ProFrac Holding Corp.

Greetings and welcome to the ProFact 2Q25 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require 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, sir. You may begin.

Thank you, operator. Good morning, everyone. Thank you for joining us for ProFract Holding Corp's conference call and webcast to review our results for the second quarter ended June 30th, 2025. With me today are Matt Wilkes, Executive Chairman, Matt 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 made 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, August 7, 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 pro-fractice 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 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 flow tech. Additional details and reconciliations for 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 Wilts.

Thank you, Michael, and good morning to all. I'll begin with brief remarks, then turn it over to Ladd to elaborate on segment performance and key trends. And Austin will run through our second quarter financials. Q2 performance unfolded largely as anticipated based on the outlook we provided during our May earnings call. As we discussed, The market dynamics that emerged early in the quarter, particularly the sharp decline in commodity prices in early April, led operators across our customer base to reassess their near-term completion requirements, with several adjusting their activity levels to varying degrees. That said, we are encouraged to see that market conditions have modestly improved compared to our Q2 exit level. Commodity prices have firmed since early Q2. Some crews have gone back to work, and we are having healthy dialogue with our customers around 2026 planning. This aligns with our previous observation that operators who reduce activity maintain the flexibility to quickly resume operations when conditions improve. Importantly, we continue to believe that today's hydraulic fracturing market dynamics create a compelling setup for the future. With industry participants exercising capital discipline in response to current economic conditions and uncertainty, we see the potential for meaningful tightening in supply demand should drilling and completion activity accelerate in response to improved commodity fundamentals in 2026. Turning to our core competitive advantages, the controllable factors that truly set us apart in the marketplace. Our vertically integrated manufacturing capabilities, combined with our sophisticated asset management platform, represent fundamental differentiators that provide both strategic agility and tangible financial value. Our asset management program is generating exceptional results. The strategic deployment of our six fleets under this program delivered our most efficient operational quarter on record in Q1 in terms of fleet efficiency and total maintenance costs. This integrated approach proved particularly valuable during recent market volatility with our ability to dynamically redeploy assets and adjust maintenance schedules, providing crucial operational flexibility. Despite the fact that demands on our equipment have significantly grown over time, our asset reliability and pumping performance are the most efficient they've ever been, enabling us to extend up time on our equipment and reduce overall failures. We believe this is directly attributable to our best-in-class personnel, in addition to our asset management and frac automation, both of which were internally conceptualized, designed, developed, and successfully implemented. Our in-house manufacturing platform delivers substantial cost advantages, enabling us to build new fleets, upgrade legacy equipment to next-generation specifications, and standardized previously acquired assets, all at costs below third-party alternatives. This internal capability spans a significant portion of our equipment portfolio, providing control over standards for quality, uniformity, and deployment timelines. However, our competitive moat extends well beyond repair and maintenance and manufacturing. Our technology leadership continues to drive measurable operational improvements and sustainable competitive advantages. Our ProPILOT platform exemplifies this commitment, delivering transformational improvements in automated fracturing operations. In the early days of ProPILOT 1.0, The platform immediately provided significant operational benefits in frac automation, namely by enabling automated pump control and frac scheduling. With automated pump control functionality, we were able to quickly reduce the manual inputs required to complete the well, enhancing decision making and allowing for faster stage completions. The frac scheduler functionality was also an early game changer for the platform, integrating completion designs into the automation software to ensure stages are consistently completed to the design. But we didn't stop there and are excited about the further evolution of the ProPILOT platform to its next phase, ProPILOT 2.0. With 2.0, a number of new functionalities have improved the platform to enhance completion automation track operations, including horsepower optimization, dual fuel optimization, interlocking load balancing, and one-click fully automated stage completions. In summary, the expanded functionality of ProPILOT 2.0 drives productivity higher by automatically maintaining pumps at peak performance and efficiency while also minimizing wear and tear on equipment. It can automatically optimize fuel economy, that's total fuel and gas substitution rates, 2.0's automated load balancing system monitors pump health in real time, detects anomalies, delivers and executes proactive recommendations to maintain steady performance, and prevents rate fluctuations. Combined, these functionalities enable fully automated frac operations, eliminating the guesswork associated with diagnosing equipment and well feedback issues. The benefits of ProPILOT 2.0 are tangible, measurable, and benefit both ProPRAC and our customers. New and exciting expansions of the platform and ProPILOT utility are also underway, which we plan to roll out in the near future. Simply put, intelligent automation delivers both speed and operational simplicity while driving superior well results, enhanced cost control, increased uptime, and greater reliability. Our innovation pipeline runs deep, Our IoTeX platform transforms operational intelligence by consolidating multi-source data streams for real-time edge decisions while enabling cloud-based analytics and machine learning capabilities. This integration optimizes data utilization, streamlines workflows, and drives cost reductions across our entire operation. Further, through Flowtech, the JP3 technology continues its expansion. With VARACS analyzers attracting strong interest across market segments, from independent producers to multinational corporations with global refinery operations, we believe our ability to develop, test, and deploy advanced technologies in-house at a fraction of third-party costs and on accelerated timelines provides us with a decisive competitive edge. Turning to profit production, we see opportunities for growth, and improved performance across our key operating regions. We maintain a strong market position in the Hainesville region where we offer dry and damp sand and anticipate that increased natural gas activity will drive improved performance. In addition, our ongoing throughput improvements in South Texas position us well to meet potential demand growth. Moving to our strategic initiatives and other differentiating value creators, During the second quarter, we entered into an innovative partnership with Flowtech Industries. This transaction represents far more than a simple asset sale. By transferring what was essentially a cost center within Profract to Flowtech, where these assets can be leveraged across a much broader market, we believe we have unlocked significant value that the market simply didn't recognize within our structure. These assets, which include patented gas monitoring and conditioning technology, formed the foundation of Flowtech's new PowerTech division. We received immediate financial benefits, including over 60% of the pro forma fully diluted equity ownership of Flowtech Industries. This gives us substantial exposure to a company that is levered to what we believe is a $3 to $6 billion global addressable market for gas quality management, spending oil and gas, data centers, refineries, and other natural gas applications. This partnership transforms assets that were previously limited to our internal operations into a scalable third-party business model that can serve the broader energy infrastructure market. It's a perfect example of how we're thinking creatively about capital allocation and value creation for our shareholders. Finally, I want to touch on our power generation strategy, which positions us uniquely in the rapidly expanding data center and power infrastructure market. Unlike traditional equipment rental models, our approach focuses on bespoke, holistic power and land opportunities that leverage our core competencies in project execution and infrastructure development. Our competitive advantage centers on our ability to accelerate access to electrons at scale. Lab will provide more color on this as well as the other things I just touched on. In Q2, we generated revenues of $502 million, adjusted EBITDA of $79 million, and free cash flow of $54 million. This compares with revenues of $600 million and adjusted EBITDA of $130 million and free cash flow of negative $14 million in Q1. While these results are a product of the market headwinds we experienced, they also reflect our ability to maintain operational excellence and generate meaningful free cash flow despite challenging conditions. In summary, Q2 results, including generating $54 million of free cash flow, largely aligned with our May outlook as activity was negatively impacted by both macroeconomic and commodity price volatility. Recent signs are encouraging as crews have returned to work and customer dialogue around future planning for 2026 intensifies. We delivered strong operational performance through strategic asset allocation with our vertically integrated manufacturing capabilities and sophisticated asset management platform providing crucial flexibility during periods of market volatility. Our technology leadership continues to deliver measurable competitive advantages with our pro-pilot platform driving breakthrough advances in track automation. Our innovative partnership with Flowtech unlocked immediate value while positioning us with significant ownership in a company levered to a multi-billion dollar global addressable market for gas quality management and asset integrity solutions. We continue to see opportunities in profit production, in particular in the Hainesville region where we expect increased natural gas activity to drive improved performance. Further, strategic investments position as well for the South Texas demand. And finally, we maintain our disciplined approach to capital allocation, while positioning ourselves for potential tightening in the market in early 2026. Vlad, over to you.