity reduction of mid-single digits, low single digits pricing headwinds. Q4 early to tell.

Q: What are the operational advantages of the sand slurry pipe system versus traditional methods?

A: In some cases, never puts sand in truck, removes truck traffic, dust, emissions, and road maintenance.

Q: How do you think customers might budget for 2026?

A: E&Ps likely to hold production at current levels or see modest decline, planning budget to support such levels.

Q: What's the timeline for revenue from the Oklo strategic alliance?

A: Revenue likely to come in '27 for initial phases, nuclear powerhouses in early 30s, with grid interconnection and management solutions coming into play.