Electric Frac Spreads Joins The Portfolio: In Q3 2023, ProPetro (PUMP) continued deploying premium completion services and next-generation equipment in the Permian Basin. During the quarter, it deployed its first FORCE electric-powered hydraulic fracturing fleet. It also deployed Tier IV DGB dual-fuel fleets. Over the past two years, the company invested ~$1 billion in transitioning its fleet. Read more about this in our recent article here.
Margin Metrics Weakened In Q3: Quarter-over-quarter, PUMP’s revenues decreased by 2.6% in Q3, while its adjusted EBITDA margin contracted by 50 basis points. Lower hydraulic fracturing, wireline activity, and softer pricing resulted in lower utilization, causing the topline and the EBITDA margin to dry up in Q3. However, the cementing business performed well during Q3.
PUMP’s Cash Flows And Repurchase: PUMP’s cash flow from operations increased by 74% in 9M 2023 compared to a year ago. Despite such impressive gains, free cash flow stayed negative. Its debt-to-equity declined to 0.04x as of September 30, 2023, from 0.06x a quarter earlier. In May 2023, it announced a $100 million share repurchase program and continued repurchasing during Q3.
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.
