On August 8, 2024, ProFrac Holding Corp (ACDC, Financial) released its 8-K filing detailing the financial and operational results for the second quarter ended June 30, 2024. ProFrac Holding Corp is a technology-focused, vertically integrated energy services company providing hydraulic fracturing, proppant production, and related completion services to upstream oil and gas companies in North America.
Performance Overview
ProFrac Holding Corp reported total revenues of $579.4 million for Q2 2024, slightly down from $581.5 million in Q1 2024 and significantly lower than the $709.2 million reported in Q2 2023. The company faced a challenging market as operators reduced drilling and completion activity, particularly in natural gas regions, leading to sequentially lower results.
Matt Wilks, ProFrac’s Executive Chairman, stated, “Overall, the market for our services has been challenged as operators have reduced drilling and completion activity, particularly in natural gas regions. This market softness in the second quarter led to sequentially lower results in the quarter.”
Segment Performance
The Stimulation Services segment generated revenues of $505.6 million, resulting in $107.3 million of Adjusted EBITDA. The Proppant Production segment reported revenues of $69.5 million with $25.7 million of Adjusted EBITDA, despite recognizing a goodwill impairment of $67.7 million related to the Haynesville Proppant reporting unit. The Manufacturing segment contributed $55.9 million in revenues and $0.1 million in Adjusted EBITDA, while Other Business Activities, primarily related to Flotek, generated $47.6 million in revenues and $4.4 million in Adjusted EBITDA.
Financial Achievements and Challenges
Despite the market challenges, ProFrac achieved records for average pump hours per fleet and efficiencies during the quarter. The company also upgraded its fleet with additional electric and Tier 4 dual fuel systems, positioning itself to meet the highest demand for these technologies. However, the company anticipates continued pricing pressure and volume declines in the Proppant Production segment, partially offset by operating cost reductions and the idling of an underperforming mine.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Total Revenues | $579.4 million | $581.5 million | $709.2 million |
| Net Income (Loss) | $(65.6) million | $3.0 million | $(4.6) million |
| Adjusted EBITDA | $137.5 million | $137.5 million | $137.5 million |
Balance Sheet and Liquidity
As of June 30, 2024, ProFrac Holding Corp reported total assets of $3.16 billion, up from $3.07 billion at the end of 2023. Total debt outstanding increased to $1.20 billion from $1.05 billion in Q1 2024, primarily due to the issuance of $120 million in senior secured floating rate notes to fund the acquisition of AST. The company had $24.0 million in cash and cash equivalents, with $161.2 million in total liquidity, including $142.0 million of availability under its asset-based credit facility.
Analysis
ProFrac Holding Corp's Q2 2024 results reflect the broader challenges faced by the oil and gas industry, particularly in natural gas regions. The company's strategic focus on upgrading its fleet and maintaining operational efficiencies positions it well for future growth, despite current market softness. However, the significant goodwill impairment and increased debt levels highlight the financial pressures the company faces. Investors will need to monitor how ProFrac navigates these challenges and leverages its technological advancements to drive long-term value.
Explore the complete 8-K earnings release (here) from ProFrac Holding Corp for further details.
