ProFrac Holding Corp.

Greetings and welcome to the ProFRAC fourth quarter and year-end 2024 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Michael Messina, Director of Finance. Please go ahead.

Thank you, operator. Good morning, everyone. Thank you for joining us for ProFRAC Holding Corp's conference call and webcast to review our results for the fourth quarter and year ended December 31st, 2024. With me today are Matt Wilkes, Executive Chairman, Ladd Wilkes, Chief Executive Officer, and Austin Harbor, Chief Financial Officer. Following my remarks, management will provide high-level commentary on the operational and financial highlights of the quarter and year before opening up the call to your questions. A replay of today's call will be available by webcast on the company's website at pfholdingscorp.com. More information on how to access the replay is included in the company's earnings press release. Please note that the information recorded on this call speaks only as of today, March 6, 2025, and therefore, you are advised that any time-sensitive information may no longer be accurate at the time of any subsequent replay, listening, or transcript reading. Also, comments on this call may contain forward-looking statements within the meaning of the United States federal securities laws, including management's expectations of future financial and business performance. These forward-looking statements reflect the current views of Profrex management and are not guarantees of future performance. Various risks, uncertainties, and contingencies could cause actual results, performance, or achievements to differ materially from those expressed in management's forward-looking statements. The listener or reader is encouraged to read Profract's Form 10-K and other filings with the Securities and Exchange Commission, which can be found at sec.gov or on the company's investor relations website section under the SEC's filing tab to understand those risks uncertainties, and contingencies. The comments today also include certain non-GAAP financial measures, as well as other adjusted figures to exclude the contribution of flow tech. Additional details and reconciliations to the most directly comparable, consolidated, and GAAP financial measures are included in the quarterly earnings press release, which can be found on the company's website. And now, I would like to turn the call over to Profrek Executive Chairman, Mr. Matt Wilkes.

Thanks, Michael, and good morning, everyone. I'll start with some brief remarks. We'll elaborate on the performance of our subsidiaries, and then Austin will walk through our financial performance. Profract's leadership across the completion value chain consistently positions us to achieve strong financial and operational performance. We continue to execute our differentiated commercial strategy by partnering with operators who prioritize integrated, highly efficient solutions at scale. As the market evolves and operators consolidate, our ability to provide comprehensive solutions at the pad enables us to capitalize on new opportunities in the most active U.S. basins. In stimulation services, our emphasis on improving service quality coupled with our internal R&D, manufacturing, and maintenance capabilities has allowed us to efficiently maintain and upgrade our pressure pumping fleet and drive commercial innovation. In essence, every fleet we deploy must consistently meet our rigorous quality and reliability standards. Excellence in operations is also underpinned by having an efficient maintenance program. To this end, our asset management platform, which prioritizes quality control and centralized maintenance, is making a big difference in the quality and economics of our pumping operations. Black will speak more to this, but at a high level, our integrated asset management program is designed to deliver field-ready equipment that is engineered for safety and reliability, purpose-built to meet every job requirement, and standardized in both appearance and operation to ensure that our equipment meets the highest industry standards. On our last call, I discussed record efficiencies in our simulation business. highlighting the best-in-class execution we see from our employees in the field every day. As Ladd will discuss, we have already seen a sizable improvement in activity in our simulation business since the end of 2024, and I am confident that we will be able to surpass our Q3 2024 efficiency per fleet record in the coming months. Already in January, we achieved new record efficiencies for a single month, despite adding a number of incremental fleets in operation and despite challenging weather conditions in certain regions. In recent earnings calls, we briefly discussed the growing and rapidly evolving opportunity in the power generation market. Through acquisitions and our own organic growth, we possess extensive experience in running electric frack operations and managing power in the field. Having an in-house PowerGen business is yet another logical extension of the holistic, integrated platform we offer. Today, we are excited to introduce this new business venture, LiveWire Power. LiveWire began operations in the fourth quarter and marks a significant step forward in our power generation strategy, focusing on the growing demand for power in remote locations driven by advances in electric frack technology. EFRAC technology requires temporary yet substantial power generation, a need not adequately met by existing electrical infrastructure. Distributed power generation will be a key component of our strategy going forward, offering a reliable and scalable solution for oilfield services companies and other industrial users. I'll let Ladd elaborate on LavaWire shortly. Looking to the future, We continue to invest in our next generation pumps and novel software platforms to stay ahead of the curve. Our commitment to innovation ensures we remain at the forefront of the industry, delivering superior performance and value to our customers. In the fourth quarter, Protrac delivered revenue of $455 million and adjusted EBITDA of $71 million. As others in the industry have noted, the North American completions industry faced typical fourth-quarter challenges, including budget constraints, holiday shutdowns, and adverse weather conditions. For the full year of 2024, we achieved revenue of $2.19 billion and adjusted EBITDA of $501 million against a backdrop of competitive pressures from softening activity in the North American oilfield services market. Keeping with the theme of driving efficiencies in profit production, We have made strategic improvements both operationally and commercially that we expect to drive significant gains. This business has a very high degree of operating leverage, and we anticipate increased volumes and profitability in 2025. Beyond driving gains through our own initiatives, we have reason to be cautiously optimistic that the market may provide favorable tailwinds. By now, you have likely heard of the potential for increased activity in the Hainesville. the largest LNG basin in the U.S., driven by improved gas prices and the region's close proximity to LNG export terminals in the Gulf of America. As a reminder, we have the largest profit footprint serving the Hainesville with 10 million tons per annum of capacity across four mines. Our scale uniquely positions Alpine to take advantage of an inflection in natural gas completions activity, but importantly, I want to note that improved results at Alpine is not predicated on a ramp in Hainesville activity. As we maneuver the competitive South and West Texas markets, we expect to improve the results in those regions as well, driven by our initiatives to further optimize operations and potentially some modest improvements to pricing as we progress through the year. We remain committed to a disciplined approach to managing our asset portfolio and capital allocation prioritizing returns and enhancing our free cash flow, maximizing liquidity, and effectively managing debt, service, and working capital. Of note, we generated $54 million of free cash flow in Q4 and $185 million in total in 2024. Before turning the call to Ladd, I'd like to wrap up with the following summary remarks. In Q4, ProFRAC delivered $455 million in revenue and $71 million in adjusted EBITDA, despite pronounced fourth quarter budget exhaustion, holiday shutdowns, and adverse weather. For the full year of 2024, we achieved $2.19 billion in revenue and $501 million in adjusted EBITDA, demonstrating a resilient model and successful navigation of competitive pressures in the North American oilfield services market. Our leadership in the completion value chain has positioned us to consistently drive strong financial and operational performance. We continue to partner with operators who prioritize integrated, highly efficient solutions. Our focus on service quality, internal R&D, and efficient maintenance through our asset management platform continues to enhance our pressure pumping operations. We are building upon our leadership in electric frac operations with our new power management venture. live wire power, marking a significant step forward. We will continue to invest in next-generation technologies that help us maintain our leadership position. In prop and production, strategic initiatives are expected to drive improvement in 2025, and our footprint in the Haynesville offers differentiated exposure to increased natural gas completion activity in the largest gas-producing region proximal to LNG export facilities along the Gulf Coast. And finally, we have strategically positioned Profract to create long-term value for our stakeholders by providing the most efficient solutions through vertically integrated in-basin scaled offerings, exceptional service, and an unwavering focus on generating free cash flow through the cycle. This success is already evident and will continue as we move through 2025 and beyond. And with that, I'll turn it over to Ladd.