PUMP Keeps Adding to Electric Frac Spreads: In April, ProPetro (PUMP) agreed to provide ExxonMobil two FORCE electric frac spreads and its Silvertip wireline and pump down services in a long-term contract. Despite the market pressure, the company’s management expressed confidence due to the ‘operational density in the resilient Permian Basin and prudent investments in next-generation equipment.” It also expects frac spread utilization to remain steady at 14 to 15 fleets in Q2 – at par with Q1. It has also recently approved a $100 million increase to its share repurchase program. Read more about this in our recent article here.

Metrics Improved In Q1: Year-over-year, PUMP’s revenues from the Hydraulic Fracturing segment increased by 18% in Q1 2024, while its adjusted EBITDA grew by 48%. Its revenues and adjusted EBITDA from the Wireline segment increased by 21% and 49%, respectively. Improved hydraulic fracturing and wireline utilization primarily caused the topline and the EBITDA to shoot up in Q1. Effective frac fleet utilization improved to 15 in Q1 2024 compared to 12.9 in the prior quarter. The rise in utilization can be attributed to increased operational activity levels in hydraulic fracturing and wireline businesses.

PUMP’s Cash Flows And Repurchase: PUMP’s cash flow from operations increased modestly (by 2%) in Q1 2024 compared to a year ago. Its free cash flow turned positive in Q1 2024. However, its capex guidance points to significantly lower (39% down) capital expenditure in FY2024. The company’s debt-to-equity remained unchanged at 0.05x as of March 31, 2024. After repurchasing and retiring 3 million shares in Q1, its aggregate repurchase stood at 8% of the outstanding shares.

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.