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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-20 · 281 added, 262 removed, 312 unchanged (64% of the section changed)

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Basis of Presentation

This discussion of our results omits our results of operations and cash flows for the year ended December 31, 2022, and the comparison of our results of operations for the years ended December 31, 2023, and 2022, which may be found in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 13, 2024.

This discussion of our results omits our results of operations and cash flows for the year ended December 31, 2023, and the comparison of our results of operations for the years ended December 31, 2024, and 2023, which may be found in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.

Unless otherwise indicated, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “ProPetro Holding Corp.,” “the Company,” “we,” “our,” “us” or like terms refer to ProPetro Holding Corp.

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Our hydraulic fracturing operations account for approximately 73.2% of our total revenues and operations.

Our total available hydraulic horsepower (“HHP”) at December 31, 2024, w as 1,556,500 HHP, which was comprised of 450,000 HHP of our Tier IV Dynamic Gas Blending (“DGB”) dual-fuel equipment, 294,000 HHP of FORCE ® electric-powered equipment and 812,500 HHP of conventional Tier II equipment.

Our total available hydraulic horsepower (“HHP”) at December 31, 2025, was 1,259,500 HHP, which was comprised of 445,000 HHP of our Tier IV Dynamic Gas Blending (“DGB”) dual-fuel equipment, 312,000 HHP of FORCE ® electric-powered equipment and 502,500 HHP of conventional Tier II equipment.

Our hydraulic fracturing fleets range from approximately 50,000 to 80,000 HHP depending on the job design and customer demand at the wellsite.

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With the industry transition to lower emissions equipment and Simul-Frac, in addition to several other changes to our customers' job designs, we believe that our available fleet capacity could decline if we decide to reconfigure our fleets to increase active HHP and backup HHP at wellsites.

In addition, in 2021 and 2022, we committed to additional conversions of our Tier II equipment to Tier IV DGB, and to purchase new Tier IV DGB dual-fuel equipment.

As such, we entered into conversion and purchase agreements with our equipment manufacturers and have received all of the converted and new Tier IV DGB dual-fuel equipment by the end of 2023, representing 450,000 HHP of our Tier IV DGB dual-fuel equipment as of December 31, 2024 .

In 2022, we entered into three-year electric fleet leases for four FORCE ® electric-powered hydraulic fracturing fleets with 60,000 HHP per fleet and in June 2024, we entered into an additional three-year lease for a fifth FORCE ® electric-powered hydraulic fracturing fleet with 72,000 HHP.

As of December 31, 2024, we have re ceived 294,000 HHP of FORC E ® electric-powered equipment representing four fleets and a portion of the fifth fleet.

We currently expect to receive the remaining equipment associated with the fifth fleet in the first half of 2025.

In the fourth quarter of 2024, we formed a new subsidiary, ProPetro Energy Solutions, LLC, (“ PROPWR” ) to provide power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers.

This subsidiary has ordered equipment, but it has not yet begun revenue-generating activities.

In 2021, we began to transition our fleet from traditional equipment to Tier IV DGB dual-fuel equipment.

In 2022, we entered into three-year electric fleet leases which commenced in 2023 and 2024 for four FORCE ® electric-powered hydraulic fracturing fleets worth of equipment with 60,000 HHP per fleet and in 2024, we entered into an additional three-year lease for one more FORCE ® electric-powered hydraulic fracturing fleet worth of equipment with 72,000 HHP (collectively the “Electric Fleet Leases”).

As of December 31, 2025, we have re ceived 312,000 HHP of FORC E ® electric-powered equipment representing five fleets worth of equipment.

In December 2024, we formed a new subsidiary, ProPetro Energy Solutions, LLC, (“ PROPWR” ), which provides turnkey power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers using mobile power generation equipment installed at customers’ sites.

This subsidiary began revenue-generating activities during the third quarter of fiscal year 2025 and has entered into contractual arrangements with equipment manufacturers to purchase mobile natural gas-fueled power generation equipment, including turbine generator sets, reciprocating engines, auxiliary equipment and battery energy storage solution equipment.

As of February 19, 2026 we had total committed capacity of approximately 240 megawatts and total delivered or on-order generation capacity of approximately 550 megawatts, split approximately 70% and 30% between high-efficiency reciprocating engine generators and low emissions modular turbines, respectively.

We anticipate all ordered units will be delivered by year-end 2027.

We continue to actively

negotiate additional contracts amid increasing demand for power solutions and to explore various financing alternatives for our power equipment.

On November 1, 2024, we sold our cementing business located in Vernal, Utah, to a business owned by a former employee as part of a strategic repositioning.

We received a promissory note for $13.0 million as consideration.

The note receivable is

secured by substantially all assets of the former employee’s business and the former employee’s ownership interests in and distributions from the business.

The note receivable is to be paid to the Company in quarterly installments with interest of 10% per annum from March 31, 2025, to December 31, 2029.

We recorded a gain on disposal of $8.2 million related to the sale of the business.

We received a promissory note for $13.0 million as consideration, and recorded a gain on disposal of $8.2 million related to the sale of the business.

The note receivable was secured by substantially all assets of the divested operations and the former employee’s ownership interests in and distributions from the business.

The note receivable was to be paid to the Company in quarterly installments with interest of 10% per annum from March 31, 2025, to December 31, 2029, but was fully repaid with interest in December 2025.

The former employee was part of our cementing operations until November 1, 2024, and is no longer affiliated with the Company.

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The Par Five Acquisition complemented our existing cementing business and enabled us to serve both the Midland and Delaware sub-basins of the Permian Basin.

On November 1, 2022, we consummated the acquisition of all of the outstanding limited liability company interests of Silvertip Completion Services Operating, LLC (the “Silvertip Acquisition”), which provides wireline perforation and ancillary services in the Permian Basin in exchange for 10.1 million shares of our common stock valued at $106.7 million, $30.0 million of cash, the payoff of $7.2 million of assumed debt, and the payment of certain other closing and transaction costs.

At December 31, 2024, we had 26 wireline units available to provide wireline perforation and ancillary services.

Collectively, the AquaProp Acquisition, the Par Five Acquisition and the Silvertip Acquisition have positioned the Company as a more integrated and diversified completions-focused energy service provider.

Business Acquisitions in the financial statements for additional disclosures.

We believe that our substantial market presence in the Permian Basin positions us well to capitalize on drilling and completion activity in the region.

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Over time, we expect the Permian Basin's Midland and Delaware sub-basins to continue to command a disproportionate share of future North American E&P spending.

We have historically conducted our business through four operating segments:

hydraulic fracturing, wireline, cementing and coiled tubing.

Prior to the fourth quarter of fiscal year 2023, our operating segments met the aggregation criteria and were aggregated into the “Completion Services” reportable segment and our coiled tubing operations (which were divested in September 2022) were shown in the “All Other” category.

Effective in the the fourth quarter of fiscal year 2023, we revised our segment reporting as we determined that our three operating segments no longer met the criteria to be aggregated.

In the fourth quarter of fiscal year 2024, we formed PROPWR to provide power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers.

This new subsidiary has ordered equipment, but it has not yet begun revenue-generating activities.

Our hydraulic fracturing, wireline and cementing operating segments meet the criteria of a reportable segment.

Our divested coiled tubing and our newly formed power generation services segments do not meet the reportable segment criteria and are included within the “All Other” category.

As of December 31, 2025, we conducted our business through four operating segments:

Hydraulic Fracturing, Wireline, Cementing and Power Generation, all of which meet the criteria of a reportable segment.

Prior to the third quarter of fiscal year 2025, our Power Generation segment did not meet the quantitative thresholds for a reportable segment and prior to the fourth quarter of fiscal year 2024, our Cementing segment did not meet the quantitative thresholds for a reportable segment.

Accordingly, they were shown in the “All Other” category.

Effective as of the third quarter of fiscal year 2025 and the fourth quarter of fiscal year 2024, Power Generation and Cementing, respectively, are shown as reportable segments since they meet the criteria of a reportable segment.

Additionally, our corporate administrative activities do not involve business activities from which it may earn revenues and its results are not regularly reviewed by the Company’s Chief Operating Decision Maker (the “CODM”) when making key operating and resource decisions.

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The Company currently provides pressure pumping, wireline and other services to ExxonMobil and previously provided such services to Pioneer.

On April 22, 2024, we entered into a sub-agreement for hydraulic fracturing services with XTO, a wholly owned subsidiary of ExxonMobil, pursuant to which we will provide hydraulic fracturing, wireline and pumpdown services with two committed FORCE ® electric-powered hydraulic fracturing fleets with the option to add a third FORCE ® fleet (also with wireline and pumpdown services) for a period of three years or for contracted hours, whichever occurs last with respect to each fleet, subject to certain termination and release rights.

On April 22, 2024, we entered into a sub-agreement for hydraulic fracturing services with XTO, a wholly owned subsidiary of ExxonMobil, pursuant to which we will provide hydraulic fracturing, wireline and pumpdown services with two committed FORCE ® electric-powered hydraulic fracturing fleets and the option to add a third FORCE ® fleet (also with wireline and pumpdown services) for a certain number of contracted hours with respect to each fleet, subject to certain termination and release rights.

This agreement will expire in approximately late 2026.

At this time, we do not expect such agreement to be renewed or extended and, if we are not able to procure additional work from XTO, we will be required to redeploy the equipment associated with the affected fleets with other customers.

Commodity Price and Other Economic Conditions

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The oil and gas industry is also impacted by general domestic and international economic conditions such as supply chain disruptions and inflation, war and political instability in oil producing countries, government regulations (both in the United States and internationally), levels of consumer demand, adverse weather conditions, and other factors that are beyond our control.

The geopolitical and macroeconomic consequences of military action in the Middle East, the Russian invasion of Ukraine, including the associated sanctions, and the adverse impacts of the COVID-19 pandemic have resulted in volatility in supply and demand dynamics for crude oil and associated volatility in crude oil pricing.

As the global response to the COVID-19 pandemic began to wane, the demand and prices for crude oil increased from the lows experienced in 2020, with the WTI average crude oil price reaching approximately $94 per barrel in 2022, the highest average price in the prior ten years.

However, the WTI average crude oil price declined to approximately $78 per barrel in 2023 and approximately $76 per barrel in 2024.

We believe that the volatility of crude oil prices in recent years has been partly driven by declines in crude oil supplies, concerns over sanctions resulting from Russia's invasion of Ukraine, concerns over a potential disruption of Middle Eastern oil supplies resulting from the conflict in the Middle East, slower crude oil production growth due to the lack of reinvestment in the oil and gas industry in the last three years, the extension of OPEC+ production cuts of approximately 3.9 million barrels per day originally announced in 2023, and concerns of a potential global recession resulting from high inflation and interest rates.

With the significant increase in global crude oil prices from 2021, including the WTI crude oil price, there was a significant increase in the Permian Basin rig count from approximately 179 at the beginning of 2021 to approximately 353 at the end of 2022, according to the Baker Hughes.

Following the increase in rig count and the WTI crude oil price, the energy service industry has experienced increased demand for its completion services, and improved pricing.

However, the Permian Basin rig count experienced a 13% decrease in 2023 to 309 at the end of 2023 and further decreased to 304 at the end of 2024 which resulted in a reduction in the demand for completion services and pressure on pricing of our services.

The geopolitical and macroeconomic consequences of military action in the Middle East, the Russian invasion of Ukraine, including the associated sanctions, and actions taken by the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia (together with OPEC and other allied producing countries, “OPEC+”) have contributed to volatility in supply and demand dynamics for crude oil and associated volatility in crude oil pricing in recent years.

More recently, the WTI average crude oil price declined to approximately $65 per barrel in 2025 compared to approximately $76 per barrel in 2024 in response to tariff policies implemented by the United States government, an anticipated increase in global supply of crude oil and concerns of a potential global recession resulting from high inflation, interest rates, impacts of tariff policies on supply chains and increased costs as whole.

Additionally, we have recently experienced a decrease in the Permian Basin rig count to 304 at the end of 2024 and a further decrease to 247 at the end of 2025, according to the Baker Hughes Company (“Baker Hughes”), which resulted in a reduction in the demand for completion services and pressure on pricing of our services.

Sustained levels of high inflation likewise caused the U.S.

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We cannot predict any future trends in the rate of inflation and crude oil prices.

A significant increase in or continued high levels of inflation, to the extent we are unable to timely pass-through the cost increases to our customers, further declines in crude oil prices, or potential change in U.S trade policy, including the imposition of tariffs and the resulting consequences, would negatively impact our business, financial condition and results of operations.

A significant increase in or continued high levels of inflation, to the extent we are unable to timely pass-through the cost increases to our customers, further declines in crude oil prices, or potential changes in the United States’ trade policy, including the imposition of tariffs and the resulting consequences, would negatively impact our business, financial condition and results of operations.

See Part II, Item 1A.

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Government regulations and investors are demanding the oil and gas industry transition to a lower emissions operating environment, including upstream and energy service companies.

As a result, we are working with our customers and equipment manufacturers to transition our equipment to a lower emissions profile.

As a result, we are working with our customers and equipment manufacturers to transition our equipment into a lower emissions profile.

Currently, a number of lower emission solutions for pumping equipment, including Tier IV DGB dual-fuel , FORCE ® electric, direct drive gas turbine and other technologies have been developed, and we expect additional lower emission solutions will be developed in the future.

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Over time, we may be required to convert substantially all of our conventional Tier II equipment to lower emissions equipment.

We have transitioned our hydraulic fracturing available equipment portfolio from approximately 10% lower emissions equipment in 2021 to approximately 35% in 2022, 60% in 2023, 70% in 2024, and expect to increase to approximately 75% by the end of the first quarter of 2025.

To the extent any of our customers have certain expectations or requirements with respect to emissions reductions from their contractors, if we are unable to continue quickly transitioning to lower emissions equipment, the demand for our services could be adversely impacted.

If the Permian Basin rig count and market conditions improve, including improved pricing for our services and labor availability, and we are able to meet our customers' lower emissions equipment demands, we believe our operational and

financial results will also continue to improve.

If the rig count or market conditions do not improve or decline in the future, and we are unable to increase our pricing or pass-through future cost increases to our customers, there could be a material adverse impact on our business, results of operations and cash flows .

Our results of operations have historically reflected seasonal tendencies, typically in the fourth quarter, relating to the holiday season, inclement winter weather and exhaustion of our customers' annual budgets.

Our results of operations have historically reflected seasonal tendencies, typically in the fourth quarter, relating to the holiday season, inclement winter weather and the exhaustion of our customers' annual budgets.

As a result, we typically experience declines in our operating and financial results in November and December, even in a stable commodity price and operations environment.

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Over the course of the year ended December 31, 2025:

• we deployed two FORCE ® electric-powered hydraulic fracturing fleets with a total capacity of 120,000 HHP.

Four FORCE ® electric-powered hydraulic fracturing fleets are now operating under contract with leading customers;

• our available equipment portfolio is expected to be comprised of approximately 75% lower emissions (FORCE ® electric and Tier IV DGB dual-fuel), and 25% conventional diesel equipment by the end of 2025;

• despite market volatility, our average active hydraulic fracturing fleet count was approximately 14 fleets, a decrease from 15 active fleets in 2023;

• we published our second annual sustainability report, which describes our commitment to building a sustainable business that supports the safe, reliable production of the energy the world needs by offering competitive, value-driving services to customers, while benefitting our shareholders, communities, and other stakeholders;

• we consummated the purchase of all of the outstanding equity interests in AquaProp on May 31, 2024, which provides wet sand solutions for hydraulic fracturing sand requirements at oil well sites;

• we formed PROPWR in the fourth quarter of 2024, to provide power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers.

This subsidiary has ordered equipment, but has not yet begun revenue-generating activities.

• we maintained operational and financial stability during a challenging operating environment faced by the broader energy markets and the completions market in the Permian Basin through our disciplined approach to cost and fleet management and focusing on consistent performance;

• our active hydraulic fracturing fleet count declined from 15 active fleets at the beginning of the year to 11 at the end of the year as we idled certain fleets to preserve them for more favorable market conditions, rather than run them at sub-economic levels;

• we secured contracts with multiple customers for our PROPWR SM power generation business and deployed our first mobile power generation equipment in the field during the third quarter of fiscal year 2025 and ended the year with total delivered or on-order generation capacity of approximately 550 megawatts, split approximately 70% and 30% between high-efficiency reciprocating engine generators and low emissions modular turbines, respectively.

We anticipate all ordered units will be delivered by year-end 2027.

As of February 19, 2026, we had total committed capacity of approximately 240 megawatts.

2025 Financial Highlights

Financial highlights for the year ended December 31, 2025:

• net loss was $137.9 million, compared to net income of $85.6 million for the year ended December 31, 2023.

Diluted net loss per common share was $1.31, compared to diluted net income of $0.76 for the year ended December 31, 2023.

Net loss for included property and equipment impairment expense of $188.6 million related to our conventional Tier II diesel-only hydraulic fracturing pumping units and associated conventional assets and goodwill impairment expense of $23.6 million related to the goodwill in our wireline operating segment.

• net income was $0.8 million, compared to net loss of $137.9 million for the year ended December 31, 2024.

Diluted net income per common share was $0.01, compared to diluted net loss of $1.31 for the year ended December 31, 2024.

Net loss for the year ended December 31, 2024 included property and equipment impairment expense of $188.6 million related to our conventional Tier II diesel-only hydraulic fracturing pumping units and associated conventional assets (“Tier II Units”) and goodwill impairment expense of $23.6 million related to the goodwill in our Wireline operating segment.

Adjusted EBITDA of approximately $208.4 million decreased 26.4%, compared to $283.2 million for the year ended December 31, 2024 (see reconciliation of Adjusted EBITDA to net income in the subsequent section “How We Evaluate Our Operations”);

• capital expenditures were reduced to $133.4 million or 57% as compared to 2023;

• net cash provided by operating activities less net cash used in investing activities improved by $106.6 million compared to 2023;

• our accounts receivable to accounts payable ratio increased to 2.1 from 1.5.

Working capital (current assets less current liabilities) increased to $70.0 million from $39.7 million;

• capital expenditures incurred increased to $281.2 million, an increase of 111% as compared to 2024.

Capital expenditures incurred included $198.4 million related to equipment orders for our Power Generation operating segment;

• secured a financing arrangement with Caterpillar Financial Services Corporation (“Caterpillar”) for a maximum total available amount of $103.7 million to support the purchase of certain natural gas-fueled power generation equipment;

• secured a lease facility described in “Note 17.

Leases” with Stonebriar Commercial Finance LLC for the right, but not the obligation, to fund up to $350.0 million of purchases of power generator equipment;

• net cash provided by operating activities less net cash used in investing activities declined by $15.4 million compared to 2024;

• our total liquidity was $205.4 million as of December 31, 2025.

consisting of cash and cash equivalents of $91.3 million and remaining availability of $114.1 million under our ABL Credit Facility;

we had $45.0 million of borrowings as of December 31, 2024, under our ABL Credit Facility;

• the Company repurchased and retired 7.2 million shares of common stock for an aggregate of $59.1 million, an average price per share of $8.21 including commissions, under the share repurchase program.

As of December 31, 2024, $89.2 million remained authorized for future repurchases of common stock under the share repurchase program.

we had total outstanding debt of $122.6 million as of December 31, 2025, comprising of $45.0 million of borrowings under our ABL Credit Facility and $77.6 million of equipment financing interim and term loans under the Caterpillar Equipment Loan Agreement (as defined below) .

Recent Developments

In January 2026, the Company sold 17.3 million shares of its common stock in an underwritten public offering for $10.00 per share, pursuant to an effective shelf registration statement on Form S-3 filed with the SEC, including shares sold pursuant to the option granted to the underwriters to purchase up to an additional 2.3 million shares of our common stock (the “2026 Common Stock Offering”).

The Company received approximately $163.3 million in net proceeds from this sale after deducting underwriting discounts and commissions and estimated offering expenses.

The Company intends to use the net proceeds from this sale for general corporate purposes, including to fund growth capital for additional power generation equipment .

In February 2026, the Company entered into an amendment to the Caterpillar Equipment Loan Agreement, under which Caterpillar increased the availability of funds by $53.6 million, which resulted in a maximum total available amount of $157.3 million to support the purchase of certain natural gas-fueled power generation equipment.

Our Assets and Operations

Completion services includes our hydraulic fracturing, wireline and cementing operations.

Completion services include our hydraulic fracturing, wireline and cementing operations.

We primarily provide these services to E&P comp anies in the Permian Basin.

During the year ended December 31, 2024, our hydraulic fracturing, wireline and cementing operations accounted fo r 75.6%, 14.1%, and 10.3% of our total revenue, respectively.

Our equipment has been designed to handle Permian Basin specific operating conditions a nd the region’s increasingly high‑intensity well completions, which are characterized by longer horizontal wellbores, more frac stages per lateral and increasing amounts of proppant per well.

We also provide turnkey power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers.

During the year ended December 31, 2025, our hydraulic fracturing, wireline, cementing and power generation operations accounted fo r approximately 73.2%, 16.5%, 10.3%, and 0% of our total revenue, respectively.

Our completion services equipment has been designed to handle Permian Basin specific operating conditions a nd the region’s increasingly high‑intensity well completions, which are characterized by longer horizontal wellbores, more frac stages per lateral and increasing amounts of proppant per well.

Our power generation operations consist of mobile natural gas-fueled power generation equipment, including turbine generator sets, reciprocating engines, auxiliary equipment and battery energy storage solution equipment.

We plan to continually reinvest in our equipment to ensure optimal performance and reliability.

How We Generate Revenue

We generate revenue through our completion services, and more specifically, by providing hydraulic fracturing services to our customers.

We generate revenue predominantly through our completion services, and more specifically, by providing hydraulic fracturing services to our customers.

We operate a fleet of mobile hydraulic fracturing, wireline and cementing units and other auxiliary equipment to perform completion services to E&P companies.

Additionally, we generate revenue through our PROPWR SM power generation business by providing turnkey power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers using mobile power generation equipment installed at customers’ sites.

These services are generally provided through contractual arrangements in which we set a price per unit of power generated or a price per period and a minimum quantity of power per period under our contracts.

We also provide personnel and services that are tailored to meet each of our customers’ needs.

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We are also sometimes paid by the hour for these complementary services.

Demand for our services is largely dependent on oil and natural gas prices, and our customers’ well completion budgets and rig count.

Demand for our completion services is largely dependent on oil and natural gas prices, and our customers’ well completion budgets and rig count.

Our revenue, profitability and cash flows are highly dependent upon prevailing crude oil prices and expectations about future prices.

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Payroll and benefit expenses related to our crews and other employees that are directly or indirectly attributable to the effective delivery of services are included in our operating costs.

Direct lab or costs amounted to 30.2% and 28.7% of total costs of service for the years ended December 31, 2024, and 2023, respectively.

The increase in our direct labor costs percentage is driven by wage adjustments and higher headcount resulting from business acquisitions.

Direct labor costs amounted to 28.5% and 30.2% of total costs of service for the years ended December 31, 2025, and 2024, respectively.

The decrease in our direct labor costs percentage is driven by the implementation of reactive cost reductions to align our costs with the decrease in customer activity experienced in fiscal year 2025.

Expendables include the product and freight costs associated with proppant, chemicals and other consumables used in our completion services and other operations.

These costs comprise a substantial variable component of our service costs, particularly with respect to the quantity and quality of sand and chemicals demanded when providing hydraulic fracturing services.

Expendable product costs comprised approximately 25.7% and 32.9% of total costs of service for the years ended

December 31, 2024, and 2023, respectively.

The percentage decrease in our expendables was primarily attributable to certain customers electing to directly source sand and the associated logistics.

Expendable product costs comprised approximately 26.8% and 25.7% of total costs of service for the years ended December 31, 2025, and 2024, respectively.

The percentage increase in our expendables was primarily attributable to the impact of general cost inflation.

Other Direct Costs.

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Other direct costs were 44.7% and 44.1% of total costs of service for the years ended December 31, 2025, and 2024, respectively.

The percentage increase in our other direct costs was primarily attributable to lease costs on our FORCE ® fleets.

The percentage increase in our expendables was primarily attributable to the impact of general cost inflation.

How We Evaluate Our Operations

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Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of our revenues.

Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures utilized by our management and other users of our financial statements such as investors, commercial banks, and research analysts, to assess our financial performance because it allows us and other users to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), nonrecurring (income) expenses and items outside the control of our management team (such as income taxes).

Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures utilized by our management and other users of our financial statements such as investors, commercial banks, and research analysts, to assess our financial performance because it allows us and other users to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), nonrecurring expenses/(income) and items outside the control of our management team (such as income taxes).

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

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Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures.

You should not consider Adjusted EBITDA and Adjusted EBITDA margin in isolation or as a substitute for an analysis of our results as reported under GAAP.

You should not consider

Adjusted EBITDA and Adjusted EBITDA margin in isolation or as a substitute for an analysis of our results as reported under GAAP.

Because Adjusted EBITDA and Adjusted EBITDA margin may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

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intersegment revenues are shown under “Reconciling Items” (in thousands):

Hydraulic Fracturing Wireline Cementing All Other Reconciling Items Total

Hydraulic Fracturing Wireline Cementing Power Generation Reconciling Items Total

Year ended December 31, 2025

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Depreciation and amortization $ 143,785 $ 22,269 $ 8,098 $ 673 $ 71 $ 174,896

Property and equipment impairment expense (1)

$ 188,601 $ — $ — $ — $ — $ 188,601

Goodwill impairment expense (2)

$ — $ 23,624 $ — $ — $ — $ 23,624

Operating lease expense on FORCE ® fleets (1)

$ 61,274 $ — $ — $ — $ — $ 61,274

Capital expenditures $ 116,257 $ 7,713 $ 9,376 $ — $ 42 $ 133,388

Capital expenditures incurred $ 69,149 $ 7,922 $ 5,752 $ 198,373 $ — $ 281,196

Goodwill $ 920 $ — $ — $ — $ — $ 920

Total assets (2)

Hydraulic Fracturing Wireline Cementing All Other Reconciling Items Total

$ 841,180 $ 162,225 $ 69,396 $ 201,481 $ 16,608 $ 1,290,890

Hydraulic Fracturing Wireline Cementing Power Generation Reconciling Items Total

Year ended December 31, 2024

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Depreciation and amortization (3)

$ 194,557 $ 20,633 $ 8,819 $ — $ 100 $ 224,109

Property and equipment impairment expense (4)

$ 188,601 $ — $ — $ — $ — $ 188,601

Goodwill impairment expense (5)

$ — $ 23,624 $ — $ — $ — $ 23,624

Operating lease expense on FORCE ® fleets (1)

$ 47,141 $ — $ — $ — $ — $ 47,141

Capital expenditures $ 294,377 $ 12,203 $ 3,440 $ — $ — $ 310,020

Capital expenditures incurred $ 116,257 $ 7,713 $ 9,376 $ — $ 42 $ 133,388

Goodwill $ 920 $ — $ — $ — $ — $ 920

Total assets (2)

Hydraulic Fracturing Wireline Cementing All Other Reconciling Items Total

$ 961,485 $ 156,349 $ 73,935 $ — $ 31,876 $ 1,223,645

Hydraulic Fracturing Wireline Cementing Power Generation Reconciling Items Total

Year ended December 31, 2023

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Depreciation and amortization (3)

Property and equipment impairment expense (1)

$ 194,745 $ 18,762 $ 5,879 $ — $ 222 $ 219,608

Capital expenditures $ 347,757 $ 2,265 $ 7,769 $ 1,876 $ 5,649 $ 365,316

Operating lease expense on FORCE ® fleets (1)

$ 5,087 $ — $ — $ — $ — $ 5,087

Capital expenditures incurred $ 294,377 $ 12,203 $ 3,440 $ — $ — $ 310,020

Goodwill $ — $ 23,624 $ — $ — $ — $ 23,624

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$ 1,189,526 $ 198,957 $ 78,475 $ — $ 13,354 $ 1,480,312

(1) Represents noncash property and equipment impairment expense on our conventional Tier II diesel-only hydraulic fracturing pumps and associated conventional assets (“Tier II Units”) for the year ended December 31, 2024, and noncash impairment expense on our DuraStim ® electric-powered hydraulic fracturing equipment for the year ended December 31, 2022.

There was no property and equipment impairment expense for the year ended December 31, 2023.

(2) Represents noncash impairment of goodwill in our wireline operating segment.

____________________

(1) Represents amortization of right-of-use assets and interest expense on lease liabilities related to operating leases on our FORCE ® electric-powered hydraulic fracturing fleets.

This cost is recorded within cost of services in our consolidated statements of operations.

We did not have this cost for the year ended December 31, 2022.

(2) Total assets under “Reconciling Items” comprise of cash on hand, certain property, equipment and operating lease right-of-use assets pertaining to our corporate administrative activities.

(3) The write-offs of remaining book value of prematurely failed power ends and other components are recorded as depreciation in 2025.

In order to conform to current period presentation, we have reclassified the corresponding amounts of $12.4 million and $38.7 million from loss on disposal of assets to depreciation for the years ended December 31, 2024 and 2023, respectively.

(4) Represents noncash property and equipment impairment expense on our Tier II Units.

There was no property and equipment impairment expense for the years ended December 31, 2025 and 2023.

(5) Represents noncash impairment of goodwill in our Wireline operating segment.

There was no goodwill impairment expense for the years ended December 31, 2025 and 2023.

A reconciliation of net (loss) income to Adjusted EBITDA is provided in the table below (in thousands):

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2025 2024 2023

Net (loss) income $ (137,859) $ 85,634 $ 2,030

Net income (loss) $ 824 $ (137,859) $ 85,634

Depreciation and amortization (1)

Property and equipment impairment expense (1)

174,896 224,109 219,608

Property and equipment impairment expense (2)

Goodwill impairment expense (3)

Interest expense 8,238 7,815 5,308

Income tax (benefit) expense (31,385) 29,868 5,356

Loss on disposal of assets and businesses, net 7,451 73,015 102,150

Income tax expense (benefit) 6,997 (31,385) 29,868

Loss (gain) on disposal of assets and businesses, net (1)

12,179 (4,925) 34,293

Stock‑based compensation 16,946 17,288 14,450

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____________________

(1) Represents noncash property and equipment impairment expense on our Tier II Units for the year ended December 31, 2024, and noncash impairment expense on our DuraStim ® electric-powered hydraulic fracturing equipment for the year ended December 31, 2022.

These impairment expenses are included in our Hydraulic Fracturing reportable segment.

(1) The write-offs of remaining book value of prematurely failed power ends and other components are recorded as depreciation in 2025.

(2) Represents noncash impairment expense on our Tier II Units.

This impairment expense is included in our Hydraulic Fracturing operating segment.

(3) Represents noncash impairment of goodwill in our Wireline operating segment.

(4) Other income for the year ended December 31, 2025 is primarily comprised of direct payment tax refunds and well service tax refunds (net of advisory fees) totaling $3.3 million, a $2.4 million unrealized gain on short-term investment, interest income from note receivable from sale of business of $1.2 million, adjustments to workers' compensation and general liability insurance premiums of $1.0 million, insurance reimbursements of $0.8 million and $1.0 million of other income.

Other income for the year ended December 31, 2024 is primarily comprised of tax refunds (net of advisory fees) totaling $5.0 million and insurance reimbursements of $2.0 million, partially offset by a $2.0 million loss to a customer related to an accidental cementing job failure.

Other expense for the year ended December 31, 2023 is primarily comprised of settlement expenses resulting from routine audits and true-up health insurance costs totaling approximately $7.4 million and a $2.5 million unrealized loss on short-term investment.

Other income for the year ended December 31, 2022 includes tax refunds (net of advisory fees) totaling $10.7 million, a $2.7 million noncash income from fixed asset inventory received as part of a settlement of warranty claims with an equipment manufacturer, and a $1.6 million unrealized loss on short-term investment.

(5) Other general and administrative expense for the years ended December 31, 2024 and 2023 primarily relates to nonrecurring professional fees paid to external consultants in connection with our business acquisitions and legal settlements, net of reimbursements from insurance carriers.

Other general and administrative expense for the year ended December 31, 2022 primarily relates to nonrecurring professional fees paid to external consultants in connection with the Company's audit committee review, SEC investigation, shareholder litigation, legal settlements and other legal matters, net of reimbursements from insurance carriers.

Results of Operations

In 2024, we conducted our business through four operating segments:

hydraulic fracturing, wireline, cementing, and power generation services (started in the fourth quarter of fiscal year 2024 and has not begun any revenue-generating activities yet).

Our power generation services operating segments are shown in the “All Other” category for segment reporting purposes.

Hydraulic Fracturing, Wireline, Cementing, and Power Generation Services (started in the fourth quarter of fiscal year 2024).

Our Power Generation operating segment is shown in the “All Other” category for segment reporting purposes.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

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Cementing 130,266 149,411 (19,145) (12.8) %

Power Generation 1,538 — 1,538 100.0 %

Elimination of intersegment service revenue (890) (307) (583) (189.9) %

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Cementing 103,388 117,490 (14,102) (12.0) %

All Other (2)

4 — 4 100.0 %

Power Generation 6,612 4 6,608 165,200.0 %

Elimination of intersegment cost of services (890) (307) (583) (189.9) %

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Depreciation and amortization (3)

174,896 224,109 (49,213) (22.0) %

Property and equipment impairment expense — 188,601 (188,601) (100.0) %

Goodwill impairment expense — 23,624 (23,624) (100.0) %

Loss on disposal of assets and business, net 7,451 73,015 (65,564) (89.8) %

Loss (gain) on disposal of assets and business, net (3)

12,179 (4,925) 17,104 347.3 %

Interest expense 8,238 7,815 423 5.4 %

Other (income) expense, net (5,531) 9,533 (15,064) (158.0) %

Income tax (benefit) expense (31,385) 29,868 (61,253) (205.1) %

Net (loss) income $ (137,859) $ 85,634 $ (223,493) (260.99) %

Other income, net (9,709) (5,531) (4,178) (75.5) %

Income tax expense (benefit) 6,997 (31,385) 38,382 122.3 %

Net income (loss) $ 824 $ (137,859) $ 138,683 100.60 %

Adjusted EBITDA (4)

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16.4 % 19.6 % (3.2) % (16.33) %

Net income (loss) margin (5)

0.1 % (9.5) % 9.6 % 101.05 %

Hydraulic Fracturing segment results of operations:

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(1) Exclusive of depreciation and amortization.

(2) Includes our newly formed power generation services business.

(2) Inclusive of stock‑based compensation.

(4) For definitions of the non‑GAAP financial measures of Adjusted EBITDA and Adjusted EBITDA margin and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to our most directly comparable financial measures calculated in accordance with GAAP, please read “How We Evaluate Our Operations.”

(3) The write-offs of remaining book value of prematurely failed power ends and other components are recorded as depreciation in 2025.

In order to conform to current period presentation, we have reclassified the corresponding amount of $12.4 million from loss on disposal of assets to depreciation for the year ended December 31, 2024.

(4) For definitions of the non‑GAAP financial measures of Adjusted EBITDA and Adjusted EBITDA margin and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to our most directly comparable financial measure calculated in accordance with GAAP, please read “How We Evaluate Our Operations.”

(5) Net loss margin reflects our net loss as a percentage of our revenue.

(6) The non‑GAAP financial measure of Adjusted EBITDA margin for the Hydraulic Fracturing segment is calculated by taking Adjusted EBITDA for the Hydraulic Fracturing segment as a percentage of our revenues for the Hydraulic Fracturing segment.

Revenue decreased 11.4%, or $186.1 million, to $1,444.3 million for the year ended December 31, 2024, as compared to $1,630.4 million for the year ended December 31, 2023.

Revenues decreased 12.1%, or $175.1 million, to $1,269.2 million for the year ended December 31, 2025, as compared to $1,444.3 million for the year ended December 31, 2024.

Revenue by reportable segment was as follows:

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Our Hydraulic Fracturing segment revenues decreased 14.9%, or $162.8 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease was primarily attributable to a decrease in our customers’ activity levels as a result of a decrease in drilling activity and decreased customer pricing, partially offset by the addition of AquaProp's operations in May 2024, which contributed $44.1 million in revenues during 2024.

Our average active hydraulic fracturing fleet count was approximately 14 fleets for the year ended December 31, 2024, a decrease from 15 fleets for the year ended December 31, 2023.

Intersegment revenues, consisting of revenues derived from our wireline segment, totaled $0.3 million and $0 for the years ended December 31, 2024 and 2023, respectively.

Our wireline segment revenue decreased 11.5%, or $26.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The decrease was primarily attributable to a decrease in our customers' activity levels as a result of a decrease in drilling activity and decreased customer pricing.

Our cementing segment revenue increased 24.2%, or $29.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The increase was primarily attributable to the addition of Par Five's operations in December 2023, which contributed to $35.3 million of the increase in revenues.

The decrease was primarily attributable to decreased customer activity, reduced customer pricing, and idling of fleets, partially offset by the addition of AquaProp's operations in May 2024, which resulted in a $41.9 million increase in revenues during fiscal year 2025 due to the impact of AquaProp’s operations for the full year ended December 31, 2025 compared to only 215 days of activity during fiscal year 2024.

Intersegment revenues totaled $0.9 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively.

Intersegment revenues were derived from our Wireline, Cementing and Power Generation segments for the year ended December 31, 2025, and from our Wireline segment for the year ended December 31, 2024.

Our Wireline segment revenues increased 2.9%, or $5.9 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase was primarily attributable to increased customer activity and utilization.

Our Cementing segment revenues decreased 12.8%, or $19.1 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease was primarily attributable to the sale of our cementing business located in Vernal, Utah in November 2024 which contributed $22.3 million in revenues during fiscal year 2024, partially offset by increases resulting from synergies gained with customers after the acquisition of Par Five Energy Services LLC.

Power Generation .

Our Power Generation segment revenue was $1.5 million for the year ended December 31, 2025.

Our Power Generation segment began revenue generating activities during the third quarter of fiscal year 2025.

Cost of Services.

Cost of services decreased 5.9%, or $66.3 million, to $1,065.5 million for the year ended December 31, 2024, from $1,131.8 million during the year ended December 31, 2023.

Cost of se rvices decreased 9.1%, or $97.3 million, to $968.2 million for the year ended December 31, 2025, from $1,065.5 million during the year ended December 31, 2024.

Cost of services by reportable segment was as follows:

Hydraulic Fracturing.

C ost of services for our hydraulic fracturing segment decreased $86.0 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

As a percentage of hydraulic fracturing segment revenues (including equipment reservation fees), hydraulic fracturing cost of services was 73.3% for the year ended December 31, 2024, as compared to 69.2% for the year ended December 31, 2023 driven by the decreased activity levels, customer price decreases and the impact of general cost inflation.

The decrease in cost of services was partially offset by an increase of $7.6 million in insurance expense resulting from higher allocation of workers' compensation, general liability and automobile insurance costs to cost of services in 2024 compared to 2023 since these costs are primarily incurred for our operational workforce, and the addition of AquaProp's operations in May 2024, which added $42.5 million in cost of services during the year ended December 31, 2024.

Our wireline segment cost of services decreased 4.7%, or $7.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023 due to scaling back in response to decreased revenues.

Our Hydraulic Fracturing segment c ost of services decreased $97.6 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024.

As a percentage of hydraulic fracturing segment revenues, Hydraulic Fracturing cost of services was 75.6% for the year ended December 31, 2025, as compared to 73.3% for the year ended December 31, 2024 driven by customer price decreases and the impact of general cost inflation.

The decrease in cost of services was partially offset by the addition of AquaProp's operations in May 2024, which resulted in a $33.8 million increase in cost of services during fiscal year 2025.

Our Wireline segment cost of services increased 5.6%, or $8.3 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024 due to increased customer activity and the impact of general cost inflation.

Intersegment cost of services, consisting of cost of services incurred to our Hydraulic Fracturing segment, totaled $0.7 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively.

Our Cementing cost of services decreased 12.0%, or $14.1 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease was primarily attributable to the sale of our cementing business located in Vernal, Utah in November 2024 which incurred $14.7 million in cost of services during fiscal year 2024.

Intersegment cost of services, consisting of cost of services incurred to our Hydraulic Fracturing segment, totaled $0.1 million and $0 for the years ended December 31, 2025 and 2024, respectively.

Our cementing cost of services increased 30.1%, or $27.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The increase was primarily attributable to the addition of Par Five's operations in December 2023, which resulted in $27.9 million of the net increase in cost of services.

Power Generation .

Our Power Generation segment cost of services was $6.6 million for the year ended December 31, 2025.

Our Power Generation segment began revenue generating activities during the third quarter of fiscal year 2025.

Intersegment cost of services, consisting of cost of services incurred to our Hydraulic Fracturing segment, totaled $0.1 million and $0 for the years ended December 31, 2025 and 2024, respectively.

General and Administrative Expenses.

General and administrative expen ses remained flat at $114.3 million for the y ear ended December 31, 2024, as compared to $114.4 million for the year ended December 31, 2023.

Excluding nonrecurring and noncash items ( i.e., stock-based compensation of $17.3 million, legal settlements (net of insurance reimbursements) of $0.2 million, transaction expenses of $1.6 million and retention bonuses and severance expenses of $2.3 million, partially offset by business acquisition contingent consideration adjustments of $2.6 million), general and administrative expenses were $95.5 million for the year ended December 31, 2024, as compared to $94.6 million for the year ended December 31, 2023.

General and administrative expen ses decreased 5.9% or $6.7 million, to $107.6 million for the year ended December 31, 2025, as compared to $114.3 million for the year ended December 31, 2024.

The net decrease was primarily attributable to a $4.5 million decrease in professional fees, a $2.3 million increase in business acquisition contingent consideration adjustments, a $2.0 million decrease in dues and subscriptions, a $1.6 million decrease in transaction expenses and a $0.4 million net decrease in other general and administrative expenses, partially offset by a $4.1 million increase in payroll.

Excluding nonrecurring and noncash items (i.e., stock-based compensation of $16.9 million, retention bonuses and severance expenses of $2.7 million and legal settlements (net of insurance reimbursements) of $0.3 million, partially offset by business acquisition contingent consideration adjustments of $4.9 million), general and administrative expenses were $92.6 million for the year ended December 31, 2025, as compared to $95.5 million for the year ended December 31, 2024.

Depreciation and Amortization.

Depreciation and amortization increased 17.1%, or $30.8 million, to $211.7 million for the yea r ended December 31, 2024, as compared to $180.9 million for the year ended December 31, 2023.

The increase was

primarily attributable to (i) assets placed into service since December 31, 2023, (ii) the addition of a finance lease for certain power generation equipment in August 2023 which resulted in $19.0 million of amortization, (iii) the addition of Par Five's operations in December 2023 which resulted in a $3.5 million increase in depreciation and (iv) the addition of AquaProp's operations in May 2024 which included $3.5 million of depreciation and amortization.

Depreciation and amortization decreased 22.0%, or $49.2 million, to $174.9 million for the year ended December 31, 2025, as compared to $224.1 million for the year ended December 31, 2024.

The decrease was primarily attributable to assets fully depreciating and a reduction in the cost basis of Tier II Units impaired in the third quarter of fiscal year 2024, partially offset by the addition of AquaProp's operations in May 2024 which resulted in a $2.7 million increase in depreciation and amortization.

Property and Equipment Impairment Expense.

During the year ended December 31, 2024, we recorded noncash property and equipment impairment expense of $188.6 million in connection with the impairment of our Tier II Units, which is included in our Hydraulic Fracturing reportable segment.

No property and equipment impairment expense was recorded during the year ended December 31, 2023.

There was no impairment expense during the year ended December 31, 2025.

During the year ended December 31, 2024, we recorded a noncash impairment expense of $188.6 million in connection with the impairment of our Tier II Units, which is included in our Hydraulic Fracturing reportable segment.

Goodwill Impairment Expense.

During the year ended December 31, 2024, we recorded goodwill impairment expense of $23.6 million in our Wireline reportable segment during the year ended December 31, 2024.

No goodwill impairment expense was recorded during the year ended December 31, 2023.

Loss on Disposal of Assets and Business.

Loss on the disposal of assets and business decreased 89.8%, or $65.5 million, to $7.5 million for the year ended December 31, 2024, as compared to $73.0 million for the year ended December 31, 2023.

The decrease was primarily attributable to an $8.2 million gain related to the sale of our cementing business located in Vernal, Utah, during 2024, losses incurred during 2023 from the decommissioning of certain hydraulic fracturing equipment, replacement of certain major components in connection with our conversion of certain Tier II hydraulic fracturing equipment to Tier IV DGB, and the write-off of certain hydraulic fracturing equipment as a result of an accidental fire at a wellsite in March 2023.

There was no goodwill impairment expense during the year ended December 31, 2025.

During the year ended December 31, 2024, we recorded goodwill impairment expense of $23.6 million in our Wireline reportable segment.

Loss (Gain) on Disposal of Assets and Business.

Loss on the disposal of assets increased 347.3%, or $17.1 million, to $12.2 million for the year ended December 31, 2025, as compared to a gain on the disposal of assets and business of $4.9 million for the year ended December 31, 2024.

The increase was primarily attributable to losses incurred during fiscal year 2025 from the sale of certain Tier II hydraulic fracturing equipment and a $8.2 million gain related to the sale of our cementing business located in Vernal, Utah, during fiscal year 2024.

Interest Expense.

Interest expense increased to $8.2 million for the yea r ended December 31, 2025, as compared to $7.8 million for t he year ended December 31, 2024.

The increase was primarily attributable to higher average outstanding borrowings under our ABL Credit Facility during the year ended December 31, 2024 and the addition of a finance lease for certain power generation equipment in August 2023.

Other (Income) Expense.

Other income was approximately $5.5 million for the year ended December 31, 2024, as compared to other expense of $9.5 million for the year ended December 31, 2023.

Other income during the year ended December 31, 2024 is primarily comprised of tax refunds (net of advisory fees) totaling $5.0 million, insurance reimbursements of $2.0 million and a $2.6 million decrease in estimated fair value of the contingent consideration payable on our acquisition of AquaProp, partially offset by a $2.0 million loss to a customer related to an accidental cementing job failure.

Other expense for the year ended December 31, 2023 is comprised of settlement expenses resulting from routine audits and true-up health insurance costs totaling approximately $7.4 million and a $2.5 million unrealized loss on short-term investment.

The increase was primarily attributable to the addition of loans under the Caterpillar Equipment Loan Agreement (as defined below) to support the purchase of certain mobile natural gas-fueled power generation equipment during the year ended December 31, 2025 .

Other Income.

Other income was approximately $9.7 million for the year ended December 31, 2025, as compared to other income of $5.5 million for the year ended December 31, 2024.

Other income for the year ended December 31, 2025 is primarily comprised of direct payment tax refunds and well service tax refunds (net of advisory fees) totaling $3.3 million, a $2.4 million unrealized gain on short-term investment, interest income from note receivable from sale of business of $1.2 million, adjustments to workers' compensation and general liability insurance premiums of $1.0 million, insurance reimbursements of $0.8 million and $1.0 million of other income.

Income Taxes.

Total income tax benefit was $31.4 million resulting in an effective tax rate of 18.5% for the year ended December 31, 2024, as compared to income tax expense of $29.9 million resulting in an effective tax rate of 25.9% for the year ended December 31, 2023.

The change in income tax benefit recorded during the year ended December 31, 2024, compared to the change in income tax expense recorded during the year ended December 31, 2023, is primarily attributable to the difference in the impact of nondeductible expenses and state taxes on the pre-tax loss for 2024, as compared to pre-tax income for 2023.

Total income tax expense was $7.0 million resulting in an effective tax rate of 89.5% for the year ended December 31, 2025, as compared to income tax benefit of $31.4 million resulting in an effective tax rate of 18.5% for the year ended December 31, 2024.

The change in income tax expense recorded during the year ended December 31, 2025, compared to the change in income tax expense recorded during the year ended December 31, 2024, is primarily attributable to the difference in the impact of nondeductible expenses, state taxes, and valuation allowances on the pre-tax income for fiscal year 2025, as compared to fiscal year 2024.

Liquidity and Capital Resources

Our liquidity is currently provided by (i) existing cash balances, (ii) operating cash flows and (iii) borrowings under our ABL Credit Facility (as defined below).

Our cash is primarily used to fund our operations, support growth opportunities, fund share repurchases under our share repurchase program and satisfy future debt payments.

Our Borrowing Base (as defined below), as redetermined monthly, is tied to the sum of 85% to 90% of monthly eligible accounts receivable and 80% of eligible unbilled accounts (up to a maximum of 25% of the Borrowing Base), in each case, depending on the credit ratings of our accounts receivable counterparties, less customary reserves.

Our liquidity is currently provided by (i) existing cash balances, including proceeds from the 2026 Common Stock Offering, (ii) operating cash flows, (iii) borrowings under our ABL Credit Facility (as defined below) and (iv) borrowings under our Caterpillar Equipment Loan Agreement (as defined below).

See “Credit Facility and Other Financing Arrangements” below.

Additionally, on December 29, 2025, we entered into the Stonebriar Equipment Lease Facility to support the lease of certain mobile power generation equipment, including turbine generator sets along with auxiliary equipment, for our PROPWR SM business line, and in January 2026, we received approximately $163.3 million from the 2026 Common Stock Offering.

Our cash is primarily used to fund our operations, support growth opportunities, fund share repurchases under our share repurchase program and satisfy future debt repayments and lease payments.

Our Borrowing Base (as defined below), under our ABL Credit Facility, as redetermined monthly, is tied to the sum of 85% to 90% of monthly eligible accounts receivable and 80% of eligible unbilled accounts (up to a maximum of 25% of the Borrowing Base), in each case, depending on the credit ratings of our accounts receivable counterparties, less customary reserves (the “Borrowing Base”).

Changes to our operational activity levels and our customers' credit ratings have an impact on our total eligible accounts receivable, which could result in significant changes to our Borrowing Base and therefore, our availability under our ABL Credit Facility.

We received advance payments from a customer for our services, and the amount outstanding in connection with the advance payments was $11.8 million and $19.2 million as of December 31, 2024 an d 2023, respectively.

There were no amounts of restricted cash as of December 31, 2024 an d 2023.

As of December 31, 2024, our borrowings under our ABL Credit Facility were $45.0 million and our total liquidity was $160.9 million, consisting of cash and cash equivalents of $50.4 million and $110.5 million of availability under our ABL Credit Facility.

On April 24, 2024, the Company's board of directors (the “Board”) approved an increase and extension to the share repurchase program previously authorized on May 17, 2023.

The program permits the repurchase of up to an additional $100 million of the Company’s common stock for a total of $200 million and extends the expiration date by one year to May 31, 2025.

We received advance payments from customers for our services, and the amount outstanding in connection with the advance payments as of December 31, 2025 was $8.1 million, which does not include any restricted cash.

As of December 31, 2025, our borrowings under our ABL Credit Facility were $45.0 million, our borrowings under our Caterpillar Equipment Loan Agreement were $77.6 million and our tota l liquidity was $205.4 million, consisting of cash and cash equivalents of $91.3 million and $114.1 million of availability under our ABL Credit Facility.

As of January 31, 2026, our borrowings under our ABL Credit Facility were $45.0 million, our borrowings under our Caterpillar Equipment Loan Agreement were $86.9 million and our total liquidity was $325.0 million, consisting of cash and cash equivalents of $236.5 million and $88.5 million of availability under our ABL Credit Facility.

In May 2025, the Company's board of directors (the “Board”) approved a further extension to the share repurchase program initially authorized on May 17, 2023.

As extended, the program permits the repurchase of up to $200 million of the Company’s common stock through December 31, 2026.

The shares may be repurchased from time to time in open market transactions, block trades, accelerated share repurchases, privately negotiated transactions, derivative transactions or otherwise, certain of which may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act, as amended, in compliance with applicable state and federal securities laws.

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The Company is not obligated to purchase any shares under the share repurchase program, and the program may be suspended, modified, or discontinued at any time without prior notice.

The Company expects to fund the repurchases using cash on hand and expected free cash flow to be generated through May 2025.

During the year ended December 31, 2024 , the Company repurchased and retired 7.2 million shares of common stock for an aggregate of $59.1 million, an average price per share of $8.21 including commissions, under the share repurchase program.

The Company expects to fund the repurchases using cash on hand and expected free cash flow to be generated through December 2026.

During the year ended December 31, 2025 , the Company made no share repurchases under the share repurchase program as it prioritized the launch and scaling of its PROPWR SM business line.

The Company intends to continue to prioritize investing in its PROPWR SM business line in the near future.

As of December 31, 2025 , $89.2 million remained authorized for future repurchases of common stock under the share repurchase program.

On May 31, 2024, the Company consummated the acquisition of all of the outstanding equity interests in AquaProp, which provides wet sand solutions for hydraulic fracturing sand requirements at oil well sites.

The cash consideration for this acquisition includes $13.7 million paid to the seller, $7.2 million paid to settle the seller’s outstanding debt, and $0.3 million paid for the seller’s transaction expenses .

On November 1, 2024, we sold our cementing business located in Vernal, Utah, to a business owned by a former employee as part of a strategic repositioning.

We received a promissory note for $13.0 million as consideration.

The note receivable is secured by substantially all assets of the former employee’s business and the former employee’s ownership interests in and distributions from the business.

The note receivable is to be paid to the Company in quarterly installments with interest of 10% per annum from March 31, 2025 to December 31, 2029.

We recorded a gain on disposal of $8.2 million related to the sale of the business.

The former employee was part of our cementing operations until November 1, 2024 and is no longer affiliated with the Company.

In October 2025, the Company sold its short-term investment in 2.6 million common shares of STEP Energy Services Ltd.

(“STEP”), which it received in 2022 as part of the consideration for its sale of its coiled tubing assets to STEP.

The Company received $9.4 million in proceeds and recognized a $0.8 million loss on sale of assets from the sale of this investment.

In December 2025, the Company received $11.9 million in proceeds as full repayment of the outstanding balance and accrued interest on its note receivable from Big 4 Services LLC (“Big 4”).

The Company received this note receivable from Big 4 on November 1, 2024 as consideration for the sale of its cementing business located in Vernal, Utah.

In January 2026, the Company sold 17.3 million shares of its common stock under an underwritten public offering for $10.00 per share, pursuant to an effective shelf registration statement on Form S-3 filed with the SEC.

The Company received approximately $163.3 million in net proceeds from this sale after deducting underwriting discounts and commissions and estimated offering expenses.

The Company intends to use the net proceeds from this sale for general corporate purposes, including to fund growth capital for additional power generation equipment.

There can be no assurance that our operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures and to continue with our share repurchases under our share repurchase program or fund future business acquisitions.

Future cash flows are subject to a number of variables, and are highly dependent on the drilling and completion, and production activity by our customers, which in turn is highly dependent on oil and natural gas prices.

Future cash flows are subject to a number of variables, and are highly dependent on the

drilling and completion, and production activity by our customers, which in turn is highly dependent on oil and natural gas prices.

Depending upon market conditions and other factors, we may issue equity and debt securities or take other actions necessary to fund our business, strategy or meet our future long-term liquidity requirements.

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The following table sets forth our net cash provided by (used in) operating, investing and financing activities during the years ended December 31, 2025 and 2024, respectively.

Year Ended December 31,

(in thousands)

Year Ended December 31,

Net cash provided by operating activities

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Net cash provided by operating activities was $231.6 million for the year ended December 31, 2025, as compared to $252.3 million for the year ended December 31, 2024.

The net decrease of $122.4 million was primarily due to lower net income adjusted for noncash expenses and the timing of our receivable collections from our customers and payments to our vendors.

The net decrease of $20.7 million was primarily attributable to lower net income adjusted for noncash expenses and the timing of our receivable collections from our customers and payments to our vendors.

Investing Activities

Net cash used in investing activities decreased to $149.8 million for the year ended December 31, 2025, from $155.1 million for the year ended December 31, 2024.

The decrease was primarily attributable to our capital light strategy and the completion of our planned investments in Tier IV DGB equipment.

The following table summarizes our capital expenditures incurred by reportable segment for the periods indicated:

The net decrease was primarily attributable to the acquisition of AquaProp which resulted in a $21.0 million net cash outflow for the year ended December 31, 2024, a $17.3 million increase in proceeds from sale of assets (including $9.4 million from the sale of the Company’s short-term investment discussed in “Note 5.

Fair Value Measurements”) and $13.0 million in proceeds from note receivable from sale of business further discussed in “Note 16.

Related Party Transactions,” partially offset by a $46.0 million increase in capital expenditures primarily related to our PROPWR SM power generation business.

The following table reconciles our capital expenditures paid to capital expenditures incurred for the periods indicated:

(in thousands)

Year Ended December 31,

Capital expenditures paid (1)

$ 186,316 $ 140,297

Capital expenditures included in accounts payable and accrued liabilities - beginning of period (14,695) (21,604)

Capital expenditures included in accounts payable and accrued liabilities - end of period 28,095 14,695

Capital expenditures related to financed equipment purchases 81,130 —

Capital expenditures financed by operating lease landlord 350 —

Capital expenditures incurred (1)

$ 281,196 $ 133,388

____________________

(1) This table reconciles cash basis capital expenditures reported in the Company's consolidated statements of cash flows to accrual basis capital expenditures reported in "Note 11.

- Reportable Segment Information" and below.

The following table summarizes our capital expenditures incurred by reportable segment for the periods indicated:

(in thousands)

Year Ended December 31,

Reportable Segments:

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Cementing 5,752 9,376

Power Generation 198,373 —

Reconciling Items (1)

Total capital expenditures (2)

Total capital expenditures incurred (2)

$ 281,196 $ 133,388

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Financing Activities

Net cash used in financing activities increased to $80.1 million for the year ended December 31, 2024, compared to $46.1 million for the year ended December 31, 2023.

The net increase was primarily driven by net borrowings of $15.0 million under our ABL Credit Facility during the year ended December 31, 2023 , a $13.0 million increase in payments of finance lease obligation and a $7.4 million increase in share repurchases and repayments of insurance financing of $1.0 million during the year ended December 31, 2024 , partially offset by a $1.6 million decrease in tax withholdings paid for net settlement of equity awards and payment of debt issuance costs of $1.2 million during the year ended December 31, 2023 .

Net cash used in financing activities decreased to $40.9 million for the year ended December 31, 2025, compared to $80.1 million for the year ended December 31, 2024.

The net decrease was primarily driven by a $59.1 million decrease in share repurchases, partially offset by a $6.8 million increase in payment of business acquisition deferred cash consideration, a $3.6 million increase in repayments of equipment financing term loans, a $3.5 million increase in repayments of insurance financing, a $2.8 million increase in payment of financing origination and debt issuance costs and a $2.3 million increase in tax withholdings paid for net settlement of equity awards .

Credit Facility and Other Financing Arrangements

Our revolving credit facility, as amended and restated in April 2022, prior to giving effect to the amendment to the revolving credit facility in June 2023, had a total borrowing capacity of $150.0 million.

The revolving credit facility had a borrowing base of 85% to 90%, depending on the credit ratings of our accounts receivable counterparties, of monthly eligible accounts receivable less customary reserves.

The revolving credit facility included a springing fixed charge coverage ratio to apply when excess availability was less than the greater of (i) 10% of the lesser of the facility size or the borrowing base or (ii) $10.0 million.

Under the revolving credit facility we were required to comply, subject to certain exceptions and materiality qualifiers, with certain customary affirmative and negative covenants, including, but not limited to, covenants pertaining to our ability to incur liens, indebtedness, changes in the nature of our business, mergers and other fundamental changes, disposal of assets, investments and restricted payments, amendments to our organizational documents or accounting policies, prepayments of certain debt, dividends, transactions with affiliates, and certain other activities.

Effective June 2, 2023, the Company entered into an amendment to its amended and restated revolving credit facility.

The amendment increased the borrowing capacity under the ABL Credit Facility to $225.0 million (subject to the Borrowing Base limit), and extended the maturity date to June 2, 2028.

Effective June 26, 2024, the company entered into an amendment to its amended and restated revolving credit facility (the revolving credit facility, as amended and restated in April 2022, as amended in June 2023, as amended in June 2024 and as may be amended further, the “ABL Credit Facility”).

The amendment increased the amount of noncash consideration that may be considered cash pursuant to certain permitted dispositions.

The ABL Credit Facility has a borrowing base of the sum of 85% to 90% of monthly eligible accounts receivable and 80% of eligible unbilled accounts (up to a maximum of 25% of the borrowing base), in each case, depending on the credit ratings of our accounts receivable counterparties, less customary reserves (the “Borrowing Base”) as redetermined monthly.

The Company is a party to the ABL Credit Facility that provides for borrowing capacity of up to $225.0 million (subject to the Borrowing Base limit), and matures on June 2, 2028.

ABL Credit Facility :

Effective December 26, 2025, the Company entered into an amendment to its amended and restated revolving credit facility (the revolving credit facility, as amended and restated in April 2022, as amended in June 2023, as amended in June 2024, as amended in December 2025 and as may be amended further, the “ABL Credit Facility”).

The amendment increased the debt basket for capital/finance leases, purchase money debt, and other similar financing facilities to $425.0 million.

The Borrowing Base as of December 31, 2025, was approximately $167.7 million.

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Under the ABL Credit Facility, we are required to comply, subject to certain exceptions and materiality qualifiers, with certain customary affirmative and negative covenants, including, but not limited to, covenants pertaining to our ability to incur liens or indebtedness, changes in the nature of our business, mergers and other fundamental changes, disposal of assets, investments and restricted payments, amendments to our organizational documents or accounting policies, prepayments of certain debt, dividends, transactions with affiliates, and certain other activities.

Borrowings under the ABL Credit Facility are secured by a first priority lien and security interest in substantially all assets of the Company.

Borrowings under the ABL Credit Facility are secured by a first priority lien and security interest in substantially all assets of the Company excluding certain mobile natural gas-fueled power generation equipment purchased under a financing arrangement.

Borrowings under the ABL Credit Facility accrue interest based on a three-tier pricing grid tied to availability, and we may elect for loans to be based on either the Secured Overnight Financing Rate (“SOFR”) or the base rate, plus the applicable margin, which ranges from 1.75% to 2.25% for SOFR loans and 0.75% to 1.25% for base rate loans.

The weighted average annual interest rate for our ABL Credit Facility for the year ended December 31, 2025, was 6.29%.

The loan origination costs relating to the ABL Credit Facility are classified as an asset on our balance sheet.

As of December 31, 2025, and 2024, we had outstanding borrowings under our ABL Credit Facility of $45.0 million and $45.0 million, respectively.

We entered into a contractual arrangement with an equipment manufacturer to purchase mobile natural gas-fueled power generation equipment for our PROPWR business line, with a total cost of $122.0 million, of which approximately $103.7 million, representing progress payments beyond the initial down payment on this equipment, will be financed.

We currently expect to start receiving this equipment from the end of the second quarter of 2025 through early 2026.

Caterpillar Equipment Loan Agreement :

On April 2, 2025, we entered into a financing arrangement and on February 6, 2026, we entered into an amendment to this financing arrangement with Caterpillar Financial Services Corporation (collectively, the “Caterpillar Equipment Loan Agreement”) to support the purchase of certain mobile natural gas-fueled power generation equipment, including turbine generator sets along with auxiliary equipment, for our PROPWR SM business line, under which the lender, Caterpillar Financial Services Corporation (an affiliate of the equipment manufacturer), will fund progress payments beyond the initial down payment on the equipment for a maximum total available amount of $157.3 million and provide us interim loans in connection with each progress payment made on our behalf.

Such interim loans will accrue interest at a floating rate per annum based on SOFR, plus a 3.85% margin, plus any increase or minus any decrease in the Bloomberg Industrial Single A Total Return Index since November 15, 2024.

Such interim loans will be combined and converted to a term loan for each unit of equipment after the final progress payment is funded for such unit.

Interest on interim loans is payable on a monthly basis until conversion to term loans.

Each term loan will accrue interest at a fixed rate per annum based on the three-year U.S Treasury rate as of the date of conversion of interim loans to the term loan for each unit of equipment, plus a 3.70% margin, plus any increase or minus any decrease in the Bloomberg Industrial Single A Total Return Index since November 15, 2024 and will be payable in equal monthly installments over a period not to exceed five years.

Each loan will be secured on a first lien basis by equipment collateral and support documents, casualty proceeds and other proceeds or products related thereto, and any proceeds from the equipment loan must be used for payment or reimbursement for the equipment subject to such loan.

Each loan will be fully and unconditionally guaranteed by the guarantors set forth in the Caterpillar Equipment Loan Agreement.

The weighted average interest rate on our interim loans (short-term loans) as of December 31, 2025 was 7.69%.

T he weighted average interest rate on our term loans (long-term loans) for the year ended December 31, 2025 was 7.34%.

Under the Caterpillar Equipment Loan Agreement, we have incurred interim loans and term loans with outstanding amounts of $2.1 million and $75.4 million , respectively, as of December 31, 2025, related to funding for equipment under construction and equipment received.

Interim and Long-Term Debt.” The financed payments from the lender (an affiliate of the equipment manufacturer) are presented as non-cash investing and financing activities within the “Supplemental Disclosure of Non-Cash Investing and Financing Activities” section of our consolidated statements of cash flows.

The repayments of term loans are presented as cash outflows under cash flows from financing activities in our consolidated statements of cash flows.

Stonebriar Equipment Lease Facility.

On December 29, 2025, ProPetro Energy Solutions , LLC (“PROPWR”) , a wholly owned subsidiary of the Company, entered into an Interim Funding Agreement and a Master Lease Agreement with Stonebriar for the right, but not the obligation, to fund up to $350.0 million of purchases of power generator equipment .

Under the Interim Funding Agreement, Stonebriar provides funding to finance down payments and progress payments owing to equipment suppliers.

Monthly rent under the Interim Funding Agreement is based on the unpaid balance of the aggregate amounts advanced under the Interim Funding Agreement and not yet converted to a lease schedule under the Master Lease Agreement, times a per annum lease rate factor equal to sum of 1-Month SOFR plus 6.25%.

Upon delivery and acceptance of a power generator, amounts outstanding under the Interim Funding Agreement with respect to such equipment are converted into a lease schedule under the Master Lease Agreement.

Stonebriar will hold legal title to such leased equipment.

The lease term for each item of equipment will be 84 months, and the rental payment amounts will be based on the equipment cost times a lease rate factor set forth in the applicable lease schedule.

PROPWR will have certain early termination and purchase options with respect to the leased equipment at various points during the lease, as set forth in the Master Lease Agreement and related lease schedule for such equipment.

Upon exercise of such rights and payment of the required amounts, PROPWR would acquire legal title to such equipment.

Off-Balance Sheet Arrangements

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Capital expenditures incurred were $281.2 million during the year ended December 31, 2025, as compared to $133.4 million during the year ended December 31, 2024.

The significant portion of our total capital expenditures incurred during the year ended December 31, 2024, were maintenance capital expenditures and conversion of our hydraulic fracturing equipment to lower emissions equipment.

Our future material use of cash will be to fund our capital expenditures.

Capital expenditures for 2025 are projected to be primarily related to capital expenditures to extend the useful life of our existing completion services assets, costs to convert some existing equipment to lower emissions equipment, purchase power generation equipment, strategic purchases and other ancillary equipment purchases, subject to market conditions and customer demand.

Our future capital expenditures depend on our projected operational activity, emission requirements and planned conversions to lower emissions equipment, among other factors, which could vary significantly throughout the year.

Based on our current plan and projected activity levels for 2025, we expect our capital expenditures to range between $300 million to $400 million which includes approximately $150 million to $200 million for our completion services business and approximately $150 million to $200 million for our PROPWR business.

We entered into a contractual arrangement with an equipment manufacturer to purchase mobile natural gas-fueled power generation equipment for our PROPWR business line, with a total cost of $122.0 million, of which approximately $103.7 million will be financed, representing progress payments beyond the initial down payment on this equipment.

We currently expect receive this equipment beginning with the end of the second quarter of 2025 through early 2026.

We entered into a contractual arrangement with another related equipment manufacturer to purchase additional natural gas-fueled power generation equipment for our PROPWR business line, with a total cost of $25.0 million.

We currently expect to receive this equipment in the first half of 2025.

We could incur significant additional capital expenditures if our projected activity levels increase during the course of the year, inflation and supply chain tightness continues to adversely impact our operations or we invest in new or different lower emissions equipment.

The significant portion of our total capital expenditures incurred during the year ended December 31, 2025 were for our Power Generation segment totaling $198.4 million including $81.1 million of financed equipment purchases for this business, and maintenance capital expenditures.

Our future material use of cash will be to fund our capital expenditures and to repay debt and other financing obligations, if any.

Although we intend to prioritize investing in our PROPWR SM business line in the near future, we may also use material amounts of cash to repurchase shares under our share repurchase program.

Capital expenditures for 2026 are projected to be primarily related to capital expenditures to purchase power generation equipment, costs to extend the useful life of our existing completion services assets, costs to convert some existing equipment to lower emissions equipment, potential buyout of leased FORCE ® electric-powered hydraulic fracturing fleets, strategic purchases and other ancillary equipment purchases, subject to

market conditions and customer demand.

Our future capital expenditures depend on our projected operational activity, emission requirements and planned conversions to lower emissions equipment and demand for our power generation services, among other factors, which could vary significantly throughout the year.

Based on our current plan and projected activity levels for 2026, we expect our capital expenditures to range between $390 million and $435 million, which includes approximately $140 million to $160 million for our completion services business, including approximately $40 million to $50 million related to lease buyouts for a portion of our FORCE ® electric-powered hydraulic fracturing fleets.

Additionally, we expect to incur approximately $250 million to $275 million in 2026 for our PROPWR SM business line.

We entered into contractual arrangements with an equipment manufacturer to purchase mobile natural gas-fueled power generation equipment, including tu rbine generator sets along with auxiliary equipment, for our PROPWR SM business line, with a total cost of $186.6 million.

The total remaining commitment ( after initial down payment and financed payments) under these arrangements as of December 31, 2025 was $87.1 million, of which $76.1 million will be financed under the Caterpillar Equipment Loan Agreement .

We expect to receive the remaining equipment currently on order under these arrangements from the first quarter through the third quarter of fiscal year 2026 .

We also entered into contractual arrangements with other equipment manufacturers to purchase additional power generation and auxiliary equipment for our PROPWR SM business line, with a total remaining commitment of approximately $203.0 million.

We expect to receive the remaining equipment currently on order under these arrangements from the middle of fiscal year 2026 through the end of fiscal year 2027 .

We could incur significant additional capital expenditures if our projected activity levels increase during the course of the year, inflation and supply chain tightness continue to adversely impact our operations or we invest in new or different lower emissions equipment.

The Company will continue to evaluate the emissions profile of its equipment over the coming years and may, depending on market conditions, convert or retire additional conventional Tier II equipment in favor of lower emissions equipment.

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Depending on the impact of these factors, the Company may decide to retain conventional equipment for a longer period of time or accelerate the retirement, replacement or conversion of that equipment.

We anticipate our capital expenditures will be funded by existing cash, cash flows from operations, and if needed, borrowings under our ABL Credit Facility.

The Company may also decide to exercise its buyout options on its leased F ORCE ® electric-powered hydraulic fracturing fleets at the end of their leases.

We anticipate our capital expenditures will be funded by existing cash, including proceeds from the 2026 Common Stock Offering, cash flows from operations, the Caterpillar Equipment Loan Agreement, other financing arrangements including the Stonebriar Equipment Lease Facility, and borrowings under our ABL Credit Facility.

Our cash flows from operations will be generated from services we provide to our customers.

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$ 45,000 $ — $ 45,000

Equipment financing interim loans (2)

2,135 2,135 —

Equipment financing term loans (3)

90,402 19,329 71,073

Operating leases (4)(5)

2 unchanged sentences

12,767 12,767 —

Sand commitments (5)

1,500 1,500 —

Equipment purchase commitments (7)

290,122 225,984 64,138

Par Five deferred cash consideration (7)

3,109 3,109 —

AquaProp deferred cash consideration (8)

Unused commitment fee on equipment lease facility (8)

1,750 — 1,750

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____________________

(1) Exclusive of future commitment fees, amortization of deferred financing costs, interest expense or other fees on our ABL Credit Facility because obligations thereunder are floating rate instruments and we cannot determine with accuracy the timing of future loan advances, repayments of future interest rates to be changed.

However, assuming a weighted average interest rate of 6.29%, and that our ABL Credit Facility debt balance remains the same, our estimated annual interest payment will be $2.8 million.

(2) Excludes interest expense because obligations under our equipment financing interim loans have floating rates of interest and we cannot determine with accuracy the timing of conversion to term loans, repayments or future interest rates to be changed.

(3) Includes interest expense since obligations under our equipment financing term loans have fixed rates of interest and predetermined repayment schedules.

(4) Operating leases exclude short-term leases and other commitments (see “Note 17.

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(5) Includes our leases for FORCE ® electric-powered hydraulic fracturing fleets (312,000 HHP).

We expect to receive the remaining equipment under these leases in the first half of 2025.

(4) Finance lease for certain power generation equipment (70 MW) to support electric-powered hydraulic fracturing equipment .

(5) Relates to a take-or-pay sand commitment with one of our sand vendors.

(6) Represents contractual commitments with two equipment manufacturers to purchase 140 megawatts of mobile natural gas-fueled power generation equipment for our PROPWR business line (see Note 18.

(6) Finance lease for certain power generation equipment (70 megawatts) to support electric-powered hydraulic fracturing equipment .

(7) Represents contractual commitments with equipment manufacturers to purchase power generation and auxiliary equipment for our PROPWR SM business line (see “Note 18.

Commitments and Contingencies” in the financial statements for additional disclosures).

(7) Represents the unpaid portion of the purchase consideration on our acquisition of Par Five to be used to cover (i) the amount by which the estimated purchase price exceeds the final purchase price, if any, and (ii) any indemnity obligations of the seller, if any.

(8) Represents the unpaid portion of the purchase consideration on our acquisition of AquaProp to be used to cover (i) the amount by which the estimated purchase price exceeds the final purchase price, if any, and (ii) any indemnity obligations of the seller, if any.

(8) Represents the maximum amount we may owe under the Stonebriar Equipment Lease Facility described in “Note 17.

Leases” for any unused portion of the lease facility.

We enter into other purchase agreements with Sand Suppliers to secure the supply of sand in the normal course of our business.

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The shortfall fee represents liquidated damages and is either a fixed percentage of the purchase price for the mi nimum volumes or a fixed price per ton of unpurchased volumes.

Our current agreements with Sand Suppliers expire at different times prior to December 31, 2025 .

Our existing agreements with the Sand Suppliers expire on May 31, 2029.

Our agreed upon sand requirements or minimum volumes are based on certain future events such as our customer demand, which cannot be reasonably estimated.

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Recent Accounting Pronouncements

Disclosure concerning recently issued accounting standards is incorporated by reference to " Note 2- Significant Accounting Policies " of our Consolidated Financial Statements contained in this Annual Report.

Critical Accounting Policies and Estimates

Disclosure concerning recently issued accounting standards is incorporated by reference to “Note 2.

Significant Accounting Policies” of our Consolidated Financial Statements contained in this Annual Report.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.

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Our actual results may materially differ from these estimates.

Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved, and that we believe are critical to the understanding of our operations.

Business Combinations

Business combinations are accounted for under the acquisition method of accounting.

Under this method, the assets acquired and liabilities assumed are recognized at their respective fair values as of the date of acquisition.

The excess, if any, of the acquisition price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill if the definition of a business is met.

For significant acquisitions, we utilize third-party appraisal firms to assist us in determining the fair values for certain assets acquired and liabilities assumed using discounted cash flows and other applicable valuation techniques.

We record any acquisition related costs as expenses when incurred.

Adjustments to the fair values of assets acquired and liabilities assumed are made until we obtain all relevant information regarding the facts and circumstances that existed as of the acquisition date (the “measurement period”), not to exceed one year from the date of the acquisition.

We recognize measurement period adjustments in the period in which we determine the amounts, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed at the acquisition date.

The estimation of the fair values of assets and liabilities acquired in business combinations requires significant judgment.

Our fair value estimates require us to use significant observable and unobservable inputs.

The estimates of fair value are also subject to significant variability, are sensitive to changes in market conditions, and are reasonably likely to change in the future.

A significant change in the observable and unobservable inputs and determination of fair value of the assets and liabilities acquired could significantly impact our consolidated financial statements.

Property and Equipment

Listed below are the accounting estimates that we believe are critical to our financial statements since these estimates require a high degree of complexity and judgment, and that we believe are critical to understanding our operations.

Depreciation and Amortization

Our property and equipment are recorded at cost, less accumulated depreciation.

Upon sale or retirement of property and equipment, the cost and related accumulated depreciation are removed from the balance sheet and the net amount, less proceeds from disposal, is recognized as a gain or loss in earnings.

We primarily retire certain components of equipment such as fluid ends and power ends, rather than the entire pieces of equipment.

The associated loss is recorded in our statement of operations as part of net loss on disposal of assets and businesses, which was $7.5 million , $73.0 million, and $102.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The estimated useful lives and salvage values of property and equipment are subject to key assumptions such as maintenance, utilization and job variation.

The estimated useful lives and salvage values of our property and equipment are subject to key assumptions such as maintenance, utilization and job variation.

These estimates may change due to a number of factors such as changes in operating conditions or advances in technology.

Unanticipated future changes in these assumptions could negatively or positively impact our net income (loss).

A 10% change in the useful lives of our property and equipment would have resulted in approximately $18.5 million impact on pre-tax loss during the year ended December 31, 2024.

Depreciation of property and equipment is provided on the straight‑line method over estimated useful lives as shown in the table below.

Buildings and property improvements

Leasehold improvements

A 10% change in the useful lives of our property and equipment would have resulted in approximately $14.7 million impact on pre-tax income during the year ended December 31, 2025.

Intangible assets, other than goodwill, consist of trade mark/trade name, customer relationships and favorable contracts.

The estimated useful lives of these intangible assets could be sensitive to changes in market conditions and management’s judgment, and are likely to change in the future if certain events occur.

Presently, there are no events or circumstances that will cause us to believe that our estimated useful life for our intangible assets are likely to change.

Impairment of Long-Lived Assets

In accordance with the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 360 regarding Accounting for the Impairment or Disposal of Long‑Lived Assets , we review the long‑lived assets including intangible assets to be held and used whenever events or circumstances indicate that the carrying value of those assets may not be recoverable.

An impairment loss is indicated if the sum of the expected future undiscounted cash flows attributable to the assets is less than the carrying amount of such assets.

We review our long‑lived assets, other than goodwill, for impairment whenever events or circumstances indicate that the carrying value of those assets may not be recoverable.

For the impairment testing on long-lived assets, other than goodwill, a long-lived asset is grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

Estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset group are compared to the carrying amount of the underlying assets.

An impairment loss is indicated if the sum of the expected future undiscounted cash flows attributable to the asset group is less than the carrying amount of such assets.

In this circumstance, we recognize an impairment loss for the amount by which the carrying amount of the assets exceeds the estimated fair value of the asset.

Our cash flow forecasts require us to make certain judgments regarding long‑term forecasts of future revenue and costs and cash flows related to the assets subject to review.

The significant assumption in our cash flow forecasts is our estimated equipment utilization and profitability.

The significant assumption is uncertain in that it is driven by future demand for our services and utilization, which could be impacted by crude oil market prices, future market conditions and technological advancements.

The significant assumptions in our cash flow forecasts are our estimated equipment utilization and profitability.

These assumptions are uncertain in that they are driven by future demand for our services and utilization, which could be impacted by crude oil market prices, future market conditions and technological advancements.

Our fair value estimates for certain long‑lived assets require us to use significant other observable inputs, including assumptions related to market based on recent auction sales or selling prices of comparable equipment.

The estimates of fair value are also subject to significant variability, are sensitive to changes in market conditions, and are reasonably likely to change in the future.

If the crude oil market declines or the demand for our services does n ot recover, and if our equipment remains idle or underutilized, the estimated fair value of such equipment may decline, which could result in future impairment charges.

Though the impacts of variations in any of these factors can have compounding or offsetting impacts, a 10% decline in the estimated future cash flows of our existing asset groups will not indicate an impairment.

During the year ended December 31, 2024 , we recorded property and equipment impairment expense of approximately $188.6 million in connection with our conventional Tier II diesel-only hydraulic fracturing pumping units and associated conventional assets.

In 2022, we recorded property and equipment impairment expense of $57.5 million on our DuraStim ® electric-powered hydraulic fracturing equipment within the hydraulic fracturing operating segment .

Intangible assets consist of trade mark/trade name, customer relationships and favorable contracts.

Trademark/trade names are amortized on a straight‑line basis over useful l ives of ten and fifteen years.

Customer relationships are amortized on a straight‑line basis over useful lives of six and ten years.

Favorable contracts are amortized on a straight‑line basis over useful lives of thirty months and five years.

Internally developed software will be amortized on a straight‑line basis over a useful life of twenty-nine months.

Our estimated useful life could be sensitive to changes in market conditions and management’s judgment, and are likely to change in the future if certain events occur.

Presently, there are no events or circumstances that will cause us to believe that our estimated useful life for our intangible assets are likely to change.

Goodwill is the excess of the consideration transferred over the fair value of the tangible and identifiable intangible assets and liabilities recognized.

Goodwill is not amortized.

We perform an annual impairment test of goodwill and intangible assets as of December 31, or more frequently if circumstances indicate that impairment may exist.

In connection with the AquaProp Acquisition, we added $0.9 million of goodwill in our hydraulic fracturing operating segment during the year ended December 31, 2024.

We recorded goodwill impairment expense of $23.6 million in our wireline reporting unit during the year ended December 31, 2024.

There were no additions to goodwill during the year ended December 31, 2023.

The hydraulic fracturing operating segment was the only segment with goodwill at December 31, 2024.

The wireline operating segment was the only segment with goodwill at December 31, 2023 .

There were no goodwill impairment losses during the year ended December 31, 2023 .

We performed our annual goodwill impairment test in accordance with ASC 350, Intangibles—Goodwill and Other , on December 31, 2024, at which time, we determined that the fair value of our wireline reporting unit was substantially in excess of its carrying value resulting in impairment.

The quantitative impairment test we perform for goodwill utilizes certain assumptions, including forecasted equipment utilization, pricing and cost assumptions.

Our discounted cash flow analysis includes significant assumptions regarding discount rates, utilization, expected profitability margin, forecasted maintenance capital expenditures, and the timing of expected cash flow.

As such, our goodwill analysis incorporates inherent uncertainties that are difficult to predict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the estimated assumptions utilized in our forecast.

As of December 31, 2024, and 2023, our goodwill carrying value w as $0.9 million and $23.6 million, respectively.

In accordance with ASC Topic 842, the Company determines if a contract is a lease at inception and evaluates identified leases for operating and finance lease accounting.

Operating or finance lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

The Company uses a discount rate based on its estimated incremental borrowing rate on a collateralized basis with similar terms and economic considerations as its lease payments at the lease commencement in determining the present value of lease payments.

Lease terms may include options to renew the lease or purchase the underlying assets, however, the Company typically cannot determine its intent to renew the lease or purchase the assets with reasonable certainty at inception.

The Company elected the short-term lease recognition practical expedient provided by ASC 842 in which leases with a term of twelve months or less will not be recognized on the balance sheet, and the practical expedient to not separate lease and non-lease components for real estate class of assets.

We elected to analogize to the measurement guidance of ASC 360 to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs.

During the years ended December 31, 2025 and 2023, we did not recognize any impairment of our long-lived assets.

During the year ended December 31, 2024, we recognized property and equipment impairment expense of approximately $188.6 million in connection with our conventional Tier II diesel-only hydraulic fracturing pumping units and associated conventional assets.

Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

4 unchanged sentences

If we determine that we would not be able to fully realize our deferred tax assets in the future in excess of their net recorded amount, we would record a valuation allowance, which would increase our provision for income taxes.

We believe the valuation allowance is a critical accounting estimate because it is susceptible to change from period to period, requires assumptions about our future income over the lives of the deferred tax assets, and because the impact of increasing or decreasing the valuation allowance is potentially material to our results of operations.

In determining our need for a valuation allowance as of December 31, 2025, we have considered and made judgments and estimates regarding estimated future taxable income.

4 unchanged sentences

Unforeseen events may significantly impact these variables, and changes to these variables could have a material impact on our income tax accounts.

The final determination of our income tax

liabilities involves the interpretation of local tax laws and related authorities in each jurisdiction.

The final determination of our income tax liabilities involves the interpretation of local tax laws and related authorities in each jurisdiction.

Changes in the operating environments, including changes in tax law, could impact the determination of our income tax liabilities for a tax year.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis