ProFrac Holding Corp.

Greetings and welcome to Profract's first quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Messina, Director of Finance. Thank you. 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 first quarter ended March 31st, 2025. With me today are Matt Wilkes, Executive Chairman, Ladd Wilkes, Chief Executive Officer, and Austin Harbour, Chief Financial Officer. Following my remarks, management will provide high-level commentary on the operational and financial highlights of the quarter 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 release. Please note that information reported on this call speaks only as of today, May 7, 2025. And therefore, you are advised that any time-sensitive information may no longer be accurate at the time of any subsequent 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 Profrex 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 filings 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 FLOTEC. 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 at sec.gov and on the company's website. And now, I would like to turn the call over to Profract's Executive Chairman, Mr. Matt Wilkes.

Thank you, Michael, and good morning to all. I'll begin with brief remarks, turn it to Ladd to elaborate on segment performance, and then Austin will run through our first quarter financials. In the first quarter, Profract delivered strong results that significantly exceeded consensus estimates. Compared to the fourth quarter, revenue grew 32% to $600 million, while adjusted EBITDA increased 83% to $130 million. Our results demonstrate the resilience of our differentiated business model, including in-house R&D, manufacturing and maintenance capabilities, our asset management platform, as well as integrated solutions. These differentiators underpin our ability to deliver top-tier reliable and safe solutions to our customers. In the first quarter, we hit yet again a new record in total pumping hours as well as average pumping hours per fleet as we were able to rapidly redeploy fleets and execute in the field as activity ramped up. Our asset management platform has been a critical factor underpinning our success. Through standardized designs and streamlined operations, we were able to promptly and cost effectively maintain and upgrade our pressure pumping fleet to deliver consistent, reliable equipment that meets rigorous safety standards and job-specific requirements. Innovation remains at the core of our business, and we are encouraged by the results of tests conducted during the first quarter on our ProPILOT automation software for hydraulic traction. Especially unique to our technology is that ProPILOT requires zero manual startup for the initial stage. you just hit play. ProPILOT is a groundbreaking autofrac platform that benefits our equipment and crews in various ways. We expect ProPILOT to drastically reduce the need for human intervention by automatically recommending courses of action to adhere to job designs. By our measure, ProPILOT eliminates the majority of the human decision points involved in frac operations. The technology factors in the specific pumps down to their individual components and automatically adjust recommendations based on mechanical feedback, fleet configuration, OEM ratings, as well as wear and tear on the components, which we believe will enable us to extend the useful lives and further minimize failures of our equipment. This system also enables us to further optimize natural gas substitution rates to deliver fuel savings for our customers. In April, we implemented ProPILOT's Autofrac functionality into a fleet in South Texas with great success. Next month, we plan to deploy it to another fleet in West Texas. We remain committed to delivering cutting-edge solutions and setting industry benchmarks that create measurable value for our customers. Last week, we co-announced the completion of a transaction with Flowtech that included the sale of innovative mobile power generation solutions. This transaction represents an evolutionary step forward in our business relationship with Flowtech. By leveraging cutting-edge intellectual property, these solutions provide industry-leading gas quality assurance and asset integrity to customers while providing a platform for future growth. We believe assets that consume gas can benefit from Flowtech's technology, especially applications that consume volatile gas molecules. For example, power generation, compression, refining, chemical plants, and flaring represent a few of the near-term adjacent applications we've identified. We remain focused on proactive customer engagement. Simply put, our priority is partnering with operators who recognize our efficient, scalable, offering enabling long-term margin-enhancing relationships with key customers. Pivoting briefly to profit, on our last call, we spoke constructively about the trends in this segment. The changes we implemented late last year and through the first quarter drove significant volume gains in the first quarter. We expect volumes in the second quarter to slightly decline compared to the first quarter. However, we anticipate that we will be able to partially offset the declines in sales volumes with favorable average sales prices and increased logistics activity. Further, our position in the Haynesville is a source of potential upside in the back half of the year. More on this when Ladd speaks. Turning to Livewire Power, our power generation business continues to make progress. Since its launch in the fourth quarter, the business has been executing on its initial objective of supporting our internal operations while delivering capabilities for future growth. We remain excited about the long-term potential of this business and the industry's power generation needs continue to evolve. To put a fine point on my remarks so far, we leveraged our strengths in an improving North American completions market to deliver first quarter results that I am proud of and to advance key strategic initiatives. I want to take this moment to thank all of our employees for their dedication and effort in achieving these results. All that said, market dynamics shifted in the early days of the second quarter. Economic uncertainty from tariffs, along with OPEC's announcement to increase oil production beginning in April, had an immediate impact on commodity prices, and more importantly, on the outlook for prices, activity, and spending. Ladd will provide more detail on how these dynamics are impacting our business, but I'd like to first set the stage with some high-level observations. Importantly, as we entered this period of uncertainty, industry-wide drilling and completions activity was consistent with maintaining relatively flat production, meaning any sharp or prolonged slowdown in activity would lead to production declines. The primary challenge facing operators today is increased cost inputs from tariffs and uncertainty about where commodity prices will trend amid persistent concerns about a potential economic slowdown and softening global demand, coupled with increased supply from OPEC. We are actively engaging with customers and vendors to navigate through this cycle, including tariff mitigation strategies in addition to increasing operating efficiency. Of note, we're observing varied responses across the value chain. The responses by operators to current market conditions remain highly individualized and shaped by factors including acreage portfolios, regional and commodity exposure, cash return commitments, hedge positions, and overall corporate strategy. Early feedback from our customers indicates that activity will decline in the second quarter relative to the first quarter as fleets and earlier programs largely targeting oil production abate. Those that are reducing activity maintain the flexibility to quickly resume operations when market conditions improve. Some operators are maintaining relatively steady activity levels, while others have adopted a more measured wait and see approach, particularly with marginal projects that might deliver better returns in an improved pricing environment. Meanwhile, The natural gas market appears to be holding up relatively well. Secular tailwinds driven by growing AI-related power demand and continued strength in LNG demand are supporting the potential for increased activity in the second half of 2025, which Ladd will also expand on shortly. We're optimistic about the opportunity in the Haynesville, particularly given our profit position in that region. Regardless of the market backdrop, We continue to take a disciplined approach to managing our asset portfolio and capital allocation by prioritizing economic returns, shoring up free cash flow, safeguarding liquidity, and prudently managing both debt, service, and working capital. Further, in response to the evolving market conditions, we're implementing strategic adjustments to our capital allocation plan to maximize cash flow generation, while ensuring our customers continue to receive the highest quality equipment and service enabled by our vertical integration. Vlad will elaborate on these two points shortly, but before turning the call over to him, I'd like to wrap up with the following summary remarks. We delivered strong Q1 results, exceeding consensus estimates with revenue growth of 32% and increased adjusted EBITDA by 83% compared to the fourth quarter. We achieved a new record in operating efficiency thanks to our best-in-class crews and differentiated business model utilizing in-house R&D, manufacturing, and maintenance capabilities and our asset management platform. We completed a strategic transaction with Flowtech, enabling a platform for growth, leveraging cutting-edge gas quality assurance and asset integrity solutions. We are observing varied customer responses to economic uncertainty, and ultimately what operators want to see is more clarity on the trajectory of commodity prices, reliability of cost inputs and tariffs, and less uncertainty regarding supply and demand dynamics. Natural gas remains a relatively bright spot, which we believe could provide some upside in the second half of the year. We saw positive momentum in profit with significant volume gains in Q1. And finally, we remain prudent and diligent in capital allocation and are actively evaluating expenditures across the organization with flexibility to adjust without compromising service quality. Lad, over to you.