ProPetro Q2 Earnings Call Highlights

ProPetro NYSE: PUMP reported second-quarter 2026 revenue of $306 million, up 13% from the prior quarter, while its net loss widened to $8 million, or $0.07 per diluted share, from a $4 million loss in the first quarter. Adjusted EBITDA rose 23% sequentially to $45 million, equal to 15% of revenue. Chief Executive Officer Sam Sledge said the company’s underlying completions business remained resilient and generated free cash flow despite operational disruptions during the quarter. Those headwinds included severe June weather in the Permian Basin, costs associated with increasing the active frac fleet count from 11 to 12, and unexpected downtime on a temporary customer project outside the Permian. “Standing up a new fleet requires upfront maintenance and deployment costs before the full earnings benefit is realized,” Sledge said. The temporarily relocated fleet has since returned to the Permian Basin. ProPetro said it plans to activate a 13th frac fleet, which is expected to begin contributing near the end of the third quarter. Sledge said the fleet will serve a new blue-chip exploration and production customer and represents an addition beyond the company’s expectations entering the year. President and Chief Operating Officer Adam Muñoz said redeploying a fleet generally takes roughly 60 to 90 days. Sledge said ProPetro does not currently intend to add a 14th fleet, citing higher redevelopment costs, the need for portfolio optimization, and a need for further pricing gains and customer contract demand before making such an investment. Management said it sees a tighter market for completion services in the Permian. Sledge said the basin is operating at roughly a mid-70s active frac-fleet count and that raising the count above the mid-80s would require meaningful investment in new growth capacity rather than replacement equipment. He said there are very few readily available fleets in the market. The company expects pricing and recontracting opportunities as contracts on much of its active horsepower come up for renewal in the next six to nine months. Management said a significant share of those fleets use next-generation natural gas-burning equipment, which it said remains in strong demand amid the spread between diesel and natural gas prices. Sledge also said customer planning activity has increased, with some larger public operators bringing forward requests for proposals for 2027 work. He said ProPetro intends to maintain a mix of dedicated contracts and operational flexibility rather than placing all capacity under long-term commitments. ProPetro’s PROPWR power-generation business increased contracted capacity to approximately 350 megawatts, up from about 240 megawatts at the time of the company’s prior earnings call. The increase included about 110 megawatts across two projects: one for a leading integrated upstream operator in the Permian and another for an industrial customer. The company is also in advanced contract negotiations for more than 100 megawatts of additional oil-and-gas-related power capacity. Management said contracts in oil and gas and industrial applications tend to have shorter initial terms than data-center arrangements but offer attractive pricing and returns. Travis Simmering, president of PROPWR, said one newly contracted Permian microgrid project is close to 100 megawatts and is designed primarily for production-related power needs rather than hydraulic fracturing. He said the company sees additional opportunities with large upstream operators and midstream companies in areas without grid connectivity. While oil and gas and industrial projects are contributing to near-term earnings, managemen...