ProPetro Holding Corp. Q3 FY2025 earnings call

• Completions Resilience: Demonstrated resilience in challenging energy markets, idled fleets to avoid subeconomic levels, focused on cost controls, and generated free cash flow. - PROPWR Progress: Secured long-term contracts, made progress in equipment deployment, ordered additional equipment, and secured a $350 million leasing facility. Anticipates PROPWR to grow to 1 gigawatt or greater by 2030. - Strategic Actions: Secured an additional frac fleet contract, with 75% of the fleet being next-generation gas burning equipment and 70% of active hydraulic horsepower under long-term contracts.

Completions Segment: Generated free cash flow despite depressed activity levels in the Permian Basin. Total revenue for the quarter was $294 million, a 10% decrease from the prior quarter. Adjusted EBITDA totaled $35 million, 12% of revenue, and decreased 29% QoQ. Free cash flow for the completions business was $25 million. PROPWR Segment: Secured significant contracts, with over 150 megawatts contracted by year-end and expecting to reach at least 220 megawatts by year-end. Ordered 140 megawatts of equipment, with total delivered or on order capacity at 360 megawatts, and plans to reach 750 megawatts delivered by year-end 2028. Average total cost of equipment, including balance of plant, is approximately $1.1 million per megawatt.

• Completions: Anticipates 10 to 11 active fleets in the fourth quarter of 2025, with sequential improvement expected in the PROPWR segment to offset holiday impacts. - Capital Expenditures: Full-year 2025 capital expenditures incurred expected to be between $270 million and $290 million, with completions business accounting for $80 million to $100 million. PROPWR business expected to incur $190 million in 2025, with 2026 projected at $200 million to $250 million depending on delivery schedules.

• Energy Market Uncertainty: Continued uncertainty due to tariffs and rising OPEC+ production affecting energy markets. - Market Weakening: Potential for further market weakening impacting completions activity. - Financing Risks: Dependence on external capital for PROPWR growth and risks associated with financing arrangements for equipment expansion.

Q: Details on the 60 megawatts data center contract, including equipment type and scaling.

A: Travis Simmering discussed reciprocating engines and battery energy storage systems for the data center contract, and mentioned scaling with existing partners and exploring both short-term and long-term deals.

Q: Future funding structures for PROPWR.

A: Caleb Weatherl explained the flexible leasing facility allows drawing funds as needed, and prioritizes using organic free cash flow from the completions business.

Q: Cost differential between data center and Permian microgrid equipment.

A: Sam Sledge stated the average $1.1 million per megawatt includes balance of plant and is similar across both applications.

Q: Economics of oilfield vs data center contracts.

A: Sam Sledge noted economics are similar, focusing on customer needs and achieving best returns.

Q: Equipment mix and data center applications.

A: Travis Simmering mentioned being comfortable with current equipment mix, looking at new technologies, and only participating in prime power applications for data centers.