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Liberty Energy Inc. (LBRT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue fell to $944M and GAAP diluted EPS to $0.31 amid softer industry activity and pricing pressure on conventional fleets; Adjusted EBITDA declined to $156M with management calling Q4 the trough and guiding to a modest sequential uptick in Q1 2025 .
  • 2025 outlook: Adjusted EBITDA guided to $700–$750M; total capex ~$650M (completions ~$450M including ~$175M maintenance; power ~$200M); expected 2025 effective tax rate ~22%; management sees room for pricing improvement as activity normalizes through the year .
  • Strategic pivot accelerating: Liberty Power Innovations (LPI) to expand beyond oilfield with 150 MW power generation received by end-2025 and another ~200 MW by end-2026; 400 MW total already in the supply chain; early deployments to merchant power, EV hubs, and C&I/data centers begin later in 2025 .
  • Balance sheet and capital returns: $20M cash, $191M ABL borrowings, $135M liquidity at 12/31/24; Q4 buybacks of ~$28M (1.0% of shares) and dividend raised 14% to $0.08 per share; remaining repurchase authorization ~$294M .
  • Estimate context: S&P Global consensus estimates were unavailable at the time of analysis (API limit). Beat/miss vs. Street cannot be assessed; tables reflect reported results only. Wall Street consensus from S&P Global unavailable.

What Went Well and What Went Wrong

What Went Well

  • Technology leadership and operational execution: record 7,143 pumping hours on a single fleet (≈600 hours/month) and continued rollout of digiTechnologies for efficiency and emissions gains .
  • LPI power growth vector: plans to take delivery of ~400 MW by end-2026 with initial 2025 deployments; positioned for data centers, merchant power, EV charging, and microgrids; management targets mid-to-high-teens CROCI over time in power .
  • Capital returns and dividend increase: Q4 buybacks of 1.0% of shares ($28M) and dividend raised to $0.08; cumulative 15.1% of shares retired since July 2022; $294M authorization remaining .

What Went Wrong

  • Pricing and activity softness: sequential revenue (-17%) and Adjusted EBITDA (-37%) declines as year-end activity slowed and near-term price pressure hit conventional fleets; management characterized Q4 as the trough .
  • Mix and cost absorption headwinds: CFO cited market headwinds, cost absorption, and partial-quarter impact from two fleets as drivers of Q4 step-down in profitability .
  • Liquidity tighter q/q: liquidity decreased to $135M with ABL draws up to $191M and capex elevated at $188M in Q4; cash ended at $20M .

Financial Results

Quarterly performance and trend (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M)$1,159.9 $1,138.6 $943.6
GAAP Diluted EPS ($)$0.64 $0.44 $0.31
Net Income ($M)$108.4 $73.8 $51.9
Adjusted EBITDA ($M)$273.3 $247.8 $155.7

YoY and sequential comps (oldest → newest)

MetricQ4 2023Q3 2024Q4 2024
Revenue ($M)$1,075.0 $1,138.6 $943.6
GAAP Diluted EPS ($)$0.54 $0.44 $0.31
Net Income ($M)$92.4 $73.8 $51.9
Adjusted EBITDA ($M)$252.5 $247.8 $155.7

Margins (calculated from reported values; oldest → newest)

MarginQ4 2023Q3 2024Q4 2024
Net Income Margin %8.6% (92.4/1,075.0) 6.5% (73.8/1,138.6) 5.5% (51.9/943.6)
Adjusted EBITDA Margin %23.5% (252.5/1,075.0) 21.8% (247.8/1,138.6) 16.5% (155.7/943.6)

Notes: Margins are computed from cited revenue and profit figures.

KPIs and balance sheet (as of/for Q4 2024)

  • Record pumping hours: 7,143 hours on a single fleet in 2024; ~600 hours/month average .
  • LPI/power progress: ~130 MW successfully deployed (primarily for completions); ~400 MW additional to be received by end-2026 .
  • Shareholder returns: Q4 repurchases $28M (1.0% of shares) and dividend $0.08/share; cumulative 15.1% retired since July 2022; $294M authorization remaining .
  • Cash/debt/liquidity: $20M cash; $191M ABL borrowings; total liquidity $135M at 12/31/24 .
  • Capex: Q4 net capex $188.1M; FY24 capex $627.1M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025Not providedModest sequential increase vs Q4 2024 New qualitative
Adjusted EBITDAQ1 2025Not providedModest sequential increase vs Q4 2024 New qualitative
Adjusted EBITDAFY 2025Not provided$700–$750M New quantitative
Total CapexFY 2025Completions capex to decline in 2025 (qualitative) ~$650M total; ~$450M completions (incl. ~$175M maintenance) and ~$200M power Updated/specified
Power MW deliveries2025–2026400 MW by end-2026 (program announced) ~150 MW received by end-2025; +~200 MW by end-2026 (all 400 MW scheduled in supply chain) Timing detail
Effective tax rateFY 2025~23–24% in 2024 ~22% of pretax income; cash taxes 1–2% higher Updated
DividendOngoingRaised to $0.08 in Q4 2024 $0.08 declared for Mar 20, 2025 (record Mar 6) Maintained at new rate

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Pricing & cycleGradual softening since 2022 peak; Tier 2 under greatest pressure; maintain discipline Q4 trough; near-term pricing pressure on conventional fleets; expect improvement as 2025 progresses Troughing, cautiously improving
Efficiency/AI & digiTechRecord pumping/stage counts; Sentinel logistics reduced downtime 90%, trucking/time by ~35% Continued operational records; digiPrime variable-speed engine with Cummins to enhance efficiency and maintenance profile Advancing
LPI/power strategyGas molecule management, mobile power for frac; early steps to expand outside oilfield ~400 MW in supply chain; 150 MW 2025, 200 MW 2026; targets merchant power, EV hubs, data centers; modular blocks (10–12 MW; 25 MW) Scaling up
Demand backdropH2 2024 modest softness; 2025 activity to support flattish production; rig counts stabilizing Lateral footage expected ~flat YoY; oil steady, gas fundamentals improving; horsepower balance tighter than fleet counts imply Stabilizing
Contracting/returnsFocus on dedicated relationships; performance-based elements; capital returns ongoing Power returns targeted mid-to-high-teens; mix of 2–8 yr and 15–20 yr contracts; share repurchases opportunistic Structured for durability

Management Commentary

  • “Frac markets reached a trough at the end of 2024... In the first quarter, we anticipate a modest sequential increase in revenue and Adjusted EBITDA.” – Ron Gusek (CEO) .
  • “We expect adjusted EBITDA [in 2025] will be in the $700 million to $750 million range… total capital expenditures will be approximately $650 million in 2025.” – Michael Stock (CFO) .
  • On power strategy: “We are uniquely positioned to rapidly deploy distributed modular power solutions... By the end of 2026, we expect to take delivery of an incremental 400 MW” – Ron Gusek .
  • On pricing: “This very much feels like the trough... pricing for next-generation assets [is] very, very resilient.” – Management Q&A .
  • On Cummins partnership: variable-speed natural gas engine to power digiPrime, with longer overhaul intervals and lower maintenance vs. diesel – management and partner comments .

Q&A Highlights

  • Pricing trough and fleet mix: Conventional/Tier 2 fleets saw pricing pressure into 2025 RFPs; next-gen digi platforms held up better; management views the market at/near trough with potential improvement later in 2025 .
  • Power business returns and contracting: Targeting mid-to-high-teens returns; contract durations range from 2–8 years (bridge/merchant) to 15–20+ years (firm PPAs for data centers) with portfolio balance by risk/term .
  • 2025 outlook specifics: EBITDA $700–$750M; completions capex ~$450M (including ~$175M maintenance) with 4–5 digiFleets, power capex ~$200M; flexibility to adjust capex to demand .
  • Merchant power and modular architecture: Modular 10–12 MW and 25 MW reciprocating blocks enable fast deployment; potential to capture spark spread and repurpose assets as grid arrives .
  • Technology/maintenance: Gas reciprocating engines projected to have 2–3x time between overhauls vs diesel; lower maintenance costs anticipated .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and Q1 2025 were unavailable due to data access limits at time of analysis; as a result, we cannot determine beat/miss vs. Street for revenue, EPS, or EBITDA. Wall Street consensus from S&P Global unavailable.

Key Takeaways for Investors

  • Near-term setup: Q4 likely marked the trough; management guides to modest sequential improvement in Q1, with potential pricing firmer later in 2025 as activity stabilizes and horsepower balances tighten—benefiting high-quality, next-gen fleets .
  • Medium-term thesis: Diversification into modular power (merchant/C&I/data centers) with ~400 MW in the supply chain and deliveries beginning 2025 adds a second earnings pillar with targeted mid-to-high-teens returns .
  • Capital allocation: 2025 capex ~$650M balances maintenance/next-gen fleet refresh and power growth; ongoing buybacks and $0.08 dividend provide support; watch liquidity as capex remains elevated in H1 .
  • Profitability drivers: Continued efficiency gains from digiTechnologies, AI-enabled logistics (Sentinel), and vertical integration (LPI) should support margins even in a flattish activity environment .
  • Watch items/catalysts: (1) Announcements of specific power contracts/deployments, (2) frac pricing/rig trends into Q2–Q3, (3) mix shift toward simul/tri-mul frac and next-gen fleets, (4) updates on Cummins variable-speed deployment .
  • Risk factors: Prolonged pricing pressure on conventional fleets, slower-than-expected power project ramp, and macro/oil & gas volatility could weigh on 2025 EBITDA realization .

Other Relevant Press Releases in Q4 Window

  • Dividend: Board declared $0.08 per share dividend payable March 20, 2025 (record March 6) .
  • Cummins partnership: Industry-first variable-speed, large-displacement natural gas engine for digiPrime, with maintenance and fuel-efficiency advantages .