ProPetro Holding Corp. Q1 FY2026 earnings call

• The business model demonstrated resilience despite weather disruptions, with completions business delivering positive results due to strategic investments, disciplined asset deployment, and cost management. - Strategic actions in 2025 are now benefiting the company, positioning it for success. - Broader environment: Early stages of assessing Iran war implications, but North American oilfield services sector showing signs of recovery. Completions market structural tightening intensifying due to attrition of smaller competitors. - Fleet: Uptick in demand for next-generation natural gas burning fleet, currently 75% of fleet is next-generation. Expect to run approximately 12 fleets in Q2. - ProPower: Significant progress with Caterpillar agreement, building commercial pipeline, strong demand for low-emission power solutions in data center, industrial, and oil and gas sectors. - Focus on disciplined execution for ProPower, using free cash flow from completions, strong balance sheet, and flexible financing for growth.

ProPetro generated total revenue of $271 million in the first quarter, a 7% decrease from the prior quarter. Net loss was $4 million, or $0.03 loss per diluted share. Adjusted EBITDA was $36 million, 13% of revenue, and decreased 29% from the prior quarter. Completions business had positive financial results despite weather disruptions. ProPower made progress with strategic framework agreement with Caterpillar, aiming to acquire up to 2.1 gigawatts of power generation capacity over five years, with expected 2.6 gigawatts delivered by year end 2031 and fully deployed in 2032. Completions business expected to account for $140 million to $160 million of full-year 2026 capital expenditures, including lease buyouts for forced electric fleet. ProPower expected to incur $400 to $450 million in capital expenditures in 2026.

• Full-year 2026 capital expenditures incurred expected to be between $540 million and $610 million, up from previous range. Completions business expected to account for $140 million to $160 million, including lease buyouts for forced electric fleet. - ProPower expected to incur $400 to $450 million in capital expenditures in 2026. - Expect to buyout all five forced electric fleet leases beginning in late 2026 and continuing through 2028. - Early signs of improving completions market with stronger commodity environment and tightening supply.

• Uncertainty remains regarding the Iran war and its global and domestic implications on supply and demand dynamics. - Volatility in the market due to ongoing uncertainties. - Potential impact of inflationary cost pressures on the P&L, especially on labor and other auxiliary support services. - Supply chain constraints and availability of equipment and labor in the completions market.

Q: What is the mix of equipment in the strategic partnership with Caterpillar and thoughts on life cycle cost, capex vs opex, fuel cost?

A: Part of capacity is gas reciprocating, with larger, more power-dense efficient engines for data center market. Strategy is choosing right tech for projects.

Q: How to think about capital cost of power gen equipment and financing?

A: Equipment cost updated to $1.4 to $1.5 million per megawatt. Funding sources include cash from completions, flexible debt facilities, lease finance facility, and proactive sourcing of low-cost flexible capital.

Q: Evaluation of oil and gas vs data center landscape for ProPower?

A: Data center opportunities larger in scale, but oil and gas has strong pricing and payback. Leverage existing operations to grow into data center space.

Q: Pressure pumping tier two fleets economics and timing?

A: Pricing needs increase for tier two fleets to make sense, likely more spot work in second half. High bar for economic and service quality.

Q: Permian fleets activity ramp up and pricing?

A: Permian could grow to 80 fleets quickly, with pricing inflecting with small customer decisions.

Q: Power contract deployment and learning?

A: 60 megawatt data center contract equipment in process of deployment, learning from experience to secure more contracts.

Q: Delivery to deployment timeline for power equipment?

A: Bigger assets, longer-term contracts, leading to 6-12 month delivery and deployment timeline.

Q: Inflationary cost pressures and labor?

A: Labor and auxiliary services could face inflationary pressures, but larger companies with developed supply chains are advantaged.

Q: Framework agreement on power equipment?

A: Assets secured in framework agreement, expected timeline to receive and deploy units.