Higher frac spreads, but profit lowers: Quarter-over-quarter, ProFrac Holding’s (ACDC) revenues increased by 7.3% in Q1, although its adjusted EBITDA shrank by 5%. Adjusted EBITDA (annualized basis) per average active fleet decreased to $25.1 million compared to $27.9 million in Q4. A higher average active fleet count led to the revenue hike in Q1. It operated 40.7 active frac spreads on average in Q1 2023 compared to an average of 29.9 frac spreads in FY2022.
Acquisition-related costs rise: In Q1, ProFrac’s costs increased significantly related to the acquisitions of U.S. Well Services, Monarch Silica, REV, Performance Proppants, and Producers. It incurred $20 million in acquired asset optimization, including upgrading, standardizing, and retiring some assets. Read more about this in our recent article here.
ACDC’s cash flow rises steeply: Excluding the acquisitions, the company’s year-over-year free cash flow improved tremendously following a substantial increase in cash flow from operations. In 2023, it plans to maximize shareholder returns and “the generation of discretionary free cash flow.”
Thanks for reading the ACDC take three, designed to give you three critical takeaways from ACDC’s earnings report. Soon we will present a second update on ACDC earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
