Executive Summary

Q2 2025 delivered strong top-line growth and margin expansion: revenue rose 26% YoY to $58.35M, gross margin increased ~500 bps to 25%, and Adjusted EBITDA more than doubled to $9.45M, though GAAP diluted EPS fell to $0.05 due to $4.2M acquisition-related costs .
Results beat S&P Global consensus on revenue and normalized EPS; revenue of $58.35M vs. $52.4M* and normalized EPS of $0.16 vs. $0.127*, while standardized EBITDA slightly missed ($7.16M* vs. $7.53M*); company-reported Adjusted EBITDA was $9.45M (definitions differ)* .
Transformation is accelerating: Data Analytics (PWRtek) contributed ~$3.2M of revenue at ~90% gross margin, lifting mix and profitability; management expects non‑ProFrac PowerTech revenue to begin in Q3 and ramp into 2026 .
Guidance maintained (Revenue: $200–$220M; Adj. EBITDA: $34–$39M), reflecting strength in Data Analytics and caution on chemistry given North American activity softness; variability in H2 outlook is primarily chemistry‑driven .
Potential stock catalysts: sustained high‑margin PWRtek contribution, custody transfer conversions (9 commercial; more in Q3), and any back‑half chemistry stabilization; one‑off acquisition costs masked stronger underlying EPS this quarter .

What Went Well and What Went Wrong

What Went Well

High‑margin Data Analytics scaled rapidly: segment revenue up 189% YoY with ~$3.2M from PWRtek rental revenue at ~90% gross margin; management reiterated expectation for ~$15M PWRtek revenue in 2025 and >$27M in 2026 .
Chemistry share gains despite lower frac activity: external chemistry revenue up 38% YoY; management highlighted market share capture even as North American frac fleets declined .
Profitability momentum: Adjusted EBITDA rose 113% YoY to $9.45M, marking the 11th consecutive quarter of adjusted EBITDA improvement; gross margin up to 25% from 20% a year ago .
- CEO: “Flotek delivered another quarter of exceptional financial performance as we continue to execute our corporate strategy…” .
- CFO: PWRtek represented ~5% of revenue but ~21% of total company gross profit in Q2, underscoring mix benefits .

What Went Wrong

GAAP EPS pressured by one‑time costs: $4.2M asset acquisition expenses for PWRtek reduced GAAP diluted EPS to $0.05 vs. $0.06 YoY, though adjusted diluted EPS was $0.16 .
Higher SG&A from stock comp lifted opex (SG&A $6.8M vs. $6.3M YoY), though as a % of sales it fell to 12% from 14% .
Balance sheet leverage optics: total liabilities rose to $100.4M from $56.9M at 12/31/24 driven by a new $39.5M related‑party note; equity declined to $71.85M (from $113.9M), warranting monitoring of capital structure as the Data Analytics ramp proceeds .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($M)	$46.15	$55.36	$58.35
Gross Profit ($M)	$9.17	$12.45	$14.41
Gross Margin (%)	20%	23%	25%
Net Income ($M)	$1.97	$5.38	$1.77
Diluted EPS ($)	$0.06	$0.17	$0.05
Adjusted EBITDA ($M)	$4.44	$7.78	$9.45

Segment revenue breakdown

Segment ($M)	Q2 2024	Q2 2025
Chemistry – External	$16.36	$22.54
Chemistry – Related Party	$27.74	$29.88
Chemistry – Total	$44.10	$52.42
Data Analytics – Product	$1.31	$1.82
Data Analytics – Service	$0.74	$4.11 (incl. ~$3.2M PWRtek)
Data Analytics – Total	$2.05	$5.93

KPIs and non-GAAP

KPI	Q2 2024	Q1 2025	Q2 2025
Adjusted Diluted EPS ($)	$0.06	—	$0.16
Asset Acquisition Expenses ($M)	—	—	$4.20
Data Analytics share of Gross Profit (%)	~7% (2Q24)	—	26% (2Q25)

Q2 2025 vs. S&P Global consensus (quarter)

Metric	Consensus	Actual	Surprise
Revenue ($M)	$52.40*	$58.35	+$5.95M / beat
Primary/Normalized EPS ($)	$0.127*	$0.16 (Adj. diluted EPS)	+$0.033 / beat
EBITDA ($M, standardized)	$7.53*	$7.16*	−$0.37M / slight miss; company Adj. EBITDA $9.45M

Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	$200–$220M (initiated 5/6)	$200–$220M (8/5)	Maintained
Adjusted EBITDA	FY 2025	$34–$39M (initiated 5/6)	$34–$39M (8/5)	Maintained

Management notes variability in H2 primarily tied to North American chemistry activity; Data Analytics expected to grow sequentially in Q3 and Q4 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current (Q2’25)	Trend
High‑margin Data Analytics / PowerTech	Q4’24: ramp in upstream apps; Q1’25: acquired 30 assets; 6‑yr $160M backlog; 2026 segment op income +$20M	~$3.2M Q2 revenue at ~90% margin; expect ~$15M 2025, >$27M 2026; 80–90% margins likely	Accelerating
Custody Transfer (DaaS)	Q4’24 pilots; <1% variance vs. GC; 8 locations expected to convert in Q2	9 installations commercial; 6 more to convert in Q3; multi‑basin rollout	Scaling
Chemistry market share vs. frac fleet decline	2024: outperformed in down market	External chemistry +38% YoY despite 24% decline in frac fleets; international up 83%	Share gains continue
Regulatory (EPA flare)	VeraCal EPA approval; market timing impacts	~$1M flare revenue YTD; continued demand amid evolving rules	Early monetization
Macro/Upstream activity	Ongoing caution on NA activity	Conservative H2 chemistry outlook; DA offsets variability	Mixed
Manufacturing / capacity	Not highlighted	Adequate analyzer and skid capacity; 4–8 week build times	Positioned to meet demand

Management Commentary

CEO: “Flotek delivered another quarter of exceptional financial performance… Our Data Analytics segment is seeing robust growth… The Chemistry Technologies segment continues to gain market share…” .
CFO: “PowerTech generated only 5% of second quarter revenue but provided a remarkable 21% of total company gross profit… third quarter revenue from these assets will surpass second quarter levels” .
CFO on margins: “We still think [PowerTech] margins are going to be very attractive… 80% to 90% is probably a reasonable assumption going forward” .
CEO on custody transfer: “Nine… locations are now fully commercial, converting to recurring monthly revenue… six additional locations are expected to convert… in 3Q” .

Q&A Highlights

PowerTech customer diversification: Five non‑ProFrac customers piloting; first smart filtration skid to deploy in “next couple of weeks”; demand from grid/data centers and rig power .
Non‑ProFrac revenue timing: Expect Q3 revenue from non‑ProFrac PowerTech services; Rental rates rise as customers move from analyzer pilots to full systems .
Margin sustainability: Q2 ~90% PowerTech gross margin viewed as sustainable in the 80–90% range as assets run through full quarters .
Custody transfer scale: Nine sites commercial in Q2 (revenue small in Q2, < $50K), more to convert in Q3; several other customers in pilot phases across multiple basins .
H2 drivers of guidance range: Variability tied to North American chemistry; Data Analytics expected to grow sequentially in Q3 and Q4 .

Estimates Context

Revenue and normalized EPS beat consensus; standardized EBITDA slightly missed (definitions differ), while company‑reported Adjusted EBITDA was stronger.
Forward consensus indicates continued growth into H2: Q3 2025 revenue ~$52.9M*, EBITDA ~$9.85M*, and EPS ~$0.157*; Q4 2025 revenue ~$53.37M*, EBITDA ~$10.23M*, EPS ~$0.17* (directionally supportive of maintained FY guidance).
Values retrieved from S&P Global.*

Key Takeaways for Investors

High‑margin mix shift: PowerTech rental revenue (~90% margin) is reshaping profitability; even modest revenue contribution materially lifts gross profit and Adjusted EBITDA .
Underlying EPS quality stronger than GAAP: $4.2M one‑time acquisition expenses depressed GAAP EPS; adjusted EPS $0.16 and Adj. EBITDA $9.45M show core momentum .
Guidance intact; near‑term variability in chemistry: H2 performance will hinge on North American activity, while Data Analytics provides a sequential uplift and visibility .
Execution catalysts in H2: Non‑ProFrac PowerTech deployments, custody transfer conversions, and international chemistry growth can drive upside to sentiment and estimates .
Watch capital structure and working capital: $39.5M related‑party note added and equity decline to $71.9M warrant monitoring as Data Analytics scales .
Estimate implications: Expect upward revisions to normalized EPS and revenue on beat; standardized EBITDA reconciliation differences should be communicated to avoid misinterpretation versus Adjusted EBITDA .
Trading setup: Momentum narrative (11 straight quarters of Adj. EBITDA improvement; high‑margin backlog) vs. chemistry activity caution suggests stock likely reacts to DA ramp milestones and any guidance updates .

Footnotes:

Values retrieved from S&P Global.*
Company figures reflect reported GAAP and non‑GAAP metrics as cited; S&P Global “EBITDA Consensus Mean” may differ from company “Adjusted EBITDA” definitions. Citations: Revenue, margins, earnings and segment details ; press release narrative -; Q1 2025 prior‑quarter context and initial guidance -; Q4 2024 prior‑quarter context -; earnings call quotes and themes -.

FLOTEK INDUSTRIES INC/CN/ (FTK)·Q2 2025 Earnings Summary