ProFrac Holding: Q1 TAKE THREE

ProFrac’s Stimulation Services and Proppant production segments experienced a performance boost in Q1 as pump hours and proppant volume recovered. However, the market conditions, which remain under pressure, will dictate its near-term outlook. The company’s cash flows also turned negative in Q1.

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Expectations Reflect Market Conditions : In 2025, ProFrac (ACDC) expects completion activity in crude oil-heavy basins will remain under pressure as operators optimize cash flow. Completion activities in natural gas-driven shale basins will likely see increasing inbound orders in 2H 2025 and early 2026.

ACDC’s frac spread count can decline in Q2 as white space in completion activity increases due to pricing pressure. ProFrac will deploy its assets and optimize repair and maintenance in accordance with activity levels in the Stimulation Services segment. The company’s proppant volumes can decline in Q2. However, favorable sales prices and increased logistics activity can partially mitigate the negative effects.

Segment Performance in Q1: From Q4’24 to Q1’25, ACDC's revenues from the Stimulation Services and Proppant production saw steep rises (36% and 45% up, respectively), while its revenues from Manufacturing remained relatively steady (6% up). Quarter-over-quarter, the company's adjusted EBITDA margin expanded by 600 basis points in Q1. Higher average pump hours per fleet and proppant production volume resulted in the topline and margin growth in Q1. Read more about ACDC in our recent article here .

Cash Flows Fell in Q1 : The company's free cash flow turned negative in Q1 2025 over a year ago due to a substantial decline in cash flow from operations. In Q1, its capex also fell. Its projected capex for FY2025 can decline further by $70 million-$100 million to “align with evolving market conditions.”

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.

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