ProPetro Holding (NYSE:PUMP) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
ProPetro Holding Corp reported a 7% decrease in revenue for Q1 2026 to $271 million, with a net loss of $4 million, primarily due to weather disruptions impacting the completions business.
The company is leveraging strategic initiatives such as the expansion of ProPower, with a new framework agreement with Caterpillar to secure up to 2.1 gigawatts of power generation capacity over the next five years.
ProPetro Holding Corp anticipates significant growth in ProPower, targeting data centers and industrial sectors, while maintaining financial flexibility through cash flow and strategic financing arrangements.
The completions market is seeing early pricing and activity tailwinds with limited capacity and disciplined capital investments, positioning the company well for future opportunities.
Management expressed confidence in their operational model and strategic positioning, despite external uncertainties like the Iran war, focusing on disciplined execution and long-term growth.
Full Transcript
OPERATOR
Hello everyone. Thank you for joining us and welcome to the ProPetro Holding Corp first quarter 2026 conference call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one again. I will now hand the conference over to Matt Augustine,, Pro Petro’s Vice President of Finance and Investor Relations. Please go ahead.
Matt Augustine (Vice President of Finance and Investor Relations)
Thank you and good morning. We appreciate your participation in today’s call. With me are Chief Executive Officer Stam Sledge, Chief Financial Officer Caleb Weatherall, President and Chief Operating Officer Adam Munoz, President of Pro Power, Travis Emery this morning we released our earnings results for the first quarter of 2026. Please note that any comments we make on today’s call regarding projections or our expectations for future events or are forward looking statements covered by the Private Securities Litigation Reform Act. Forward looking statements are subject to several risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and risk factors discussed in our filings with the SEC. Also, during today’s call we will reference certain non-GAAP, financial measures. Reconciliations of these non-GAAP, measures to the most directly comparable GAAP, measures are included in our earnings release. Finally, after our prepared remarks, we will hold a question and answer session. With that I would like to turn the call over to Stam.
Stam Sledge (Chief Executive Officer)
Thanks Matt and good morning everyone. The results we generated in the first quarter of 2026 demonstrate the resilience of our business model. Despite weather related disruptions that significantly impacted revenue and profitability. During the quarter we delivered positive financial results in our completions business, particularly when measured by adjusted EBITDA less incurred capital expenditures. These results highlight the strength or industrialized model which is the result of strategic investments, disciplined asset deployment and rigorous cost management. The strategic actions we implemented throughout 2025 to protect our assets and right size our cost structure are now delivering measurable benefits, positioning us for success in the current market environment. We’ll continue to leverage the industrialized nature of our completions business to drive expansion of ProPower,, which we expect to fuel future earnings growth and further strengthen our value proposition with respect to the broader environment. We’re still in the early stages of assessing the global and domestic implications of the Iran War. While uncertainty remains, we’re starting to see signs of recovery across a broader North American oilfield services sector given a strengthening commodity backdrop that is driving early pricing and activity tailwinds across our completions business. Importantly, structural tightening in the completions market continues to intensify driven by ongoing attrition, particularly amongst smaller and less disciplined competitors. This trend was already emerging prior to the onset of the Iran War and has since accelerated with the recent increase in demand for US frac activity. Notably, there was already very little spare frac equipment capacity even before the conflict began, further amplifying current market constraints. These dynamics, combined with ongoing capital investment discipline and pricing discipline have tempered any plans to expand capacity both within ProPetro and among our close peers in the completion space. Collectively, these factors have created a more constructive supply and demand environment for our business over time. We do recognize the impact that the Iran War has created for our business. However, the market remains volatile and we expect this uncertainty to persist until there is more clarity on the disruptions in the Middle east and the subsequent impacts on global supply and demand dynamics. While external conditions are beyond our influence, we remain focused on what we can control our commitment to operational excellence, exercising rigorous cost discipline and deploying capital strategically.
Stam Sledge (Chief Executive Officer)
Our stable and industrialized business model ensures our positioning not only to navigate this volatility, but also to maximize opportunities and emerge stronger as conditions fatalize. Turning briefly to our fleet Due to the significant diesel to natural gas price to scale currently at play in the Permian Basin, we’ve seen enoughtic in demand for next generation natural gas burning fleet. Currently approximately 75% of our fleet is next generation spanning our Tier 4 BGB dual fuel and Force electric fleet.
Stam Sledge (Chief Executive Officer)
Recently we’ve also added a small number of 100% natural gas burning direct drive unit that operate at the highest performance standard and complement our existing fleet. These additions are measured and are not intended to expand our overall capacity in this environment, but rather to further enhance our portfolio. We anticipate adding a few more units later this year to capture targeted demand as it advises. As we look ahead, early indications suggest that the floor for crude prices has risen and is becoming more stable which is constructed for our business due to the strong demand for next generation natural gas burning fleet. We’re currently sold out across our Tier 4 DGB, dual fuel and Force electric fleet and accordingly expect to run approximately 12 fleets in the second quarter up from the approximately 11 in the first quarter. Importantly, we do have a few additional Tier 2 diesel fleets available which we will deploy only if opportunities meet our economic return threshold. Given disciplined deployments and limited capacity in the completions market, we’re well positioned to quickly capitalize on new opportunities as they emerge.
Stam Sledge (Chief Executive Officer)
Now moving over to Propower, we’ve made significant progress across several key initiatives this past quarter, highlighted by our recent announcement of a new strategic framework agreement with Caterpillar. This agreement enables ProPower, to acquire up to approximately 2.1 gigawatts of additional power generation capacity over the next five years. When combined with the approximate 550 megawatts previously ordered and upon successful delivery of assets under this agreement, ProPower, is positioned to have approximately 2.6 gigawatts of power generation capacity delivered by year end 2031 and fully deployed in 2032.
Stam Sledge (Chief Executive Officer)
Our nearly 20 year strategic partnership with Caterpillar has been instrumental in shaping our long term growth plan for ProPower,. This collaboration enables us to pursue shared success while providing ProPower, with reliable access to high quality assets even amidst the challenges of an exceptionally constrained supply chain. Together, we’re well positioned to capture the future opportunities and drive mutual value. This agreement underscores ProPower,’s leadership in deploying innovative energy solutions and we’re excited about the transformative potential it brings to our company.
Stam Sledge (Chief Executive Officer)
To support our upsized order backlog, we have built a robust commercial pipeline. Demand for reliable and low emission power solutions remains very strong, fueling continued growth across the data center industrial and oil and gas sectors. Notably, we’re pleased to report major advancements representing several hundred megawatts of high potential data center opportunity in a select portion of our data center commercial pipeline. While specific details are contingent on finalizing agreements, these developments highlight our expanding leadership and and strategic positioning in the digital infrastructure market.
Stam Sledge (Chief Executive Officer)
Additionally, we’re engaged in advanced contract negotiations for approximately 100 megawatts to support oil and gas microgrid projects. With deployment expected later this year. These commercial developments will rapidly expand our total committed capacity beyond the approximately 240 megawatts currently committed under contract. We are confident in ProPower,’s future growth and expect to secure additional contracts throughout 2026 as we extend and deepen relationships with both new and existing partners. The majority of future megawatts are anticipated to be contracted within the data center and industrial sectors, driven by their larger load requirements and long term strategic commitment. Importantly, our near term focus also remains on disciplined execution, deploying and scaling ProPower, across our contracted customers, with a strong emphasis on de risking deployment and building a resilient operational foundation to support sustainable long term growth and profitability.
Stam Sledge (Chief Executive Officer)
As we continue to deploy capital to grow ProPower,, we remain committed to maintaining financial flexibility and a strong balance sheet. Our preferred source of funding continues to be free cash flow generated from our completions. This is supplemented by our strong balance sheet proceeds from our recent equity offering and access to flexible financing arrangements including our Caterpillar financing facility and lease financing structures that we already have in place.
Stam Sledge (Chief Executive Officer)
Given the recent increased orders, we will continue to actively pursue low cost capital and flexible financing solutions to support ProPower,’s growth. Looking ahead While we’re still in the early days for ProPower,, we’ve already made significant progress to secure customer commitments and have real momentum and real operation that allow us to negotiate additional contracts from a position of strength and proven service quality. As the demand for reliable low emissions power solutions continues to grow, we expect Pro Power to continue to scale and deliver increasing returns over time.
Stam Sledge (Chief Executive Officer)
Our approach remains consistent. We’re staying nimble and disciplined while continuing to lean into the opportunity we see in Power. Stepping Back the strategy we’ve been executing over the past several years is now working. Our completions business continues to generate resilient financial results and provides the foundation to fund growth, while ProPower, represents a high growth and high return on investment vehicle that we are just beginning to scale. Importantly, ProPetro is a strong company pursuing value enhancing growth opportunities from a position of strength. We maintain a healthy balance sheet that provides us with the flexibility to invest in Pro Power. At the same time, we’re beginning to see tailwinds emerge in our completions business with early signs of tightening supply and improving pricing dynamics. We have a strong balance sheet, first class customers and a first class team that continue to execute at a high level while operating safely, efficiently and productively.
Stam Sledge (Chief Executive Officer)
Taken together, we believe we’re well positioned to execute through the current environment and create meaningful long term value.
Caleb Weatherall (Chief Financial Officer)
Thanks Sam and good morning everyone. As Sam mentioned, ProPetro,’s first quarter performance once again demonstrated the industrialized and resilient nature of our business. Despite lower revenue, we generated positive financial results in our completion setting which continues to highlight the durability of our company. At the same time, we have made meaningful Recent progress in ProPower including advancing equipment orders and securing additional capital. These efforts position ProPower to become an increasingly important contributor to the company’s future earnings profile. During the first quarter, ProPetro, generated total revenue of $271 million, a decrease of 7% as compared to the prior quarter. Net loss totaled $4 million or $0.03 loss per diluted share compared to net income of $1 million for $0.01 income per diluted share. For the fourth quarter of 2025, adjusted EBITDA totaled $36 million with 13% of revenue and decreased 29% compared to the prior quarter.
Caleb Weatherall (Chief Financial Officer)
This includes the lease expense related to our electric fleets of $16 million. As Sam mentioned, the decrease in adjusted EBITDA this quarter was primarily driven by reduced utilization in the completions business, which was significantly impacted by adverse weather conditions. Net cash provided by operating activities was $3 million as compared to $81 million in the prior quarter. The decrease is primarily attributable to lower adjusted EBITDA and working capital headwinds in the first quarter, which consumed approximately $32 million in cash and working capital tailwinds of the prior quarter, which were an approximately $35 million source of
Caleb Weatherall (Chief Financial Officer)
cash. During the first quarter, capital expenditures paid were $43 million and capital expenditures incurred were $85 million, including approximately $14 million primarily supporting maintenance in our completions business and approximately $71 million supporting pro power orders. Notably, the difference between incurred and paid capital expenditures is primarily comprised of Pro Power related capital expenditures that have been financed and paid directly by our financing partners and unpaid capital expenditures included in accounts payable and accrued liabilities.
Caleb Weatherall (Chief Financial Officer)
Net cash used in investing activities as shown on the Statement of Cash flow during the first quarter of 2026 was $41 million, which included capital expenditures paid of $43 million, offset by $2 million in proceeds from certain asset sales. We currently anticipate full year 2026 capital expenditures incurred to be between $540 million and $610 million, up from the $390 million to $435 million range highlighted in our fourth quarter earnings report of this the completions business is expected to account for approximately $140 million to $160 million, including approximately $40 to $50 million related to planned lease buyouts for a portion of our Force Electric Fleet portfolio. As a reminder, the five Force Electric Fleet leases were secured with an initial three year term and include options to either buy out or extend leases at the end of that period. The intent behind these leases was to defer upfront capital expenditures while securing the equipment at an attractive cost of capital supported by the earnings from the Force Electric fleets. The strategy proved successful, enabling PERPETRA to rapidly transform our fleet and still generate accretive cash flow.
Caleb Weatherall (Chief Financial Officer)
Our current intent to exercise the upcoming lease buyouts reflects the completion of a deliberate and strategic capital allocation decision. By exercising these options, we will take full ownership of the four suites. Each buyout will immediately reduce our lease …
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