Flotek Industries at EnerCom Denver: Strategic Growth and Expansion

On Monday, 18 August 2025, Flotek Industries (NYSE:FTK) presented at the EnerCom Denver – The Energy Investment Conference, showcasing its strategic evolution over the past six years. The company highlighted significant growth in its data analytics segment and maintained a focus on improving its core chemistry business. Despite market challenges, Flotek has achieved consistent financial improvements and continues to expand its market presence.

Key Takeaways

• Flotek has achieved 11 consecutive quarters of adjusted EBITDA improvement.
• The data analytics segment is projected to contribute over 60% of adjusted EBITDA by 2026.
• Revenue guidance for 2025 is between $200 million and $220 million.
• The company’s stock value has increased by 230% since 2023.
• Flotek is focusing on international expansion and strategic acquisitions.

Financial Results

Flotek Industries reported impressive financial performance, with:

• A 31% increase in revenue from 2024 to 2025.
• Adjusted EBITDA up nearly 102% year-on-year.
• A 189% growth in revenue from the data segment, now 24% of total revenue.
• Gross margins of 63% in the data analytics segment for 2025.
• Revenue guidance for 2025 between $200 million and $220 million.
• Adjusted EBITDA guidance for 2025 between $34 million and $39 million.

Operational Updates

The company’s operational advancements include:

• Expansion into power services, custody transfer, and flare monitoring.
• Custody transfer units saving operators up to $50,000 per day.
• 100% utilization of the flare monitoring fleet on recurring contracts.
• Secured a $160 million backlog from the PowerTech contract.
• Acquisition and commissioning of 30 power generation assets, with 28 operational.

Future Outlook

Looking ahead, Flotek aims to:

• Expand its data analytics segment to encompass over 60% of adjusted EBITDA by 2026.
• Continue growing its market share in the chemistry technology segment.
• Explore new opportunities in real-time water treatment and flow assurance.
• Leverage a $15 billion addressable market with strategic acquisitions.

Conclusion

For a detailed understanding of Flotek Industries’ strategic direction and financial performance, refer to the full transcript below.

Full transcript - EnerCom Denver – The Energy Investment Conference:

Veronica Raleya, Partner, Baker Bots: Good morning. I’m Veronica Raleya, partner at Baker Bots in our New York office. I am here to present Doctor. Ryan Azel from Flotek Industries. He has a career spanning more than twenty years in the energy industry, currently a CEO of Flotek Industries.

Now in his third year in such role, he’s been at the company for about six years, serving in many roles. Prior to joining Flotek for over a decade, Doctor. Rizelle held various leadership roles at Halliburton. He has a PhD in polymer science, and he’s also a published scientist and an author on more than 26 patents. Please join me in welcoming Doctor.

Ryan Ezel.

Ryan Azel, CEO, Flotek Industries: Good morning and it’s a pleasure to be here this week at intercom and I personally like to thank each of you for attending our brief session here on Flotek. Flotek, for those of you that’s focused on innovative chemistry and data solutions to drive value for our customers and shareholders. And we believe that this convergence of chemistry and data will lead to the evolution of future landscape for for energy infrastructure sector. And we wanna be at the forefront of delivering these solutions in real time data. Now, would say I’ve been this month marks my sixth anniversary of being here at Flotek.

And I’ll tell you, leading this transformation has been quite the journey over the past six years. And we started back in 2021 laying out a three, five, and ten year strategic plan for the improvement organization that consisted of two phases. The first was the reparation and improvement of our core chemistry business and its growth to grow market share. The second was the development and growth of a real time data analytics segment, which we believe will drive the value creation for the business going forward. And we’re proud to report here today that both of those pieces of strategies are going very well.

When we look at it today, we are sitting at 11 consecutive quarters of adjusted EBITDA improvement, showing the execution of this strategy. Along the way, we believe that we’ve secured multiple long term chemistry and data supply agreements that continue to drive high margin backlog revenue growth, And we’ve done all this with record established HSE and service quality fundamentals within the industry. One of the particular locations that we have is going on ten years without lost time incidents or recordable incidents in the field of operations, which is phenomenal to see. In addition, this being my sixth anniversary at Flotek, this is also our third year anniversary of presenting here at Intertek I mean Intercom. And I’m really pleased to present our overall improved performance over those years as you now start to see improvements in all financial metrics, including gross profit, revenue, adjusted EBITDA and net cash flow.

More importantly, what we see is the improvement in the value creation for shareholders as we’ve seen since 2023, a 230% increase in stock value, which again drives creation for our shareholders going forward. When you look at the ’24 versus the ’25 on the revenue aspect, we’re up 31% despite a challenging market. When you look at adjusted EBITDA, we’re up almost 102% year on year. Diving a little more deeper into the quarter, you look at our high margin data analytics segment is continuing to grow and expand, delivering significant profitability performance. If you’ve seen a 189% growth in revenue from the data segment with a significant increase in gross profit, it now represents 24%.

On a look forward basis, we believe in 2026 that our data analytics segment consisting of our real time measurements will encompass more than 60% of our adjusted EBITDA on a look forward basis as we look to make this transition from a core innovative chemistry to a real time chemistry and data monitoring company, which is from a long term aspect drives significant shareholder and value creation. Diving into these numbers a little bit deeper, we improved in every single metric in profitability year on year. You look at revenue growth, gross profit, net income, adjusted EBITDA, particularly when you look at adjusted EPS, take into consideration the recent acquisition we had of real time gas monitoring and gas conditioning assets, this created our section called PowerTech that I’ll talk about in a little bit more here at the back half of the presentation. But again, when you look at the sixth consecutive quarter of growth across all metrics, again showing the execution of our strategy and where we’re going with the organization. We talk about continuous financial improvement.

These eleven consecutive quarters of adjusted EBITDA improvement have again shown how each of that convergence piece of outlaying the landscape for profitability for the organization. This also represents the second year we’ve given guidance out to the industry where we see total revenue between 200,000,000 and $220,000,000 and adjusted EBITDA between 34,000,000 and $39,000,000 When you look at the midpoint of our prior guidance, it’s up 600 basis points from 2024 on adjusted EBITDA. And the midpoint would be a $36,500,000 improvement higher than where we were last year. Going to more of our strategic approach to the business. In 2021, we were just a core chemistry technology segment only had about a $2,100,000,000 addressable market.

With the addition of our data analytics segment and JP3 Technologies, we’ve now opened up potential measurement areas all along the energy infrastructure value chain. We look at power generation, custody transfer, what we see from data center power, what we see at transmix, read vapor pressure monitoring. We’re also transitioning to our ability to monitor production chemistry in real time, which will result in successive sales in chemistry technologies as well as water treatment. So, over the periods of time, what you saw was the original 2,100,000,000.0 to $2,600,000,000 market has now expanded to over $15,000,000,000 of addressable market for flow tech. In that period, we grew our chemistry business from less than 1% market share to almost 20% market share of chemicals delivered on-site, and we’re continuing to see the significant growth in our data analytics segment.

So, what I would say if you were looking at us in the first inning of a long nine inning baseball game, we have significant runway to continue to grow the business. Diving a little bit more into our strategy. Our data analytics segment is the most exciting emerging piece of our business. What started as an acquisition of JP3 Measurement, which is a data analytics company out of Austin, Texas, that was focused on capital sales within the midstream to downstream segment. Since that point, we’ve transitioned this business to almost 100% of data as a service monitoring, moving over from CapEx sales to long term recurring revenue models.

We’ve moved the business away from just a pure midstream to a significant growth in the upstream segment. This helped moved by our presence in the chemistry technologies area. From there, we focus on three major categories around power services, which we look at real time gas condition and gas monitoring. We offer one of the only services in the industry that can do custody transfer level monitoring of gas quality and subsequently treat and blend on location for any power generation type service that uses natural gas or hydrocarbons. We also have a really exciting emerging business around custody transfer that can replace the composite testing and sample testing required to utilize GC.

We can actually look at real time gas quality at GC level, taking a measurement every five seconds, which will make a significant transition in the business to where you truly understand in real time gas quality. And we’ve had great success in this long term pilot program we’ve had running with one of the largest operators here in North America, where those custody transfer units have now transitioned over into long term contracts. They are creating significant value, some of them generating up to $50,000 of savings a day in terms of BT quality measurement and rebate perpetual monitoring that we see at various locations. So quite a bit of exciting areas around custody transfer. The last one in the upstream piece from our data analytics is around our flare monitoring.

We have a unique solution that can actually go to location, plug directly into a flare no matter high pressure, low pressure, and actually give net heating values and BTU values in real time, leading to the performance of the flares. What started as a real time mobile service is now transitioning into actually being built in line with a lot of flaring systems to optimize production and what they utilize at location for flare optimization. So a really exciting piece there. And I’m proud to say on that piece that we have our entire flare monitoring fleet currently is 100% utilized on recurring contracts all over The U. S.

And we’re continuing to deploy multiple units per day. Looking at the impact of the data analytics segment on our business, you can see that over time as those data as a service transitions take place, you start to see significant improvement in the high margin growth, where traditionally if we had sold a VariX or an XPET unit as monitoring device just on a capital sale, we have recognized about 40% margin. However, as we’ve transitioned to the data as a service monitoring, you’re now seeing margins exceed 80% and combined you start to see the improvement as the 2025 gross margins of the segment was 63%, and we expect that to continue to improve throughout the back half of the year and as we roll into 2026 and going forward as we have forecasted significant growth within the data analytics segment in all areas of upstream around power, custody transfer, and our flare opportunities. What’s even more important and what we’ve transitioned a lot of the discussions that we have with the investment community is we are now generating revenue backlog from our data as a service components. One of the core ones there was our recent PowerTech long term contract, which secured almost $160,000,000 in backlog services along with our new custody transfer and what we’re doing in flare opportunities.

So, we’re continuing to report and monitor significant growth in data as a service over the next five years driven by recurring backlog. This adds quite a bit of stability, forecast ability towards where we’re going to be performing on financials and revenue growth and profitability, which adds some comfort to the cyclical nature of a lot of the energy sector that we’ve been in the past, where we’re heavily weighted towards the chemistry environment, which typically followed rig activity or frac fleet activity. So this transition is phenomenal for not only the company, but also our stakeholders and long term customers providing stability. Looking at some of the things in a little bit more detail. We talked about our power services.

In April, we acquired 30 power generation assets. We don’t mean turbines in this case. What we look at is the gas conditioning units that plug directly into the gas flow lines and detect swings in BTU quality. From there, we have emergency stop devices that we see a drastic swing that could cause damage to turbines or dual fuel equipment, etcetera. It can divert this gas, we can blend it down and keep the BTUs level for safe optimization.

Along the way, we also secured a six year contract with these assets that puts them under a 100% dry lease type program as we continue to build that program out, and it will be the cornerstone of our power tech development and growth. Now have out of the 30 assets, we have commissioned have operating 28 of those now, and we expect to have all 30 operating by the 2025. We’ve also expanded our portfolio. We were granted three more patents last week on some new pieces of equipment. One is called our ESD Smart Skid.

It is a scaled down version of our current ESD unit. It’s extremely mobile. It can move it on a 20 foot trailer. It has all the same operations as our traditional ESD, but costs about 40% less. So it has some definite economics and operations on the growth.

We currently have deployed the new one into the field of operations and we’re all scheduled to build quite a few more before the end of the year. We look to give you a little additional guidance on what that CapEx will be as we report earnings here in Q3. But definitely some exciting pieces no one in the industry has yet been able to deliver the combination of custody transfer, fuel monitoring, metering, control, and what we look at in terms of sour gases, etcetera, flowing and divert and treat gas in real time. So this is a transformational step in Flotek’s data as a service and operational service revenue business going forward. I also talked about custody transfer.

What’s been exciting about custody transfer is that when we acquired JP3, that company was actually started with a vision of being able to monitor custody transfers that most, I would say, resource owners and even some operators felt that they weren’t ever being fully compensated for the total value of their gas, whether it’s the initial thirty to sixty days of production, NGLs that are lost, the ability of a GCC typically to undervalue gas by 3% to 5%. What our new units do is they plug directly into production flow lines, whether at the initial wellhead on completion, at a gathering location, etc. And we can monitor volume, BTU quality, net heating value, gas composition, the speciation, everything taking a measurement accurately once every eight seconds to the full tilt. And we’ve run this apparatus specifically against inline and auto sampling gas chromatography. And over twenty four months of strict testing, we’ve only been able to find a point zero two variance between BTUs of our expected variance units as compared to typical automated gas chromatography.

So not only does it give you a robust and cost effective way to monitor BTU, it can create significant value for reservoir and resource allocation in terms of its valuation on initial production. I do believe in the long term, this represents probably one of the most important segments for flowtech as we start to see multiple areas of this in the industry convert over to utilizing these real time measurements from our expect units. One of the core things that allowed us to advance forward was we initially our Varex units were a little bit cost prohibitive initially to put on location to operate for custody transfer for the number that was required. So we put together a year long R and D project. And the unit you see here is what we call our new expect unit.

We finished commissioning it in Q4 twenty twenty four. It allowed us to have a 70% reduction in cost of the unit, but yet has the same operational capabilities. It has zero moving parts, is extremely robust, and very minimal R and M maintenance for it. And so it also runs an inline calibration gas in a cell so that it stays in calibration the full time, which is something very important in terms of making sure that you are maintaining calibration throughout the measurement in these remote locations. So quite exciting technological advancements, all that we’ve got various intellectual property around for maintaining the XBEC unit.

So, I’m extremely excited. We’ve also been able to launch these technologies into various international geographies into Asia as well as The Middle East. And those projects will be coming online here in the back half of the year in the 2026. So we expect significant traction and growth from the core part of our data analytics and custody transfer business. Now transitioning to our final segment to discuss is around our chemistry technology segment.

As a chemist myself, this is still an exciting part of the portfolio. We believe that we have brought something to the market that transitioned where Flotek was ten years ago and it’s all focused around what we call prescriptive chemistry management. For the past twenty years of all the chemical and completions work that we’ve done here in North American land, we’ve actually consolidated a database that we utilize core physical chemical properties at whatever well location or geographical location, target zone, reservoir to be completed. And we actually run AI driven chemometric models to dose and calculate particular chemical packages that we’ve shown to improve production through publicly available data with our experience after completing almost 20,000 wells worldwide. And what we’ve seen is this has allowed us to not only one, have more rapid and accurate chemistry prescription, but it’s also allowed us to bring our R and D costs down from an average spend of $12,000,000 a year to about $1,800,000 a year, adding cost savings and velocity which has improved our overall financial performance, but also allowed us to put a bigger scope of work with less people through the R and D labs.

And it’s pretty exciting because the chemometric models that we use are driven by the same chemometric models that we utilize inside JP3 for our modeling that we do in the field combined with the 60,000 crude samples that we’ve been able to accumulate from the JP3 modeling. So it’s really exciting. We also as part of our chemistry completion package now offer the XPEC unit to be left behind at every well location to monitor not only chemicals that go down hole but also as the production comes online to understand that efficacy within the first thirty to sixty days, which is of significant value in the test and trial cases that we’ve done. So it actually has bolted on where you’ve seen the true convergence between our data analytics segment and the overall performance of our chemistry business. So the execution of our prescriptive chemistry management strategy has paid dividends for us in the long term.

As I mentioned, when we put this strategy in place in 2021, we represented less than 1% of the completion chemistry moved in North American land. And as you can see here, we’ve continued to grow in revenue despite the decreasing rig activity or fleet activity. Now it’s not always just the fleet activity that is the direct indicator. We also track lateral foot completed, intensity, completion design, amount of water that we’re tracking with it. But again, you can still see the trend of performance that we are consistently gaining market share with differentiated solutions and technologies and our approach.

We don’t believe that there’s one silver bullet type of chemistry. It’s an engineered approach to pick the customized design and the right package to minimize formation damage, effectively carry the displacement that we see, and also the surfactants and other technologies that impede typical producibility. We do nano pore testing, we do real time microfluidic environments, we do all those things that are put in place to provide transparency on what our chemistry is doing downhole and combined with our data analytics measurements on the back end to show that the production comes. So it is a very unique solution that continues to gain traction. And it’s not just gaining traction

We’re seeing that as you start to see the unconventional completions take place in international environments. We’ve moved in the same PCM services into Latin America, The Middle East and other operational areas. So really excited about the continued evolution of the chemistry business and its growth. Even in the back half of this year we do expect to see continued market share gains as the industry is challenged at the current frac fleet and rig activities. So in closing, we truly feel that there’s been quite a transformational past here at Flotek over the past six years and that we are very compelling investment opportunities.

You look at in share price just in the ten years that we’ve been presenting here at Intercom over the past three years. Our data analytics is paving a way for a completely evolved organization to where in 2026, we do expect that more than 60% of our EBITDA profitability will come from the data as a service monitoring from the data analytics segment. We also expect to see continued market share growth within our chemistry technology segment. And we’re looking for pathways to expand from not only the completion environment, but also what we do in terms of real time water treatment, prescriptive chemistry there and also moving into the more midstream focused downstream area where we improve flow assurance that are in combination with our current chemical and data measurements that we’ll see. This has opened up, as I said, from about $2,600,000,000 market to almost a $15,000,000,000 addressable market for Flotek going forward.

Most importantly is that every quarter we’re continuing to see profitability and revenue growth, which is important for shareholders and we’re now continuously generating continuous net income, and which is something that as part of this whole transformational journey was the end goal in creating a unique solution that lays out multiple years of continued growth for the organization. And the final thing is that where I push on with each one of our employees every single day is that safety being that final condition of employment. As we approach on the convergence of these innovative chemical and data solutions, our service quality and safety still separates us apart in the industry as it adds velocity and understanding in terms of what we do with safety and performance for each one of customers and our stakeholders. So with that, we’re presenting at a few more of the conferences coming up over the next few years around the power generation, the technical conference here in NYC, and also the Gateway Conference on the West Coast. But I know we’ll transition to another room for questions.

But again, thank you for your time and appreciate your attendance

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