Executive Summary

Q1 2025 was seasonally soft and below consensus: revenue $154.0M vs S&P consensus $160.8M (miss), Primary EPS (S&P definition) -$1.27 vs -$0.86 (miss), S&P EBITDA $8.2M vs $19.9M (miss), driven by winter seasonality, a non-recurring Mid-Con completions issue (~$6–$7M top-line impact), and reduced directional drilling . Estimates marked with an asterisk are from S&P Global; coverage depth = 1 estimate.*
Mix and execution strengths persisted in the Southwest: segment Adjusted EBITDA reached $11.7M with 17.9% margin (highest in recent history for the segment since the 2020 QES merger) .
Liquidity compressed post-refinancing and seasonal working capital build: liquidity $58.1M (cash $14.6M, ABL/FILO availability ~$43.5M); net debt rose to $238.3M; levered FCF -$47.8M in Q1 .
Management guided Q2 revenue up low-to-mid single digits QoQ with margin expansion; withheld full-year specifics given macro volatility, despite prior Q4 commentary of FY25 Adjusted EBITDA margin 13–15% .
Tactical flexibility: the March refinancing enabled a PIK interest option (used in April) and re-opened a $49M repurchase authorization (subject to covenants), providing optionality for cash preservation and opportunistic capital allocation .

What Went Well and What Went Wrong

What Went Well
- Southwest outperformance: revenue $65.2M (+6% QoQ) and Adjusted EBITDA $11.7M (+22% QoQ), with 17.9% margin; management expects this higher-margin mix to be the “new normal” for the region .
- Cost control and margin resiliency: Adjusted EBITDA margin improved 208 bps YoY despite lower revenue and rigs (company-wide cost initiatives) .
- Technology advancement: developing Gen2 Oracle SRT with >0.5M running feet; positioning for gas basins as LNG capacity ramps .
What Went Wrong
- Revenue/EPS/EBITDA all missed S&P consensus amid seasonality and operational downtime in Mid-Con; Q1 net loss widened to -$27.9M (net loss margin -18.1%) . S&P consensus metrics show misses for revenue, EPS, and EBITDA.*
- Northeast/Mid-Con compression: revenue fell 18% QoQ to $41.0M; operating income turned negative (-$8.1M); Adjusted EBITDA dropped 72% QoQ to $2.7M due to non-recurring operational issues and weaker gas-focused activity .
- Liquidity draw and cash burn: levered FCF -$47.8M; cash fell to $14.6M driven by ~$33M refinancing costs, working capital seasonality, and capex .

Financial Results

Overall KPIs vs prior quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$188.9	$165.5	$154.0
Net (Loss) ($USD Millions)	$(8.2)	$(14.7)	$(27.9)
Diluted EPS ($)	$(0.51)	$(0.90)	$(1.62)
Adjusted EBITDA ($USD Millions)	$27.8	$22.7	$13.8
Adjusted EBITDA Margin (%)	14.7%	13.7%	9.0%
Net (Loss) Margin (%)	(4.3)%	(8.9)%	(18.1)%

Q1 2025 vs S&P Global consensus

Metric	Q1 2025 Actual	S&P Consensus	Surprise
Revenue ($USD Millions)	$154.0	$160.8*	Miss
Primary EPS (S&P definition) ($)	$(1.27)*	$(0.86)*	Miss
EBITDA (S&P definition) ($USD Millions)	$8.2*	$19.9*	Miss

Values marked with an asterisk were retrieved from S&P Global.

Segment revenue

Segment Revenue ($USD Millions)	Q3 2024	Q4 2024	Q1 2025
Rocky Mountains	$67.9	$54.0	$47.8
Southwest	$68.6	$61.4	$65.2
Northeast/Mid-Con	$52.4	$50.1	$41.0
Total	$188.9	$165.5	$154.0

Segment Adjusted EBITDA

Segment Adjusted EBITDA ($USD Millions)	Q3 2024	Q4 2024	Q1 2025
Rocky Mountains	$16.6	$11.8	$6.7
Southwest	$8.7	$9.6	$11.7
Northeast/Mid-Con	$10.9	$9.8	$2.7
Corporate & Other	$(8.4)	$(8.5)	$(7.3)
Total	$27.8	$22.7	$13.8

Liquidity, leverage, cash flow, and capex

KPI	Q3 2024	Q4 2024	Q1 2025
Liquidity ($USD Millions)	$126.3	$112.0	$58.1
Cash & Equivalents ($USD Millions)	$82.7	$91.6	$14.6
Net Debt ($USD Millions)	$202.5	$193.5	$238.3
Capex – Gross ($USD Millions)	$21.0	$15.3	$15.0
Levered Free Cash Flow ($USD Millions)	$(1.6)	$15.5	$(47.8)
Unlevered Free Cash Flow ($USD Millions)	$7.5	$25.2	$(37.8)

Product/service mix (% of revenue)

Mix	Q3 2024	Q4 2024	Q1 2025
Drilling	21%	22%	20%
Completion	54%	52%	51%
Production	16%	16%	18%
Intervention	9%	10%	11%

Non-GAAP note: Q1 Adjusted EBITDA of $13.8M excludes $6.0M of one-time costs (legal, operational, loss on debt extinguishment) and $0.8M non-cash compensation; S&P’s EBITDA “actual” tracks a different definition (non-adjusted), explaining the gap vs company Adjusted EBITDA .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (sequential)	Q2 2025	n/a	Up low- to mid-single digits QoQ; schedules-based	New near-term guide
Margin	Q2 2025	n/a	Margin expansion QoQ	New near-term guide
Adjusted EBITDA Margin	FY 2025	13%–15% (Q4 commentary)	Full-year specifics withheld; more cautious tone	Effectively narrowed near-term focus
Capex (gross/net)	FY 2025	Not previously quantified	Lowered to $40–$50M gross; $30–$40M net	Lowered vs prior internal plans
Share repurchase capacity	Ongoing	Restricted by prior covenants	$49M authorization accessible, subject to covenant limits	Enabled post-refi
Interest modality	2025	n/a	PIK option available and utilized in April, defers ~$2.4–$2.5M/month cash outflow (cost +100 bps)	New flexibility

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
AI/tech demand & tools	Emphasis on extended reach laterals, tech services resilience	Notes datacenter/AI demand as a gas macro tailwind	Gen2 Oracle SRT under development; >0.5M feet run	Increasing focus on tech-led differentiation
Macro/tariffs/supply chain	General volatility commentary	Macro watch; 2025 cautious optimism	Tariffs creating episodic delays; plan to pass-through costs where possible	Macro headwinds elevated
Regional mix	Rockies/Northeast variability	Seasonal declines across regions	Southwest strength; Rockies seasonal; Mid-Con downtime	Southwest structurally stronger
Gas exposure	n/a	Anticipated LNG-driven gas activity upcycle	Dry gas ~12.5% of revenue; expecting uplift with LNG adds	Building optionality in gas basins
Capital structure	n/a	Refinancing completed March 12	PIK elected in April; share buyback flexibility reinstated	More flexible, cash-preserving
M&A/consolidation	n/a	n/a	Deleveraging-focused, creative financing; fragmented targets revisiting deals	Opportunistic but disciplined
Guidance tone	Guided Q4 seasonal decline	FY25 Adj. EBITDA margin 13–15%	Q2-only guide; full-year withheld	More cautious/near-term oriented

Management Commentary

“Our company-wide focus on cost controls enabled us to increase our first quarter 2025 Adjusted EBITDA margin by 208 basis points over last year’s first quarter, despite revenue and rig count being down 12% and 5%, respectively.” — CEO Chris Baker .
“We are targeting a modest sequential revenue increase… up low to mid-single digits… and margin expansion.” — CEO Chris Baker (Q2 outlook) .
“The PIK election… was due the week of the tariff announcement… there’s an incremental ~100 bps cost… [but] defers about $2.4–$2.5 million of monthly cash cost.” — CFO Keefer Lehner .
“We missed out on approximately $6–$7 million of scheduled Q1 Mid-Con revenue due to the… nonrecurring operational issue.” — CFO Keefer Lehner .
“Adjusted EBITDA [Southwest] was at the highest level… and we expect this to become the new normal… due to shifting revenue mix.” — Company statement .

Q&A Highlights

Q2 outlook conservatism and oil-price whipsaw: Management framed the low–mid single-digit Q2 guide on a rolling 90-day view amid operators delaying projects when WTI dipped into the high-$50s, then reevaluating as prices rebounded .
Capital allocation flexibility: PIK option used in April to preserve liquidity during tariff/OPEC-driven uncertainty; buybacks are allowed but practically constrained by covenants and market conditions; ATM sales preceded macro shift .
Gas pivot optionality: Dry gas was ~12.5% of Q1 revenue; assets can be relocated if needed; seeing stability/improvement in Haynesville and Northeast as LNG/gas macro builds .
M&A stance: Deleveraging transactions only; financing remains challenging; seeing counterparties return post-2024 as consolidation logic strengthens .
Regional/oily basins commentary: Smaller operators are more reactive to price swings; delays seen in Bakken/Rockies could revert as prices stabilize .

Estimates Context

Q1 2025: Revenue $154.0M vs S&P consensus $160.8M (miss); Primary EPS (S&P) -$1.27 vs -$0.86 (miss); S&P EBITDA $8.2M vs $19.9M (miss). Number of covering estimates: 1 for revenue and EPS, indicating thin coverage.*
S&P’s Primary EPS “actual” (-$1.27) aligns with company Adjusted Diluted Loss/share, not GAAP diluted (-$1.62), while S&P EBITDA “actual” is below company Adjusted EBITDA ($13.8M), reflecting definitional differences (S&P tracks EBITDA vs company “Adjusted EBITDA”) . Values marked with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

Q1 shortfall vs S&P consensus was driven by known seasonal factors and a specific Mid-Con operational downtime; management expects a rebound with Q2 revenue up low–mid single digits and margin expansion, making execution against the Mid-Con recovery the near-term swing factor .
Southwest’s structurally improving mix (rentals/tech/coiled tubing) is a positive margin anchor; watch for sustainability of ~18% segment EBITDA margins as a core driver of consolidated mix improvement .
Liquidity trough likely behind: working capital normalization (two extra payrolls), refi costs, and restricted cash unwind ($6M already freed) suggest cash/availability should build through 2025 if macro cooperates .
Capital structure flexibility (PIK interest, selective buybacks) provides optionality to defend liquidity during volatility and potentially capture dislocations; monitor covenant headroom and monthly PIK decisions as signals of cash posture .
Gas exposure offers upside optionality into 12–24 month LNG-driven demand; Oracle SRT Gen2 development supports differentiation in gas basins; asset mobility enables tactical pivot .
Estimate base is thin (1 analyst), raising the probability of outsized stock moves on operational prints; stabilization in Mid-Con and confirmation of Q2 guide are likely near-term catalysts. Values retrieved from S&P Global.*
Medium term: consolidation optionality remains, but any deal must be deleveraging with creative financing; improved pricing/utilization from gas cycles could be the more immediate path to margin normalization .