• Full Year Revenue: $4.2 billion.
• Full Year Net Income: $316 million.
• Full Year Adjusted EBITDA: $922 million.
• Return on Capital Employed: 17%.
• Cash Return on Capital Invested: 21%.
• Full Year Revenue Decline: 9% decrease from $4.7 billion in 2023 to $4.3 billion in 2024.
• Fourth Quarter Revenue: $944 million, a 17% sequential decline.
• Fourth Quarter Net Income: $52 million.
• Fourth Quarter Adjusted Net Income: $70 million.
• Fourth Quarter Adjusted EBITDA: $156 million.
• General and Administrative Expenses: $56 million in the fourth quarter.
• Net Debt: $171 million at year-end.
• 2024 Capital Expenditures: $627 million.
• Share Buybacks and Dividends: $127 million in share buybacks and $48 million in cash dividends in 2024.
• 2025 Adjusted EBITDA Guidance: $700 million to $750 million.
• 2025 Capital Expenditures Guidance: Approximately $650 million.

• Warning! GuruFocus has detected 4 Warning Sign with LBRT.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Liberty Energy Inc (NYSE:LBRT) achieved strong financial performance in 2024 with revenue of $4.2 billion, net income of $316 million, and adjusted EBITDA of $922 million.
• The company successfully executed fleet transition initiatives and cost optimization efforts using AI-enhanced digital systems.
• Liberty Energy Inc (NYSE:LBRT) distributed $550 million to shareholders since July 2022 through share buybacks and dividends.
• The company is expanding its power generation services business, leveraging its expertise to meet rising power demand in North America.
• Liberty Energy Inc (NYSE:LBRT) has built strong partnerships and investments across various energy sectors, including geothermal, nuclear, and battery technologies.

Negative Points

• Liberty Energy Inc (NYSE:LBRT) experienced a 9% decline in full-year revenue compared to 2023, with revenue totaling $4.3 billion.
• The fourth quarter of 2024 saw a sequential decline in revenue by 17%, driven by market headwinds and larger-than-expected absorption.
• Frac pricing has softened over the last year, impacting profitability, especially for older Tier 2 assets.
• The company anticipates adjusted EBITDA for 2025 to be in the range of $700 million to $750 million, down from 2024.
• Liberty Energy Inc (NYSE:LBRT) faces near-term price pressure in the completions market due to slowing activity and conventional fleet impacts.

Q & A Highlights

Q: Can you discuss the current state of frac pricing and how it compares to a year ago? A: Ron Gusek, incoming CEO, explained that frac pricing has softened over the past year, with a peak in mid- to late 2022. The decline has been gradual, with older Tier 2 assets being most affected. However, next-generation assets, like the digi platform, have shown resilience in pricing as they head into 2025.

Q: How does Liberty Energy balance the power needs for frac operations with opportunities outside the oil patch? A: Ron Gusek emphasized the importance of controlling key variables in frac operations, including power supply. Liberty Energy's strategy involves vertical integration and ensuring efficiency by managing fuel supply and power generation assets. This approach allows them to maintain high service levels for their customers.

Q: What are the expected returns from deploying mobile power generation outside the oil and gas industry? A: Ron Gusek stated that returns will vary based on contract duration and application. Long-term contracts, like those for data centers, will have different return profiles compared to shorter-term bridge power contracts. Liberty Energy targets an average return profile in the mid- to high teens across its power business portfolio.

Q: Can you provide more details on the new variable speed natural gas-powered engine developed with Cummins? A: Ron Gusek noted that while the IP for the engine belongs to Cummins, Liberty Energy has an advantageous position as the launch partner. The engine offers lower fuel costs, longer time between overhauls, and reduced maintenance costs compared to diesel engines, enhancing operational efficiency and cost-effectiveness.

Q: How does Liberty Energy plan to compete in the power generation space against other entrants? A: Ron Gusek highlighted Liberty Energy's strengths in service delivery, supply chain management, and engineering expertise. The company aims to replicate its success in the frac business by offering a comprehensive solution that includes modular power generation assets, strong partnerships, and a focus on efficiency and reliability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.