Key Strategies: In Q2, Liberty Energy’s management emphasized the displacement of diesel with natural gas, including deploying its natural gas-fueled digiFleets. Recently, it has enhanced its LPI (Liberty Power Innovations) portfolio in the DJ Basin. It generated its first CNG sales in June. Adopting Sentinel (real-time data and AI predictive analytics) lowered proppant delivery downtime by 90% and decreased the truck count and delivery time by ~35% each, as per the company estimates. The company will depend on digiTechnologies, LPI services, supply chain, scale, and integrated services to drive efficiency and meet demand from the upstream companies.

Industry Outlook in 2H 2024: LBRT expects the North American completions activity to be modestly softer in 2H 2024. Despite that, LBRT’s performance is expected to remain steady. This is because its strategic investments in natural gas-fueled pumping and power generation technologies will drive higher earnings and cash flow. Also, a demand-pull of energy would result in tightness for quality frac crews in the industry. However, the increase in frac intensity would also reduce the horsepower requirements to meet frac fleet demand. You can also read more about LBRT’s fracking activities in our report here.

Fundamental Metrics Improved In Q2: LBRT’s revenues increased by 8% in Q2 quarter-over-quarter, while its adjusted EBITDA recorded an 11.6% rise. So, the growth rate (on revenues and EBITDA) reversed to a positive in Q2 versus a decline in the previous quarter. The company’s debt-to-equity, however, remained unchanged at 0.08x as of June 30, 2024. Daily pumping efficiencies and frac spread utilization improved in Q2, leading to the topline and operating income recovery. Since 2022, it has distributed $458 million to shareholders by retiring shares and paying quarterly cash dividends.

Thanks for reading the LBRT Take Three, designed to give you three critical takeaways from LBRT’s earnings report.  Soon, we will present a second update on LBRT’s earnings, highlighting its current strategy, news, and notes we extracted from our deeper dive.