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ProFrac Holding Corp. (ACDC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was a seasonal trough: revenue fell to $455.0 million, adjusted EBITDA to $70.8 million (16% margin), and net loss widened, driven by budget exhaustion, adverse weather, and pricing pressure .
  • Management highlighted stabilization in pricing and a >25% activity increase from Q4 trough; efficiency surpassed the Q3 2024 peak early in 2025 with all next-gen equipment deployed .
  • CapEx guidance for FY 2025 set at $250–$300 million (maintenance $150–$175 million; growth $100–$125 million focused on fleet upgrades, next-gen tech, and sand mines), signaling disciplined investment amid expected flattish-to-modestly improving frac market .
  • Strategic launch of Livewire Power to address distributed power needs for e-frac and other industrial users provides a new growth vector and integration synergies; Q4 2024 operations began in October .
  • Near-term stock catalysts: Q1 2025 rebound in Stimulation Services activity and efficiency, stabilization with potential pricing improvement in proppant, and tightening industry horsepower supply per management commentary .

What Went Well and What Went Wrong

What Went Well

  • Efficiency and activity rebound starting January 2025; all next-generation fleets deployed with efficiency records surpassing Q3 2024 peak, and >25% increase in active fleet count from Q4 trough .
  • Proppant segment positioned for material volume improvement in 2025; average daily mine production improved >50% in Q1-to-date vs Q4, with high operating leverage aiding profitability .
  • Launch of Livewire Power to meet e-frac power needs and broader industrial demand; management prioritizing embedded internal demand first and evaluating adjacent markets including AI .

What Went Wrong

  • Sequential revenue decline ($575.3M to $454.7M) and margin compression (adjusted EBITDA from $134.8M to $70.8M; margin 23% to 16%) due to seasonal budget exhaustion, holiday shutdowns, weather, and continued pricing pressure .
  • Stimulation Services impacted by $9M shortfall expense from supply agreement with Flotek and reactivation-related costs ($4M R&M; ~$2M labor) .
  • Proppant pricing softness, especially in West Texas; Q4 Proppant EBITDA margin fell to 31% from 33% in Q3 on lower cost absorption and realized prices .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$489.1 $575.3 $454.7
Net loss ($USD Millions)$(96.5) $(43.5) $(101.7)
Adjusted EBITDA ($USD Millions)$109.5 $134.8 $70.8
Adjusted EBITDA Margin (%)N/A23% 16%
Net cash provided by operating activities ($USD Millions)$42.7 $98.0 $76.5
Capital expenditures ($USD Millions)$33.1 $70.0 $63.2
Free cash flow ($USD Millions)$12.8 $30.9 $54.3

Segment Breakdown (Revenue and Adjusted EBITDA)

SegmentQ4 2023 Revenue ($MM)Q3 2024 Revenue ($MM)Q4 2024 Revenue ($MM)Q4 2023 Adj. EBITDA ($MM)Q3 2024 Adj. EBITDA ($MM)Q4 2024 Adj. EBITDA ($MM)
Stimulation Services$403.3 $507.1 $384.4 $55.5 $112.6 $53.6
Proppant Production$92.9 $52.8 $46.5 $47.4 $17.3 $14.2
Manufacturing$34.1 $61.5 $61.9 $1.8 $0.1 $3.0
Other$43.5 $51.3 $54.9 $4.8 $4.8 $4.4
Eliminations$(84.7) $(97.4) $(93.0) ——$(4.4)
Total$489.1 $575.3 $454.7 $109.5 $134.8 $70.8

Balance Sheet and Liquidity (FY End)

MetricFY 2024
Total debt ($USD Billions)$1.11B
Net debt ($USD Billions)$1.12B
Cash & cash equivalents ($USD Millions)$15.0 (incl. $4.0 related to Flotek)
Liquidity ($USD Millions)$81.0 (incl. $71.0 ABL availability)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total CapExFY 2025N/A$250–$300M New
Maintenance CapExFY 2025N/A~$150–$175M New
Growth CapExFY 2025N/A~$100–$125M (fleet upgrades, next-gen tech, sand mines) New
Stimulation Services activity/Rev/ProfitQ1 2025 vs Q4 2024N/A“Sizable improvement” expected given increased activity and stabilized pricing New
Proppant volumes/pricingFY 2025N/AMaterial volume improvement; pricing stabilized with opportunities to improve New

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Q-1)Q4 2024 (Current Period)Trend
Electric frac / next-gen fleets~70% active fleets next-gen; evaluating power generation solutions ~72% active fleets with e-fleet or gas-capable; record efficiency per fleet Livewire launched; effectively sold out of e-fleet and next-gen gas equipment; 80% of active fleets next-gen Strengthening integration; expanding power capabilities
Pricing dynamicsManage in flat profile; cost controls, inventory discipline Efficiency-driven margins; noted pricing/ activity softness Pricing stabilized; long-term commitments prioritized over spot increases; potential revisit with tariffs/labor inflation Stabilized; cautious on increases
Supply/demand & asset attritionMaintaining next-gen position, acquisition of AST to bolster scale Expect decline in Q4 pricing/activity; recovery in 2025 Industry tightening; accelerated attrition of legacy fleets; potential meaningful tightening if gas improves Tightening supply; favor higher-spec fleets
Regional trends (West/South TX; Haynesville)Maintaining presence; weakness in gas basins; idled one mine West Texas competitive; anticipating recovery in 2025 Stronger fleet pickup in West & South TX; Haynesville exposure (10MM tpa, 4 mines) with potential LNG-driven tailwinds Improving activity; Haynesville optionality
Tariffs/labor inflationNot emphasizedNot emphasizedCosts could rise; pricing may be revisited Watch cost inflation
Power generation beyond O&G (AI)Evaluating opportunities including AI-related power demand Not emphasizedLivewire focused on internal demand first; evaluating AI and other markets selectively Optionality expanding

Management Commentary

  • “Fourth quarter 2024 results reflected the impact of seasonal budget exhaustion and adverse weather, as well as pricing pressure.”
  • “Since the fourth quarter trough, hydraulic fracturing efficiency has surpassed the 2024 peak experienced in the third quarter, with all of our next generation equipment deployed, and pricing having stabilized.”
  • “We anticipate setting new operating efficiency records over the balance of 2025.”
  • On Livewire: “Livewire… marks a significant step forward in our power generation strategy… Distributed power generation will be a key component… offering a reliable and scalable solution for oilfield service companies and other industrial users.”
  • CFO on Q4 costs: “EBITDA… included reactivation costs of approximately $4 million… repair and maintenance and approximately $2 million in labor costs… [and] approximately $9 million in shortfall expense related to our supply agreement with Flotek.”

Q&A Highlights

  • Activity & profitability: Management sees strong start to 2025 with operators reactivating fleets and adding sand volumes; prioritizes long-term contracts over aggressive spot pricing to derisk cash flows and sustain returns .
  • Power generation & CapEx: Livewire to prioritize internal e-frac demand, with disciplined growth capex meeting return thresholds; majority 2025 spend slated for Stimulation Services and ongoing Proppant projects .
  • Supply/demand & attrition: Tightening horsepower supply due to accelerated attrition of legacy equipment; potential meaningful tightening if gas markets improve; focus on higher-spec platforms .
  • Fleet count outlook: Low-30s active fleets seen as a reasonable 2025 baseline, contingent on returns; growth will be patient and returns-driven .
  • Proppant operations: One Haynesville asset remained idled; seven operational mines with best-ever utilization at many sites; focus on long-term commitments over immediate price hikes .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, and EBITDA was unavailable at time of analysis due to API limit constraints, so we cannot quantify beat/miss versus estimates. If provided, comparisons would be anchored to S&P Global consensus ranges.

Key Takeaways for Investors

  • Q4 2024 softness appears transitory; management guides to sizable improvement in Q1 2025 on increased activity and stabilized pricing, aided by next-gen fleet deployment and asset management program .
  • Proppant is a 2025 recovery lever: >50% Q1-to-date mine production uplift vs Q4, high operating leverage, and potential pricing improvement as demand rises (Haynesville optionality) .
  • Livewire Power adds a strategic adjacency aligned with e-frac electrification; near-term focus on internal demand with potential to expand into AI and industrial markets, providing multi-vertical optionality .
  • Balance sheet remains leveraged (net debt ~$1.12B; liquidity ~$81M); continued free cash flow deployment toward deleveraging is a key medium-term priority and risk monitor .
  • Pricing strategy emphasizes durable customer relationships and long-term commitments over spot hikes; watch for cost inflation (tariffs, labor) and industry horsepower tightness that could support pricing later in 2025 .
  • Segment mix: Stimulation Services is the primary earnings driver; Proppant should improve volumes and margins in 2025; Manufacturing contribution is stabilizing and transitioning power-gen contributions to “Other” (Livewire) over 1H25 .
  • Tactical trade: Near term, position for Q1 activity/efficiency rebound and Livewire narrative; medium term, monitor Haynesville gas activity, efficiency per fleet metrics, and any pricing adjustments as supply tightens .

Additional Context: Q4 2024 Press Releases

  • Third-party electrification win: ProFrac partnered with Prairie Operating Co. to implement an electric frac fleet in Colorado, deploying 25 advanced E-Pumps and turbine generation; supports electrification narrative and top-tier asset contracting .