Executive Summary

Flotek delivered its strongest quarter in five years with Q1 revenue up 37% YoY to $55.4M, gross margin at ~23%, net income of $5.4M, and adjusted EBITDA of $7.8M; management initiated FY2025 guidance of $200–$220M revenue and $34–$39M adjusted EBITDA, implying ~12% and ~80% YoY growth at midpoints .
Key beat vs S&P Global consensus: revenue $55.36M vs $44.50M estimate*; Primary EPS $0.213 vs $0.06 estimate*; EBITDA $5.81M vs $4.60M estimate* — driven by 88% growth in external Chemistry revenues and 57% growth in Data Analytics . Values retrieved from S&P Global*.
Strategic catalyst: expansion into mobile power generation via acquisition/lease of 30 PWRtek assets and a six-year lease with a ~$160M recurring backlog; expected to add ~$14M of high-margin rental revenue in 2025 and ~$27.4M annually in 2026 for Data Analytics, with ~80% gross margins and >$20M 2026 segment operating income .
Narrative watch items: 2H25 chemistry uncertainty (customer capex, tariffs on pipe/tubulars) and continued reliance on ProFrac minimum purchase mechanics (Q1 included $7.5M MPR) even as mix shifts toward recurring DAS/power-gen revenues .

What Went Well and What Went Wrong

What Went Well

External Chemistry acceleration and market share gains: external Chemistry revenues rose 88% YoY; international chemistry revenue of $3.8M (Middle East strength) contributed to growth .
Data Analytics momentum and new vertical: Data Analytics revenue up 57% YoY, supported by growing product and service sales; entry into mobile power generation via PWRtek adds a six-year ~$160M recurring backlog and ~~80% gross margins, with 2025 revenue uplift (~~$14M) and 2026 fixed-fee revenue of $27.4M expected .
Operating leverage and profitability: SG&A held to 11% of revenue (down ~400 bps YoY), net income +244% YoY, and 10th straight quarter of adjusted EBITDA improvement; FY25 guide midpoint implies adjusted EBITDA margin of ~17% (up ~600 bps vs 2024) .

Quote (CEO): “We have now grown revenue, net income and adjusted EBITDA in five consecutive quarters… [and] our transformative expansion into enhanced real-time data monitoring and gas conditioning in the mobile power generation sector positions Flotek to deliver an exceptionally strong 2025 and beyond.”

What Went Wrong

Mix dependence on ProFrac MPR/OSP: Q1 included $7.5M from minimum purchase requirements under the ProFrac supply agreement; related-party MPR revenue was down 14% YoY (affecting revenue mix optics) .
Second-half chemistry visibility: management adopted a conservative outlook for 2H25 chemistry given E&P capex commentary, oil price uncertainty, and tariff impacts on pipe/tubular costs .
Transition costs/timing: eight of the 30 acquired power-gen assets were not in service at acquisition; full revenue/earnings impact builds through 2H25/2026 as units enter service and additional DAS pilots convert .

Financial Results

Overall P&L progression (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$49.74	$50.76	$55.36
Gross Profit ($M)	$9.12	$12.28	$12.45
Gross Margin %	18.3%	24%	~23%
Net Income ($M)	$2.53	$4.43	$5.38
Diluted EPS ($)	$0.08	$0.14	$0.17
Adjusted EBITDA ($M, non-GAAP)	$4.80	$7.02	$7.78

Q1 2025 vs prior-year Q1 detail

Metric	Q1 2025	Q1 2024	Change
Revenue ($M)	$55.36	$40.37	+37%
Gross Profit ($M)	$12.45	$8.82	+41%
Net Income ($M)	$5.38	$1.56	+244%
Diluted EPS ($)	$0.17	$0.05	+240%
Adjusted EBITDA ($M)	$7.78	$4.03	+93%

Consensus vs actual (S&P Global; reported quarter)

Metric	Consensus	Actual (SPGI)	Surprise
Revenue ($M)	44.50*	55.36*	+$10.86M (beat)*
Primary EPS ($)	0.06*	0.213*	+$0.153 (beat)*
EBITDA ($M)	4.60*	5.81*	+$1.21M (beat)*

Note: Company-reported diluted GAAP EPS for Q1 2025 was $0.17 , which differs from SPGI “Primary EPS” actual used for estimate comparisons. Values retrieved from S&P Global*.

Segment revenue (Q1 YoY)

Segment	Q1 2025 ($000)	Q1 2024 ($000)	YoY %
Chemistry Technologies – External	22,009	11,685	88%
Chemistry Technologies – Related Party	30,729	27,014	14%
Chemistry Technologies – Total	52,738	38,699	36%
Data Analytics – Product	1,662	933	78%
Data Analytics – Service	962	742	30%
Data Analytics – Total	2,624	1,675	57%

Select KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
SG&A Expense ($M)	$5.71	$6.63	$6.28
SG&A as % of Revenue	11.5%	13.1% (calc from )	11%
DA Service Revenue ($M)	$0.79	$1.65	$0.96

Non-GAAP note: Adjusted EBITDA excludes items such as stock comp, severance, contingent liability revaluation, gain on asset disposal, and amortization of contract asset; reconciliation provided in the 8‑K/press release .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	None (to be issued with Q1)	$200M–$220M	Initiated
Adjusted EBITDA (non-GAAP)	FY 2025	None (to be issued with Q1)	$34M–$39M	Initiated

Management notes midpoint implies ~12% revenue growth and ~80% adjusted EBITDA growth vs 2024; adjusted EBITDA margin ~17% at midpoint .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Data Analytics: Flare monitoring (EPA)	JP3 analyzer approved; units ramping; rental/service recurring; regulatory timing impacted Q4	Demand improved post-Dec 2024 updates; sales momentum through March, recurring DAS emphasized	Positive momentum
Data Analytics: Custody transfer (XSPCT/Verax)	3 field trials → 14 committed by Q4; pilots converting in 2025	8 pilot sites converting to recurring in Q2; E&P scale-up in US + pilots in UAE/Saudi	Scaling; international expansion
Mobile Power Generation (PWRtek)	15 active power-gen units by Q4’24; subscriptions; 9 more committed	Acquired 30 assets; 6-year lease; ~$160M backlog; ~80% gross margins; 2025 $14M, 2026 $27.4M revenue	Transformative expansion
Chemistry external/international	External grew despite weaker frac count; international ramp in UAE/Saudi; Q4 external +50% seq.	External +88% YoY; international $3.8M; continued Middle East focus	Share gains, intl growth
Macro/supply chain/tariffs	Q4 noted regulatory timing; 2025 guidance to come	Conservative 2H chemistry view; tariffs on pipe/tubulars; oil price uncertainty	Mixed headwinds
Leverage/liquidity	Debt/EBITDA improved; ABL paydown	ABL repaid in March; plan to use OSP to prepay $40M note; leverage to <1x by Q1’26	Balance sheet strengthening

Management Commentary

Strategy: “Convergence of innovative Data and Chemistry solutions… positions Flotek to deliver an exceptionally strong 2025 and beyond” .
Power-gen thesis: “Six-year contract anchoring over $160 million in recurring revenue backlog… generating over $20 million in annual operating income [2026]… boosting free cash flow” .
Custody transfer value: “At a single pilot site, we have pinpointed an annual customer opportunity of up to $3.5 million of savings… eight pilot locations set to transition to recurring DAS revenue in Q2 2025” .
Outlook/tone: “We have now secured long-term contracts for both our chemistry and Data Analytics segments, which should provide confidence in Flotek’s ability to deliver consistent revenue and profitability” .

Q&A Highlights

PWRtek expansion and TAM: Management expects rapid third-party uptake post-acquisition; considering capex to build additional units; sees ~500-unit domestic oil & gas TAM for certain solutions and broader opportunities in grid and data centers .
Custody transfer pipeline: 8 pilots converting in Q2; 14 additional sites planned with the lead E&P plus ~10 other customers; UAE contracts expected mid-year .
International chemistry trajectory: Stable growth in UAE/Saudi (approved slickwater systems, ADNOC mega tender) and developing Argentina opportunity .
Capital allocation/leverage: Intent to use ProFrac order shortfall payments to pay down the $40M acquisition note without prepayment penalties; leverage targeted below 1x by Q1’26 .
2H25 chemistry risk: Guidance embeds conservatism on 2H chemistry due to E&P capex and tariff headwinds .

Estimates Context

Q1 2025 beats vs S&P Global: Revenue $55.36M vs $44.50M estimate*; Primary EPS $0.213 vs $0.06 estimate*; EBITDA $5.81M vs $4.60M estimate*. Values retrieved from S&P Global*.
Note on measures: Company’s diluted GAAP EPS was $0.17, while SPGI “Primary EPS” actual was $0.213 — differences reflect varying definitions/adjustments .
Implications: Street likely raises FY25 revenue/EBITDA and embeds recurring DAS/power-gen contributions; watch for 2H chemistry estimate tempering per management’s conservative posture .

Key Takeaways for Investors

Beat-and-raise setup: Strong Q1 beats and the initiation of FY25 guidance with a step-up in adjusted EBITDA margin (~17% midpoint) reframe earnings power .
Mix shift to recurring/high-margin analytics: $160M backlog in mobile power generation plus custody-transfer/flare DAS growth expand visibility and margins .
Chemistry growth durable but cyclical: External/international momentum offsets potential 2H25 slowdowns; monitor E&P capex and tariff impacts .
Balance sheet path improving: Use of order shortfall payments to prepay the $40M note and rising EBITDA support leverage <1x by Q1’26 .
Execution catalysts: Conversion of pilots to recurring DAS (Q2), commissioning of remaining PWRtek units (2H), international contract wins (UAE/Saudi) .
Risks: Reliance on ProFrac agreement mechanics (MPR/OSP), regulatory timing for flare, commodity-driven activity levels .
Monitoring framework: Track DA service run-rate, PWRtek utilization and gross margins, international chemistry orders, and 2H25 visibility on North American completions.

Footnotes:

Values retrieved from S&P Global* (consensus and SPGI actuals table).
All other metrics sourced from company press releases, 8‑K, slides, 10‑Q, and Q1 2025 call transcript as cited.

FLOTEK INDUSTRIES INC/CN/ (FTK)·Q1 2025 Earnings Summary