Flotek Industries, Inc.

Good morning, ladies and gentlemen, and welcome to Flowtech Industries' fourth quarter and fourth year 2024 earnings conference call. At this time, note that all lines are in the listen-only mode. Following the presentation, we will conduct a question and answer session. And if at any time during this call you require immediate assistance, please press star zero for an operator. Also note that the call is being recorded on Tuesday, March 11, 2025. And now I would like to turn the conference over to Mike Cotelli, Director of Finance and Vista Relations. Please go ahead, sir.

Thank you, and good morning, everyone. We appreciate your participation in Flowtech's fourth quarter and full year 2024 earnings conference call. Joining me on the call today are Ryan Ezell, Chief Executive Officer, and Bon Clement, Chief Financial Officer. First, we will provide prepared remarks concerning our business operations and financial results for the fourth quarter and full year 2024. Following that, we will open up the call for any questions you have. Flow Tech's fourth quarter and full year 2024 financial and operating results press release was issued yesterday afternoon. We also posted an updated 2024 earnings presentation that we will be referencing on today's call. These can all be found on the investor relations section of our website. In addition, today's call is being webcast, and a replay will be available on our website following the conclusion of this call. Please note that the comments made on today's call regarding projections or expectations for future events are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with SEC. Please refer to the reconciliations provided in the earnings press release and investor presentation as management will be discussing non-GAAP metrics on this call. With that, I will turn the call over to our CEO, Ryan Azell.

Thank you, Mike, and good morning. We appreciate everyone's interest in Flowtech and for joining us today as we discuss our fourth quarter and full year 2024 operational and financial results. The closing months of the year brought industry-wide challenges, but the Flowtech team remained steadfast on the execution of our corporate strategy, delivering the strongest quarter since 2017. I'm proud of the organization's laser focus on elevating our performance to increase market share and profitability growth in both of our complementary business segments in the face of such market headwinds. We remain unwavering in our commitment to create value for shareholders through continuous improvement of our processes, market share expansion, and innovative products and services. and maintaining the trend of delivering strong results that outpace the market as we head into 2025. With that, I'd like to turn to slide five and touch on some key highlights for the quarter and the year that Bon will discuss in detail in just a moment. With a backdrop of weaker North American oilfield service activity, Q4 2024 total revenues rose 20% versus Q4 of 2023. This is led by a 21% jump in external customer revenue, highlighting our ability to execute and the continued progress we've made in capturing market share through the deployment of differentiated chemistry and data solutions. This is quite an accomplishment considering the fact that the active frac fleet counts declined over 25% from the peak of the first quarter of 2024. It's also important to note that our Q4 external customer revenue was the highest in the last five years, with our international chemistry business making its largest quarterly contribution in the last 10 years. Our data analytics service revenue grew 124% versus Q4 2023 and 44% versus the full year of 2023. Additionally, we completed the development of three new products within our data analytics segment in the second half of 2024, which results in opening access to a future total addressable market of more than $500 million. These include our new EXPECT custody transfer units, Raman measurement devices, and VeriCal analyzers for flare monitoring. In Q4 2024, net income was $4.4 million. And adjusted EBITDA was $7 million, up 111% and 78% respectively, versus Q4 of 2023. Full year, 2024 adjusted EBITDA reached $20.3 million, up $18.5 million from 2023, and being the highest since 2017. This exceeded our guidance of $18.5 million by 10%. Float Tech's 2024 stock performance ranked in the top three out of all old field service stocks. Delivering on our commitment to enhancing shareholder value, we saw a 140% improvement in our stock price. And most importantly, all of these achievements were accomplished with zero lost time incidents in the field of operations. Now I'd like to take a moment to thank our employees for their hard work and commitment to safety and service quality in achieving these outstanding results. I continue to be excited about the future of Flowtech as we expand our position as a technology leader, driving innovation and delivering differentiated chemistry and data solutions that are tailored to our customers' needs. We strive to create solutions for future challenges that impact our industry, leveraging chemistry as the common value creation platform. Flowtech will remain at the forefront of novel and multidisciplinary advancements as we bring new technologies to the market through the convergence of data and chemistry solutions. Flowtech is creating unique products and services to expand our addressable market through the application of real-time data and predictive chemical management that improves the ultimate recovery of hydrocarbons from each asset while providing a level of transparency never achieved in energy and infrastructure segments. As we move into 2025, we're excited about three of our upstream data analytics applications. The first is our VeriCal flare monitoring solution. In Q4 2024, we grew the number of VeriCal units to 13 in rental service and sold an additional two units. These numbers exceeded the expectations provided on our call in October, despite fourth quarter flare monitoring revenues being impacted by the delayed EPA update. The majority of FLIR application revenues to date continue to be through rental and service contracts, which imply a recurring revenue stream that generated over $1.3 million in the final five months of 2024. The second is our EXPECT custody transfer solution. Our upstream custody transfer use cases continue to expand into field trials with a total of 14 committed units in the fourth quarter of 2024, This is 27% higher than what was discussed in last quarter's earnings call. Our ability to monitor hydrocarbon quality and composition in real time with the measurements taken every five seconds will create an emerging market for Flowtech in 2025. This revolutionary application creates an elevated level of transparency and enterprise risk minimization for producing wells that's never been achieved in the oil and gas industry to date. And the third is our power generation solutions. In Q4 of 2024, we expanded to 15 active power generation units deployed, with nine more already committed for a 2025 delivery date. With 100% of these units committed to monthly subscriptions, these assets support our measure more strategy focused on data as a service revenue models. Our technology provides mobile power generation customers with unmatched real-time gas quality and volume visibility, protecting high-value equipment while displacing diesel and or CNG with lower-cost field gas, and simplifying the royalty payment process. Leveraging these unique technologies provides significant opportunities to expand Flowtech's presence in the energy infrastructure space. And finally, we expect the continued expansion of our data-as-a-service model with the launch of our next-generation near-infrared, Raman, and aqueous measurement systems, unlocking significant upstream and downstream market opportunities to support further growth. As we look forward, the demand for oil and gas is expected to expand for the next decade with further requirements needed through 2045. For the first time in nearly two decades, The demand for electricity in the U.S. is expected to climb 15% by 2030, with natural gas expected to provide the bulk of the incremental demand. We expect the overall expansion of the global economy to continue to create substantial demand for all forms of energy, which will increase service intensity within the targeted sectors. As we look at 2025, and although the first quarter has historically posed difficulties for revenue growth, given customer operating schedule and weather slowdowns, we're currently cautiously optimistic about sustaining our profitability momentum into the early months of 2025. We are confident that our expanding suite of services positions us to deliver unique and superior solutions to a variety of the industry's most challenging problems while maximizing our customers' value chains. Now, I'll turn the call over to Von to provide key financial highlights.