More electric frac spreads to join the portfolio: In Q1 2023, ProPetro’s (PUMP) effective frac spread utilization increased to 15.5 fleets compared to 14.5 frac spreads in Q4 2022. In Q3, it expects to add two electric frac spreads and two more by the end of 2023. It also plans to reduce the share of legacy capacity as it looks to retire 140,000 hydraulic horsepower of Tier II conventional diesel frac equipment during 2023. Read more about this in our recent article here.
Fundamentals metrics gained in Q1: Quarter-over-quarter, PUMP’s revenues increased by 21.4% in Q1, while its adjusted EBITDA margin expanded by 400 basis points. An increase of one effective fleet utilization, repricing a substantial portion of the active fleets, and transition into more efficient next-generation gas-burning equipment resulted in better performance in Q1.
PUMP’s cash flows and leverage: PUMP’s cash flow from operations increased by 190% in Q1 2023 compared to a year ago. Despite such impressive gains, free cash flow stayed negative and deteriorated further in Q1 2023 due to a sharper rise in capex. Higher maintenance expenditures and the continued conversion of Tier IV DGB pumps contributed to higher capex and FCF deterioration. Its debt-to-equity remained nearly unchanged at 0.03x as of March 31, 2023.
Thanks for reading the PUMP take three, designed to give you three critical takeaways from PUMP’s earnings report. Soon we will present a second update on PUMP earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
