ProFrac (ACDC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $579.4M, nearly flat sequentially but down $129.8M year-over-year, with a net loss of $66.7M including a $67.7M goodwill impairment.

• Achieved record operating efficiency per active fleet and increased market share in West Texas, despite market headwinds and customer transitions.

• Completed acquisitions of AST, BPC, and NRG, expanding manufacturing and stimulation services; AST acquisition funded by $120M in senior secured notes.

• Cash from operations for the first half of 2024 was $192.6M, a decrease of $194.6M from the prior year.

• Free cash flow rose 187% sequentially to $74M in Q2.

Financial highlights

• Q2 2024 revenue was $579.4M, flat sequentially but down 18% year-over-year.

• Adjusted EBITDA was $135.6M, down 15% from Q1 and from $182.5M in Q2 2023, with a margin of 23%.

• Net loss was $66.7M, including a $67.7M goodwill impairment; operating loss was $49.2M.

• Stimulation Services revenue was $505.6M; Proppant production revenue was $69.5M; Manufacturing revenue was $55.9M.

• Free cash flow in Q2 was $74M.

Outlook and guidance

• 2024 capital expenditures expected at the lower end of guidance: $150–$200M for maintenance and ~$100M for growth, mainly for fleet upgrades and sand mine improvements.

• Management expects cash, operations, and credit facility availability to cover capital and debt needs for at least the next 12 months.

• Stimulation Services pricing expected to remain steady; Proppant Production volumes and pricing anticipated to decline before a gradual recovery.

• Cautiously optimistic about a recovery in natural gas basins, with potential for significant performance impact if activity rebounds.