What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-20 · 580 added, 587 removed, 1035 unchanged (53% of the section changed)

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Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm (PCAOB ID :

Consolidated Balance Sheet s as of December 31, 2024 and 2023

Consolidated Statement s of Operations for the years ended December 31, 2024, 2023 and 2022

Consolidated Statement s of Changes in Shareholders’ Equity for th e years ended December 31, 2024, 2023 and 2022

Consolidated Statement s of Cash Flows for the years ended December 31, 2024, 2023 and 2022

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023

Notes to Consolidated Financial Statements

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ProPetro Holding Corp.

and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, shareholders' equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of ProPetro Holding Corp and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 19, 2026 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

As discussed in Notes 2 and 11 to the financial statements, the Company adopted ASU 2023-07, Segment Reporting (Topic 280) as of December 31, 2024, and changed the composition of its segment information in 2023.

We also have audited the adjustments necessary to restate the 2022 segment information and to reflect the adoption of ASU 2023-07, Segment Reporting (Topic 280) to the 2022 segment information, as provided in Note 11.

In our opinion, such adjustments are appropriate and have been properly applied.

We were not engaged to audit, review or apply any procedures to the 2022 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2022 financial statements taken as a whole.

Basis for Opinion

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Business Combination—Aqua Prop, LLC

As discussed in Note 4 of the consolidated financial statements, the Company completed the acquisition of all of the outstanding equity interests in Aqua Prop LLC (AquaProp) on May 31, 2024, for total consideration transferred of $35.8 million, which included contingent consideration with an acquisition date fair value of $10.9 million.

The Company accounted for this transaction under the acquisition method of accounting for business combinations whereby the fair value of the consideration transferred was allocated to the assets acquired, including a customer relationship intangible asset of $18.6 million, and liabilities assumed based upon their acquisition date fair values.

Management estimated the fair value of the contingent consideration by applying a probability-weighted expected return method for the different scenarios that may occur based upon the amount of additional equipment delivered by the seller, at the request of the Company, and the amount of wet sand expected to be delivered by such equipment within a 30-month period.

Management estimated the fair value of the customer relationship intangible asset using a discounted cash flow method whereby forecasted cash flows expected to be derived from the intangible asset over the economic life of the asset, adjusted for expected attrition, are discounted to present value.

We identified the valuation of the customer relationship intangible asset and the contingent consideration liability at the AquaProp acquisition date as a critical audit matter because of the significant assumptions management used in estimating the fair values, including forecasted cash flows and the selection of a discount rate for the customer relationship intangible asset and forecasted tonnage of wet sand expected to be delivered for the contingent consideration.

Auditing management’s assumptions involved a high degree of auditor judgment and an increase in audit effort, including the use of valuation specialists, due to the impact these assumptions could have on the accounting estimates.

Our audit procedures related to the valuation of the customer relationship intangible asset and the contingent consideration liability included the following, among others:

• We obtained an understanding of the relevant controls related to management’s business combination fair value estimates and tested such controls for design and operating effectiveness, including controls over management’s review of significant assumptions used in the fair value estimates.

• We read the purchase and sale agreement to understand and evaluate the terms of the acquisition.

• We tested the reasonableness of management’s forecasts of cash flows in the valuation of the customer relationship intangible asset by comparing them to historical results and evaluating publicly available industry information.

• We tested the reasonableness of management’s forecasts of tonnage of wet sand to be delivered by comparing the estimated capacity of each piece of equipment to in-process contracts and considering the impact of the estimated timing of the delivery to the estimate of fair value.

• We utilized our valuation specialists to assist in the following procedures, among others:

◦ Evaluating the appropriateness of the valuation models used by management to estimate the fair values of the customer relationship intangible asset and contingent consideration and testing their mathematical accuracy.

◦ Evaluating the appropriateness of the methodology used by management to develop the attrition rate for the customer relationship.

◦ Comparing the source information underlying the determination of the discount rates to publicly available market data and verifying the accuracy of the calculations.

Impairment of Long-lived Assets—Fair Value of Conventional Tier II Diesel-only Hydraulic Fracturing Pumping Units and Associated Conventional Assets

As discussed in Notes 2 and 5 to the consolidated financial statements, at September 30, 2024, the Company performed a recoverability assessment on the long-lived assets in its conventional Tier II diesel-only hydraulic fracturing pumping units and associated conventional assets asset group (the “Tier II Units”).

In performing the recoverability assessment, the Company first compared the carrying value of the asset group to the estimated undiscounted cash flows to be generated over the remaining useful life of the asset group’s primary asset.

Because the carrying value of the asset group exceeded the estimated undiscounted cash flows, the Company then estimated the fair value of the asset group, utilizing both a market approach and a cost approach, and recorded an impairment charge of $188.6 million.

We identified management’s estimated fair value of the Tier II Units as a critical audit matter because of the significant assumptions management used in estimating the fair value of the assets, including the selection of the valuation methods used to estimate fair value, the determination of the highest and best use of the assets, and consideration of the appropriateness of market data, among others.

Auditing management’s assumptions involved a high degree of auditor judgment and an increase in audit effort, including the use of our valuation specialists, due to the impact these assumptions could have on the accounting estimate.

Our audit procedures related to the Company’s estimate of the fair value of the Tier II Units included the following, among others:

• We obtained an understanding of the relevant controls related to management’s estimate of fair value of the Tier II Units and tested such controls for design and operating effectiveness, including controls over management’s review of the significant assumptions used in estimating the fair value of the underlying assets.

• We tested the completeness and accuracy of the Tier II Units by agreeing the carrying values and other relevant information to the underlying support.

• We utilized our valuation specialists to assist in the following procedures, among others:

◦ Evaluating the appropriateness of the valuation models used by management to estimate the fair value of the Tier II Units and testing their mathematical accuracy.

◦ Evaluating management’s determination of the highest and best use of the Tier II Units.

◦ Corroborating managements estimates of fair value by comparing such estimates to publicly available market data.

Goodwill Impairment Testing—Wireline Reporting Unit

As discussed in Notes 2 and 5 to the consolidated financial statements, management tests the Company’s goodwill for impairment, at the reporting unit level, at December 31 of each fiscal year, or more frequently if events or changes in circumstances indicate the goodwill might be impaired.

To test goodwill for impairment, management compares the estimated fair value of the reporting unit to the carrying amount, including the recorded goodwill.

An impairment is recorded when the carrying value of the reporting unit exceeds its estimated fair value.

The Company's estimated reporting unit fair value is based on a combination of income and market approaches.

The income approach involves the use of a discounted cash flow method with the cash flow projections discounted at an appropriate discount rate.

The market approach involves the use of comparable public companies’ market multiples in estimating the fair value.

During the year ended December 31, 2024, the Company recorded a goodwill impairment charge of $23.6 million in its Wireline reporting unit, which represented a full impairment of the goodwill in that reporting unit.

We identified the valuation of the Wireline reporting unit as a critical audit matter because of the significant assumptions management used in estimating the fair value of the reporting unit, including revenue growth rates and margin percentages used in the projected cash flows, the determination of the discount rate applicable to the reporting unit, and the identification of comparable guideline public companies and market multiples.

Our audit procedures related to the estimated fair value of the Wireline reporting unit included the following, among others:

• We obtained an understanding of the relevant controls related to management’s impairment assessment and tested such controls for design and operating effectiveness, including controls over management’s review of the significant assumptions utilized in the fair value measurement.

• We tested the reasonableness of management’s forecasts of cash flows, including revenue and margins, by comparing them to historical results and evaluating publicly available industry information.

• We tested the underlying data used by management in the development of the forecasts of cash flows for accuracy and completeness by agreeing it to source data.

• We utilized our valuation specialists to assist in the following procedures, among others:

◦ Evaluating the appropriateness of the Company's valuation methodology and testing the mathematical accuracy.

◦ Testing the reasonableness of the discount rate using in the income approach by comparing the inputs used by management to publicly available market data.

◦ Evaluating the comparability of the guideline public companies identified by management based upon publicly available market data.

◦ Corroborating the market multiples selected by the Company in the market approach by comparing them publicly available market data.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Power Generation Arrangements

As disclosed in Note 2 to the financial statements, the Company’s power generation arrangements involve providing turnkey power generation services to customers using mobile power generation equipment installed at customers’ sites.

The evaluation of the accounting implications of these power generation arrangements requires the application of complex accounting rules and consideration of several factors which can impact the amount and timing of revenue recognized.

The Company evaluates whether the use of its power generation equipment installed at customers’ sites to provide power generation services represents a lease in accordance with the applicable accounting guidance.

If a lease is identified, the accounting guidance requires management to assess whether the lease component is separate from the nonlease components, determine the appropriate allocation of consideration based on relative standalone selling prices, and evaluate the resulting revenue recognition and lease classification implications.

For the power generation arrangements entered into during the year ended December 31, 2025, management determined that an operating lease existed in the contract and the nonlease components, primarily power generation and related support activities, represent the predominant components of the contract;

accordingly the Company has accounted for the lease and nonlease components as a single performance obligation and recognizes the revenue over time as the Company delivers the services.

We identified the Company’s evaluation of the accounting treatment of the power generation arrangements as a critical audit matter because of the complexity involved in management’s evaluation of the contracts, including management’s interpretation and application of the applicable accounting rules and the judgments required by management to analyze the nature of the services provided, assess whether the embedded lease conveyed the right to control the use of an identified asset, and to estimate standalone selling prices for the nonlease components.

Auditing management’s accounting conclusions involved a high degree of auditor judgment and an increase in audit effort due to the impact management’s conclusions could have on the Company’s accounting for the power generation arrangements.

Our audit procedures related to the Company’s evaluation of the accounting treatment of the power generation arrangements included the following, among others:

• We obtained an understanding of the relevant controls related to management’s evaluation of the power generation arrangements and tested such controls for design and operating effectiveness.

• We obtained management’s technical accounting memorandum and evaluated the reasonableness of management’s conclusions on the accounting treatment of the power generation arrangements by assessing whether the Company’s conclusions regarding the identification of a lease, the classification of the lease, and revenue recognition principles were consistent with relevant accounting guidance.

• We sampled the Company’s power generation arrangements and read the customer agreements to assess the existence of identified assets and whether control of those assets was conveyed to the customer.

• We tested management’s allocation of consideration between lease and nonlease components in its power generation arrangements, which management based on standalone selling prices, by comparing the inputs in management’s allocation to applicable contract terms and available market data and testing the mathematical accuracy of management's calculations.

/s/ RSM US LLP

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To the Shareholders and the Board of Directors of ProPetro Holding Corp.

Opinion on Internal Control over Financial Reporting

Opinion on the Internal Control Over Financial Reporting

We have audited ProPetro Holding Corp's (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company and our report dated February 19, 2026, expressed an unqualified opinion.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Aqua Prop, LLC from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a purchase business combination in the second quarter of 2024.

We have also excluded Aqua Prop, LLC from our audit of internal control over financial reporting.

Aqua Prop, LLC is a wholly owned subsidiary whose total assets and revenue represent approximately 4.9% and 3.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Basis for Opinion

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February 19, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

PROPETRO HOLDING CORP.

and Subsidiaries

Opinion on the Financial Statements

We have audited, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of ASU No.

2023-07, Segment Reporting , discussed in Note 11 to the consolidated financial statements, the consolidated statements of operations, shareholders' equity, and cash flows of ProPetro Holding Corp.

and Subsidiaries (the “Company”), for the year ended December 31, 2022, and the related notes (collectively, referred to as, the “financial statements”) (the 2022 financial statements before the effects of the retrospective adjustments discussed in Note 11 to the financial statements are not presented herein).

In our opinion, the 2022 financial statements, before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of ASU No.

2023-07, Segment Reporting , discussed in Note 11 to the financial statements, present fairly, in all material respects, the results of the Company’s operations and cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of ASU No.

2023-07, Segment Reporting discussed in Note 11 to the financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied.

Those retrospective adjustments were audited by other auditors.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provided a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

February 23, 2023

We began serving as the Company's auditor since 2013.

In 2023, we became the predecessor auditor.

PROPETRO HOLDING CORP.

CONSOLIDATED BALANCE SHEETS

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Prepaid expenses 19,896 17,719

Short-term investment, net 7,849 7,745

Short-term investment — 7,849

Other current assets

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Accrued and other current liabilities 65,981 70,923

Interim debt - net of debt issuance costs 2,113 —

Current maturities of long-term debt - net of debt issuance costs 13,844 —

Operating lease liabilities 43,572 39,063

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DEFERRED INCOME TAXES 63,433 59,770

LONG-TERM DEBT 45,000 45,000

LONG-TERM DEBT - net of debt issuance costs and current maturities 105,613 45,000

NONCURRENT OPERATING LEASE LIABILITIES

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NONCURRENT FINANCE LEASE LIABILITIES

13,187 30,886

OTHER LONG-TERM LIABILITIES

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Additional paid-in capital 897,739 884,995

Retained earnings (accumulated deficit)

Accumulated deficit

( 68,001 ) ( 68,825 )

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Goodwill impairment expense — 23,624 —

Loss on disposal of assets and businesses, net

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

12,179 ( 4,925 ) 34,293

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1,262,808 1,611,246 1,500,056

OPERATING (LOSS) INCOME

OPERATING INCOME (LOSS)

6,350 ( 166,960 ) 130,343

OTHER (EXPENSE) INCOME:

OTHER INCOME (EXPENSE):

Interest expense ( 8,238 ) ( 7,815 ) ( 5,308 )

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9,709 5,531 ( 9,533 )

Total other income (expense)

Total other income (expense), net

1,471 ( 2,284 ) ( 14,841 )

INCOME (LOSS) BEFORE INCOME TAXES 7,821 ( 169,244 ) 115,502

INCOME TAX BENEFIT (EXPENSE)

INCOME TAX (EXPENSE) BENEFIT

( 6,997 ) 31,385 ( 29,868 )

NET (LOSS) INCOME

NET INCOME (LOSS)

$ 824 $ ( 137,859 ) $ 85,634

NET (LOSS) INCOME PER COMMON SHARE:

NET INCOME (LOSS) PER COMMON SHARE:

$ 0.01 $ ( 1.31 ) $ 0.76

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Tax withholdings paid for net settlement of equity awards — — ( 3,543 ) — ( 3,543 )

Share repurchases ( 5,795 ) ( 6 ) ( 51,732 ) — ( 51,738 )

Excise tax on share repurchases — — ( 444 ) — ( 444 )

Net income — — — 85,634 85,634

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Excise tax on share repurchases — — ( 531 ) — ( 531 )

Net income — — — 85,634 85,634

Net loss — — — ( 137,859 ) ( 137,859 )

BALANCE - December 31, 2024 102,995 $ 103 $ 884,995 $ ( 68,825 ) $ 816,273

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Tax withholdings paid for net settlement of equity awards — — ( 4,201 ) — ( 4,201 )

Share repurchases ( 7,195 ) ( 7 ) ( 59,101 ) — ( 59,108 )

Excise tax on share repurchases — — ( 531 ) — ( 531 )

Net loss — — — ( 137,859 ) ( 137,859 )

Net income — — — 824 824

BALANCE - December 31, 2025 104,310 $ 104 $ 897,739 $ ( 68,001 ) $ 829,842

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CASH FLOWS FROM OPERATING ACTIVITIES:

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

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

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

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 174,896 224,109 219,608

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Goodwill impairment expense — 23,624 —

Deferred income tax (benefit) expense ( 33,336 ) 27,840 4,213

Amortization of deferred debt issuance costs 438 359 785

Deferred income tax expense (benefit) 3,663 ( 33,336 ) 27,840

Amortization of deferred financing origination and debt issuance costs 504 438 359

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

Provision for credit losses — — 34

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

Loss (gain) on disposal of assets and businesses, net 12,179 ( 4,925 ) 34,293

Unrealized (gain) loss on short-term investment ( 2,355 ) ( 105 ) 2,538

Business acquisition contingent consideration adjustments ( 4,900 ) ( 2,600 ) —

Noncash income from settlement with equipment manufacturer — — ( 2,668 )

Changes in operating assets and liabilities:

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23,505 6,236 8,957

Proceeds from note receivable from sale of business 13,000 — —

Net cash used in investing activities

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Repayments of borrowings — — ( 15,000 )

Payments of finance lease obligation ( 17,676 ) ( 4,663 ) —

Payments of finance lease obligations ( 18,513 ) ( 17,676 ) ( 4,663 )

Repayments of equipment financing term loans ( 3,571 ) — —

Repayments of insurance financing ( 4,510 ) ( 970 ) —

Payment of debt issuance costs — ( 1,179 ) ( 824 )

Proceeds from exercise of equity awards — — 963

Payment of financing origination and debt issuance costs ( 2,807 ) — ( 1,179 )

Payment of business acquisition deferred cash consideration ( 6,773 ) — —

Tax withholdings paid for net settlement of equity awards ( 4,200 ) ( 1,909 ) ( 3,543 )

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50,443 33,354 88,862

CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of year

$ 50,443 $ 33,354 $ 88,862

See notes to consolidated financial statements.

PROPETRO HOLDING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

FOR THE YEARS ENDED DECEMBER 31, 2024 , 2023 AND 2022

(In thousands)

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets:

CASH AND CASH EQUIVALENTS — End of year

$ 91,334 $ 50,443 $ 33,354

Summary of cash, cash equivalents and restricted cash

Cash and cash equivalents $ 50,443 $ 33,354 $ 78,862

Restricted cash — — 10,000

Total cash, cash equivalents and restricted cash — End of year $ 50,443 $ 33,354 $ 88,862

See notes to consolidated financial statements.

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ProPetro Holding Corp.

(“Holding”), a Texas corporation was formed on April 14, 2007, and it is a holding company for its wholly owned subsidiaries ProPetro Services, Inc., a Texas corporation (“Services”), Silvertip Completion Services Operating, LLC, a Delaware limited liability company (“Silvertip”), Aqua Prop, LLC, a Texas limited liability company (“AquaProp”) and ProPetro Energy Solutions, LLC, a Texas limited liability company (“PROPWR”) .

Services, Silvertip and AquaProp together offer hydraulic fracturing, wireline, cementing, wet sand solutions and other complementary services to oil and gas producers, located primarily in Texas and New Mexico.

PROPWR has not begun any revenue-generating activities yet and was formed to provide power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers, located primarily in Texas and New Mexico and will do business as PROPWR.

(“Holding”), a Texas corporation formed on April 14, 2007, is a holding company for its wholly owned subsidiaries ProPetro Services, Inc., a Texas corporation (“Services”), Silvertip Completion Services Operating, LLC, a Delaware limited liability company (“Silvertip”), Aqua Prop, LLC, a Texas limited liability company (“AquaProp”) and ProPetro Energy Solutions, LLC, a Texas limited liability company (“PROPWR”) .

Services, Silvertip and AquaProp together provide hydraulic fracturing, wireline, cementing, wet sand solutions and other complementary services to oil and gas producers, located primarily in Texas and New Mexico.

PROPWR 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.

Holding was converted and incorporated as a Delaware Corporation on March 8, 2017.

Unless otherwise indicated, references in these notes to consolidated financial statements to “ProPetro Holding Corp.,” “the Company,” “we,” “our,” “us,” or like terms refer to Holding, Servi ces, Silvertip, AquaProp, and PROPWR.

In December 2024, we formed a new subsidiary, ProPetro Energy Solutions, LLC, doing business as PROPWR, which provides turnkey power generation services to oil and gas producers and for 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.

On November 1, 2024, we sold our cementing business located in Vernal, Utah, to Big 4 Services LLC, a Wyoming limited liability company (“Big 4”), solely 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 Big 4 and the former employee’s ownership interests in and distributions from Big 4.

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 within loss on disposal of assets and business within our consolidated statement of operations for the year ended December 31, 2024.

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 within loss on disposal of assets and business within our consolidated statement of operations for the year ended December 31, 2024.

The note receivable was secured by substantially all assets of Big 4 and the former employee’s ownership interests in and distributions from Big 4.

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.

The Company does not expect to have any significant continuing involvement with Big 4 other than collection of the note receivable.

On May 31, 2024, we 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 “AquaProp Acquisition”).

The cash consideration for the AquaProp 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 .

The Company ceased involvement with Big 4 upon collection of all outstanding amounts under the promissory note.

On May 31, 2024 (the “AquaProp Acquisition Date”), we 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 “AquaProp Acquisition”).

The cash consideration for the AquaProp Acquisition included $ 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 .

As a result of the acquisition, we expanded our operations into the wet sand service business unit.

On April 22, 2024, we entered into a sub-agreement for hydraulic fracturing services with XTO Energy Inc.

("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 December 1, 2023, we consummated the purchase of the assets and operations of Par Five Energy Services LLC (“Par Five”), which provides cementing services in the Delaware Basin in exchange for $ 25.3 million of cash including deferred cash consideration of $ 3.1 million which is payable to Par Five or its beneficiary on June 1, 2025, with interest at 4.0 % per annum (the “Par Five Acquisition”) .

(“XTO”), a wholly owned subsidiary of Exxon Mobil Corporation (“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.

On December 1, 2023, we consummated the purchase of the assets and operations of Par Five Energy Services LLC (“Par Five”), which provides cementing services in the Delaware Basin in exchange for $ 25.3 million of cash including deferred cash consideration of $ 3.1 million which was payable to Par Five or its beneficiary on June 1, 2025, with interest at 4.0 % per annum (the “Par Five Acquisition”) .

Par Five’s business complements our existing cementing business and enables 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, which provides wireline perforation and ancillary services solely 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 (“the Silvertip Acquisition”).

On December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property from Pioneer Natural Resources USA, Inc.

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In connection with the Pioneer Pressure Pumping Acquisition, Pioneer received 16.6 million shares of our common stock and $ 110.0 million in cash.

In May 2024, Pioneer merged with and into a wholly owned subsidiary of Exxon Mobil Corporation (“ExxonMobil”) after which ExxonMobil became the owner of these shares.

In May 2024, Pioneer merged with and into a wholly owned subsidiary of ExxonMobil after which ExxonMobil became the owner of these shares.

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

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Principles of Consolidation — The accompanying consolidated financial statements include the accounts of Holding and its wholly owned subsidiaries, Services, Silvertip, AquaProp, and PROPWR.

All intercompany accounts and transactions have been eliminated in consolidation.

Significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation — The accompanying consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates — Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting period.

Such estimates include, but are not limited to, allowance for credit losses, useful lives for depreciation of property and equipment, estimates of fair value of property and equipment, estimates related to fair value of reporting units for purposes of assessing goodwill, intangible assets, discount rates underlying our lease right-of-use assets and liabilities, estimates related to deferred tax assets and liabilities, including any related valuation allowances, and estimates of fair value of stock‑based compensation.

Such estimates include, but are not limited to, allowance for credit losses, useful lives for depreciation of property and equipment, estimates of fair value of property and equipment, estimates of fair values of assets and liabilities acquired in business combinations, estimates related to fair value of reporting units for purposes of assessing goodwill, intangible assets, discount rates underlying our lease right-of-use assets and liabilities, estimates related to deferred tax assets and liabilities, including any related valuation allowances, and estimates of fair value of stock‑based compensation.

Actual results could differ from those estimates.

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Our wireline contracts with our customers have one performance obligation, which is the contracted total stages, satisfied over time.

We recognize revenue over time using a progress output, unit-of-work performed method, which is based on the agreed fixed transaction price and actual stages completed.

We believe that

We recognize revenue over time using a progress output, unit-of-work

PROPETRO HOLDING CORP.

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SIGNIFICANT ACCOUNTING POLICIES (Continued)

recognizing revenue based on actual stages completed faithfully depicts how our wireline services are transferred to our customers over time.

performed method, which is based on the agreed fixed transaction price and actual stages completed.

We believe that recognizing revenue based on actual stages completed faithfully depicts how our wireline services are transferred to our customers over time.

In addition, certain of our wireline equipment is entitled to daily equipment charges while the equipment is on the customer’s locations.

The Company recognizes revenue related daily equipment charges on a daily basis as the performance obligations are met.

The transaction price for each performance obligation for all our completion services is fixed per our contracts with our customers.

Coiled tubing involves complementary downhole well completion/remedial services.

The performance obligation for these services had a fixed transaction price which was satisfied at a point-in-time upon completion of the service when control was transferred to the customer.

Accordingly, we recognized revenue at a point-in-time, upon completion of the service and transfer of control to the customer.

Effective September 1, 2022, we shut down our coiled tubing operations, and disposed of all of our coiled tubing assets.

The Company recognizes revenue related to daily equipment charges on a daily basis as the performance obligations are met.

Our power generation arrangements involve 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.

The Company evaluates whether the use of its power generation equipment installed at customers’ sites to provide power generation services contains a lease in accordance with FASB ASC Topic 842, Leases .

The Company has generally concluded that its power generation service agreements contain a lease.

As discussed further below in our accounting policies for leases, for power generation equipment installed at customers’ sites in conjunction with providing power generation services, the Company accounts for lease and nonlease components of power generation arrangements as a single performance obligation and accounts for the combined component in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers , since power generation services (nonlease components) represent the predominant component.

The Company accounts for revenue earned in the form of variable consideration related to power generation output in accordance with the guidance on variable consideration in FASB ASC Topic 606.

The Company recognizes its power services revenues over time based on the agreed fixed transaction price and the greater of actual output of power produced or the minimum agreed quantity of output, and any variable consideration from output of power produced in excess of the minimum agreed quantity of output.

The Company recognizes revenue related to other ancillary services at a point-in-time, upon completion of the performance obligations.

The transaction price for each performance obligation for all our services is fixed per our contracts with our customers.

The Company assesses customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition.

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Accounts Receivable — Accounts receivable are stated at the amount billed and billable to customers.

At December 31, 2024, December 31, 2023 and January 1, 2023, amounts billed to customers (net of allowance for credit losses) included as part of our accounts receivable was $ 148.8 million , $ 181.6 million, and $ 164.0 million, respectively.

At December 31, 2024, December 31, 2023, and January 1, 2023, accrued revenue (unbilled receivable) included as part of our accounts receivable was $ 47.2 million, $ 55.4 million and $ 51.9 million, respectively.

At December 31, 2024, the transaction price allocated to the remaining performance obligation for our partially completed hydraulic fracturing and wireline operations was $ 38.7 million, which is expected to be completed and recognized within one month following the current period balance sheet date.

At December 31, 2023, the transaction price allocated to the remaining performance obligation for our then partially completed hydraulic fracturing and wireline operations was $ 33.8 million, which was recorded as part of revenues for the year ended December 31, 2024.

As of December 31, 2024, the Company had no allowance for credit losses.

Our allowance for credit losses is based on the evaluation of both our historic collection experience and economic outlook for the oil and gas industry.

We evaluated the historic loss experience on our accounts receivable and also considered separately customers with receivable balances that may be negatively impacted by current or future economic developments and market conditions.

While the Company has not

The table below shows a summary of our accounts receivable:

PROPETRO HOLDING CORP.

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SIGNIFICANT ACCOUNTING POLICIES (Continued)

experienced significant credit losses in the past and has not yet seen material changes to the payment patterns of its customers, the Company cannot predict with any certainty the degree to which the impacts of depressed economic activities, including the potential impact of periodically adjusted borrowing base limits, level of hedged production, or unforeseen well shut-downs may affect the ability of its customers to timely pay receivables when due.

(in thousands)

December 31, 2025 December 31, 2024 December 31, 2023

Amounts billed to customers - net of allowance for credit losses

$ 171,812 $ 148,783 $ 181,610

Accrued revenue (unbilled receivable)

28,941 47,211 55,402

Total accounts receivable - net of allowance for credit losses $ 200,753 $ 195,994 $ 237,012

Transaction price allocated to the remaining performance obligation for our partially completed hydraulic fracturing and wireline operations (1)

$ 31,558 $ 38,708 $ 33,804

____________________

(1) The remaining performance obligation at December 31, 2025 is expected to be completed and recognized as revenue within one month following the current period balance sheet date.

The remaining performance obligations at the remaining dates were recorded as revenue within one month following those dates.

As of December 31, 2025, the Company had no allowance for credit losses.

Our allowance for credit losses is based on the evaluation of both our historic collection experience and economic outlook for the oil and gas industry.

While the Company has not experienced significant credit losses in the past and has not yet seen material changes to the payment patterns of its customers, the Company cannot predict with any certainty the degree to which the impacts of depressed economic activities, including the potential impact of periodically adjusted borrowing base limits, level of hedged production, or unforeseen well shut-downs may affect the ability of its customers to timely pay receivables when due.

Accordingly, in future periods, the Company may revise its estimates of expected credit losses.

The table below shows a summary of allowance for credit losses:

The table below shows a summary of our allowance for credit losses:

(in thousands)

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Contract Assets and Liabilities — We do not have any significant contract asset balances other than amounts billed to customers and accrued revenue discussed in the Accounts Receivable section above.

Contract liabilities include cash advances from a customer in connection with our contract with the customer to provide FORCE ® electric-powered hydraulic fracturing equipment and services.

These cash advances from the customer will be credited towards the customer’s invoice as our revenue performance obligations are met over the contract period.

The cash advances received represent contract liabilities in connection with the performance of certain completion services.

The cash advance (contract liability) balances, which are included in accrued and other current liabilities in our consolidated balance sheets, were $ 11.8 million, $ 19.2 million, and $ 10.0 million at December 31, 2024, December 31, 2023, and January 1, 2023, respectively.

During the years ended December 31, 2024 an d 2023, we recognized revenue of $ 6.7 million, and $ 5.7 million, respectively, from the cash advance amount outstanding at the beginning of the period.

Contract liabilities include 1) cash advances from a customer in connection with our contract with the customer to provide FORCE ® electric-powered hydraulic fracturing equipment and services and 2) an upfront payment from a customer in connection with our contract to provide power generation services.

These amounts received from customers will be credited towards the customers’ invoices as our revenue performance obligations are met over the contract period.

These cash advances and upfront payments received represent contract liabilities in connection with the performance of certain completion services and power generation services.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (Continued)

The table below shows a summary of our contract liabilities:

(in thousands)

December 31, 2025 December 31, 2024 December 31, 2023

Cash advances received from customers - outstanding balance (1)

$ 8,104 $ 11,823 $ 19,190

Year Ended December 31,

December 31, 2025 December 31, 2024 December 31, 2023

Revenue recognized from cash advance balances outstanding at the beginning of period $ 7,949 $ 6,683 $ 5,670

____________________

(1) These balances are included in accrued and other current liabilities in our consolidated balance sheets.

Inventories — Inventories, which consists only of raw materials and fluid ends, are stated at lower of average cost and net realizable value.

Note Receivable — Note receivable is stated at face value plus accrued interest and represents the consideration received for sale of our cementing business located in Vernal, Utah, to a business owned by a former employee and 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.

At December 31, 2024, the note receivable had a carrying amount of $ 13.2 million including accrued interest, which the Company expects to be fully collectible.

Of the carrying amount at December 31, 2024, the amount collectible within one year was $ 2.1 million and the amount collectible beyond one year was $ 11.1 million, which are included in our consolidated balance sheet under other current assets and other noncurrent assets, respectively.

Note Receivable — Note receivable was stated at face value plus accrued interest and represented the consideration received for sale of our cementing business located in Vernal, Utah on November 1, 2024, to a business owned by a former employee and was 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 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.

At December 31, 2024, the note receivable had a carrying amount of $ 13.2 million including accrued interest.

Of the carrying amount at December 31, 2024, the amount collectible within one year was $ 2.1 million and the amount collectible beyond one year was $ 11.1 million, which were included in our consolidated balance sheet as of December 31, 2024, under other current assets and other noncurrent assets, respectively.

Property and Equipment — The Company’s property and equipment are recorded at cost, less accumulated depreciation.

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Leasehold improvements

Upon sale or retirement of property and equipment, including certain major components of our completion services equipment that are replaced, 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 the statement of operations.

A significant portion of our loss on disposal of assets and businesses relates to replacement of major components like fluid and power ends.

The Company recorded a loss on disposal of assets and businesses of $ 7.5 million , $ 73.0 million, and $ 102.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The Company recorded a loss on disposal of assets of $ 12.2 million and $ 34.3 million for the years ended December 31, 2025 and 2023, respectively, and a gain on disposal of assets and businesses of $ 4.9 million for the year ended December 31, 2024.

Impairment of Long‑Lived Assets — In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“Codification” or “ASC”) 360, Accounting for the Impairment or Disposal of Long‑Lived Assets , the Company reviews its long‑lived 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 asset group is less than the carrying amount of such asset group.

In this circumstance, the Company recognizes an impairment loss for the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.

No property and equipment impairment expense was recorded during the years ended December 31, 2025 and 2023.

During the year ended December 31,

PROPETRO HOLDING CORP.

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SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment of Long‑Lived Assets — In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360, Accounting for the Impairment or Disposal of Long‑Lived Assets , the Company reviews its long‑lived 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 asset group is less than the carrying amount of such asset group.

In this circumstance, the Company recognizes an impairment loss for the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.

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, (the “Tier II Units”) .

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

D uring the year ended December 31, 2022 , w e recorded property and equipment impairment expense of approximately $ 57.5 million in connection with our DuraStim® electric-powered hydraulic fracturing equipment.

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 (the “Tier II Units”) .

The Company accounts for long‑lived assets to be disposed of at the lower of their carrying amount or fair value, less cost to sell once management has committed to a plan to dispose of the assets.

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Goodwill is not amortized.

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

We test goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

Historically, we have performed our annual impairment test of goodwill as of December 31, in accordance with our policy.

During the fourth quarter of fiscal year 2025, we elected to change the annual goodwill impairment testing date from December 31 to October 1.

Accordingly, we performed the impairment test for the current fiscal year as of October 1, 2025.

We do not believe this change represents a material change in the method of applying an accounting principle.

This voluntary change in accounting principle is preferable as it allows management sufficient time to complete goodwill impairment tests in advance of our year-end financial reporting and provides additional time for executing key controls and conducting management reviews over the significant estimates and judgments inherent in the test.

Additionally, the change was not made to accelerate, avoid or trigger an impairment charge.

The change was applied prospectively.

The determination of impairment is made by comparing the carrying amount of a reporting unit with its fair value, which is generally calculated using a combination of market and income approaches.

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We accounted for the AquaProp Acquisition as a business combination using the acquisition method of accounting.

Goodwill of $ 0.9 million was recorded within our hydraulic fracturing operating segment as of the AquaProp Acquisition Date (as defined below), which represents the excess of the purchase price over the fair value of the assets and liabilities assumed.

Goodwill of $ 0.9 million was recorded within our Hydraulic Fracturing operating segment as of the AquaProp Acquisition Date, which represents the excess of the purchase price over the fair value of the assets and liabilities assumed.

On November 1, 2022, we acquired Silvertip for $ 148.1 million.

We accounted for the Silvertip Acquisition as a business combination using the acquisition method of accounting.

Goodwill of $ 23.6 million was recorded within our wireline operating segment as of the Silvertip Acquisition Date (as defined below), which represents the excess of the purchase price over the fair value of the assets and liabilities assumed.

We conducted our annual impairment test of goodwill in accordance with ASC 350, Intangibles—Goodwill and Other , as of December 31, 2024, and determined that the goodwill in our wireline operating segment and reporting unit was fully impaired due to the Company updating its outlook for this reporting unit as a result of decreased revenue and profitability experienced during the year ended December 31, 2024.

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

No impairment to the carrying value of goodwill for our hydraulic fracturing reporting unit was required.

The following table summarizes goodwill by operating segment as of December 31, 2024, and 2023 and changes for the years then ended:

We accounted for the acquisition of Silvertip as a business combination using the acquisition method of accounting.

Goodwill of $ 23.6 million was recorded within our Wireline operating segment as of the date of acquisition of Silvertip, which represented the excess of the purchase price over the fair value of the assets and liabilities assumed.

The Hydraulic Fracturing operating segment is the only segment with goodwill as of December 31, 2025.

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

We conducted our annual impairment test of goodwill in accordance with FASB ASC Topic 350, Intangibles—Goodwill and Other , as of October 1, 2025, and based on our assessment of qualitative factors, we determined that the fair value of the reporting unit contained within the Hydraulic Fracturing operating segment was more likely than not in excess of its carrying amount, including goodwill.

During the year ended December 31, 2024, we recorded goodwill impairment expense of $ 23.6 million as full impairment of the goodwill in our Wireline operating segment and reporting unit.

PROPETRO HOLDING CORP.

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SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table summarizes goodwill by operating segment as of December 31, 2025, 2024 and 2023, and changes for the years the ended December 31, 2025 and 2024:

(in thousands)

Hydraulic Fracturing Wireline Total

Balance as of January 1, 2023

Balance as of December 31, 2023

Goodwill $ — $ 23,624 $ 23,624

2 unchanged sentences

Goodwill acquired during year 3,130 — 3,130

Measurement period adjustment ( 2,210 ) — ( 2,210 )

Impairment losses — ( 23,624 ) ( 23,624 )

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Accumulated impairment losses — ( 23,624 ) ( 23,624 )

— 23,624 23,624

Goodwill acquired during year — — —

Measurement period adjustment ( 2,210 ) — ( 2,210 )

Impairment losses — — —

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No significant residual value is estimated for intangible assets.

Leases — 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.

Leases — In accordance with FASB 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.

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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.

The Company elected the short-term lease recognition practical expedient provided by FASB ASC Topic 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 FASB ASC Topic 360, Property, Plant, and Equipment , 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.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (Continued)

We elected to apply the lessor practical expedient for our power generation equipment class of assets, which allows us to choose not to separate nonlease components from lease components and, instead, account for each separate lease component and the nonlease components associated with that lease component as a single component if the nonlease components otherwise would be accounted for under FASB ASC Topic 606, and both (1) the timing and pattern of transfer for the lease component and nonlease components associated with that lease component are the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease in accordance with ASC 842-10-25 paragraphs 2 through 3A.

The Company’s power generation service arrangements involve the use of its power generation equipment installed at customers’ sites to provide turnkey power generation services.

The lease and nonlease components of these arrangements meet both conditions and the power generation services (nonlease components) represent the predominant component of these arrangements.

Accordingly, the Company accounts for the revenue from these arrangements in accordance with FASB ASC Topic 606.

Income Taxes — 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.

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We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized.

In making such a determination, we consider all positive and negative evidence, including future reversals of existing taxable temporary

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (Continued)

differences, projected future taxable income, and the results of recent operations.

In making such a determination, we consider all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and the results of recent operations.

If we determine that we would not be able to fully realize our deferred tax assets in the future, we would record a valuation allowance.

Deferred Loan Costs — The Company capitalized certain costs in connection with the amendment and restatement of its revolving credit facility, including lender, legal, and accounting fees.

These costs are being amortized over the term of the related loan using the straight‑line method.

Unamortized deferred loan costs associated with loans paid off or refinanced with different lenders are expensed in the period in which such an event occurs.

Deferred loan costs are classified as a reduction of long‑term debt or in certain instances as an asset in the consolidated balance sheet.

Amortization of deferred loan costs is recorded as interest expense in the statement of operations, and during the years ended December 31, 2024, 2023, and 2022, the amount of expense recorded was $ 0.4 million, $ 0.4 million, and $ 0.8 million, respectively.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized.

If we determine that we would not be able to fully realize our deferred tax assets in the future, we would record a valuation allowance.

Deferred Financing Origination and Debt Issuance Costs — The Company capitalized certain costs in connection with the amendment and restatement of its revolving credit facility, including lender, legal, and accounting fees.

The Company also capitalized certain costs in connection with entering into its Stonebriar Equipment Lease Facility discussed further in “Note 17.

Leases.” These costs are being amortized over the term of the related financing facility using the straight‑line method.

Unamortized deferred financing origination and debt issuance costs associated with loans paid off or refinanced with different lenders are expensed in the period in which such an event occurs.

Deferred financing origination costs are classified as an asset in the consolidated balance sheet.

Deferred debt issuance costs are classified as a reduction of long‑term debt in the consolidated balance sheet.

Amortization of deferred financing origination and debt issuance costs is recorded as interest expense in the statement of operations, and during the years ended December 31, 2025, 2024, and 2023, the amount of expense recorded was $ 0.5 million, $ 0.4 million, and $ 0.4 million, respectively.

Stock-Based Compensation — The Company recognizes the cost of stock-based awards on a straight‑line basis over the requisite service period of the award, which is usually the vesting period under the fair value method.

8 unchanged sentences

Share Repurchases — All shares of common stock repurchased through the Company's share repurchase program are retired upon repurchase.

The Company accounts for the purchase price of repurchased common stock in excess of par value ($ 0.001 per share of common stock) as a reduction of additional paid-in capital, and will continue to do so until additional paid-in capital is reduced to zero.

The Company accounts for the purchase price of repurchased common stock in excess of par value ($ 0.001

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (Continued)

per share of common stock) as a reduction of additional paid-in capital, and will continue to do so until additional paid-in capital is reduced to zero.

Thereafter, any excess purchase price will be recorded as a reduction of retained earnings.

4 unchanged sentences

VIEs that are not consolidated are accounted for under the measurement alternative, equity method, amortized cost, or other appropriate methodology based on the nature of the interest held.

Change in Accounting Estimates — Current trends in hydraulic fracturing equipment operating conditions such as larger pads, changes to job design and increased pumping hours per day have resulted in shorter useful lives for certain critical components that are included in our property and equipment assets.

These recent trends necessitated a review of useful lives of our critical components like fluid ends, power ends, hydraulic fracturing units and other components in the first quarter of 2023.

We determined that the estimated useful life of fluid ends is now less than one year, resulting in our determination that costs associated with the replacement of these components will no longer be capitalized, but instead recorded in inventories and amortized to cost of services over their estimated useful life.

We have also shortened the estimated useful lives of power ends to two years from five years and hydraulic fracturing units to ten years from fifteen years .

This change in accounting estimates was made effective January 1, 2023, and accounted for prospectively.

The net effect of this change for the year ended December 31, 2024, was a $ 15.6 million increase in net loss, or $ 0.15 per basic and diluted share, respectively.

The net effect of this change for the year ended December 31, 2023, was a $ 19.1 million decrease in net income, or $ 0.17 per basic and diluted share, respectively.

The Company plans to phase out its Tier II Units earlier than the current weighted average remaining useful life of this asset group in response to decreasing customer demand for and related pricing pressures on this asset group.

Accordingly we shortened the remaining useful lives of those Tier II Units that currently have useful lives beyond 2027 to no longer than the

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (Continued)

end of 2027 to align with management's use and expected economic life.

Change in Accounting Estimates — The Company plans to phase out its Tier II Units earlier than the original weighted average remaining useful life of this asset group in response to decreasing customer demand and related pricing pressures on this asset group.

Accordingly we shortened the remaining useful lives of those Tier II Units that currently have useful lives beyond 2027 to no longer than the end of 2027 to align with management's use and expected economic life.

This change was made effective October 1, 2024.

The net effect of this change for the year ended December 31, 2025, was a $ 0.8 million decrease in net income, or $ 0.01 per basic and diluted share, respectively.

The net effect of this change for the year ended December 31, 2024, was a $ 1.7 million increase in net loss, or $ 0.02 per basic and diluted share, respectively.

Reclassification of Prior Period Presentation — Certain reclassifications have been made to prior periods to conform to the current period presentation.

These reclassifications had no effect on our balance sheet, operating and net income (loss) or cash flows from operating, investing and financing activities.

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 (gain) on disposal of assets to depreciation for the years ended December 31, 2024 and 2023, respectively.

Recently Issued Accounting Standards

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Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

This ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification (“Codification”).

This ASU incorporates certain SEC disclosure requirements into the ASC.

The amendments in the ASU represent changes to clarify or improve disclosure and presentation requirements of a variety of Codification topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations.

1 unchanged sentence

We do not expect ASU 2023-06 to have a material impact on our consolidated financial statements .

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires public business entities to disclose on an annual and interim basis, 1) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (the “CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”) and 2) an amount for other segment items representing the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss.

This ASU also requires public entities to provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods, clarifies that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit or loss but at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles under GAAP.

This ASU also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and requires a public entity that has a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

We adopted this ASU 2023-07 for the fiscal year ended December 31, 2024, as required under this standard.

Reportable Segment Information.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires disaggregation of certain components included in the Company’s effective tax rate and income taxes paid disclosures.

The guidance is effective for annual periods beginning after December 15, 2024.

We are currently assessing the impact of ASU 2023-09 on our consolidated financial statements but do not expect it will have a material impact.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which establishes new income tax disclosure requirements within FASB ASC 740 in addition to modifying and eliminating certain existing requirements.

The ASU also replaces the term “public entity” throughout FASB ASC 740 with the term “public business entity” as defined in the ASC master glossary.

The ASU’s amendments are intended to enhance the transparency and decision-usefulness of such disclosures.

Under the new guidance, public business entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation.

The ASU also includes additional disaggregation requirements related to income taxes paid.

The ASU’s disclosure requirements apply to all entities subject to FASB ASC 740.

The Company has reported its effective tax rate in accordance with the new disclosures requirements on a prospective basis.

In November 2024, the FASB issued ASU No.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (Continued)

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets .

This ASU provides a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years.

Early adoption is permitted.

We plan to adopt this ASU for our fiscal year beginning on January 1, 2026, and we do not expect it to have a material effect on our consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

This ASU updates the guidance for capitalization of internal-use software development costs by removing all references to software development project stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met.

This ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years.

Early adoption is permitted.

We do not expect to early adopt ASU No.

We are currently assessing the impact of this ASU on our consolidated financial statements.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

The amendments in this ASU clarify interim disclosure requirements and the applicability of Topic 270 and provide a comprehensive list of interim disclosures that are required by GAAP.

The amendments in this ASU also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

The intent of the disclosure principle is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods.

The amendments in this ASU also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP.

This ASU is effective for interim periods within annual periods beginning after December 15, 2027.

Early adoption is permitted.

We do not expect to early adopt ASU No.

We plan to adopt this ASU for our interim period beginning on January 1, 2028, and we do not expect it to have a material effect on our consolidated financial statements.

In December 2025, the FASB issued ASU No.

2025-12, Codification Improvements .

The amendments in this ASU address stakeholder suggestions on the ASC and make other incremental improvements to GAAP.

The amendments make ASC updates to a broad range of topics arising from technical corrections, unintended application of the ASC, clarifications, and other minor improvements.

This ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years.

Early adoption is permitted.

We plan to adopt this ASU for our fiscal year beginning on January 1, 2027, and we do not expect it to have a material effect on our consolidated financial statements.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUPPLEMENTAL CASH FLOWS INFORMATION

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Supplemental cash flows disclosures

Interest paid

$ 7,305 $ 4,564 $ 467

Income taxes paid

$ 1,792 $ 1,110 $ 129

Interest paid - net of amounts capitalized $ 7,969 $ 7,305 $ 4,564

Income taxes paid - net of refunds received $ 3,468 $ 1,792 $ 1,110

Supplemental disclosure of noncash investing and financing activities

Capital expenditures included in accounts payable and accrued liabilities $ 28,095 $ 14,695 $ 21,604

$ 14,695 $ 21,604 $ 82,452

Equipment purchases financed and corresponding issuances of loans $ 81,130 $ — $ —

Leasehold improvements financed by operating lease landlord $ 350 $ — $ —

Insurance financing included in other current liabilities $ — $ 5,479 $ —

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Business acquisition contingent consideration included in other long-term liabilities $ — $ 10,900 $ —

Common stock issued for business acquisition $ — $ — $ 106,736

Noncash purchases of property and equipment $ — $ — $ 2,668

Note receivable from sale of business $ — $ 13,000 $ —

Equity securities received in exchange for sale of assets $ — $ — $ 11,853

BUSINESS ACQUISITIONS

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Cash consideration 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.

The deferred cash consideration of $ 3.7 million will be used to cover the amount by which the estimated purchase price exceeds the final purchase price, if any.

The unused amount is payable to the seller on May 31, 2025.

This obligation is shown within other current liabilities in our consolidated balance sheets.

As of December 31, 2024, the outstanding amount for this obligation was $ 3.7 million.

The deferred cash consideration of $ 3.7 million was paid to the seller in May 2025.

Included in the deferred cash consideration is a liability incurred to the seller of $ 1.8 million.

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Accordingly, the liability incurred to the seller was recognized as consideration in the business combination as cash was not paid at closing.

The post-closing transaction for

The post-closing transaction for the Company’s purchase of the additional equipment occurred in July 2024 and the purchases were accounted for as additions

PROPETRO HOLDING CORP.

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BUSINESS ACQUISITIONS (Continued)

the Company’s purchase of the additional equipment occurred in July 2024 and the purchases were accounted for as additions to property and equipment in our consolidated balance sheet and capital expenditures in our consolidated statement of cash flows.

to property and equipment in our consolidated balance sheet and capital expenditures in our consolidated statement of cash flows.

Also in the purchase agreement as an additional post-closing transaction, the seller agreed to purchase and then deliver to the Company up to five more additional equipment spreads at the request of the Company within a 30-month period following the delivery of the first additional spread at a purchase price equal to the lower of $ 4.8 million or cost.

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The contingent consideration payable will be adjusted to estimated fair value at the end of each subsequent reporting period until the contingencies are resolved and consideration payments are made.

The estimated fair value of the contingent consideration payable was $ 8.3 million at December 31, 2024, resulting in a $ 2.6 million decrease from May 31, 2024.

The estimated fair value of the contingent consideration payable was $ 3.4 million at December 31, 2025, resulting in a $ 4.9 million decrease from December 31, 2024.

The decrease in the estimated fair value of the contingent consideration payable was primarily driven by updated projections regarding the probability of different scenarios and the amount and timing of additional equipment to be delivered by the seller under those scenarios.

The decrease in the estimated contingent consideration payable is included in general and administrative expenses in our consolidated statement of operations for the year ended December 31, 2024.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS ACQUISITIONS (Continued)

The decrease in the estimated contingent consideration payable is included in general and administrative expenses in our consolidated statement of operations for the years ended December 31, 2025 and 2024.

The following table summarizes the recognized amounts of identified assets, and liabilities assumed at the acquisition date:

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The assets acquired include three intangible assets, the trademark/trade name for AquaProp, customer relationships and favorable contracts.

The trademark was assigned a fair value of $ 1.3 million with zero residual value and will be amortized on a straight‑line basis over fifteen years .

The trademark was assigned a fair value of $ 1.3 million with zero residual value and will be amortized on a

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS ACQUISITIONS (Continued)

straight‑line basis over fifteen years .

The customer relationships were assigned a fair value of $ 18.6 million with zero residual value and will be amortized on a straight‑line basis over six years .

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The following combined supplemental unaudited pro forma information presents consolidated information of the Company as if the AquaProp Acquisition had occurred on January 1, 2023.

The supplemental unaudited pro forma information presented

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS ACQUISITIONS (Continued)

below is for illustrative purposes only and does not reflect future events that occurred after December 31, 2024, or any operating efficiencies or inefficiencies that may result from the AquaProp Acquisition.

The supplemental unaudited pro forma information presented below is for illustrative purposes only and does not reflect future events that occurred after December 31, 2024, or any operating efficiencies or inefficiencies that may result from the AquaProp Acquisition.

The information is not necessarily indicative of results that would have been achieved had the Company controlled AquaProp during the periods presented.

The information presented below does not include the year ended December 31, 2022, as AquaProp was formed in 2023.

(unaudited, in thousands)

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These expenses are included in general and administrative expenses on the Company’s consolidated statement of operations for the year ended December 31, 2024, and are reflected in pro forma net income for the year ended December 31, 2023, in the table above .

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS ACQUISITIONS (Continued)

The Company’s consolidated statement of operations for the year ended December 31, 2024, includes 215 days of AquaProp operations as the AquaProp Acquisition closed on May 31, 2024.

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Total net assets acquired $ 25,324

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS ACQUISITIONS (Continued)

The deferred cash consideration of $ 3.1 million will be used to cover (i) the amount by which the estimated purchase price exceeds the final purchase price, if any and (ii) indemnity obligations of the seller.

The unused amount is payable to Par Five or its beneficiary on June 1, 2025, and accrues interest at 4.0 % per annum.

This obligation is shown within other current liabilities in our consolidated balance sheet as of December 31, 2024.

As of December 31, 2024, the outstanding amount for this obligation was $ 3.1 million.

The deferred cash consideration of $ 3.1 million and accrued interest at 4.0 % per annum was paid to the seller in May 2025.

The fair value of the assets acquired includes account receivables of $ 8.6 million.

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These adjustments included nonrecurring acquisition costs incurred in 2023 but have been adjusted to be reflected in 2022.

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Par Five to reflect the additional depreciation that would have been charged assuming the fair value adjustments to property, plant, and equipment had been applied from January 1, 2022, with the consequential tax effects.

For the year ended December 31, 2023, the Company incurred $ 1.3 million of acquisition costs.

These expenses are included in general and administrative expenses on the Company’s consolidated statement of operations for the year ended December 31, 2023, and are reflected in pro forma net income for the year ended December 31, 2022, in the table above.

The Company’s consolidated statement of operations for the year ended December 31, 2023, includes 31 days of Par Five operations as the Par Five Acquisition closed on December 1, 2023.

Silvertip Acquisition

On November 1, 2022 (the "Silvertip Acquisition Date"), the Company entered into a purchase and sale agreement with New Silvertip Holdco, LLC, pursuant to which the Company acquired 100 % of the outstanding limited liability company interests of Silvertip, a wireline services company in the Permian Basin, in exchange for total consideration of $ 148.1 million (the "Silvertip Purchase Price") consisting of 10.1 million shares of the Company’s 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 $ 4.1 million of certain seller closing and transaction costs.

The Company accounted for the Silvertip Acquisition using the acquisition method of accounting.

The Silvertip Purchase Price was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair value at the Silvertip Acquisition Date.

The estimated fair values of certain assets and liabilities, including accounts receivable, require

PROPETRO HOLDING CORP.

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BUSINESS ACQUISITIONS (Continued)

significant judgments and estimates.

The measurements of assets acquired and liabilities assumed, are based on inputs that are not observable in the market and thus represent Level 3 inputs.

The following table summarizes the fair value of the consideration transferred in the Silvertip Acquisition and the Silvertip Purchase Price to the fair value of the assets acquired and liabilities assumed (which are included within the accompanying consolidated balance sheet as of December 31, 2022) as of the Silvertip Acquisition Date:

(in thousands)

Total purchase consideration:

Cash consideration $ 30,000

Equity consideration 106,736

Debt payments and closing costs 11,320

Total consideration $ 148,056

Cash and cash equivalents $ 2,681

Accounts receivable and unbilled revenue 21,079

Inventories 1,209

Prepaid expenses 2,476

Other current assets 1,059

Property and equipment (1)

Intangible assets:

Trademark/trade name (2)

Customer relationships (2)

Goodwill 23,624

Operating lease right-of-use asset 2,783

Total assets acquired 164,689

Accounts payable 7,659

Accrued and other current liabilities 6,178

Operating lease liability 2,796

Total liabilities assumed 16,633

Total purchase consideration $ 148,056

(1) Remaining useful lives ranging from less than one to 22 years.

(2) Definite lived intangibles with amortization period of 10 years.

The goodwill arising from the Silvertip Acquisition is attributable to the expected operational synergies resulting from our integrated service offerings.

The goodwill arising from the Silvertip Acquisition has been allocated to our wireline operations, and are included in our wireline operating segment.

The Company’s transaction costs were recognized separately from the acquisition of assets and assumptions of liabilities in the Silvertip Acquisition, and were expensed as incurred.

These costs are included within general and administrative expenses in our consolidated statements of operations.

The following combined pro forma information assumes the Silvertip Acquisition occurred on January 1, 2021.

The pro forma information presented below is for illustrative purposes only and does not reflect future events that occurred after December 31, 2022, or any operating efficiencies or inefficiencies that may result from the Silvertip Acquisition.

The information is not necessarily indicative of results that would have been achieved had the Company controlled Silvertip during the periods presented.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS ACQUISITIONS (Continued)

(unaudited, in thousands)

Year Ended December 31, 2022

Revenue $ 1,428,282

Net income 26,716

The Company’s consolidated statement of operations for the year ended December 31, 2022, includes 61 days of Silvertip operations as the Silvertip Acquisition closed on November 1, 2022.

For the year ended December 31, 2023, the Company incurred $ 1.3 million of acquisition costs.

The Company’s consolidated statement of operations for the year ended December 31, 2023, includes 31 days of Par Five operations as the Par Five Acquisition closed on December 1, 2023.

FAIR VALUE MEASUREMENTS

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The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued and other current liabilities, and long-term debt are estimated to be approximately equivalent to carrying amounts as of December 31, 2025, and 2024 and have been excluded from the table below.

PROPETRO HOLDING CORP.

2 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued and other current liabilities, and long-term debt are estimated to be approximately equivalent to carrying amounts as of December 31, 2024, and 2023 and have been excluded from the table below.

Assets measured at fair value on a recurring basis as of December 31, 2024, are set forth below:

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 are set forth below:

(in thousands)

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December 31, 2025:

Short-term investment $ 7,849 $ 7,849 $ — $ — $ 105

Business acquisition contingent consideration payable $ 3,400 $ — $ — $ 3,400 $ 4,900

1 unchanged sentence

Short-term investment $ 7,849 $ 7,849 $ — $ — $ 105

Short-term investment — On September 1, 2022, the Company received 2.6 million common shares of STEP Energy Services L td.

(“STEP”) with an estimated fair value of $ 11.8 million as part of the consideration for the sale of our coiled tubing assets to STEP.

The shares were treated as an investment in equity securities measured at fair value using Level 1 inputs based on observable prices on the Toronto Stock Exchange and are shown under current assets in our consolidated balance sheets.

As of December 31, 2024, the fair value of the short-term investment was estimated at $ 7.8 million.

The fluctuation in stock price resulted in an unrealized gain of $ 0.1 million for the year ended December 31, 2024, an unrealized loss of $ 2.5 million for the year ended December 31, 2023, and an unrealized loss of $ 1.6 million for the year ended December 31, 2022 .

Business acquisition contingent consideration payable $ 8,300 $ — $ — $ 8,300 $ 2,600

Short-term investment — On October 27, 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 the 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.

Prior to the sale, the shares were accounted for as an investment in equity securities measured at fair value using Level 1 inputs based on observable prices on the Toronto Stock Exchange and were shown under current assets in our consolidated balance sheets.

As of October 27, 2025 (the date of sale), the fair value of the short-term investment was estimated at $ 10.2 million.

The fluctuation in stock price resulted in an unrealized gain of $ 2.4 million for the year ended December 31, 2025, an unrealized gain of $ 0.1 million for the year ended December 31, 2024, and an unrealized loss of $ 2.5 million for the year ended December 31, 2023.

Included in the unrealized gain for the year ended December 31, 2025, was a gain of $ 0.2 million resulting from noncash foreign currency translation.

Included in the unrealized gain for the year ended December 31, 2024, was a loss of $ 0.7 million resulting from noncash foreign currency translation.

Included in the unrealized loss for the year ended December 31, 2023, was a gain of $ 0.1 million resulting from noncash foreign currency translation.

Included in the unrealized loss for the year ended December 31, 2022, was a loss of $ 0.3 million resulting from noncash foreign currency translation.

The unrealized gains and losses resulting from stock price fluctuation and noncash foreign currency translation are included in other income (expense) in our consolidated statements of operations.

The Company is restricted from selling, transferring or assigning more than 0.9 million shares in any one calendar month .

Business acquisition contingent consideration payable — On May 31, 2024, the Company completed the acquisition of all of the outstanding equity interests in AquaProp in exchange for $ 13.7 million of cash, $ 3.7 million of deferred cash consideration payable to AquaProp's seller by May 31, 2025, the payoff of $ 7.2 million of assumed debt, the payment of $ 0.3 million of certain transaction costs and estimated contingent consideration of $ 10.9 million.

The contingent consideration payable was measured at fair value using Level 3 inputs based on the probability-weighted expected return method and is shown under other long-term liabilities in our condensed consolidated balance sheets.

The fair value of the contingent consideration payable is remeasured at the end of each reporting period.

As of December 31, 2024, the estimated fair value of the contingent consideration payable was $ 8.3 million resulting in a $ 2.6 million decrease from May 31, 2024.

As of December 31, 2025, the estimated fair value of the contingent consideration payable was $ 3.4 million resulting in a $ 4.9 million decrease from December 31, 2024.

Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future.

The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3):

PROPETRO HOLDING CORP.

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FAIR VALUE MEASUREMENTS (Continued)

The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3):

(in thousands)

Year Ended December 31, 2024

Year Ended December 31, 2025 Year Ended December 31, 2024

Business acquisition contingent consideration payable - opening balance $ 8,300 $ —

1 unchanged sentence

Decrease in estimated fair value (1)

( 4,900 ) ( 2,600 )

Business acquisition contingent consideration payable - closing balance $ 3,400 $ 8,300

(1) The decrease in the estimated fair value of the business acquisition contingent consideration payable is included in other income (expense) in our consolidated statement of operations for the year ended December 31, 2024.

(1) The decrease in the estimated fair value of the business acquisition contingent consideration payable is included in general and administrative expenses in our consolidated statement of operations.

Assets Measured at Fair Value on a Nonrecurring Basis

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These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances.

These assets and liabilities include those acquired through the business combinations, which are required to be measured at fair value on the acquisition date according to ASC Topic 805, Business Combinations (see Note 4.

These assets and liabilities include those acquired through the business combinations, which are required to be measured at fair value on the acquisition date according to FASB ASC Topic 805, Business Combinations (see “Note 4.

Business Acquisitions”).

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The Company utilized market interest rates for business loans which represented inputs other than quoted prices within Level 1 that are observable for the asset, either directly or indirectly (Level 2) to determine the implied fair value of the note receivable.

The note receivable was fully repaid with interest in December 2025.

Whenever events or circumstances indicate that the carrying value of long-lived assets may not be recoverable, the Company reviews the carrying values of long‑lived assets, such as property and equipment and other assets to determine if they are recoverable.

If any long‑lived assets are determined to be unrecoverable, an impairment expense is recorded in the period.

As part of the quarterly evaluation for the three months ended September 30, 2024, after evaluating the current market conditions and new information available, such as decreasing customer demand for and related pricing pressures on its Tier II Units, among other factors, the Company determined that the marketability of its Tier II Units had declined.

As a result, the Company plans to strategically phase out its Tier II Units before the end of the original weighted average remaining useful life of this asset group.

The Company performed an impairment analysis on its Tier II Units as of September 30, 2024, by comparing estimated future cash flows on an undiscounted basis to the carrying value of these assets.

The Company determined that its

No impairment of property and equipment was recorded during the years ended December 31, 2025 and 2023.

We recorded impairment expense of $ 188.6 million during the year ended December 31, 2024, in connection with a decline in the

PROPETRO HOLDING CORP.

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FAIR VALUE MEASUREMENTS (Continued)

Tier II Units were impaired, as their carrying value was greater than their estimated future cash flows on an undiscounted basis.

Accordingly, we recorded property and equipment impairment expense of approximately $ 188.6 million within our hydraulic fracturing operating segment during the year ended December 31, 2024, in connection with our Tier II Units.

marketability of our Tier II Units due to decreased customer demand and related pricing pressures.

As of September 30, 2024 (the impairment measurement date), the estimated fair value of our Tier II Units was $ 63.8 million which was determined using the market and cost approaches, which represent Level 3 inputs in the fair value measurement hierarchy.

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The carrying value of our Tier II Units as of September 30, 2024, prior to the impairment expense was approximately $ 252.4 million.

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

We recorded property and equipment impairment expense of approximately $ 57.5 million during the year ended December 31, 2022 , in connection with our DuraStim ® electric-powered hydraulic fracturing pumps that did not meet the manufacturer's specifications or our expectations.

We generally apply fair value techniques to our reporting units on a nonrecurring basis associated with valuing potential impairment loss related to goodwill, if any.

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If the reporting unit’s carrying amount exceeds its fair value, we consider goodwill impaired, and the impairment loss is calculated and recorded in the period.

We conducted our annual impairment test of goodwill as of December 31, 2024, and determined that the goodwill in our wireline operating segment and reporting unit with a carrying value of $ 23.6 million was fully impaired due to the Company updating its outlook for this reporting unit as a result of decreased revenue and profitability experienced during the year ended December 31, 2024.

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

During the year ended December 31, 2024, we recorded goodwill impairment expense of $ 23.6 million as full impairment of the goodwill in our Wireline operating segment and reporting unit.

We applied weightings of 75 %, 25 %, and 0 % to the fair values derived from the income approach, the guideline public company method and the guideline transaction method, respectively, to assess fair value.

We used the Gordon Growth Model to determine the terminal value and applied a terminal growth rate of 3.0 %, a 23.0 % income tax rate and a 24.9 % discount rate for the wireline reporting unit.

No impairment to the carrying value of goodwill for our hydraulic fracturing reporting unit was required .

There were no goodwill impairment losses during the years ended December 31, 2023, and 2022 .

Significant Accounting Policies” for a summary of goodwill by operating segment.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT

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(in thousands)

$ 14,076 $ 14,076

40,342 37,888

Land $ 14,076 $ 14,076

Buildings 51,360 40,342

Equipment and vehicles 1,186,903 1,040,242

1,040,242 1,551,261

Leasehold improvements

1,101,609 1,611,236

Subtotal 1,258,648 1,101,609

Less accumulated depreciation

2 unchanged sentences

$ 793,475 $ 688,225

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT (Continued)

Depreciation consisted of the following:

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Depreciation related to cost of services (1)

$ 146,882 $ 197,162 $ 208,493

Depreciation related to general and administrative expenses 38 100 222

Total depreciation $ 146,920 $ 197,262 $ 208,715

The Company incurred amortization expense of $ 19.0 million and $ 5.2 million on its finance lease right-of-use asset, which is related to cost of services for the years ended December 31, 2024, and 2023, respectively .

There was no amortization expense related to finance leases for the year ended December 31, 2022.

____________________

(1) 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.

The Company incurred amortization expense of $ 18.5 million , $ 19.0 million and $ 5.2 million on its finance lease right-of-use asset, which is related to cost of services for the years ended December 31, 2025, 2024, and 2023, respectively .

The Company also incurred amortization expense on its intangible assets (see “Note 7.

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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 .

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

Amortization expense, all of which was related to general and administrative expenses, was $ 9.4 million, $ 7.9 million and $ 5.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The Company’s intangible assets subject to amortization consisted of the following:

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INTANGIBLE ASSETS (Continued)

(in thousands)

4 unchanged sentences

Internally developed software 81 60

Total intangible assets 79,470 57,300

Total intangible assets acquired 79,491 79,470

Accumulated amortization:

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Favorable contracts ( 792 ) ( 292 )

Amortization of Software ( 33 ) —

Total accumulated amortization ( 24,015 ) ( 14,565 )

1 unchanged sentence

$ 55,476 $ 64,905

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INTANGIBLE ASSETS (Continued)

Estimated remaining amortization expense for each of the subsequent fiscal years is expected to be as follows:

4 unchanged sentences

The average amortization period remaining is approximately 6.3 years.

LONG‑TERM DEBT

INTERIM AND LONG‑TERM DEBT

Asset-Based Loan Credit Facility

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.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 revolving credit facility to $ 225.0 million (subject to the Borrowing Base (as defined below) 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, "AB L Credit Facility").

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

The Company is a party to an amended and restated revolving credit facility (as amended, the “ABL Credit Facility”) that provides for borrowing capacity of up to $ 225.0 million (subject to the Borrowing Base (as defined below) limit), and matures on June 2, 2028.

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

The ABL Credit Facility includes a springing fixed charge coverage ratio to apply when excess availability is less than the greater of (i) 10 % of the lesser of the facility size or the Borrowing Base or (ii) $ 15.0 million.

The ABL Credit Facility includes a springing fixed charge coverage ratio that applies when excess availability is less than the greater of (i) 10 % of the lesser of the facility size or the Borrowing Base or (ii) $ 15.0 million.

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 the Caterpillar Equipment Loan Agreement (as defined below) and other equipment that may be purchased under other financing arrangements.

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.

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After borrowings outstanding and letters of credit of appro ximately $ 8.6 million under the ABL Credit Facility , we had approximately $ 114.1 million available for borrowing under our ABL Credit Facility as of December 31, 2025.

Effective December 26, 2025, the Company entered into an amendment to its 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 .

Equipment Financing Arrangements

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 (an affiliate of the equipment manufacturer) will fund progress payments beyond the initial down payment on the equipment for a maximum total amount of $ 157.3 million and provide us interim loans in connection with each progress payment made on our behalf.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INTERIM AND LONG‑TERM DEBT (Continued)

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 %.

During the year ended December 31, 2025, we capitalized $ 0.3 million of interest on our interim loans.

The debt issuance costs relating to our interim and term loans are presented as a deduction from the carrying amount of the loans in the consolidated balance sheets.

As of December 31, 2025, we had $ 2.1 million in interim loans outstanding and term loans outstanding of $ 75.4 million .

Interim loans, net of debt issuance costs, are presented as interim debt within current liabilities in our consolidated balance sheet as of December 31, 2025.

Current maturities of term loans, net of debt issuance costs, are presented as current maturities of long term debt within current liabilities and long-term portion of term loans, net of debt issuance costs, is presented in long-term debt, respectively, in our consolidated balance sheet as of December 31, 2025.

The financed payments from the lender (an affiliate of the equipment manufacturer) are presented as non-cash investing and financing activities in “Note 3.

Supplemental Cash Flows Information”.

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

Total debt consisted of the following:

(in thousands)

December 31, 2025 December 31, 2024

ABL Credit Facility $ 45,000 $ 45,000

Equipment financing interim loans 2,135 —

Equipment financing term loans 75,424 —

Total debt 122,559 45,000

debt issuance costs, net of amortization ( 989 ) —

Total debt, net of debt issuance costs 121,570 45,000

interim debt (current), net of debt issuance costs ( 2,113 ) —

current maturities of long-term debt, net of debt issuance costs ( 13,844 ) —

Total long-term debt, net of debt issuance costs $ 105,613 $ 45,000

Maturities of total debt (minimum annual principal payments required) as of December 31, 2025 are as follows:

(in thousands)

Year ABL Credit Facility Equipment Financing Interim Loans Equipment Financing Term Loans

2026 $ — $ 2,135 $ 14,047

2027 — — 16,840

2028 45,000 — 16,375

2029 — — 16,192

2030 — — 11,970

Total $ 45,000 $ 2,135 $ 75,424

Between January 1, 2026 and February 19, 2026, we incurred $ 13.4 million in additional loans under the Caterpillar Equipment Loan Agreement.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCRUED AND OTHER CURRENT LIABILITIES

1 unchanged sentence

(in thousands)

Financed and accrued insurance $ 5,140 $ 1,222

Accrued and financed insurance $ 3,508 $ 5,140

Accrued payroll and related expenses 23,522 19,562

19,562 14,284

Deferred revenue (advance from customer) 11,823 19,190

Deferred revenue (advances from customers) 8,104 11,823

Capital expenditure, taxes and other accruals

10 unchanged sentences

The Company currently has four operating segments for which discrete financial information is readily available:

hydraulic fracturing (inclusive of acidizing and wet sand solutions), wireline, ce menting and our newly formed power generation services

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORTABLE SEGMENT INFORMATION (Continued)

which has not begun any revenue-generating activities yet .

T hese operating segments represent how the CODM evaluates performance and allocates resources.

Hydraulic Fracturing (inclusive of acidizing and wet sand solutions), Wireline, Ce menting (met the reporting threshold in fourth quarter of fiscal year 2024) and Power Generation (met the reporting threshold in third quarter of fiscal year 2025) .

T hese operating segments represent how the Company’s Chief Operating Decision Maker (the “CODM”) evaluates performance and allocates resources.

Our CODM is a group comprised of our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Commercial Officer.

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The sale of these assets did not qualify for presentation and disclosure as a discontinued operation, and accordingly, we have recorded the resulting gain from the sale as part of our loss on disposal of assets and business in our consolidated statement of operations.

The sale of these assets did not qualify for presentation and disclosure as a discontinued operation, and accordingly, we have recorded the resulting gain from the sale as part of our gain on disposal of assets and business in our consolidated statement of operations.

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

On September 1, 2022, the Company shut down its coiled tubing operations and disposed of its coiled tubing assets to STEP as part of a strategic repositioning, and recorded a loss on disposal of $ 13.8 million.

The divestiture of our coiled tubing assets did not qualify for presentation and disclosure as a discontinued operation, and accordingly, we have recorded the resulting loss from the disposal as part of our loss (gain) on disposal of assets in our consolidated statement of operations.

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

In the fourth quarter of fiscal year 2024, we formed a new subsidiary to provide power generation services.

This new subsidiary has not begun any revenue-generating activities yet.

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.

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 CODM when making key operating and resource decisions.

As a result, corporate administrative expenses have been included under “Reconciling Items.”

Our Hydraulic Fracturing, Wireline, Cementing and Power Generation operating segments 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 per FASB ASC Topic 280, Segment Reporting .

Additionally, our corporate administrative activities do not involve business activities from which they may earn revenues.

As a result, corporate administrative expenses and intersegment revenue have been included under “Reconciling Items.” Prior period segment information has been revised to conform to our current presentation.

Our Hydraulic Fracturing operating segment revenue approximated 73.2 %, 75.6 % and 78.5 % of our revenue for the years ended December 31, 2025, 2024, and 2023, respectively.

Revenue from our wireline operating segment (resulting from the acquisition of Silvertip in 2022) approximated 14.1 %, 14.1 % and 2.4 % of our revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

Revenue from our Wireline operating segment approximated 16.5 %, 14.1 % and 14.1 % of our revenue for the years ended December 31, 2025, 2024 and 2023, respectively.

Our Cementing operating segment revenue approximated 10.3 %, 10.3 % and 7.4 % of our revenue for the years ended December 31, 2025, 2024 and 2023, respectively.

Our newly formed power generation services operating segment has not begun any revenue-generating activities yet.

Revenue from our coiled tubing operating segment which was divested in 2022 approximated 1.1 % of our revenue for the year ended December 31, 2022.

Our operating segments are subject to inherent uncertainties which may influence our prospective activities.

Inter-segment revenues are not material and are not shown separately in the tables below.

The Company manages and assesses the performance of its reportable segments by their adjusted EBITDA (earnings before interest expense, income taxes, depreciation and amortization, stock-based compensation expense, other income or expense, gain or loss on disposal of assets and businesses and other unusual or nonrecurring expenses or income such as impairment charges, retention bonuses, severance, costs related to asset acquisitions, insurance recoveries, one-time professional fees and legal settlements).

Revenue from our Power Generation services operating segment, which began revenue-generating activities during the third quarter of fiscal year 2025, approximated 0 % for the year ended December 31, 2025.

Our operating

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORTABLE SEGMENT INFORMATION (Continued)

segments are subject to inherent uncertainties which may influence our prospective activities.

Intersegment revenues are not material and are not shown separately in the tables below.

The Company manages and assesses the performance of its reportable segments by their adjusted EBITDA (earnings before interest expense, income taxes, depreciation and amortization, stock-based compensation expense, business acquisition contingent consideration adjustments, other income or expense, gain or loss on disposal of assets and businesses and other unusual or nonrecurring expenses or income such as impairment charges, retention bonuses, severance, costs related to asset acquisitions, insurance recoveries, one-time professional fees and legal settlements).

As part of the CODM’s review of segment-level performance, each member of the CODM group reviews the adjusted EBITDA of the Company’s reportable segments and provides expertise and analyses from their respective areas which drive the evaluation of the performance of the Company’s reportable segments and allocation of resources to those segments.

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intersegment revenues and cost of services are shown under “Reconciling Items” (in thousands):

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORTABLE SEGMENT INFORMATION (Continued)

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 (2)

$ 188,601 $ — $ — $ — $ — $ 188,601

Goodwill impairment expense (3)

$ — $ 23,624 $ — $ — $ — $ 23,624

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

7 unchanged sentences

Depreciation and amortization (3)

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

$ 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

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

Goodwill $ 920 $ — $ — $ — $ — $ 920

Total assets (2)

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

PROPETRO HOLDING CORP.

1 unchanged sentence

REPORTABLE SEGMENT INFORMATION (Continued)

Hydraulic Fracturing Wireline Cementing All Other Reconciling Items Total

Hydraulic Fracturing Wireline Cementing Power Generation Reconciling Items Total

Year ended December 31, 2023

7 unchanged sentences

Depreciation and amortization (3)

Property and equipment impairment expense (2)

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

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

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

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

1 unchanged sentence

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

____________________

(1) Revenue recognized over time under our Hydraulic Fracturing reportable segment was $ 921.3 million, $ 1,077.2 million and $ 1,263.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

1 unchanged sentence

All revenue under our Wireline reportable segment is recognized over time.

All revenue under our All Other category is recognized at a point in time.

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

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

All revenue under our Cementing reportable segment is recognized at a point in time.

Revenue recognized over time under our Power Generation reportable segment was $ 1.3 million for the year ended December 31, 2025.

Revenue recognized at a point in time under our Power Generation reportable segment was $ 0.2 million for the year ended December 31, 2025.

(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.

(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.

A reconciliation from reportable segment level financial information to the consolidated statements of operations is provided in the table below (in thousands):

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

PROPETRO HOLDING CORP.

1 unchanged sentence

REPORTABLE SEGMENT INFORMATION (Continued)

A reconciliation from reportable segment level financial information to the consolidated statements of operations is provided in the table below (in thousands):

Year Ended December 31,

4 unchanged sentences

Cementing 130,266 149,411 120,277

All Other — — 13,440

Power Generation 1,538 — —

Total service revenue for reportable segments 1,270,048 1,444,593 1,630,399

11 unchanged sentences

Cementing - other direct costs 12,028 14,151 10,409

All Other - labor ( 6 ) — 6,007

All Other - expendables — — 265

All Other - other direct costs 10 — 7,497

Power Generation - labor 2,817 ( 6 ) —

Power Generation - expendables 52 — —

Power Generation - other direct costs 3,743 10 —

Total cost of services for reportable segments 969,065 1,065,821 1,131,801

5 unchanged sentences

Cementing 4,867 5,381 5,324

All Other 366 — 1,135

Power Generation 6,506 366 —

Total general and administrative expenses excluding nonrecurring and noncash items for reportable segments 40,423 38,241 45,194

14 unchanged sentences

Cementing 22,011 26,539 24,665

All Other ( 370 ) — ( 1,463 )

Power Generation ( 11,580 ) ( 370 ) —

Total Adjusted EBITDA for reportable segments 260,560 340,531 453,404

1 unchanged sentence

Depreciation and amortization (1)

( 174,896 ) ( 224,109 ) ( 219,608 )

Property and equipment impairment expense (2)

3 unchanged sentences

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 )

5 unchanged sentences

Retention bonus and severance expense ( 2,633 ) ( 2,324 ) ( 2,297 )

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

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

Hydraulic Fracturing $ 841,180 $ 961,485 $ 1,189,526

1 unchanged sentence

Cementing 69,396 73,935 78,475

All Other — — —

Power Generation 201,481 — —

Total assets for reportable segments 1,274,282 1,191,769 1,466,958

1 unchanged sentence

Total assets $ 1,290,890 $ 1,223,645 $ 1,480,312

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

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

(2) Represents the noncash property and equipment impairment expense of our Tier II Units .

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

(3) Other income for the year ended December 31, 2024, is primarily comprised of tax refunds totaling (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 one-time 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 is primarily comprised of a $ 10.7 million net tax refund (net of advisory fees) received in March 2022 from the Texas Comptroller of Public Accounts in connection with limited sales, excise and use tax audit of the period from July 1, 2015, through December 31, 2018, $ 2.7 million of noncash income from fixed asset inventory received as part of a settlement of warranty claims with an equipment manufacturer, partially offset by and a $ 1.6 million unrealized loss on short-term investment.

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

Other general and administrative expense for the year ended December 31, 2023, primarily relates to nonrecurring professional fees paid to external consultants in connection with our business acquisitions and legal settlements, net of reimbursement 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 our audit committee review, SEC investigation, shareholder litigation, legal settlement to a vendor and other legal matters, net of reimbursement from insurance carriers.

During the years ended December 31, 2024, 2023, and 2022, we received reimbursement of approxim ately $ 0.2 million , $ 0.4 million, and $ 10.4 million, respectively, from our insurance carriers in connection with the SEC investigation and shareholder litigation.

(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.

(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 .

Major Customers

The Company had revenue from the following significant customers that accounted for the following percentages of the Company’s total revenue:

PROPETRO HOLDING CORP.

1 unchanged sentence

REPORTABLE SEGMENT INFORMATION (Continued)

Major Customers

The Company had revenue from the following significant customers that accounted for the following percentages of the Company’s total revenue:

Year Ended December 31,

5 unchanged sentences

Customer E 0.0 % 6.6 % 19.7 %

Customer F 2.6 % 0.5 % 1.4 %

Customer G 1.6 % 7.7 % 33.1 %

Customer H 0.0 % 2.3 % 4.7 %

The above customers are third-party customers.

Revenue from these customers was derived our Hydraulic Fracturing, Wireline and Cementing segments and our All Other category.

NET (LOSS) INCOME PER SHARE

Basic net (loss) income per common share is computed by dividing the net (loss) income relevant to the common stockholders by the weighted-average number of shares outstanding during the year.

Diluted net (loss) income per common share uses the same net (loss) income divided by the sum of the weighted-average number of shares of common stock outstanding during the period, plus dilutive effects of options, performance stock units (“PSUs”) and restricted stock units (“RSUs”) outstanding during the period calculated using the treasury method and the potential dilutive effects of preferred stocks (if any) calculated using the if-converted method.

Revenue from these customers was derived from our Hydraulic Fracturing, Wireline and Cementing segments.

NET INCOME (LOSS) PER SHARE

Basic net income (loss) per common share is computed by dividing the net income (loss) relevant to the common stockholders by the weighted-average number of shares outstanding during the year.

Diluted net income (loss) per common share uses the same net income (loss) divided by the sum of the weighted-average number of shares of common stock outstanding during the period, plus dilutive effects of options, performance stock units (“PSUs”) and restricted stock units (“RSUs”) outstanding during the period calculated using the treasury method and the potential dilutive effects of preferred stocks (if any) calculated using the if-converted method.

(in thousands, except for per share data)

2 unchanged sentences

Numerator (both basic and diluted)

Net (loss) income relevant to common stockholders $ ( 137,859 ) $ 85,634 $ 2,030

Denominator for basic net (loss) income per share 105,469 113,004 105,868

Net income (loss) relevant to common stockholders $ 824 $ ( 137,859 ) $ 85,634

Denominator for basic net income (loss) per share 103,838 105,469 113,004

Dilutive effect of stock options — — —

1 unchanged sentence

Dilutive effect of restricted stock units 1,058 — 370

Denominator for diluted net (loss) income per share 105,469 113,416 106,939

Basic net (loss) income per common share ( 1.31 ) 0.76 0.02

Diluted net (loss) income per common share ( 1.31 ) 0.76 0.02

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NET INCOME (LOSS) PER SHARE (Continued)

As shown in the table below, the following stock options, RSUs and PSUs outstanding as of December 31, 2024, 2023, and 2022 have not been included in the calculation of diluted (loss) income per common share for the years ended December 31, 2024, 2023, and 2022 because they would be anti-dilutive to the calculation of diluted net (loss) income per common share:

Denominator for diluted net income (loss) per share 105,398 105,469 113,416

Basic net income (loss) per common share 0.01 ( 1.31 ) 0.76

Diluted net income (loss) per common share 0.01 ( 1.31 ) 0.76

As shown in the table below, the following stock options, RSUs and PSUs outstanding as of December 31, 2025, 2024, and 2023 have not been included in the calculation of diluted income (loss) per common share for the years ended December 31, 2025, 2024, and 2023 because they would be anti-dilutive to the calculation of diluted net income (loss) per common share:

(in thousands)

Year Ended December 31,

2025 2024 2023

3 unchanged sentences

Total 641 180 779

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SHARE REPURCHASE PROGRAM

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.

In May 2025, the Company's board of directors (the “Board”) approved a further extension of 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, 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.

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

federal excise tax on certain repurchases of stock by publicly traded U.S.

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Thereafter, any excess purchase price will be recorded as a reduction of retained earnings.

During the year ended December 31, 2024, the Company paid an aggregate of $ 59.1 million, an average price per share of $ 8.21 including commissions, for share repurchases under the share repurchase program, thereby retiring 7.2 million shares.

The Company has accrued $ 0.5 million in respect of the IRA 2022 repurchase excise tax as of December 31, 2024.

During the year ended December 31, 2025 , the Company made no share repurchases under the share repurchase program.

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

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2020 Long Term Incentive Plan

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK‑BASED COMPENSATION (Continued)

In October 2020, our shareholders approved the ProPetro Holding Corp.

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In May 2023, our stockholders approved the Amended and Restated ProPetro Holding Corp.

2020 Long Term Incentive Plan (the "A&R 2020 Incentive Plan"), which had been previously approved by the Board.

The A&R 2020 Incentive Plan became effective on May 11, 2023, and replaced the 2020 Incentive Plan.

The A&R 2020 Incentive Plan authorizes up to 8,050,000 shares of common stock to be issued under awards granted pursuant to the plan in lieu of the 4,650,000 shares of common stock available for issuance under the 2020 Incentive Plan.

The 2017 Incentive Plan and the A&R 2020 Incentive Plan are herein collectively referred to as the "Incentive Plans."

2020 Long Term Incentive Plan (the “A&R 2020 Incentive Plan”) and in May 2025, approved the Second Amended and Restated ProPetro Holding Corp.

2020 Long Term Incentive Plan (the “Second A&R 2020 Incentive Plan”), which had been previously approved by the Board.

The Second A&R 2020 Incentive Plan became effective on May 20, 2025, and replaced the A&R 2020 Incentive Plan.

The Second A&R 2020 Incentive Plan authorizes up to 10,520,000 shares of common stock to be issued under awards granted pursuant to the plan in lieu of the 8,050,000 shares of common stock available for issuance under the A&R 2020 Incentive Plan.

The 2017 Incentive Plan, the A&R 2020 Incentive Plan and the Second A&R 2020 Incentive Plan are herein collectively referred to as the “Incentive Plans.”

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK‑BASED COMPENSATION (Continued)

Stock Options

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Restricted Stock Units

In 2024, we granted 1,806,956 RSUs to employees, officers and directors pursuant to the A&R 2020 Incentive Plan, which generally vest ratably over a three-year vesting period or a two-year period at one-third after first year anniversary and two-thirds after the second year anniversary, in the case of awards to employees and officers, and generally vest in full after one year , in the case of awards to directors.

In 2025, we granted 1,785,354 RSUs to employees, officers and directors pursuant to the A&R 2020 Incentive Plan and the Second A&R 2020 Incentive Plan.

RSUs granted to employees and officers generally vest ratably over a three-year vesting period, a two-year vesting period (at approximately one-third after the first year anniversary and approximately two-thirds after the second year anniversary) or a one-year vesting period.

RSUs granted to directors generally vest in full after one year .

RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award.

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For the years ended December 31, 2025, 2024, and 2023, the Company recognized stock compensation expense for RSUs of approximately $ 12.7 million, $ 11.9 million and $ 7.8 million, respectively.

On March 31, 2022, the Company modified the RSUs previously granted to a former officer in 2019, 2020, and 2021 to accelerate the vesting of such RSUs in connection with his separation agreement.

On December 31, 2022, the Company modified the RSUs previously granted to a former officer in 2020, 2021, and 2022 to accelerate the vesting of such RSUs in connection with his separation agreement.

As a result of these modifications, we recorded a net incremental stock expense of $ 1.2 million during the year ended December 31, 2022.

As of December 31, 2025, the total unrecognized compensation expense for all RSUs was approxima tely $ 13.6 million, and is expected to be recognized over a weighted-average period of approximately 1.5 years.

PROPETRO HOLDING CORP.

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STOCK‑BASED COMPENSATION (Continued)

As of December 31, 2024, the total unrecognized compensation expense for all RSUs was approxima tely $ 15.9 million, and is expected to be recognized over a weighted-average period of approximately 1.6 years.

The following table summarizes the RSUs activity during the year December 31, 2025 (in thousands, except for fair value):

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Performance Stock Units

In 2024, we granted 637,266 P SUs to certain key employees and officers as new awards under the A&R 2020 Incentive Plan.

Each PSU earned represents the right to receive either one share of common stock or, as determined by the administrator in its sole discretion, a cash amount equal to the fair market value of one share of common stock or amount of cash on the day immediately preceding the settlement date.

The actual number of shares of common stock that may be issued under the PSUs ranges from 0 % up to a maximum of 200 % of the target number of PSUs granted to the participant, based on our total shareholder return ("TSR") relative to a designated peer group of comparable companies (“Peer Group”), generally at the end of a three-year period.

In 2025, we granted 950,000 P SUs to certain key employees and officers as new awards under the A&R 2020 Incentive Plan and the Second A&R 2020 Incentive Plan.

Each PSU earned represents the right to receive either one share of common stock or, as determined by the administrator in its sole discretion, a cash amount equal to the fair market value of one share of common stock on the day immediately preceding the settlement date.

The actual number of shares of common stock that may be issued under the majority of our PSUs ranges from 0 % up to a maximum of 200 % of the target number of PSUs granted to the participant, based on our total shareholder return (“TSR”) relative to a designated peer group of comparable companies (“Peer Group”), generally at the end of a three-year period.

In addition to the TSR conditions, vesting of the PSUs is generally subject to the recipient’s continued employment through the end of the applicable performance period.

The grant date fair value of these PSUs is determined using a Monte Carlo simulation.

Additionally, the actual number of shares of common stock that may be issued under certain PSUs could be either 0 %, 50 % or 100 % of the target number of PSUs granted contingent upon the attainment of pre-established performance goals over a period of up to four years .

The grant date fair value of these PSUs is based on the closing share price of our common stock on the date of grant.

Compensation expense is recorded ratably over the corresponding requisite service period.

The grant date fair value of PSUs is determined using a Monte Carlo simulation.

Grant recipients do not have any shareholder rights until performance relative to the Peer Group has been determined following the completion of the performance period and shares have been issued.

In connection with a former officer’s separation agreement, on March 31, 2022, the Company modified the PSUs previously granted to such former officer in 2020 and 2021 to provide for deemed satisfaction of the service requirement applicable to such PSUs as of March 31, 2022, such that such PSUs shall remain outstanding and eligible to vest based on our TSR relative to the P eer Group over the applicable performance period.

In connection with a former officer’s separation agreement, on December 31, 2022, the Company modified the PSUs previously granted to such former officer in 2021 and 2022 to provide for deemed satisfaction of the service requirement applicable to such PSUs as of December 31, 2022, such that such PSUs shall rem ain outstanding and eligible to vest based on our TSR relative to the Peer Group over the applicable performance period.

As a result of these modifications, we recorded a net incremental stock expense of $ 2.6 million during the year ended December 31, 2022.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized stock compensation expense for the PSUs of approximatel y $ 4.2 million, $ 5.4 million and $ 6.6 million, respectively.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK‑BASED COMPENSATION (Continued)

The following table summarizes information about PSUs activity during the year ended December 31, 2025 (in thousands, except for fair value):

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The total unrecognized stock-based compensation expense as of December 31, 2025 was approximately $ 22.6 million, and is expected to be recognized over a weighted-average period of approximately 1.5 years.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of the provision for income taxes are as follows:

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2025 2024 2023

$ 836 $ — $ —

( 33,756 ) 28,109 4,157

Current $ 2,530 $ 836 $ —

1,915 ( 33,756 ) 28,109

4,445 ( 32,920 ) 28,109

Current 804 1,115 2,028

1,748 420 ( 269 )

2 unchanged sentences

$ 6,997 $ ( 31,385 ) $ 29,868

Reconciliation between the amounts determined by applying the federal statutory rate of 21% for years ended December 31, 2024, 2023 and 2022 to income tax (benefit) expense is as follows:

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES (Continued)

Reconciliation between the amounts determined by applying the federal statutory rate of 21% to income tax (benefit) expense is as follows:

(in thousands)

Year Ended December 31, 2025

federal statutory tax rate $ 1,642 21.0 %

State and local income tax, net of federal (national) income tax effect (1)

Nontaxable or nondeductible items:

Stock-based compensation 1,076 13.8 %

Nondeductible compensation 1,721 22.0 %

Meals and entertainment 427 5.5 %

Other 87 1.1 %

Effective tax rate $ 6,997 89.6 %

____________________

(1) State taxes in Utah and New Mexico made up the majority (greater than 50 percent) of the tax effect in this category.

(in thousands)

Year Ended December 31,

Taxes at federal statutory rate $ ( 35,541 ) $ 24,256

$ ( 35,541 ) $ 24,256 $ 1,551

State taxes, net of federal benefit 1,194 2,092

1,194 2,092 709

Section 162(m) limitation 534 2,089

Stock-based compensation 2,168 1,718

2,168 1,718 ( 767 )

Valuation allowance — ( 780 )

— ( 780 ) ( 336 )

Other 260 493

Total income tax (benefit) expense $ ( 31,385 ) $ 29,868

$ ( 31,385 ) $ 29,868 $ 5,356

Deferred tax assets and liabilities are recognized for estimated future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES (Continued)

Income taxes paid, net of refunds received, during the year ended December 31, 2025 were as follows:

(in thousands)

Year Ended December 31, 2025

Federal income taxes:

United States $ 1,380

State income taxes:

New Mexico 1,384

Other state jurisdictions 26

Total income taxes paid - net of refunds received $ 3,468

Deferred income tax assets and liabilities are recognized for estimated future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements.

The significant items giving rise to deferred tax assets (liabilities) are as follows:

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Accrued liabilities $ 3,629 $ 3,291

$ 3,291 $ 1,410

Allowance for credit losses — —

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Net operating losses 30,423 40,546

40,546 63,983

Lease liabilities 17,019 20,940

20,940 11,736

Total deferred tax assets

Total deferred income tax assets

58,451 74,455

Valuation allowance ( 1,450 ) ( 577 )

( 577 ) ( 577 )

Total deferred tax assets — net

Total deferred income tax assets — net

$ 57,001 $ 73,878

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Property and equipment ( 101,267 ) ( 110,856 )

( 110,856 ) ( 156,393 )

Prepaid expenses ( 2,219 ) ( 1,691 )

( 1,691 ) ( 1,509 )

Right-of-use assets ( 16,948 ) ( 21,101 )

Total deferred tax liabilities

Total deferred income tax liabilities

( 120,434 ) ( 133,648 )

Net deferred tax liabilities

Net deferred income tax liabilities

$ ( 63,433 ) $ ( 59,770 )

The Tax Cuts and Jobs Act included a reduction to the maximum deduction allowed for net operating losses generated after December 31, 2017, and the elimination of carryback of net operating losses.

On July 4, 2025, “An Act to provide for reconciliation pursuant to title II of H.

14”, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted into law in the United States.

The OBBBA contains several changes to corporate taxation including modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated fixed asset depreciation.

These provisions did not have a material impact on the Company's effective tax rate for the year ended December 31, 2025.

As of December 31, 2025, the Company had approximately $ 138.0 million of U.S.

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As of December 31, 2025, the Company’s state NOLs were approximately $ 42.8 million and will begin to expire in 2030.

The tax effected amount of state NOLs is $ 1.8 million, all of which is fully offset by valuation allowance.

Utilization of NOLs may be limited under Section 382 of the Code due to future ownership changes.

As of December 31, 2024, we determined that $ 0.6 million valuation allowance was necessary against our state deferred tax assets.

The Company’s U.S.

federal income tax returns for the y ear end ed December 31, 2021, an d through the most recent filing remain open to examination by the Internal Revenue Service under the applicable U.S.

federal income tax returns for the year ended December 31, 2022, and through the most recent filing remain open to examination by the Internal Revenue Service under the applicable U.S.

federal statute of limitations provisions.

The various states in which the Company is subject to income tax are generally open to examination for the tax years ended December 31, 2020, and through the most recent filing.

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the

PROPETRO HOLDING CORP.

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INCOME TAXES (Continued)

largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

The various states in which the Company is subject to income tax are generally open to examination for the tax years ended December 31, 2021, and through the most recent filing.

The Company records uncertain tax positions in accordance with FASB ASC 740, Income Taxes , on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

As of December 31, 2025, 2024 and 2023, no uncertain tax positions were recorded.

The Company will continue to evaluate its tax positions in accordance with ASC 740 and will recognize any future effect as either a benefit or charge to income in the applicable period.

Income tax penalties and interest assessments recognized under ASC 740 are accrued as a tax expense in the period that the Company’s taxes are in an uncertain tax position.

The Company will continue to evaluate its tax positions in accordance with FASB ASC 740 and will recognize any future effect as either a benefit or charge to income in the applicable period.

Income tax penalties and interest assessments recognized under FASB ASC 740 are accrued as a tax expense in the period that the Company’s taxes are in an uncertain tax position.

Any accrued tax penalties or interest assessments will remain until the uncertain tax position is resolved with the taxing authorities or until the applicable statute of limitations has expired.

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Operations and Maintenance Yards

The Company rents three yards from an entity in which a director of the Company has an equity interest, and the total annual rent expense for each of the three yards was approximately $ 0.03 million, $ 0.1 million and $ 0.1 million, respectively.

The Company previously rented three yards from an entity in which a director of the Company has an equity interest, and incurred rent expense of $ 0.02 million, $ 0.1 million and $ 0.1 million, respectively, during the year ended December 31, 2025, and $ 0.03 million, $ 0.1 million and $ 0.1 million, respectively, during the years ended December 31, 2024 and 2023.

The Company previously rented two additional yards from this entity and incurred rent expense of $ 0.02 million and $ 0.1 million, respectively during the year ended December 31, 2023.

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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 s ub-agreement for Hydraulic Fracturing Services with XTO Energy Inc.

(“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.

Revenue from services provided to ExxonMobil (including Pioneer and XTO) subsequent to Pioneer's merger with ExxonMobil accounted for $ 187.7 million of our total revenue during the year ended December 31, 2024.

Revenue from services provided to Pioneer (including equipment reservation fees) prior to its merger with ExxonMobil accounted f or approximately $ 6.8 million of our total revenue during the year ended December 31, 2024 .

R evenue from services provided to Pioneer (including equipment reservation fees) prior to its merger with ExxonMobil accounted for approximate ly $ 125.1 million and $ 423.7 million of our total revenue durin g the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2024, the total accounts receivable due from ExxonMobil (including Pioneer and XTO), including estimated unbilled receivable for services we provided, amounted to $ 70.8 million and the amount due to ExxonMobil (including Pioneer and XTO) was $ 0 .

As of December 31, 2023, the balance due from Pioneer for services we provided amounted to approximately $ 2.4 million and the amount due to Pioneer was $ 0 .

On April 22, 2024, we entered into a s ub-agreement for Hydraulic Fracturing Services with XTO, a wholly owned subsidiary of ExxonMobil, pursuant to which we agreed to 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.

Revenue from services provided to ExxonMobil (including Pioneer and XTO) subsequent to Pioneer's merger with ExxonMobil accounted for approximately $ 315.9 million of our total revenue for the year ended December 31, 2025.

Revenue from services provided to ExxonMobil (including Pioneer and XTO) subsequent to Pioneer's merger with ExxonMobil accounted for approximately $ 187.7 million of our total revenue for the year ended December 31, 2024.

Revenue from services provided to Pioneer prior to its merger with ExxonMobil accounted f or approximately $ 6.8 million and $ 125.1 million of our total revenue for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2025 and 2024, the total accounts receivable due from ExxonMobil (including Pioneer and XTO), including estimated unbilled receivable for services we provided, amounted to approximately $ 51.2 million and $ 70.8 million, respectively.

As of December 31, 2025 and 2024, the amount due to ExxonMobil (including Pioneer and XTO) was $ 0 .

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED-PARTY TRANSACTIONS (Continued)

Big 4 and Former Employee

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

The note receivable is secured by substantially all assets of Big 4 and the former employee’s ownership interests in and distributions from Big 4.

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.

The note receivable is considered subordinated financial support to Big 4 and represents a variable interest to the Company in Big 4.

The note receivable was secured by substantially all assets of Big 4 and the former employee’s ownership interests in and distributions from Big 4.

Prior to full repayment in fiscal year 2025, the note receivable was considered subordinated financial support to Big 4 and represented a variable interest to the Company in Big 4.

See “Note 19.

Variable Interest Entity” for the carrying value of the note receivable as of December 31, 2024.

We recorded interest income of $ 0.2 million for the year ended December 31, 2024 which is included in our consolidated statement of operations under other income (expense).

Cash inflows from collections on the note receivable will be included in our consolidated statement of cash flows under cash flows from investing activities.

We recorded interest income of $ 1.2 million and $ 0.2 million for the years ended December 31, 2025 and 2024, respectively, which is included in our consolidated statement of operations under other income (expense).

Cash inflows from collections on the note receivable are included in our consolidated statement of cash flows under cash flows from investing activities.

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

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LEASES (Continued)

Operating Leases

Description of Leases

We have operating leases for five FORCE ® electric-powered hydraulic fracturing equipment fleets (the “Electric Fleet Leases”), facilities and office space.

We have operating leases for five FORCE ® electric-powered hydraulic fracturing equipment fleets (the “Electric Fleet Leases”), facilities and office spaces.

The terms and conditions of these leases vary by the type of the underlying asset.

We did not account for land separately from buildings under our leases of facilities because we concluded that the accounting effect was insignificant.

We did not account for land separately from buildings under our leases of facilities and office spaces because we concluded that the accounting effect was insignificant.

Our operating leases do not include residual value guarantees, covenants or financial restrictions.

Further, our operating leases do not contain variability in payments resulting from either an index change or rate change.

We assumed two leases for facilities as part of our acquisition of Silvertip Completion Services Operating, LLC on November 1, 2022.

Our operating leases have remaining lease terms of approximately 0.8 years to 3.9 years as of December 31, 2024.

Our operating leases have remaining lease terms of approximately 1.0 year to 4.7 years as of December 31, 2025.

Our operating leases have renewal options ranging from none to three renewal options of up to one year each at the end of their current contractual lease periods.

2 unchanged sentences

In addition to fixed rent payments, the Electric Fleet Leases contain variable payments based on equipment usage.

The right-of-use assets and liabilities related to the Electric Fleet Leases are included in our Hydraulic Fracturing reportable segment, related to leases for facilities are included in our Hydraulic Fracturing and Wireline reportable segments, and related to office space are included in our Wireline reportable segment and our corporate administrative function.

Year Ended December 31,

The right-of-use assets and liabilities related to the Electric Fleet Leases are included in our Hydraulic Fracturing reportable segment, related to leases for facilities are included in our Hydraulic Fracturing and Wireline reportable segments, and related to office spaces are included in our Wireline and Power Generation reportable segments and our corporate administrative function.

(in thousands) 2025 2024

Operating lease right of use cost $ 182,130 $ 85,775

Operating lease amortization of right-of-use assets 49,836 7,192

Net Book Value of Operating Leases $ 132,294 $ 78,583

Operating lease right-of-use assets - cost $ 206,518 $ 182,130

Operating lease right-of-use assets - accumulated amortization (106,731) ( 49,836 )

Operating lease right-of-use assets - net $ 99,787 $ 132,294

Finance Leases

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This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets.

Year Ended December 31,

(in thousands) 2024 2023

Finance lease right of use cost $ 54,842 $ 52,612

Finance lease amortization of right-of-use assets 24,129 5,163

Net Book Value of Finance Leases $ 30,713 $ 47,449

The components of lease costs are as follows:

PROPETRO HOLDING CORP.

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LEASES (Continued)

(in thousands) 2025 2024

Finance lease right-of-use assets - cost $ 53,292 $ 54,842

Finance lease right-of-use assets - accumulated amortization ( 42,655 ) ( 24,129 )

Finance lease right-of-use assets - net $ 10,637 $ 30,713

The components of lease costs are as follows:

Year Ended December 31,

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Short-Term Leases

We elected the practical expedient option, consistent with ASC 842, to exclude leases with a term of twelve months or less ("short-term lease") from our balance sheet and continue to record short-term leases as a period expense.

We elected the practical expedient option, consistent with FASB ASC Topic 842, to exclude leases with a term of twelve months or less (“short-term lease”) from our balance sheet and continue to record short-term leases as a period expense.

Initial Direct Costs

The Company incurred initial direct costs of approximately $ 25.5 million , $ 25.0 million during the years ended December 31, 2024 and 2023, respectively , to place the leased equipment into its intended use, which are included in the right-of-use assets cost related to our Electric Fleet Leases.

No initial direct costs were incurred during the year ended December 31, 2022.

We elected to analogize to the measurement guidance of FASB ASC Topic 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.

The Company incurred initial direct costs of approximately $ 4.1 million , $ 25.5 million and $ 25.0 million during the years ended December 31, 2025, 2024 and 2023 , respectively , to place the leased equipment into its intended use, which are included in the right-of-use assets cost related to our Electric Fleet Leases.

Supplemental Cash Flow Information

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— 2,230 52,612

(1) D uring the year ended December 31, 2024, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases.

During the year ended December 31, 2023, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases, our execution of facilities and office leases and our extension of a facilities lease .

(2) During the year ended December 31, 2024, we recorded noncash finance lease obligations related to additional rent on the Power Equipment Lease.

During the year ended December 31, 2023 , we recorded noncash finance lease obligations arising from obtaining right-of-use assets related to the commencement of the Power Equipment Lease.

(1) D uring the year ended December 31, 2025, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to office leases for our corporate headquarters and our power generation business.

During the year ended December 31, 2024, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases.

During the year ended December

PROPETRO HOLDING CORP.

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LEASES (Continued)

31, 2023, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Leases, our execution of facilities and office leases and our extension of a facilities lease .

(2) During the year ended December 31, 2024, we recorded noncash finance lease obligations related to additional rent on the Power Equipment Lease.

During the year ended December 31, 2023 , we recorded noncash finance lease obligations arising from obtaining right-of-use assets related to the commencement of the Power Equipment Lease.

Lease Terms and Discount Rates

Lease terms and discount rates are as follows:

2025 2024 2023

Weighted average remaining lease term:

Operating leases 2.4 years 3.1 years

Finance leases 1.6 years 2.6 years

Operating leases 2.2 years 2.4 years 3.1 years

Finance leases 0.6 years 1.6 years 2.6 years

Weighted average discount rate:

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Present value of future lease payments (lease obligation) $ 79,213 $ 12,442

Stonebriar Equipment Lease Facility

On December 16, 2025, we entered into an Interim Funding Agreement (the “Interim Funding Agreement”) and a Master Lease Agreement (the “Master Lease Agreement” and together with the Interim Funding Agreement, the “Stonebriar Equipment Lease Facility”) with Stonebriar Commercial Finance LLC (“Stonebriar”) for the right, but not the obligation, to fund up to $ 350.0 million of purchases of power generator equipment for our PROPWR business line.

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 shall be 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.

With respect to the leased equipment, PROPWR will have certain early termination and purchase options 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

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LEASES (Continued)

title to such equipment.

The Interim Funding Agreement expires on December 31, 2028, or earlier if the full amount of the facility is funded before this date.

The origination costs relating to the Stonebriar Equipment Lease Facility will be classified as an asset in our consolidated balance sheet until leases are executed, at which time the amounts that correspond to the proportion of funding obtained compared to the total funding originally available under the facility will be recognized as initial direct costs for such leases.

As of December 31, 2025, we had no leases and no outstanding lease liability amounts under the Stonebriar Equipment Lease Facility.

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements.

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.

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 these generators in the first half of 2025.

The power generation equipment from these contractual arrangements represent total capacity of 140 megawatts.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES (Continued)

We entered into contractual arrangements with an equipment manufacturer to purchase mobile natural gas-fueled power generation equipment , including turbine generator sets along with auxiliary equipment, for our PROPWR SM business line , with a total remaining commitment (after our initial down payment and payments financed under the Caterpillar Equipment Loan Agreement) of approximately $ 87.1 million, of which $ 76.1 million will be financed under the Caterpillar Equipment Loan Agreement .

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.” 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 entered into the Electric Fleet Leases, which contain options to extend the leases or purchase the equipment at the end of each lease or at the end of each subsequent renewal period.

As of December 31, 2024, all five of the Electric Fleet Leases commenced when the Company took possession of all equipment associated with the first four FORCE ® electric-powered hydraulic fractu ring fleets and some of the equipment associated with the fifth fleet under these leases.

Lease payments pertaining to the remaining equipment under the fifth Electric Fleet Lease is expected to commence when the Company takes possession of the remaining associated equipment .

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

As of December 31, 2025, all five of the Electric Fleet Leases commenced when the Company took possession of all equipment associated with its five FORCE ® electric-powered hydraulic fractu ring fleets under these leases.

The total estimated contractual commitment in connection with the Electric Fleet Leases excluding the cost associated with the option to purchase the equipment at the end of each lease is approximately $ 77.4 million .

1 unchanged sentence

The total estimated contractual commitment in connection with the Power Equipment Lease is approximately $ 12.8 million .

We also have leases for facilities and office spaces with a total estimated contractual commitment of approximately $ 7.6 million .

See “Note 17.

Leases” for further details on these leases.

The Company enters into purchase agreements with its sand suppliers (the “Sand Suppliers”) to secure supply of sand as part of its normal course of business.

1 unchanged sentence

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 agreements with the Sand Suppliers expire a t December 31, 2025.

Our sand agreement with one of our Sand Suppliers that will expire on December 31, 2025, has a take-or-pay commitment o f $ 1.5 million.

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

We had no take-or-pay commitments with our Sand Suppliers as of December 31, 2025 .

During the years ended December 31, 2025, 2024, and 2023, no shortfall fee was recorded.

The Stonebriar Equipment Lease Facility requires us to pay an unused commitment fee of 0.5 % of any unused portion of the lessor’s $ 350.0 million funding commitment at December 31, 2028.

The maximum amount we may owe for this fee is $ 1.8 million.

As of December 31, 2025 and 2024, the Company had issued le tters of credit of $ 8.6 million and $ 8.6 million, respectively, under the ABL Credit Facility in connection with the Company's casualty insurance policy.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES (Continued)

Contingent Liabilities

16 unchanged sentences

The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company's liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

The Company is self-insured up to $ 10 million per occurrence for certain losses arising from or attributable to fire and/or explosion at the wellsites that do not have qualified fire suppression measures.

No accrual was recorded in our financial statements in connection with this self-insurance strategy because the occurrence of fire and/or explosion cannot be reasonably estimated.

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES (Continued)

The Company is self-insured up to $ 10 million per occurrence for certain losses.

No accrual was recorded in our financial statements in connection with this self-insurance strategy because the occurrence of such losses cannot be reasonably estimated.

Regulatory Audits

In 2020, the Texas Comptroller of Public Accounts (the “Comptroller”) commenced a routine audit of the Company's motor vehicle and other related fuel taxes for the periods of July 2015 through December 2020.

As of December 31, 2024, the audit was substantially complete and the Company accrued for an estimated settlement expense of $ 6.0 million .

As of December 31, 2025, the audit was substantially complete and the Company accrued an estimated settlement expense of $ 6.0 million .

In May 2022, the Company received a notification from the Comptroller that it will commence a routine audit of the Company’s gross receipt taxes, which will routinely cover up to a four-year period.

As of December 31, 2024, the audit was nearing completion and the Company accrued for an estimated settlement expense of $ 0.8 million .

As of December 31, 2025, the audit was nearing completion and the Company accrued an estimated settlement expense of $ 0.8 million .

VARIABLE INTEREST ENTITY

5 unchanged sentences

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

The note receivable is secured by substantially all assets of Big 4 and the former employee’s ownership interests in and distributions from the entity.

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 evaluated our note receivable from Big 4 for VIEs in accordance with ASC 810, Consolidation .

The Company holds a variable interest in Big 4 and Big 4 is a VIE due to its lack of sufficient equity to finance its operations without additional subordinated financial support from the Company.

The note receivable from Big 4 is considered subordinated financial support and represents a variable interest to the Company in Big 4.

Assets and liabilities related to the Company’s variable interest in Big 4 included in the Company’s consolidated balance sheets are limited to the unpaid balance of the note receivable and any accrued interest.

The Company’s maximum exposure to loss as a result of its involvement with Big 4 is also limited to the unpaid balance of the note receivable and any accrued interest.

The consolidation of Big 4 is not required as the Company is not the primary beneficiary of this VIE as we do not have the power to direct the activities that most significantly impact Big 4’s economic performance.

The note receivable was secured by substantially all assets of Big 4 and the former employee’s ownership interests in and distributions from the entity.

We evaluated our note receivable from Big 4 for VIEs in accordance with FASB ASC Topic 810, Consolidation .

The Company held a variable interest in Big 4 and Big 4 is a VIE due to its lack of sufficient equity to finance its operations without additional subordinated financial support from the Company.

The note receivable from Big 4 was considered subordinated financial support and represented a

PROPETRO HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

VARIABLE INTEREST ENTITY (Continued)

variable interest to the Company in Big 4 prior to full repayment.

Assets and liabilities related to the Company’s variable interest in Big 4 included in the Company’s consolidated balance sheets were limited to the unpaid balance of the note receivable and any accrued interest prior to full repayment.

The Company’s maximum exposure to loss as a result of its involvement with Big 4 was also limited to the unpaid balance of the note receivable and any accrued interest prior to full repayment.

The consolidation of Big 4 was not required prior to full repayment of the note receivable as the Company was not the primary beneficiary of this VIE as we did not have the power to direct the activities that most significantly impacted Big 4’s economic performance.

We consider such activities to include performing customer contract obligations, maintaining and establishing customer relationships, and managing costs, among other operational activities.

We do not have any control over such activities.

We did not have any control over such activities.

Such power is held by Big 4’s sole owner.

We account for the note receivable (our variable interest) at amortized cost.

We accounted for the note receivable (our variable interest) at amortized cost.

As of December 31, 2024, the carrying value of the note receivable including interest was $ 13.2 million.

Of the carrying value at December 31, 2024 the amount collectible within one year was $ 2.1 million and the amount collectible beyond one year was $ 11.1 million , which are included in our consolidated balance sheet under other current assets and other non current assets, respectively.

Of the carrying value at December 31, 2024, the amount collectible within one year was $ 2.1 million and the amount collectible beyond one year was $ 11.1 million , which are included in our consolidated balance sheet as of December 31, 2024, under other current assets and other noncurrent assets, respectively.

SUBSEQUENT EVENT

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.

At December 31, 2025, the Company had approximately $ 0.3 million of deferred offering expenses related to this transaction, which are included in other current assets in our consolidated balance sheet .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data