PUMP Keeps Adding to Electric Frac Spreads: In Q4 2023, ProPetro (PUMP) deployed another FORCE electric frac spread, following up with the first FORCE electric-powered hydraulic fracturing fleet deployed in Q3. Despite deteriorating results in Q4, the management expressed an “anticipation of our customers resuming operations in early January 2024.” It also expects frac spread utilization to bounce back to “14 to 15 fleets” in Q1 2024. Read more about this in our recent article here.

Key Metrics Dropped In Q4: Quarter-over-quarter, PUMP’s revenues decreased by 18% in Q4, while its adjusted EBITDA margin contracted by 690 basis points. Lower hydraulic fracturing utilization (12.9 in Q4 from 15.5 in Q3) primarily caused the topline and the EBITDA margin to dry up in Q4. The fall in utilization can be attributed to higher-than-expected seasonality and energy operators’ budget exhaustion in Q4.

PUMP’s Cash Flows And Repurchase: PUMP’s cash flow from operations increased by 25% in FY2023 compared to a year ago. Its free cash flow also turned mildly positive. Its capex guidance points to a lower capital expenditure in FY2024. The company’s debt-to-equity declined to 0.05x as of December 31, 2023, from 0.03x a year earlier. After repurchasing and retiring 1.6 million shares in Q4, it repurchased an additional 0.8 million shares in February 2024.

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.