Liberty Energy Inc.

Welcome to the Liberty Energy Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Anjali Voria, Director of Investor Relations. Please go ahead.

Thank you, Wyatt. Good morning, and welcome to the Liberty Energy fourth quarter and full year 2024 earnings conference call. Joining us on the call are Ron Gusick, incoming chief executive officer, and Michael Stock, chief financial officer. Before we begin, I would like to remind all participants that some of our comments today may include forward-looking statements reflecting the company's views about future prospects, revenues, expenses, or profits. These matters involve risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These statements reflect the company's beliefs based on current conditions that are subject to certain risks and uncertainties that are detailed in our earnings release and other public filings. Our comments today also include non-GAAP financial and operational measures. These non-GAAP measures including EBITDA, adjusted EBITDA, adjusted net income, Adjusted net income per diluted share and cash return on invested capital are not a substitute for GAAP measures and may not be comparable to similar measures of other companies. A reconciliation of net income to EBITDA and adjusted EBITDA, net income to adjusted net income, and adjusted net income per diluted share and the calculation of adjusted pre-tax return on capital employed and cash return on invested capital, as discussed on this call, are available on our investor relations website. I will now turn the call over to Ron.

Good morning, everyone, and thank you for joining us to discuss our full year and fourth quarter 2024 operational and financial results. Liberty delivered strong leadership in technological innovation and executional excellence in 2024. Solid financial performance and several operational records were achieved, even as industry activity softened through the year. We concluded the year with revenue of $4.3 billion net income of $316 million and adjusted EBITDA of $922 million. Full-year return of capital employed was 17% and our 2024 cash return on capital invested of 21% exceeded the 13-year S&P average. We executed on our fleet transition initiatives, cost optimization efforts using AI-enhanced digital systems and expansion of our natural gas fueling and delivery capacity to optimal scale. We are relentlessly focused on long-term value creation, balancing compelling growth opportunities with return of capital to shareholders. Since July 2022, we have distributed $550 million to shareholders through the retirement of 15% of shares outstanding and quarterly cash dividends. We have built strong partnerships and investments across the energy corridor in geothermal, nuclear, battery, power generation technologies, and the Australian Beetlejuice Basin assets. Today, we have an undeniable opportunity to leverage our knowledge, experience, and expertise in energy systems to meet a rise in power demand in North America. As we embark on an extraordinary new chapter for our company, our founder, Chris Wright, is similarly charting a new path as the U.S. Secretary of Energy. On behalf of the Liberty family, I'd like to extend a heartfelt congratulations to my dear friend of over 20 years for his visionary leadership and significant contribution to Liberty and the broader energy sector. Entering 2025, we have two key strategic priorities, continued technology innovation and leadership in completion services, and significant expansion of our burgeoning power generation services business. As the preeminent completion service provider, the innovation cycle in software, equipment, and design is driving long-term margin enhancement, improvement in capital efficiency, and lower emissions. Our technology team has led advances in design and development of the latest engine technologies for completion services applications. Yesterday, we announced the latest iteration of development for our DigiPrime platform with the industry's first natural gas variable speed large displacement engine with Cummins, a partner of ours since the founding of our firm. This engine enhances our already industry-leading DigiFleet offering by combining high fuel efficiency with the ability to manage transient load and precision rate control, unrivalled in the industry. We have built an integrated ecosystem of software that seamlessly brings together our Digi technologies with advanced cloud-based software for our pump control systems, power generation, demand management and logistics platform, and on-site fuel management software systems. This ecosystem reduces the total cost of delivery, improving our returns and lowering the cost to bring a barrel of oil to the surface for our customers. We are also excited to celebrate the incredible operational feat achieved by one of our DigiPrime fleets. In 2024, this Liberty fleet set a single crew company record of 7,143 hours pumped in a year, averaging nearly 600 hours per month. This equates to approximately 96% of available hours of the year under normal dedicated fleet utilization. As we look ahead, Liberty has an historic opportunity to deliver differentiated power services and solutions to meet growing energy demand. During 2024, we put into motion our distributed energy business that provides a compelling alternative to traditional generation and transmission. Harmful energy policy, high regulatory barriers, and decades of underinvestment in grid infrastructure have increased the fragility of the grid and hindered the ability to respond quickly to growing demand. The rising demand for electrons from the proliferation of data centers, onshoring of manufacturing activity, expansion in mining operations, and industrial electrification provides a supportive backdrop to expand our power generation business outside the oil field. We are uniquely positioned to rapidly deploy distributed modular power solutions with low emission, scalable power infrastructure tailored to meet specific project demands. Liberty brings together a distinctive set of strengths that put us in an advantaged position to grow a successful power business. Since 2011, we have deployed almost $5 billion in capital to build a high returns completion business, which now operates and maintains more than 3,000 pieces of rotating heavy equipment in remote, harsh environments across North America. We have a foundational culture that attracts and retains great people, all of whom strive to deliver at the highest level. Our service delivery is augmented by extensive engineering expertise in engine technologies, mobile power plant assembly, and asset operation in the rigors of the oil field, ensuring thoughtful power generation asset selection and easing future deployment in other applications. We also have critical supply chain relationships built over our history that enhance the innovation cycle and ensure timely access to key components. We have a large operations platform across the United States and Canada, including equipment packaging capabilities to ensure we can fabricate, deliver, and support each installation Together these strengths enable us to build a distributed power business with durability and longevity over the coming years. We are growing our partnerships in the areas of critical technology and infrastructure development to ensure we can provide a coordinated solution that addresses all aspects of a power generation application. Reliability expectations, load variability, gas supply quality, emissions requirements and cooling needs, amongst other considerations, demand strong engineering support paired with a range of technology offerings. We will provide an infrastructure delivery mechanism for electrons that fits the specific application. In the near term, we are targeting merchant power, data centers, commercial EV charging stations, and microgrids for resource extraction applications. We have already successfully deployed 130 megawatts, primarily for DigiFleet applications. By the end of 2026, we expect to take delivery of and deploy an incremental 400 megawatts of power generation, with the initial deployments commencing later this year. Frac markets reached a trough at the end of 2024 after progressive quarterly declines in industry activity since early 2023. Early signs of an inflection in completions activity have now emerged from 2024 lows. Oil producers, which comprise the vast majority of frac activity, are working to simply maintain production. and are returning to anticipated activity levels after the year-end slowdown. Improving natural gas fundamentals are encouraging. For the full year, industry-wide lateral footage completed is expected to be approximately flat with 2024. The slowing pace of activity in late 2024 resulted in near-term price pressure to start 2025, most notably impacting conventional fleets. The fundamental outlook for next generation, higher quality fleets remains strong as operators continue to demand technologies that provide significant emissions reductions, fuel savings, and operational efficiency advantages. The growing complexities of E&P demands and the continued drive for efficiency gains necessitate continued investment in technology and partnerships with high quality service companies. Liberty is well positioned to meet this demand. Fleet titling, attrition, and cannibalization of aging equipment likely accelerate in the next two years as a large swath of Tier 2 equipment reaches end of life. Concurrently, fleet sizes continue to expand to meet increased horsepower requirements for higher intensity fracs. These two dynamics imply the supply and demand balance in horsepower is tighter than industry frac fleet counts infer. An improvement in frac activity through the year could support better pricing dynamics. Global oil markets reflect ongoing uncertainties in geopolitics, Chinese economic growth, OPEC Plus production plans, and a change in the domestic political climate. But the resulting commodity price fluctuation has not yet led to a meaningful change in E&P activity plans. Natural gas demand is supported by LNG export capacity expansion and a large projected multi-year increase in North American power consumption. Power demand is rising at the fastest pace since the start of the century, as accelerating demand from data centers is converging with the reshoring of manufacturing activity and projected increases from mining, electrification, and other commercial and industrial applications. This pace of growth requires power infrastructure solutions that can be adapted to the dynamic needs of individual customers. Liberty is well positioned to meet this demand with a modular solution that offers reliability, redundancy, and the ability to accelerate deployment timelines and scale alongside growing load requirements. Entering 2025, we are excited to lead the industry with innovative and durable technologies that will drive our continued success in the years ahead. We are investing to build truly differential competitive advantages, both in the completions arena and in our new power business, to generate significant value for our customers and our shareholders. We expect our investments today will lead to strong returns in the coming years. In the first quarter, we anticipate a modest sequential increase in revenue and adjusted EBITDA. For the full year, within the completion services business, we expect solid free cash flow generation as capital expenditures moderate, even as pricing headwinds impact profitability. As we embark on the next chapter of Liberty's story, we will also significantly grow our investment in power infrastructure to take advantage of a generational opportunity in power demand growth. With that, I'd like to turn the call over to Michael Stock, our CFO, to discuss our financial results and outlook.