Earnings call transcript: ProPetro Q2 2025 results miss expectations, stock drops

ProPetro Holding Corp reported a net loss for the second quarter of 2025, missing analysts’ expectations. The company posted a loss per share of $0.07, compared to a forecasted gain of $0.03. Revenue also fell short of expectations at $326 million against a forecast of $330.51 million. Following the announcement, ProPetro’s stock fell sharply, dropping 14.91% to $5.39 in pre-market trading. According to InvestingPro data, the company has not been profitable over the last twelve months, though analysts predict a return to profitability this year with an EPS forecast of $0.24.

Key Takeaways

• ProPetro reported a net loss of $7 million for Q2 2025.
• Revenue decreased by 9% quarter-over-quarter to $326 million.
• The stock price dropped nearly 15% in pre-market trading.
• The company is focusing on capital discipline and cost optimization.
• Future guidance reflects persistent market uncertainty.

Company Performance

ProPetro’s performance in the second quarter of 2025 was marked by a notable decline in revenue and earnings. The company faced challenges in maintaining its growth trajectory amid market volatility and operational adjustments. Compared to previous quarters, ProPetro’s financial results reflect the broader industry trend of reduced activity in the Permian Basin, a key region for the company.

Financial Highlights

• Revenue: $326 million, down 9% quarter-over-quarter.
• Earnings per share: Loss of $0.07, compared to a forecasted gain of $0.03.
• Adjusted EBITDA: $50 million, representing 15% of revenue, down 32%.
• Free cash flow from completions: $26 million.
• Total cash: $75 million.
• Total liquidity: $178 million.

Earnings vs. Forecast

ProPetro’s actual earnings per share of -$0.07 missed the forecast of $0.03, resulting in a negative surprise of 333.33%. This significant miss highlights the challenges the company faces in aligning its operational strategies with market expectations. Revenue also fell short of the projected $330.51 million, missing by 1.36%.

Market Reaction

The market reacted negatively to ProPetro’s earnings announcement, with the stock price dropping 14.91% in pre-market trading to $5.39. This decline reflects investor concerns over the company’s ability to navigate the current market environment and meet financial expectations. The stock’s performance is also influenced by its proximity to the 52-week low of $4.61. However, InvestingPro analysis suggests the stock is currently undervalued, with a beta of 1.19 indicating moderate market sensitivity. Discover more insights and 6 additional ProTips with an InvestingPro subscription.

Outlook & Guidance

Looking ahead, ProPetro anticipates ongoing market uncertainty through 2025 and 2026. The company has set a capital expenditure guidance of $270-310 million, with a focus on completions and Pro Power expansion. ProPetro expects to operate 10-11 active fleets in the third quarter and potentially reduce this number further in the fourth quarter. The company maintains a healthy liquidity position with a current ratio of 1.44, and EBITDA of $248.25 million for the last twelve months. For comprehensive analysis including detailed financial metrics and expert insights, check out the ProPetro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO Sam Sledge emphasized the company’s strategic focus on leveraging its next-generation equipment and resilient business model. "We’re confident that these strengths and our resilient capital light cash flow generative business model will enable us to continue delivering shareholder value," Sledge stated. He also highlighted the company’s commitment to expanding its Pro Power business.

Risks and Challenges

• Market uncertainty due to tariffs and OPEC+ production decisions.
• Reduced fleet count and idling of equipment to preserve resources.
• Weakened price discipline among smaller frac providers.
• Potential plateau in production levels in key regions.
• Pressure on maintaining operational excellence amid challenging conditions.

Q&A

During the earnings call, analysts raised questions about ProPetro’s strategy for equipment export opportunities and market expansion for Pro Power. The company also addressed inquiries about activity levels and efficiency gains in the Permian Basin, emphasizing its focus on high-margin, next-generation equipment.

Full transcript - Propetro Holding Corp (PUMP) Q2 2025:

Conference Operator: Good day, and welcome to the Pearl Petro Holding Corp. Second Quarter twenty twenty five Conference Call. Please note, this event is being recorded. I would now like to turn the conference back over to Matt Augustine, Vice President of Finance and Investor Relations for ProPetro Holding Corp. Please go ahead.

Matt Augustine, Vice President of Finance and Investor Relations, ProPetro Holding Corp: Thank you, and good morning. We appreciate your participation in today’s call. With me are Chief Executive Officer, Sam Sledge President and Chief Operating Officer, Adam Munoz Chief Accounting Officer and Principal Financial Officer, Selena Davila and our new Chief Financial Officer, Caleb Weatherall. Caleb will introduce himself later in the call, but given he’s new to the company and wasn’t with us for the second quarter, he will not be participating in the question and answer session today. This morning, we released our earnings results for the 2025.

Please note that any comments we make on today’s call regarding projections or our expectations for future events 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 Sam.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Thanks, Matt, and good morning, everyone. Thanks for joining us today. Before I discuss our results this quarter, I’d like to take a moment and introduce you to Caleb Weatherill, our new Chief Financial Officer. We’re excited to have him on board as his wealth of experience in the energy and financial sectors is a perfect match for us here at ProPetro. We are confident that he will be instrumental in helping us drive long term shareholder value and I look forward to having him as part of the team.

Caleb, would you like to say a few words?

Caleb Weatherall, Chief Financial Officer, ProPetro Holding Corp: Thanks, Sam, for the warm welcome. I’m truly thrilled to join the incredible team at ProPetro. Having grown up and built my career in Midland, I’ve long admired ProPetro’s reputation for excellence and its deep roots in the community. It’s an honor to join such a respected first class organization. While I just joined the company a few weeks ago, I’ve hit the ground running and I’m enjoying working closely with Sam and the rest of the leadership team.

With a clear focus on capital discipline and efficiency, I’m excited to help advance ProPetro’s next chapter of success as we build on its strong financial and operational foundation. I want to assure you that the company’s disciplined approach to capital allocation and commitment to maintaining a strong balance sheet while investing for growth will not change. I’m looking forward to getting to know you all better in the coming quarters. And with that, I’ll turn it back to Sam.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Thanks, Caleb. Now I’d like to share some thoughts on the environment we’re operating in and provide an overview of our performance in the second quarter. Despite recent macroeconomic uncertainty, ProPetro delivered a resilient quarter both operationally and financially. Our strategy is proving effective driven by our emphasis on capital light assets and disciplined investments as well as our continued implementation of our industrialized business model. Our legacy completions business continues to generate sustainable free cash flow supported by ongoing cost optimization and targeted capital programs.

These efforts are fueling our growth trajectory including new initiatives like Pro Power, which I’ll discuss further in a moment. With regard to the current operating environment, both the broader energy markets and more specifically the completions market in the Permian Basin continue to face challenges. We believe the Permian frac fleet counts are likely approaching 70 compared to approximately 90 to 100 fleets operating at the start of this year. Increased market uncertainty driven by tariffs and rising OPEC plus production has resulted in more idle capacity than anticipated. Furthermore, price discipline has weakened at the lower end of the market, particularly among subscale frac providers.

While we’ve had the opportunity to keep virtually all of our fleets active, we have proactively chosen to idle certain fleets rather than run our fleets at the sub economic levels, therefore preserving them for more favorable market conditions in the future. That said, we are prepared to navigate this market by controlling what we can control, our everyday behaviors inside of ProPetro. Our strategic investments including past M and A activity, pro power growth and force electric fleet transition have strengthened the company’s foundation so that we can withstand market turbulence. ProPetro is a strong business led and operated by an experienced team with low debt and first class customers in one of the world’s leading regions for hydrocarbon production, the Permian Basin. Regardless of market conditions, we are confident that these strengths and our resilient capital light cash flow generative business model will enable us to continue delivering shareholder value.

Market cycles like this create opportunity as changes in the environment can offer up new ways for companies like ProPetro to profitably grow and better serve our clients, allowing us to emerge on the other side of the cycle healthier than before and well positioned to operate in a market that has improved with respectable supply and demand. In contrast, many of our smaller peers often the less disciplined competitors in the market and those who have not invested in next generation technology may struggle to withstand a downturn for as long given their limited ability to earn returns on their deployed assets. With that, I’d now like to discuss our capital light investments. I’m pleased to report that demand for our next generation services particularly our force electric fleet remains very strong. Approximately 75% of our fleet is next generation between the Tier four DGB dual fuel and force electric fleets.

Moreover, as we reported last quarter, over 50% of ProPetro’s active hydraulic horsepower is now under long term contracts. This is inclusive of two Tier four DGB dual fuel fleets and four electric fleets. Notably, one of the force fleets is a very large single frac fleet utilizing equipment equivalent to two standard zipper fleets. As a result, we currently have five fleets worth of force equipment supporting four deployed fleets. Importantly, we plan to continue and potentially accelerate the transition from our Tier two diesel equipment to our Force electric equipment given its high demand, successful contracts and commercial leverage which we expect to offer lower risk for future earnings.

On the pro power side, we currently have approximately two twenty megawatts on order with deliveries that began recently and are expected to be completed by mid year twenty twenty six. We are especially proud to announce our inaugural contract during the quarter, which was executed in collaboration with a Permian focused E and P operator and commits 80 megawatts of power generation capacity to deliver turnkey power to a distributed microgrid installation. Asset deployment is scheduled to begin in the third quarter of this year and continue throughout 2026. This ten year midstream like agreement marks a major milestone for our Pro Power and serves as a future blueprint and a testament to our commitment to innovation and long term growth. Furthermore, over the coming weeks and months, we anticipate announcing multiple long term contracts with oil and gas customers to meet their infield power requirements.

Based on our ongoing discussions, we are confident that we will secure long term agreements for all two twenty megawatts of currently ordered equipment by the 2025. Additionally, we are actively engaging with our power generation suppliers regarding our next equipment orders. While these developments are exciting, we believe this is still just the beginning for this business. We will continue to align our actions with Pro Power’s mission to rethink the grid, therefore unlocking more exciting opportunities to serve our existing and prospective clients both in oil and gas and other industries to create long term value for ProPetro shareholders. Now turning to capital allocation, which is more important than ever in an environment like this.

Our dynamic capital allocation strategy allows us to continue to grow Pro Power and our Force Electric fleets while also pursuing disciplined M and A and focusing on shareholder returns. We have been taking and will continue to take a balanced approach to executing this strategy to maximize value. In fact, our financial improvements and the value we have created over the past two years are a direct result of this very approach. Selena will share more details about our financial results in a moment, but I wanted to highlight that in the second quarter we generated resilient free cash flow in our completions business. Utilization across all segments was down due to larger macro impacts including lower commodity prices, heightened uncertainty and weather downtime.

However, our pricing remained largely stable and our operational excellence and cost controls remained strong, particularly as it relates to maintenance capital expenses. Looking ahead our visibility into our activity outlook remains somewhat limited. As I touched on earlier the impacts of tariffs and OPEC plus production increases have caused ongoing uncertainty in the back half of this year and we expect that to persist into 2026 even with the recent stability of oil prices. Accordingly, in the third quarter, we expect to see a reduction in activity, particularly with our more conventional equipment and we anticipate normal seasonal patterns in the fourth quarter. As a result, we expect to operate an average of 10 to 11 fleets in the third quarter with the possibility of running fewer fleets in the fourth quarter.

That said, as we navigate a fluid and uncertain environment, ProPetro remains in a solid position supported by our strong balance sheet, first class customers, refreshed next generation asset base, growth through pro power, sustainable cash generation and long term contractual stability. Most importantly, these results and strengths are made possible by and due to our outstanding team. On that note, Selena, I’ll turn it over to you.

Selena Davila, Chief Accounting Officer and Principal Financial Officer, ProPetro Holding Corp: Thanks Sam and good morning all. In terms of the numbers, ProPetro generated total revenue of $326,000,000 a decrease of 9% as compared to the prior quarter. Net loss totaled $7,000,000 or $07 loss per diluted share compared to net income of $10,000,000 or $09 income per diluted share for the 2025. Adjusted EBITDA totaled $50,000,000 with 15% of revenue and decreased 32% compared to the prior quarter. This includes the lease expense related to our electric fleets of $14,000,000 Importantly, one attributable factor for lower financial performance this quarter was and is our strategic decision to maintain our idle fleets in optimal working conditions.

This ensures preparation for rapid deployment once market conditions improve and that we are best positioned to capitalize on future opportunities as they arise. Net cash provided by operating activities and net cash used in investing activities as shown on the statement of cash flows were $54,000,000 and $36,000,000 respectively. Free cash flow for our completions business was $26,000,000 As Sam mentioned, our legacy completions business continues to generate sustainable free cash flow. Even in today’s challenging market environment, we are operating with the consistency and reliability of a mature industrialized enterprise. Capital expenditures paid were $37,000,000 and capital expenditures incurred were $73,000,000 including $30,000,000 primarily supporting maintenance in our completions business and $43,000,000 supporting our Pro Power orders.

The difference between incurred and paid capital expenditures is primarily comprised of Pro Power related capital expenditures that have directly by our financing partner and unpaid capital expenditures included in accounts payable and accrued liabilities. In terms of CapEx incurred guidance, we will continue to evaluate the market and scale CapEx with activity realizations. As we sit here today, given what Sam shared around our activity outlook, we now anticipate our 2025 CapEx for our completions business to be between $100,000,000 and $140,000,000 We do still expect to spend approximately $170,000,000 for our Pro Power business, inclusive of finance CapEx. So our total range will be between $270,000,000 and $310,000,000 down from $295,000,000 to $345,000,000 on last quarter’s call. Importantly, cash and liquidity remained strong, which is very important today’s uncertain market.

As of 06/30/2025, total cash was $75,000,000 and total liquidity at the end of the 2025 was $178,000,000 including cash and $103,000,000 of available capacity under the ABL credit facility. As for our share repurchase program in May 2025, the company extended its $200,000,000 share repurchase program to December 2026. Since the program inception in May 2023, the company has repurchased 13,000,000 shares, representing approximately 11% of outstanding common stock. In the 2025, the company did not repurchase any shares as it prioritized the launch and scaling of the Pro Power business. In terms of approach, our capital allocation strategy continues to be and will continue to be centered, while remaining flexible and dynamic so we can pivot as needed.

Between forced electric fleet conversions, pro power growth, disciplined M and A investments and share repurchases, while also maintaining a strong balance sheet and commitment to capital discipline. With that, Sam, back over to you.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Thanks, Talina. I’m proud of how our company and team have navigated recent market volatility and positioned ProPetro to thrive in any environment. Our resilience is a direct result of several things, namely a legacy completions business that is profitable through various cycles and will continue to fuel our growth in Pro Power, as well as our investments including Force Electric fleets, Pro Power and a thoughtful M and A approach that together provide us with a rock solid foundation to withstand market turbulence. And lastly, our core strengths of our strong balance sheet with low debt, first class customers and a first class team, a team that’s proactive and quick on its feet for which I’m immensely thankful. At the end of the day, we’re well prepared for what lies ahead and remain confident in both our strategy and the future of our company.

We’ve built significant momentum and a strong foundation. I’m certain we will continue to build on this progress. None of our achievements would be possible without the dedication and hard work of our ProPetro teammates. Your commitment to operating safely, efficiently and responsibly inspires confidence in our ability to navigate this dynamic environment. Thanks for everything you do.

With that operator, we’d now like to open the line to questions.

Conference Operator: We will now begin the question and answer session. The first question comes from Derek Pauthiser, Piper Sandler. Please go ahead, sir.

Derek Pauthiser, Analyst, Piper Sandler: Hey, good morning, Sam. Just wanted to start off with more of a bigger picture question on the Permian Basin. So we talked about approaching 70 fleets from the 90 to 100 at the start of the year. This means 20 to 30 idle fleets. And you talked about potential for persistent uncertainty moving into 2026.

Just how much of an overhang do you think this will be on the Permian Basin? How can we think about the industry working through this big oversupply with the frac equipment and how it will impact perpetual going forward?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: It’s a great question, Derek. I think it’s I mean, kind of boils down to traditional supply and demand. And you’ve heard us talk a lot about that the kind of tiering or stacking of frac supply with electric and all gas offerings at the top and all diesel offerings at the bottom. It’s very obvious that the most disrupted part of that supply stack is the diesel equipment. That’s been exactly what’s happened to us as well.

We think because of the looseness in the market and some of the lack of discipline pricing we’ve seen at that lower end of the market, it likely is a long term tailwind via attrition. So we’re just choosing not to play in that loose part of the market right now. All the meanwhile, the top end of our stack, several of our dual fuel fleets as well as all of our electric fleets are humming along nicely with absolutely no disruptions to pricing or activity. So I’d hate to be a player in the market that hasn’t invested in some of this next generation equipment and it’s just sitting on the lower end of that stack. How long does the looseness last?

Hard to see, but as you could see by our guidance and kind of our outlook in the back half of the year, think that kind of looseness in the market is here to stay for at least 2025 possibly into the 2026. Beyond that, if and when the market does turn up a little bit, we’re I don’t know if there’s going be anybody better positioned in the Permian Basin than us to play into a recovery market sometime next year.

Derek Pauthiser, Analyst, Piper Sandler: Got it. That makes sense. I guess turning over to Pro Power, excited to see the inaugural contract there. You mentioned you’re kind of honing in on your next equipment orders. I’m just curious if you’ll any thoughts around continue to go with the recip or the smaller turbines or maybe you step into the larger turbines?

And also, are you still going to be focused in on the oil and gas industry? Or do think we’ll see any potential to expand in more industrial applications and potentially even data centers?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. Look, I mean, we’re really happy with the flexibility of the gas recips and the smaller turbines that we have on order right now. It’s giving us a lot of optionality in the market from a contracting standpoint and the type of work. So beyond the two twenty megawatts that we’ve ordered, you’ll likely see some of the same. But beyond that, we’re probably going to hold kind of our cards pretty tight to the best in terms of any other types of power sources that we’re getting into given that that’s pretty competitive from a supply chain standpoint.

Remind me of the second part of your question.

Derek Pauthiser, Analyst, Piper Sandler: Just the end markets staying in oil and gas or potentially looking into industrial, yes.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Really strong demand pull in oil and gas right now, mainly in midstream. We in our scripted remarks and our press release hinted at more announcements coming in the near future, things that we have in the pipeline that are very close to the finish line. Those deals are likely very similar, maybe varying in size, but very similar in structure to what you saw with the first contract that we recently announced. And demand is really good in oil and gas. So here initially we’re really going to stick to and hammer what we know right here in our backyard.

Beyond that look we’re having some really interesting exploratory conversations about non oil and gas opportunities. It remains to be seen how quickly some of those can materialize. But look, if you’re in the power supply chain and you’re an operator of megawatts of scale, which we are, your opportunities frankly just show up at your doorstep. So we’re shifting through a lot of different things from a long term strategic standpoint that leave us really, really excited about the future prospects of Pro Power.

Derek Pauthiser, Analyst, Piper Sandler: Got it. Thanks Sam. I’ll turn it back.

Conference Operator: The next question comes from Eddie Kim, Barclays. Please go ahead.

Eddie Kim, Analyst, Barclays: Hi, good morning. Thanks for all the commentary about the market conditions. Just wanted to ask about how we should think about the trajectory for 4Q. You mentioned in prepared remarks kind of normal seasonal patterns. But looking at the past two years, your revenue in 4Q had a double digit sequential decline.

Is that the level of decline sort of consistent with how you typically think about normal 4Q seasonality? And just, I mean, in particular this year, should we potentially expect maybe some incremental softness on top of normal seasonality just given the market conditions currently? Any thoughts there would be great.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. Look, mean to be honest it’s a little bit hard to see into 4Q right now. We’re very confident about our 3Q guide that we gave 10 to 11 fleets. That said, I mean, there’s your numbers are correct on the last year or two from like a 3Q to 4Q, but we’ve also seen quarters that have gone opposite direction as well. So I think it kind of all depends on what the commodity price does and what the forward look looks like for the E and P space If they can gain more certainty around their plans going into 2026 and do they want to secure some of that work earlier rather than later.

Also when we talk about seasonality just to clarify it’s usually off of that 3Q mark. So our 10 to 11 fleet guide. So would there be regular holiday white space on top of the 10 to 11 fleets, which we expect to be active through the end of the year. I think we’ve just right now are being conservative with some holiday white space. But look, we’re also here we sit with a pretty pessimistic near term market view.

But at the same time we continue to have conversations with our customers and prospective customers about projects that could change that outlook pretty drastically and pretty quickly. We just don’t have any certainty of that right now. So we’re going to be pretty conservative and realistic as we look into the back half of the year.

Eddie Kim, Analyst, Barclays: Got it. Great. That’s helpful. Thank you. Shifting to Pro Power, it’s great to hear your confidence in securing long term contracts for that entire two twenty megawatts by year end.

I’m a little surprised just given the challenging market conditions in oil and gas currently. But I mean, does that just suggest that power demand, even for microgrids is almost independent of, I guess, drilling and completions activity and only I guess it’s more tied to midstream and production. Or are operators kind of looking past kind of near term weakness in that maybe in anticipation of market conditions kind of rebounding next year? Any thoughts there would be great.

Don Christ, Analyst, Johnson Rice: Yes. These first few steps from a

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: power standpoint for us as it pertains to our entrance into the market non completions related. So production in midstream like you mentioned and like we’ve mentioned in the last couple of calls here. So that is that’s quite bifurcated or maybe disconnected from some of the volatility that we see in the drilling and completions market. And it’s really aimed at at the end of the day cost savings for our customers. So even if they cycle down, overall the space cycles down on the drilling and completion side, it doesn’t mean that they quit producing their wells and that they’re not continuing to look for ways to lift that production and move it in a less expensive manner.

And that’s right what we’re aimed at right now. So as the Permian continues to have power demand needs, on the mainly on the production side, we think we’re really well positioned to create quite a bit of stability in our business long term by being a bit separated from the completions and drilling space with our power offering.

Eddie Kim, Analyst, Barclays: Great. Thank you. I’ll turn it back.

Conference Operator: The next question comes from Grant Hynes, JPMorgan. Please go ahead.

Grant Hynes, Analyst, JPMorgan: Hey, good morning,

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: team. Good morning.

John Daniel, Analyst, Daniel Energy Partners: So you guys messaged 10 to 11 fleets kind of in 3Q, down about 20% from the thirteen, fourteen in the second quarter. But in your prepared remarks, some of the simul frac work, particularly on the forced fleet side. Could you maybe give us some color, I guess, on how much more simul frac might be working kind of in the second half versus the first half and perhaps utilization on a horsepower basis when we just think about sequential change kind of versus the 20% reduction in fleet count?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. I don’t know how much we want to detail we want to give there. I’d say proportionally it’s pretty similar. Simulfrac continues to be a big part of our business, especially on the electric side. We don’t think there’s any better safety cost efficiency way to approach completing your wells other than with an electric simul frac setup.

So more of that probably going into next year as we continue to expand our force offering, but kind of quarter over quarter it’s pretty proportional from a simul Zipper standpoint.

John Daniel, Analyst, Daniel Energy Partners: Got you. And then maybe transitioning to power. You mentioned sort of the initial deployment for that 80 megawatt contract starting in 3Q twenty twenty five and into 2026. How should we think about sort of the lead time on the asset deployment? And anything in terms of sort of startup costs and the deployment there?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. I mean you’ll see a little bit of startup costs that are being bared in our numbers that we disclosed in our press release information. So there will be a little bit of that. It’s really not much. I mean this business is much more personnel light than our legacy completions businesses.

And that equipment will deploy in a pretty linear manner from 3Q through mid year next year. As we mentioned in our remarks, we mentioned earlier, we’re also in very developed discussions with our suppliers on our next orders that likely we could take delivery of in 2026 inside of 2026 as well if those orders are placed fairly soon. So that could even be a tailwind to estimates and expectations as it pertains to our power business in 2026. I’ll also say as it pertains to whatever that next order may look like, we’ll be pretty quiet on what type of equipment that’s going to be. But in terms of size, we think each one of our orders in the power space will likely be very meaningful.

We don’t have any interest in kind of trickling out the size of Pro Power. We have every interest in multiplying the size of this business as quickly as possible given the pipeline of opportunities that we’re seeing. So we’re quite serious and focused about scaling that business as quickly as possible into the opportunity set that we’re seeing.

Eddie Kim, Analyst, Barclays: Appreciate the color. Thanks.

Conference Operator: The next question comes from Waqar Syed, ATB Capital Markets. Please go ahead.

Grant Hynes, Analyst, JPMorgan: Thanks for taking my question. Sam, a big picture question. We’re all trying to figure out like how this decline in completion activity in the Permian, how it’s going to impact the production in the basin. But from your perspective, as this activity declines and the number of crews decline, it is likely a lot of that is being offset by the Simon fracs. So do you have a sense that if activity completion crews is down like by 25%, Then in terms of the total footage that is fracked, how much lower that is?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. Hard to say, Waqar. I can tell you just and this is my personal opinion, viewpoint on this. It’s been quite surprising to me that we haven’t seen production at least in the Permian Basin, but domestically in The U. S.

Roll more than it has. I think it’s starting to plateau and show signs of potentially developing an early downward trend. But I as we sit here boots on the ground counting every crew that we know working and counting up the simul frac crews that we know of here in the Permian Basin across the whole space. It’s really, really hard for me to believe that we are at an activity level that’s going to sustain Permian production today. There has as you mentioned, there’s been several efficiency developments over the last few years, things like simul frac that have increased maybe completed footage per crew.

I do not think at all that we are outrunning that right now. So I would expect sometime in the future Permian production to roll just from our point of view kind of in the completion services space.

Grant Hynes, Analyst, JPMorgan: Great. Thank you. And then by our calculations, you’ve got like seven Tier four DGB fleets, let’s say four fleets. So should we assume that everything that’s working is for you, those 11 fleets, all of them are the next generation fleets? Or do you have any one of the Tier four DGB fleets being down and Tier two working?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: There’s a little bit of diesel still in the system right now. But as I mentioned earlier, when I kind of described the supply stack, the dual fuel and electric have been far more resilient.

Grant Hynes, Analyst, JPMorgan: So you do have a Tier four DGB fleet down?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: We have some Tier four DGB equipment down right now. We’ll not say much more than that.

Grant Hynes, Analyst, JPMorgan: Okay. And like if I look at your quarter over quarter EBITDA progression for the different business lines, it seems like Wireline is tracking the fracking business relatively closely. So as we look into Q3, again, it track fairly quick wireline track has the same trajectory as fracking?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. It’s going to track pretty closely with everything else as is cementing has tracked kind of rig count kind of the changes in rig count fairly closely as well.

Grant Hynes, Analyst, JPMorgan: No, I noticed that in cementing EBITDA quarter over quarter was down about almost 42%, 43% versus 24%, 25% declines for wireline and cementing. It’s just is this anything in particular going on with cementing or just the scale thing small, so a small change makes a bigger difference?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: That and a full quarter effect of drilling rigs parking, that always happens ahead of frac fleets and wireline units. We started to see cementing deteriorate in really towards the end of the first quarter. So you’re seeing a full quarter effect of some of that.

Grant Hynes, Analyst, JPMorgan: Thank you, sir. Appreciate all the color.

Conference Operator: The next question comes from Geoff LeBlanc, TPH. Please go ahead.

Matt Augustine, Vice President of Finance and Investor Relations, ProPetro Holding Corp0: Good morning, Sam and team. Thank you for taking my question.

Don Christ, Analyst, Johnson Rice: Good morning.

Matt Augustine, Vice President of Finance and Investor Relations, ProPetro Holding Corp0: Regarding your contracting capacity long term, should we be aware of any price reopeners? Or I guess more broadly, how should we think about the stability of the pricing given that historically you expressed a willingness to work with your long term customers? Thank you.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. The contracts are pretty set on the contracts that we’ve talked about that we have on the dual fuel and electric side. There’s on average there’s some semi annual adjustments to those prices, but they’re pretty formulaic and passive usually resulting in low single digit changes that are pretty hard to see probably from the outside point of view. So pretty stable.

Matt Augustine, Vice President of Finance and Investor Relations, ProPetro Holding Corp0: That works. Thanks for the color. I’ll hand the call back to the operator.

Conference Operator: The next question comes from Don Christ, Johnson Rice. Please go ahead.

Don Christ, Analyst, Johnson Rice: Good morning, Sam. Most of my questions have been answered, but I did want to ask one kind of more macro question and it relates to just the broader equipment out in the space today. You’ve seen some of your smaller competitors sell their equipment and that equipment is going overseas. And then NOV talked about five or six different countries around the world that are exporting unconventional technology to go frac their wells. And just a broader question as to are you seeing demands for the sale of your kind of diesel stuff to go overseas?

And do you think that can more balance the market as we kind of look out a year or two as more of this equipment moves overseas?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Look, think the demand is there. And I think there’s a lot of different places globally that are taking notice of how we do what we do over here as an industry. No surprise, but America innovates and works harder to figure out how to do more with less than any other country of the world. And that is maybe more evident in the energy space than any other place. And we have fielded inquiries from other countries about not only equipment, but expertise and services as well.

It’s hard to say if that’s like a meaningful variable in what happens domestically to supply and demand, but I think it definitely helps. So we’ll watch that closely and we’ve been a pure Permian pressure pumping frac provider for the history of our company. But it doesn’t mean that we don’t answer some of those phone calls and entertain some of those ideas because there are some instances where that could make a lot of economic sense because of some of these other areas across the globe being so interested in what we do and how we do what we do. So I think it could be a help Don. I think it will likely improve the supply and demand equation a little bit hard to say how much.

Don Christ, Analyst, Johnson Rice: I appreciate that color. If I could sneak in one more, if you were going to order some new solar turbines today, what would the lead time on that be? We’re hearing it’s extending out pretty far.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: It’s not getting any shorter. And I’ll probably stop short quoting you an exact number, But we’ve got a great relationship in that part of the supply chain. And we’re pretty confident that we’ll utilizing those relationships to continue to scale our power business in a meaningful way.

Don Christ, Analyst, Johnson Rice: I appreciate the color. Thanks, Sam.

Conference Operator: The next question comes from John Daniel, Daniel Energy Partners. Please go ahead.

John Daniel, Analyst, Daniel Energy Partners: Hey, Sam. Sort of a big picture question. Your on your release, you note the market and the Permian has gone from, call it, 90 to 100 to maybe down to the 70 range. I’m just curious like if no one had reduced pricing six to nine months ago, would the frac fleet be 60 or would it still be 70? What would it what do you think it would be?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: I don’t know. Mean, I don’t six to nine months ago, I don’t know if there was a ton of pricing change in the market. I think the activity disruptions we at ProPetro have seen most recently have been due to pricing movements in the last thirty to sixty days.

John Daniel, Analyst, Daniel Energy Partners: That’s fine. Just call it ninety days ago. My question is what’s the right level of demand? You follow me? And is service pricing really having an influence on whether they keep or release the fleet?

I guess that’s where I’m going. There’s

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: probably 10 to 20 fleets in the market that are doing what I just frankly call stupid stuff right now. So could it be lower? And look, I have to commonly remind ourselves and remind others discipline in the frac space is either saying no to work that doesn’t make a return or saying no to building the next piece of equipment in a way we’re doing both right now. Right. It would encourage others at the bottom end of the market to do the same because it doesn’t turn out well when you’re making decisions that don’t cover your cash cost to operate your fleets.

Another thing I think in this that maybe is lost a little bit that we’ve recently talked about is, if fleets have moved from say 90 to 70 and we’ve moved from 15 fleets to 10.5 fleets at the midpoint of our guidance, we’ve not lost any market share at all. And that’s the same market share of activity that exists in the Permian right now. And we’re prioritizing protecting our margins and protecting our equipment, because we think that that’s the rational right business decision for us.

John Daniel, Analyst, Daniel Energy Partners: Fair enough. And then, Sam, I guess another one, if you’ll entertain this one, but like the guys that you when you go from say 15 down to 10.5, the customers that are using those four fleets, Do you have any indication from them whether this is budget related, just pure price competition? Do they come back next year? Just some thoughts on maybe where the Permian frac market might be normalized, if there’s ever a word there’s in this business, but for next year?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Yes. This is an interesting question, John. I’m glad you asked that. It’s to be candid with you, this is mainly one customer of ours that we’re talking about that’s had a fairly frantic response to changes in commodity prices and outlook. So we then back to my kind of description of what discipline looks like, we then have to make our own voluntary decisions.

Do we want to help them with that issue or do we want to save our equipment and our margins for a better day? We’ve chosen the latter.

John Daniel, Analyst, Daniel Energy Partners: Fair enough. Okay. Well, thanks for keeping the call going and

Eddie Kim, Analyst, Barclays: let me on. I appreciate it.

Conference Operator: The next question comes from Stephen Gengaro, Stifel. Please go ahead.

Matt Augustine, Vice President of Finance and Investor Relations, ProPetro Holding Corp1: Thanks. Good morning, everybody. I joined late, so I apologize, Sam, if you answered this. But when we think about the efficiency gains across the drilling and completion lifecycle of a well, is there a way or have you guys thought about how do we get the fair value we’re extracting, right? To the extent you’re more efficient than you were a year or two ago, like is it just not possible?

Or is there a way to drive value for you or the high end pressure bumpers for the efficiencies you bring to the table?

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: I can tell you this much pretty plainly. When you have next generation equipment, you’re able to contract that equipment. We’re doing that inside of those contracts. I don’t want to say too much more about kind of our commercial model and architecture because we’re pretty proud of how creative and innovative we’ve been on that end. But there is light at the end of that tunnel, Stephen, and we are doing that in some instances.

It’s mainly around our electric equipment. That’s another reason why given kind of our bullish long term outlook and our confidence in things like our electric equipment, we start to discuss should we accelerate investment and deployment of more equipment like that. We really like that idea and we’re kind of working through how we can do that going into next year so that we can capitalize on those efficiency gains and the other benefits that things like electric equipment bring to bear.

Matt Augustine, Vice President of Finance and Investor Relations, ProPetro Holding Corp1: Great. Okay. That was all for me. Thank you.

Conference Operator: Ladies and gentlemen, this was our last question and this concludes our Q and A session. I would now like to turn the conference back over to CEO, Sam Sledge for closing remarks.

Sam Sledge, Chief Executive Officer, ProPetro Holding Corp: Thanks everyone for joining us today. Thanks for your interest in ProPetro. We look forward to talking to you again soon. Have a great day.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines. Goodbye.

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