Revenues And Margin Fell In Q4, But Frac Metrics Improve in 2024: Quarter-over-quarter, ProFrac Holding’s (ACDC) revenues decreased by 15% in Q4, while its adjusted EBITDA shrank by ~27%. Decreased activity levels, led by lower commodity prices, and lower pricing primarily caused the revenue and EBITDA margin to decline in Q4. Since the start of Q4, PUMP has activated ten frac spreads.

However, the company appears to be heading for a much stronger 2024. In January, it achieved its highest pumping efficiency for the past five quarters, while in February, it exceeded its FY2023 pumping hours per active fleet by 20%.

Segment Performance In Q4: From Q3 to Q4, ACDC’s revenues from the Manufacturing segment dipped the most (22% down), followed by Stimulation Services (18% down). The adjusted EBITDA margin also shrank steeply in the Stimulation Services segment. Read more about ACDC in our recent article here.

Cash Flows Rise But Low Capex Guidance: The company’s year-over-year free cash flow improved tremendously in FY2023 following a substantial increase in cash flow from operations. In FY2024, it expects to reduce capex by 34% compared to FY2023 as it “align spending levels and growth initiative timelines.” It also reduced long-term debt by 26% by December 31, 2023, compared to a year ago.

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.