• Revenue: $575 million for the third quarter.
• Adjusted EBITDA: $135 million with a margin of 23%.
• Free Cash Flow: $31 million in the third quarter.
• Stimulation Services Revenue: $507 million, with adjusted EBITDA of $113 million.
• Proppant Production Revenue: $53 million, a 24% sequential decline.
• Proppant Production Adjusted EBITDA: $17 million, a 33% sequential decrease.
• Manufacturing Segment Revenue: $62 million, up approximately 10% from the second quarter.
• SG&A Expenses: $52 million in the third quarter.
• Cash Capital Expenditures: $70 million in the third quarter.
• Total Cash and Cash Equivalents: $26 million as of September 30.
• Total Liquidity: Approximately $109 million at quarter end.
• Total Debt Outstanding: Approximately $1.2 billion at the end of the third quarter.

• Warning! GuruFocus has detected 5 Warning Signs with ACDC.

Release Date: November 05, 2024

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

Positive Points

• ProFrac Holding Corp (NASDAQ:ACDC) delivered strong third-quarter results with $575 million in revenue and $135 million in adjusted EBITDA.
• The company achieved record-setting efficiency per active fleet, highlighting operational excellence and customer service.
• ProFrac is investing in next-generation equipment, including electric pumps and dual fuel technologies, which are in high demand.
• The company has a strategic asset management program that ensures high-quality and reliable fleet deployment.
• ProFrac is well-positioned to capitalize on power generation opportunities, responding to increased demand due to grid constraints and electrification trends.

Negative Points

• The proppant segment faced challenges due to prolonged weakness in natural gas-related activity and increased competition in West Texas.
• Pricing pressures negatively impacted margins, despite cost management efforts.
• The company anticipates a softer fourth quarter due to budget exhaustion and lower activity levels.
• ProFrac is retiring 400,000 horsepower of legacy diesel-burning equipment, which may impact short-term capacity.
• The Haynesville region's subdued drilling and completion activity negatively affected asset performance.

Q & A Highlights

Q: Can you provide more color on your 2025 outlook, particularly regarding the oil side in West Texas and South Texas? A: Matt Wilks, Executive Chairman, noted that they expect Q1 2025 to pick up from Q4 and Q3 levels, with a good start to the year. However, on a year-over-year basis, it will be flat to slightly down.

Q: How are you managing the interplay between pricing and cost management, especially in the stimulation and proppant segments? A: Matt Wilks explained that their vertical integration allows better control over fixed costs, with utilization bringing down the cost structure through operating leverage. Despite competitive pricing, they benefit from their operational footprint and efficiencies.

Q: What is the outlook for CapEx in 2025, particularly between maintenance and growth efforts? A: Austin Harbour, CFO, stated that it's too early to provide firm guidance on CapEx for 2025, as they are still in the early stages of the RFP season. More details will be available in the next call.

Q: How are you balancing pricing versus fleet deployments, and what is your current fleet count? A: Matt Wilks mentioned they do not disclose exact fleet counts but focus on keeping existing fleets operational and customers close. They anticipate tighter supply and demand due to equipment attrition and have reorganized asset management to ensure the best fleet quality.

Q: What impact do you expect from the activation of Dune Express on your business next year? A: Matt Wilks indicated that they do not expect a material impact from Dune Express. They see potential upside in the proppant business and are focused on increasing scale and benefiting from operating leverage.

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