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Liberty Energy Inc. (LBRT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 7% sequentially to $1.04B, while GAAP diluted EPS increased to $0.43; Adjusted EBITDA improved 8% q/q to $180.8M, though all three metrics declined year-over-year due to softer completions pricing and industry activity compression .
  • Versus Wall Street consensus, Liberty beat on revenue (actual $1.0425B vs $1.00697B*) and was roughly in line to slightly above on Adjusted EBITDA (company-reported $180.8M vs $176.5M*), but missed on adjusted EPS ($0.12 actual vs $0.135*). Pricing headwinds and emergence of “white space” were cited as drivers .
  • Management withdrew its full-year EBITDA target range and guided Q3 revenue and EBITDA to soften sequentially; 2025 CapEx was cut to ~$575M (≈$75M below prior plan), and tax expense rate guided to ~25% with approximately no cash taxes in H2 2025 .
  • Strategic catalysts: expanding long-term power opportunities (Oklo alliance, two power facility collaborations) and technology leadership (DigiPrime variable speed natural gas engine, sand slurry pipe system) to drive efficiency and customer engagement despite near-term pricing pressure .

What Went Well and What Went Wrong

What Went Well

  • Sequential growth despite industry softness: “Revenue and Adjusted EBITDA increased 7% and 8% sequentially…against an industry backdrop of softening completions activity,” attributed to record efficiencies and increased utilization .
  • Tech differentiation: Successful field testing of the industry’s first variable speed natural gas reciprocating engine (DigiPrime) with two units running ~1,700 hours, improving torque, rate control, and component life; early evidence of power and fluid ends lasting twice as long vs conventional systems .
  • Logistics innovation: Completed field trial of PropX last‑mile sand slurry pipe system expected to reduce costs, improve delivery reliability, and decrease emissions and road maintenance .

What Went Wrong

  • Year-over-year compression: Revenue down 10% y/y, GAAP EPS $0.43 vs $0.64 y/y, and Adjusted EBITDA down 34% y/y, reflecting pricing pressure and softer completions activity .
  • Pricing and calendar “white space”: CFO highlighted market-wide pricing headwinds (low single-digit decline) and increasing white space as activity slows; management plans to modestly reduce fleet count and redeploy horsepower to simul-frac offerings .
  • Guidance uncertainty: Full-year EBITDA target range withdrawn amid macro volatility and pricing pressure; Q3 revenue/EBITDA expected to soften sequentially, elevating decrementals as fleet count changes .

Financial Results

Consolidated performance vs prior quarters (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$943.574 $977.461 $1,042.521
GAAP Diluted EPS ($)$0.31 $0.12 $0.43
Adjusted EPS ($)$0.10 $0.04 $0.12
Net Income ($USD Millions)$51.893 $20.111 $71.016
Operating Income ($USD Millions)$24.924 $18.172 $37.073
Adjusted EBITDA ($USD Millions)$155.740 $168.150 $180.798
Net Income Margin % (calc)5.5% (51.893/943.574) 2.1% (20.111/977.461) 6.8% (71.016/1,042.521)
Adjusted EBITDA Margin % (calc)16.5% (155.740/943.574) 17.2% (168.150/977.461) 17.3% (180.798/1,042.521)

Year-over-year comparison (Q2 2024 vs Q2 2025)

MetricQ2 2024Q2 2025
Revenue ($USD Millions)$1,159.884 $1,042.521
GAAP Diluted EPS ($)$0.64 $0.43
Adjusted EPS ($)$0.61 $0.12
Adjusted EBITDA ($USD Millions)$273.256 $180.798

KPI and balance sheet snapshot

KPIQ2 2025
Liquidity ($USD Millions)$276 (incl. ABL availability)
Cash ($USD Millions)$19.6
Total Debt ($USD Millions)$160.0
Net Debt ($USD Millions)~$140 (CFO)
Capital Expenditures ($USD Millions)$134.0
Dividend Paid (Q2, $USD Millions)$13 (at $0.08 per share)
ABL Commitments Expanded$750M from $525M (July)

Estimate comparison (Q2 2025)

MetricConsensus*ActualSurprise
Revenue ($USD)$1,006,972,810*$1,042,521,000 +$35,548,190 / +3.5%
Adjusted/Primary EPS ($)$0.135*$0.12 -$0.015
EBITDA ($USD)$176,512,490*$180,798,000 (company Adj. EBITDA) +$4,285,510

Values retrieved from S&P Global*.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EBITDA trajectoryQ3 2025Not providedSofter sequentially (vs Q2) Lowered
Full-year EBITDA target rangeFY 2025Range provided in Jan (not reiterated)Withdrawn Withdrawn
Capital ExpenditureFY 2025≈$650M (prior plan) ~$575M Lowered by ~$75M
Tax expense rateH2 2025N/A~25% of pre‑tax income; approx. no cash taxes in H2 New
Fleet deploymentH2 2025N/AModestly reduce fleet count; redeploy horsepower to simul‑frac Reduction/repositioning
Dividend per shareQ3 2025$0.08 $0.08 (payable Sep 18, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/data center power demandExpect 400 MW deliveries by end 2026; modular distributed solutions; rising U.S. power demand IMG acquisition to expand utility/EPC capabilities; modular deployment narrative continues Strategic alliance with Oklo; turnkey integrated baseload nuclear + flexible gas and grid management for large loads Expanding partnerships and solution breadth
Tariffs/macro volatilityPrice pressure to start 2025; outlook uncertain; operators maintaining production Monitoring tariffs; hedging support; flight to quality Pricing headwinds (low single digits), white space emerging; Q3 sequential softening; full-year EBITDA guide withdrawn Macro headwinds intensifying near-term
Product performanceDigiPrime rollouts to moderate; record pumping hours achieved Variable speed pump testing; benchmark component longevity via AI monitoring Two variable-speed units ~1,700 hours; significant power/fluid end life extension; next-gen frac design Strong tech validation and durability gains
Supply chainN/AStronger scale and supply chain; vertical integration Gas reciprocating engine capacity available; could more than double 2026 order book Adequate capacity to support power growth
Regional trendsIndustry-wide lateral footage ~flat for 2025 Stable activity; LNG supportive for gas Overweight Haynesville vs Permian; Haynesville tailwind Gas-focused regions supportive
Regulatory/legalN/AN/ANuclear timelines: Oklo baseload in early 2030s; staged gas-first rollout; grid integration (Liberty Chorus) Long-dated nuclear path; staged execution
Logistics innovationN/AN/ASand slurry pipe system field trial; reduce dust, costs, road maintenance Emerging efficiency lever

Management Commentary

  • “Liberty delivered an exceptional second quarter…record efficiencies and increased utilization that more than offset industry pricing headwinds” — Ron Gusek, CEO .
  • “We are excited to bolster our technology leadership with rapid progress on our cutting-edge digiPrime…industry’s first variable speed natural gas reciprocating engine” .
  • “We also completed the successful field trial of the industry’s first last-mile sand slurry system…reduce costs, improve delivery reliability, and decrease dust, emissions and road maintenance” .
  • “Amidst market pressures and near-term reductions in customer activity, we are planning to modestly reduce our deployed fleet count and reposition this horsepower to support our expanded simulfrac offering” .
  • CFO: “We…expect third quarter revenue and EBITDA to soften sequentially…withdrawing our full-year EBITDA target range” .
  • CFO: “We now expect total capital expenditures for 2025 of approximately $575 million, approximately $75 million less than planned” .

Q&A Highlights

  • Near-term trajectory: Management expects mid-single-digit activity reductions and low single-digit pricing declines; Q3 softness followed by normal seasonality in Q4, with clarity to come next quarter .
  • Power growth and timelines: Three sites to begin asset deployment in H2 2025; meaningful data center revenues around 2027, nuclear baseload integration in early 2030s; flexible grid interaction strategy (Liberty Chorus) .
  • Simul‑frac economics: Consolidating horsepower into fewer, larger fleets improves per-fleet profitability and reduces client cost per lateral foot — “win‑win” .
  • Supply chain resiliency: Ability to materially expand 2026 power generation order book; confidence in ~12‑month delivery times from partners .
  • Regional mix: Overweight Haynesville supports stable gas activity; tailwind relative to Permian sand market softness .
  • Capital allocation: Refrained from share repurchases in Q2 amid volatility; opportunistic stance remains, balanced against growth investments to expand long‑term EPS power .

Estimates Context

  • Q2 2025 results vs consensus: Revenue beat ($1.0425B actual vs $1.00697B*); Adjusted/Primary EPS miss ($0.12 actual vs $0.135*); Adjusted EBITDA roughly inline to modest beat ($180.8M company vs $176.5M*) .
  • Forward consensus (context): Q3 2025 consensus revenue ~$964.8M*, EPS ~–$0.0746*, EBITDA ~$129.8M*; Q4 2025 consensus revenue ~$860.1M*, EPS ~–$0.2177*, EBITDA ~$94.8M* (reflecting expected sequential softness).
    Values retrieved from S&P Global    .

Key Takeaways for Investors

  • Near-term softness: Management withdrew full-year EBITDA guidance and expects Q3 revenue/EBITDA to decline sequentially; pricing headwinds and white space likely drive estimate cuts .
  • Operational resilience: Sequential revenue/Adjusted EBITDA growth despite industry declines underscores Liberty’s efficiency and utilization advantages; net debt fell to ~$140M and liquidity improved to $276M .
  • Technology moat: DigiPrime variable-speed natural gas engine and PropX sand slurry system enhance efficiency, reduce emissions/costs, and support premium pricing for next‑gen fleets .
  • Power optionality: Oklo alliance plus Range/Imperial (PA) and AltitudeX (CO) projects broaden long-term power revenue pipeline; early deployments begin H2 2025 with scalable modular approach .
  • Capital discipline: 2025 CapEx cut to ~$575M focuses spend on highest-return completions and staged power growth; dividend maintained at $0.08/share .
  • Trading setup: Expect near-term estimate revisions and cautious sentiment on services pricing; watch for Q3 cadence, pricing stabilization, and execution on simul‑frac redeployment as potential stock catalysts .
  • Medium-term thesis: Tech-led efficiency, vertical integration, and diversified power solutions position Liberty to gain share through the cycle and monetize rising U.S. power demand from data centers and industrial electrification .