ProPetro Holding Corp. 10-K

Item 8. Financial Statements and Supplementary Data. FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm (PCAOB ID: 49 ) 56 Consolidated Balance Sheets as of December 31, 2025 and 2024 59 Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 60 Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025, 2024 and 2023 61 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 62 Notes to Consolidated Financial Statements 63 55 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of ProPetro Holding Corp. 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, 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. 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 audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits 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 audits 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 audits 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 audits provide a reasonable basis for our opinion. Critical Audit Matters 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. 56 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 We have served as the Company's auditor since 2023. Houston, Texas February 19, 2026 57 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of ProPetro Holding Corp. 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. In our opinion, the Company maintained, in all material respects, effective 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. 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. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting 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 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ RSM US LLP Houston, Texas February 19, 2026 58 PROPETRO HOLDING CORP. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024 (In thousands, except share data) 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 91,334 $ 50,443 Accounts receivable - net of allowance for credit losses of $ 0 and $ 0 , respectively 200,753 195,994 Inventories 13,323 16,162 Prepaid expenses 19,896 17,719 Short-term investment — 7,849 Other current assets 1,398 4,054 Total current assets 326,704 292,221 PROPERTY AND EQUIPMENT - net of accumulated depreciation 793,475 688,225 OPERATING LEASE RIGHT-OF-USE ASSETS 99,787 132,294 FINANCE LEASE RIGHT-OF-USE ASSETS 10,637 30,713 OTHER NONCURRENT ASSETS: Goodwill 920 920 Intangible assets - net of amortization 55,476 64,905 Other noncurrent assets 3,891 14,367 Total other noncurrent assets 60,287 80,192 TOTAL ASSETS $ 1,290,890 $ 1,223,645 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 115,009 $ 92,963 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 Finance lease liabilities 12,442 19,317 Total current liabilities 252,961 222,266 DEFERRED INCOME TAXES 63,433 59,770 LONG-TERM DEBT - net of debt issuance costs and current maturities 105,613 45,000 NONCURRENT OPERATING LEASE LIABILITIES 35,641 58,849 NONCURRENT FINANCE LEASE LIABILITIES — 13,187 OTHER LONG-TERM LIABILITIES 3,400 8,300 Total liabilities 461,048 407,372 COMMITMENTS AND CONTINGENCIES (Note 18) SHAREHOLDERS’ EQUITY: Preferred stock, $ 0.001 par value, 30,000,000 shares authorized, none issued, respectively — — Common stock, $ 0.001 par value, 200,000,000 shares authorized, 104,310,266 and 102,994,958 shares issued and outstanding, respectively 104 103 Additional paid-in capital 897,739 884,995 Accumulated deficit ( 68,001 ) ( 68,825 ) Total shareholders’ equity 829,842 816,273 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,290,890 $ 1,223,645 See notes to consolidated financial statements. 59 PROPETRO HOLDING CORP. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 , 2024 AND 2023 (In thousands, except per share data) 2025 2024 2023 REVENUE - Service revenue $ 1,269,158 $ 1,444,286 $ 1,630,399 COSTS AND EXPENSES: Cost of services (exclusive of depreciation and amortization) 968,175 1,065,514 1,131,801 General and administrative expenses (inclusive of stock‑based compensation) 107,558 114,323 114,354 Depreciation and amortization 174,896 224,109 219,608 Property and equipment impairment expense — 188,601 — Goodwill impairment expense — 23,624 — Loss (gain) on disposal of assets and businesses, net 12,179 ( 4,925 ) 34,293 Total costs and expenses 1,262,808 1,611,246 1,500,056 OPERATING INCOME (LOSS) 6,350 ( 166,960 ) 130,343 OTHER INCOME (EXPENSE): Interest expense ( 8,238 ) ( 7,815 ) ( 5,308 ) Other income (expense), net 9,709 5,531 ( 9,533 ) Total other income (expense), net 1,471 ( 2,284 ) ( 14,841 ) INCOME (LOSS) BEFORE INCOME TAXES 7,821 ( 169,244 ) 115,502 INCOME TAX (EXPENSE) BENEFIT ( 6,997 ) 31,385 ( 29,868 ) NET INCOME (LOSS) $ 824 $ ( 137,859 ) $ 85,634 NET INCOME (LOSS) PER COMMON SHARE: Basic $ 0.01 $ ( 1.31 ) $ 0.76 Diluted $ 0.01 $ ( 1.31 ) $ 0.76 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 103,838 105,469 113,004 Diluted 105,398 105,469 113,416 See notes to consolidated financial statements. 60 PROPETRO HOLDING CORP. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 , 2024 AND 2023 (In thousands) Common Stock Shares Amount Additional Paid‑In Capital Retained Earnings (Accumulated Deficit) Total BALANCE - January 1, 2023 114,515 $ 114 $ 970,519 $ ( 16,600 ) $ 954,033 Stock‑based compensation cost — — 14,450 — 14,450 Issuance of equity award, net 763 1 ( 1 ) — — 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 BALANCE - December 31, 2023 109,483 $ 109 $ 929,249 $ 69,034 $ 998,392 Stock‑based compensation cost — — 17,288 — 17,288 Issuance of equity awards, net 707 1 ( 1 ) — — Tax withholdings paid for net settlement of equity awards — — ( 1,909 ) — ( 1,909 ) Share repurchases ( 7,195 ) ( 7 ) ( 59,101 ) — ( 59,108 ) Excise tax on share repurchases — — ( 531 ) — ( 531 ) Net loss — — — ( 137,859 ) ( 137,859 ) BALANCE - December 31, 2024 102,995 $ 103 $ 884,995 $ ( 68,825 ) $ 816,273 Stock‑based compensation cost — — 16,946 — 16,946 Issuance of equity, net 1,315 1 ( 1 ) — — Tax withholdings paid for net settlement of equity awards — — ( 4,201 ) — ( 4,201 ) Net income — — — 824 824 BALANCE - December 31, 2025 104,310 $ 104 $ 897,739 $ ( 68,001 ) $ 829,842 See notes to consolidated financial statements. 61 PROPETRO HOLDING CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 , 2024 AND 2023 (In thousands) 2025 2024 2023 CASH FLOWS FROM 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 Property and equipment impairment expense — 188,601 — Goodwill impairment expense — 23,624 — 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 (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 ) — Changes in operating assets and liabilities: Accounts receivable ( 4,759 ) 51,498 ( 12,408 ) Other current assets 913 ( 2,301 ) ( 831 ) Inventories 2,840 1,543 ( 6,017 ) Prepaid expenses ( 2,177 ) 1,327 ( 6,143 ) Accounts payable 9,573 ( 64,501 ) ( 11,429 ) Accrued and other current liabilities 23,460 ( 10,506 ) 26,814 Net cash provided by operating activities 231,607 252,295 374,742 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 186,316 ) ( 140,297 ) ( 370,869 ) Business acquisitions, net of cash acquired — ( 21,038 ) ( 22,215 ) Proceeds from sale of assets 23,505 6,236 8,957 Proceeds from note receivable from sale of business 13,000 — — Net cash used in investing activities ( 149,811 ) ( 155,099 ) ( 384,127 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings — — 30,000 Repayments of borrowings — — ( 15,000 ) 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 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 ) Share repurchases — ( 59,108 ) ( 51,738 ) Payment of excise taxes on share repurchases ( 531 ) ( 444 ) — Net cash used in financing activities ( 40,905 ) ( 80,107 ) ( 46,123 ) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 40,891 17,089 ( 55,508 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of year 50,443 33,354 88,862 CASH AND CASH EQUIVALENTS — End of year $ 91,334 $ 50,443 $ 33,354 See notes to consolidated financial statements. 62 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND HISTORY ProPetro Holding Corp. (“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, 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 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 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 December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property from Pioneer Natural Resources USA, Inc. (“Pioneer”) and Pioneer Pumping Services, LLC (“Pioneer Pumping Services”) (the “Pioneer Pressure Pumping Acquisition”). 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 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. 63 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements are as follows: Principles of Consolidation — The accompanying consolidated financial statements include the accounts of Holding and its wholly owned subsidiaries, Services, Silvertip, AquaProp, and PROPWR. 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 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. Revenue Recognition — The Company’s services are sold based upon contracts with customers. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Hydraulic fracturi ng is an oil well completion technique, which is part of the overall well completions process. It is a well-stimulation technique intended to optimize hydrocarbon flow paths during the completion phase of shale w ellbores. The process involves the injection of water, sand and chemicals under high pressure into shale formations. Our hydraulic fracturing 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 recognizing revenue based on actual stages completed faithfully depicts how our hydraulic fracturing services are transferred to our customers over time. Acidizing, which is part of our Hydraulic Fracturing operating segment, involves a well-stimulation technique where acid or similar chemicals are injected under pressure into formations to form or expand fissures. Our acidizing contracts have one performance obligation, satisfied at a point-in-time, upon completion of the contracted service or sale of acid or chemical when control is transferred to the customer. Jobs for these services are typically short term in nature, with most jobs completed in less than a day. We recognize acidizing revenue at a point-in-time, upon completion of the performance obligation. Wet sand solutions, which is part of our Hydraulic Fracturing operating segment, involve providing onsite storage and handling of wet sand used in the completion phase of shale wellbores. We recognize revenue from sale of wet sand, location services and transportation services over time using a progress output, unit-of-work performed method, which is based on the agreed fixed transaction price, fixed units per stage and actual stages completed. Our cementing services use pressure pumping equipment to deliver a slurry of liquid cement that is pumped down a well between the casing and the borehole. Our cementing contracts have one performance obligation, satisfied at a point-in-time, upon completion of the contracted service when control is transferred to the customer. Jobs for these services are typically short term in nature, with most jobs completed in less than a day. We recognize cementing revenue at a point-in-time, upon completion of the performance obligation. Wireline services (including pumpdown) are oil well completion techniques, which are part of the well completion services. Our wireline services utilize equipment with a drum of wireline to deploy perforating guns in the well to perforate the casing, cement, and formation. Once the well is perforated, the well can be fractured. Pumpdown utilizes pressure pumping equipment to pump water into the well to deploy perforating guns attached to wireline through the lateral section of a well. 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 64 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 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. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. Business Combinations — Business combinations are accounted for under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recognized at their respective fair values as of the date of acquisition. The excess, if any, of the acquisition price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill if the definition of a business is met. For significant acquisitions, we utilize third-party appraisal firms to assist us in determining the fair values for certain assets acquired and liabilities assumed using discounted cash flows and other applicable valuation techniques. We record any acquisition related costs as expenses when incurred. Adjustments to the fair values of assets acquired and liabilities assumed are made until we obtain all relevant information regarding the facts and circumstances that existed as of the acquisition date (the “measurement period”), not to exceed one year from the date of the acquisition. We recognize measurement period adjustments in the period in which we determine the amounts, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed at the acquisition date. The estimation of the fair values of assets and liabilities acquired in business combinations requires significant judgment. Our fair value estimates require us to use significant observable and unobservable inputs. The estimates of fair value are also subject to significant variability, are sensitive to changes in market conditions, and are reasonably likely to change in the future. A significant change in the observable and unobservable inputs and determination of fair value of the assets and liabilities acquired could significantly impact our consolidated financial statements. Cash and Cash Equivalents — All highly liquid investments with an original maturity of three months or less. Restricted Cash — Our restricted cash related to cash received from a customer in connection with our contract with the customer to provide FORCE ® electric-powered hydraulic fracturing equipment and services. The restricted cash was used to pay for contractually agreed upon expenditures. Our restricted cash balances at December 31, 2025 and 2024 were $ 0 and $ 0 , respectively. Accounts Receivable — Accounts receivable are stated at the amount billed and billable to customers. The table below shows a summary of our accounts receivable: 65 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) (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. 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 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 our allowance for credit losses: (in thousands) Year Ended December 31, 2025 2024 2023 Balance - January 1, $ — $ 236 $ 419 Provision for credit losses during the period — — 34 Write-off during the period — ( 236 ) ( 217 ) Balance - December 31, $ — $ — $ 236 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 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. 66 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. 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 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. Depreciation — Depreciation of property and equipment is provided on the straight‑line method over the following estimated useful lives: Land Indefinite Buildings and property improvements 5 - 30 years Vehicles 1 ‑ 5 years Equipment 1 ‑ 22 years Leasehold improvements 5 ‑ 20 years 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 depreciation in the statement of operations. 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, 67 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. Goodwill — Goodwill is the excess of the consideration transferred over the fair value of the tangible and identifiable intangible assets and liabilities recognized in a business combination. Goodwill is not amortized. 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. If the fair value of the reporting unit exceeds the carrying value, no further testing is performed. If the fair value of the reporting unit is less than the carrying value, we consider goodwill to be impaired, and the amount of impairment loss is calculated and recorded in the statement of operations. On May 31, 2024, we acquired AquaProp for $ 35.8 million. 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, 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 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. 68 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. 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 December 31, 2023 Goodwill $ — $ 23,624 $ 23,624 Accumulated impairment losses — — — — 23,624 23,624 Goodwill acquired during year 3,130 — 3,130 Measurement period adjustment ( 2,210 ) — ( 2,210 ) Impairment losses — ( 23,624 ) ( 23,624 ) Balance as of December 31, 2024 Goodwill 920 23,624 24,544 Accumulated impairment losses — ( 23,624 ) ( 23,624 ) 920 — 920 Goodwill acquired during year — — — Impairment losses — — — Balance as of December 31, 2025 Goodwill 920 23,624 24,544 Accumulated impairment losses — ( 23,624 ) ( 23,624 ) $ 920 $ — $ 920 Intangible Assets — Intangible assets consist of customer relationships, trademark/trade name, favorable contracts acquired in connection with the acquisition of S ilvertip and AquaProp and internally developed software costs. In connection with the acquisition of Silvertip, we added intangible assets consisting of $ 46.5 million of customer relationships and $ 10.8 million of trademark/trade name. In connection with the acquisition of AquaProp, we added intangible assets consisting of $ 18.6 million of customer relationships, $ 1.3 million of trademark/trade name and $ 2.2 million of favorable contracts. Intangible assets are amortized on a basis that reflects the pattern in which the economic benefits of the intangible assets are realized on a straight‑line basis over the asset’s estimated useful life. No significant residual value is estimated for intangible assets. 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. The Company uses a discount rate based on its estimated incremental borrowing rate on a collateralized basis with similar terms and economic considerations as its lease payments at the lease commencement in determining the present value of lease payments. Lease terms may include options to renew the lease or purchase the underlying assets, however, the Company typically cannot determine its intent to renew the lease or purchase the assets with reasonable certainty at inception. The Company elected the short-term lease recognition practical expedient provided by 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. 69 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. 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. Under this method, deferred tax assets and liabilities are determined on the basis of differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. 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 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. 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 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 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. Total compensation cost is measured on the grant date or modification date, as applicable, using fair value estimates. Insurance Financing — The Company annually renews its commercial insurance policies, and may choose to either directly pay the insurance premium or finance a portion of the premium. If the Company finances a portion of the premium, a prepaid insurance asset is recorded and amortized monthly over the relevant period. Concentration of Credit Risk — The Company’s assets that are potentially subject to concentrations of credit risk are cash and cash equivalents and trade accounts receivable. Cash balances are maintained in financial institutions, which at times exceed federally insured limits. The Company monitors the financial condition of the financial institutions in which accounts are maintained and has not experienced any losses in such accounts. The receivables of the Company are with credible operators in the oil and natural gas industries. The Company performs ongoing evaluations as to the financial condition of its customers with respect to trade receivables. 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 70 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. 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. Variable Interest Entities — The Company may enter into strategic investments or other arrangements that are considered variable interests and such entities are considered variable interest entities (“VIE”). If the Company is the primary beneficiary of a VIE, it is required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates, at the inception of the Company’s involvement with a VIE and on an ongoing basis, whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The assessment of whether the Company is the primary beneficiary of its VIE investments requires significant assumptions and judgments. 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 — 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 In October 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. 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. ASU 2023-06 will become effective for each amendment on the effective date of the SEC's corresponding disclosure rule changes. We do not expect ASU 2023-06 to have a material impact on our consolidated financial statements . 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. 2024-03, Income Statement: Reporting Comprehensive Income: Expense Disaggregation Disclosures (Subtopic 220-40) , which requires public business entities to disclose, in the notes to financial statements, additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB issued ASU No. 2025-01, Clarifying the Effective Date, which revised the effective date of ASU No. 2024-03 for interim periods . The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently assessing the impact of ASU 2024-03 and ASU 2025-01 on our consolidated financial statements. 71 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. 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. 2025-06. 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. 2025-11. 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. 72 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. SUPPLEMENTAL CASH FLOWS INFORMATION (in thousands) Year Ended December 31, 2025 2024 2023 Supplemental cash flows disclosures 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 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 $ — Business acquisition deferred cash consideration included in other current liabilities $ — $ 3,664 $ — Business acquisition deferred cash consideration included in other long-term liabilities $ — $ — $ 3,180 Business acquisition contingent consideration included in other long-term liabilities $ — $ 10,900 $ — Note receivable from sale of business $ — $ 13,000 $ — 4. BUSINESS ACQUISITIONS AquaProp Acquisition On May 31, 2024, the Company completed 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. As a result of the acquisition, the Company expanded its operations into the wet sand service business unit. The following table summarizes the consideration transferred to AquaProp at the acquisition date: (in thousands) Fair value of purchase consideration: Cash $ 21,216 Deferred cash consideration 3,664 Contingent consideration 10,900 Total consideration $ 35,780 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 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. In the purchase agreement as a post-closing transaction, AquaProp's seller agreed to purchase and then sell to the Company, and the Company agreed to purchase from the seller, two additional equipment spreads within 90 days of the closing at a purchase price equal to cost plus a 50 % premium. The post-closing transaction was determined to be a transaction separate from the business combination, but the premium was determined to represent consideration transferred in the business combination as the above market terms of the arrangement would not have been agreed upon absent the business combination. 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 Company’s purchase of the additional equipment occurred in July 2024 and the purchases were accounted for as additions 73 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. BUSINESS ACQUISITIONS (Continued) 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. The additional post-closing transaction was determined to be a transaction separate from the business combination, but the Company recorded an intangible asset amounting to $ 0.3 million for the estimated fair value of the potential favorable pricing on such spreads as part of the consideration transferred in the business combination. This intangible asset is included within favorable contracts in the table below. The additional post-closing transaction for the Company’s purchase of the additional equipment will be accounted for as additions to property and equipment in our consolidated balance sheet and capital expenditures in our consolidated statement of cash flows. The acquisition of AquaProp also included a contingent consideration arrangement that requires additional consideration to be paid by the Company to the seller based on the amount of wet sand delivered during a 30-month period following the delivery of the first additional spread, attributable to the five additional equipment spreads described above. Amounts are payable under the earnout arrangement if the Company reaches certain delivery thresholds (in tons) of wet sand using the specific equipment provided by the seller or by other parties. The range of the undiscounted amounts the Company could be obligated to pay under the contingent consideration agreement is between $ 0 and $ 12.5 million. The fair value of the contingent consideration for the business combination recognized at the acquisition date of $ 10.9 million was estimated by applying the probability-weighted expected return method for the different scenarios that may occur based on 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. The fair value measurement of the contingent consideration is based on significant inputs not observable in the market, and thus represent Level 3 measurements. 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 $ 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 years ended December 31, 2025 and 2024. The following table summarizes the recognized amounts of identified assets, and liabilities assumed at the acquisition date: (in thousands) Recognized amounts of assets acquired and liabilities assumed: Cash $ 178 Accounts receivable 10,551 Property and equipment 13,468 Intangible assets: Trade name 1,300 Customer relationships 18,600 Favorable contracts 2,210 Accounts payable ( 1,423 ) Factored receivables ( 10,024 ) Total net assets acquired 34,860 Goodwill 920 Total consideration $ 35,780 The fair value of the assets acquired includes accounts receivable of $ 10.6 million. The gross amount due under contracts is $ 10.6 million, of which none is expected to be uncollectible. The Company did not acquire any other class of receivable as a result of the acquisition of AquaProp. 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 74 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. 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 . The favorable contracts were assigned a fair value of $ 2.2 million with zero residual value out of which $ 0.3 million will be amortized over thirty months and $ 1.9 million will be amortized over five years . The fair value of the trademark was estimated using the relief-from-royalty method, which calculates the hypothetical royalty fees that would be saved by owning an intangible asset rather than licensing it from another owner. This method forecasts revenue over the estimated useful life of the asset and then applies the following: a royalty rate based on comparable royalty and/or licensing transactions, income tax rate and discount rate, to calculate the discounted cash flows to arrive at the value of the trademark. Key assumptions include revenue forecasted at historical trends with a 0 % long-term growth rate, 1.0 % royalty rate, 21.6 % income tax rate and a 40.5 % discount rate. The fair value of the customer relationships was estimated using the multi-period excess earnings method. This method is a specific application of the discounted cash flow method, in which revenue derived from the intangible asset is estimated using total business revenue as a proxy and subsequently adjusted for attrition. Then deductions are made for business expenses and required returns attributable to other assets in the business. The excess earnings after these deductions are discounted to present value at an appropriate rate of return to arrive at the intangible asset value. Key assumptions include revenue forecasted at historical trends with a 0 % long-term growth rate, 20.0 % attrition rate, 21.6 % income tax rate and a 40.5 % discount rate. The fair value of the favorable contracts was estimated using a discounted cash flow analysis. Key assumptions include forecasted revenue based on a probability-weighting of the number of spreads that will be active with a 0 % long-term growth rate, 21.6 % income tax rate and a 35.0 % discount rate. The goodwill is attributable to the acquired workforce and significant synergies. Goodwill is assigned 100 % to the Hydraulic Fracturing operating segment of the Company. The goodwill recognized is deductible for income tax purposes. During the period from May 31, 2024, to December 31, 2024, the Company made measurement period adjustments to recognize favorable contracts intangible assets of $ 2.2 million and decrease goodwill by $ 2.2 million and to increase accounts payable acquired as part of the acquisition of AquaProp by $ 0.5 million to reflect facts and circumstances in existence as of the acquisition date. The adjustment to accounts payable decreased the deferred cash consideration payable to the seller. The acquired business generated revenues of $ 44.1 million and a net loss of $ 2.3 million for the period from May 31, 2024, to December 31, 2024. 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 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. (unaudited, in thousands) Year Ended December 31, 2024 2023 Revenue $ 1,486,776 $ 1,653,010 Net (loss) income ( 126,736 ) 91,508 The Company had material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net (loss) income. These adjustments included nonrecurring acquisition costs incurred in 2024 but have been adjusted to be reflected in 2023. These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of AquaProp to reflect the additional depreciation that would have been charged assuming the fair value adjustments to property and equipment had been applied from January 1, 2023, with the consequential tax effects. For the year ended December 31, 2024, the Company incurred acquisition-related costs of $ 1.5 million. 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 . 75 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. 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. Par Five Acquisition On December 1, 2023, the Company completed the acquisition of certain assets and certain liabilities of Par Five which provides cementing and remediation services across the Permian Basin in Texas and New Mexico. As a result of the acquisition, the Company expanded its operations in the cementing service business unit. The following table summarizes the consideration transferred to Par Five and the recognized amounts of identified assets acquired and liabilities assumed at the acquisition date: (in thousands) Total purchase consideration: Cash $ 22,215 Deferred cash payment 3,109 Total consideration $ 25,324 (in thousands) Recognized amounts of assets acquired and liabilities assumed: Accounts receivable $ 8,641 Inventory 321 Property, plant and equipment 17,175 Accrued liabilities ( 813 ) Total net assets acquired $ 25,324 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. The gross amount due under contracts is $ 8.6 million, of which none is expected to be uncollectible. The Company did not acquire any other class of receivable as a result of the acquisition of Par Five. The Company previously recognized a preliminary estimate of $ 8.7 million for accounts receivable acquired as part of the Par Five Acquisition. During the year ended December 31, 2024 , the Company made measurement period adjustments to net decrease accounts receivable by $ 0.1 million. These measurement period adjustments reflect facts and circumstances in existence as of the acquisition date. The cumulative impact of these adjustments was a decrease in deferred cash consideration payable. The acquired business contributed revenues of $ 4.9 million and net income of $ 1.2 million to the Company for the period from December 1, 2023, to December 31, 2023. The following combined supplemental unaudited pro forma information presents consolidated information of the Company as if the business combination had occurred on January 1, 2022. The supplemental pro forma information presented below is for illustrative purposes only and does not reflect future events that occurred after December 31, 2023, or any operating efficiencies or inefficiencies that may result from the Par Five Acquisition. The information is not necessarily indicative of results that would have been achieved had the Company controlled Par Five during the periods presented. (unaudited, in thousands) Year Ended December 31, 2023 Revenue $ 1,672,350 Net income 99,536 The Company had material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net income. These adjustments included nonrecurring acquisition costs incurred in 2023 but have been adjusted to be reflected in 2022. 76 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. BUSINESS ACQUISITIONS (Continued) 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. 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. 5. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches and establishes a hierarchy for inputs used in measuring fair value that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used, when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions other market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment. Level 2 — Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 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. 77 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. FAIR VALUE MEASUREMENTS (Continued) Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 are set forth below: (in thousands) Estimated fair value measurements Balance Quoted prices in active market (Level 1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) Total gains (losses) December 31, 2025: Business acquisition contingent consideration payable $ 3,400 $ — $ — $ 3,400 $ 4,900 December 31, 2024: Short-term investment $ 7,849 $ 7,849 $ — $ — $ 105 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. 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. 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 consolidated balance sheets. The fair value of the contingent consideration payable is remeasured at the end of each reporting period. 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. 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. Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future. 78 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. 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, 2025 Year Ended December 31, 2024 Business acquisition contingent consideration payable - opening balance $ 8,300 $ — Addition — 10,900 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 general and administrative expenses in our consolidated statement of operations. Assets Measured at Fair Value on a Nonrecurring Basis Assets measured at fair value on a nonrecurring basis are set forth below: (in thousands) Estimated fair value measurements Balance Quoted prices in active market (Level 1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) Total gains (losses) December 31, 2024: Implied fair value of wireline reporting unit goodwill (1) $ — $ — $ — $ — $ ( 23,624 ) November 1, 2024: Note receivable on sale of Vernal, Utah cementing business $ 13,000 $ — $ 13,000 $ — $ — September 30, 2024: Property and equipment, net $ 63,791 $ — $ — $ 63,791 $ ( 188,601 ) (1) The implied fair value of our wireline reporting unit was determined using Level 3 inputs and was $ 0 at December 31, 2024 (the measurement date) after full impairment. Certain assets and liabilities are measured at fair value on a nonrecurring basis. 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 FASB ASC Topic 805, Business Combinations (see “Note 4. Business Acquisitions”). The Company performed a fair value assessment of the $ 13.0 million promissory note obtained as consideration for the sale of its cementing business located in Vernal, Utah, to Big 4 on November 1, 2024 (the date of the transaction), and concluded that the fair value of the note receivable approximated its carrying value and no discount or premium adjustment was needed. 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. 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 79 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. FAIR VALUE MEASUREMENTS (Continued) 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. Our fair value estimates required us to use significant unobservable inputs, including assumptions related to replacement cost, among others. The fair value of approximately 95 % of our Tier II Units was estimated using the market approach and the remaining assets were valued using the cost approach. For assets valued using the market approach, we relied upon the direct match and comparable match methods of the market approach to value certain assets such as hydraulic fracturing pumps and their associated engines, transmissions, and power ends where significant market data was available and an active secondary market exists. Key assumptions include declining desirability for conventional diesel equipment due to emissions and fuel efficiency challenges based on research gathered from third party auctioneers. For assets valued using the cost approach, we estimated the current cost of reproducing a new replica of the asset being appraised using the same, or closely similar, materials for each asset or group of assets by using the indirect (trending) method of the cost approach. Allowances were made for physical deterioration as well as functional and economic obsolescence as appropriate. Key assumptions include forecasted use of Tier II Units. The carrying value of our Tier II Units as of September 30, 2024, prior to the impairment expense was approximately $ 252.4 million. 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. Our estimate of the reporting unit fair value is based on a combination of income and market approaches, Level 3 in the fair value hierarchy. 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. We used both the guideline public company method and the guideline transaction method under the market approach. Significant assumptions include projected revenue growth, capital expenditures, gross margins, discount rates, terminal growth rates, and weight allocation between income and market approaches. 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. 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. See “Note 2. Significant Accounting Policies” for a summary of goodwill by operating segment. 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: (in thousands) December 31, 2025 2024 Land $ 14,076 $ 14,076 Buildings 51,360 40,342 Equipment and vehicles 1,186,903 1,040,242 Leasehold improvements 6,309 6,949 Subtotal 1,258,648 1,101,609 Less accumulated depreciation ( 465,173 ) ( 413,384 ) Property and equipment — net $ 793,475 $ 688,225 80 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. PROPERTY AND EQUIPMENT (Continued) Depreciation consisted of the following: (in thousands) Year Ended December 31, 2025 2024 2023 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 ____________________ (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. Intangible Assets”). 7. INTANGIBLE ASSETS Intangible assets consist of trade mark/trade name, customer relationships and favorable contracts. Trademark/trade names are amortized on a straight‑line basis over useful l ives of ten and fifteen years . Customer relationships are amortized on a straight‑line basis over useful lives of six and ten years . Favorable contracts are amortized on a straight‑line basis over useful lives of thirty months and five years . Internally developed software 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: (in thousands) December 31, 2025 2024 Intangible assets acquired: Trademark/trade name $ 12,100 $ 12,100 Customer relationships 65,100 65,100 Favorable contracts 2,210 2,210 Internally developed software 81 60 Total intangible assets acquired 79,491 79,470 Accumulated amortization: Trademark/trade name ( 3,557 ) ( 2,390 ) Customer relationships ( 19,633 ) ( 11,883 ) Favorable contracts ( 792 ) ( 292 ) Amortization of Software ( 33 ) — Total accumulated amortization ( 24,015 ) ( 14,565 ) Intangible assets — net $ 55,476 $ 64,905 81 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. INTANGIBLE ASSETS (Continued) Estimated remaining amortization expense for each of the subsequent fiscal years is expected to be as follows: (in thousands) Year Estimated future amortization expense 2026 $ 9,441 2027 9,315 2028 9,301 2029 9,077 2030 7,108 2031 and beyond 11,234 Total $ 55,476 The average amortization period remaining is approximately 6.3 years. 8. INTERIM AND LONG‑TERM DEBT Asset-Based Loan Credit Facility 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 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 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. The weighted average annual interest rate for our ABL Credit Facility for the year ended December 31, 2025, was 6.29 % . The loan origination costs relating to the ABL Credit Facility are classified as an asset in our balance sheet. As of December 31, 2025, and 2024 , we had outstanding borrowings under our ABL Credit Facility of $ 45.0 million and $ 45.0 million , respectively. 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. Such 82 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. 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 Less: debt issuance costs, net of amortization ( 989 ) — Total debt, net of debt issuance costs 121,570 45,000 Less: interim debt (current), net of debt issuance costs ( 2,113 ) — Less: 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. 83 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9. ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consisted of the following: (in thousands) December 31, 2025 2024 Accrued and financed insurance $ 3,508 $ 5,140 Accrued payroll and related expenses 23,522 19,562 Deferred revenue (advances from customers) 8,104 11,823 Capital expenditure, taxes and other accruals 30,847 34,398 Total $ 65,981 $ 70,923 10. EMPLOYEE BENEFIT PLAN The Company has a 401(k) plan, modified effective January 1, 2019, and further modified effective April 1, 2022. The Company matches 100 % of the employee contributions up to 6 % of gross salary, up to the annual limit. The employees are fully vested in their contributions when made. Prior to the April 1, 2022, modification, the employees vested in the Company’s contributions to the 401(k) plan 25 % per year, beginning in the employee’s first year of service, with full vesting occurring after four years of service. Effective April 1, 2022, the Company allows for immediate vesting of the Company’s contributions. During the years ended December 31, 2025, 2024, and 2023, the recorded expense under the plan was $ 6.9 million, $ 6.8 million, and $ 5.9 million, respectively. 11. REPORTABLE SEGMENT INFORMATION 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 (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. On November 1, 2024, the Company sold its cementing business located in Vernal, Utah, to a business owned by a former employee as part of a strategic repositioning. 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. 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. 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 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. 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 84 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. 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. Even though the CEO has the authority to override the other members for strategic or other reasons, key decisions are made jointly by the CODM group. The following tables set forth certain financial information with respect to the Company’s reportable segments; intersegment revenues and cost of services are shown under “Reconciling Items” (in thousands): Hydraulic Fracturing Wireline Cementing Power Generation Reconciling Items Total Year ended December 31, 2025 Service revenue (1) $ 929,210 $ 209,034 $ 130,266 $ 1,538 $ ( 890 ) $ 1,269,158 Cost of service - labor $ 189,602 $ 54,134 $ 29,349 $ 2,817 $ — $ 275,902 Cost of service - expendables $ 137,925 $ 60,611 $ 62,011 $ 52 $ ( 857 ) $ 259,742 Cost of service - other direct costs $ 375,066 $ 41,727 $ 12,028 $ 3,743 $ ( 33 ) $ 432,531 General and administrative expenses excluding nonrecurring and non cash items for reportable segments $ 18,051 $ 10,999 $ 4,867 $ 6,506 $ — $ 40,423 Adjusted EBITDA for reportable segments $ 208,566 $ 41,563 $ 22,011 $ ( 11,580 ) $ — $ 260,560 Depreciation and amortization $ 143,785 $ 22,269 $ 8,098 $ 673 $ 71 $ 174,896 Capital expenditures incurred $ 69,149 $ 7,922 $ 5,752 $ 198,373 $ — $ 281,196 Goodwill $ 920 $ — $ — $ — $ — $ 920 Total assets (2) $ 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 Service revenue (1) $ 1,092,000 $ 203,182 $ 149,411 $ — $ ( 307 ) $ 1,444,286 Cost of service - labor $ 233,156 $ 53,609 $ 35,353 $ ( 6 ) $ — $ 322,112 Cost of service - expendables $ 149,809 $ 56,533 $ 67,986 $ — $ ( 307 ) $ 274,021 Cost of service - other direct costs $ 417,237 $ 37,983 $ 14,151 $ 10 $ — $ 469,381 General and administrative expenses excluding nonrecurring and non cash items for reportable segments $ 21,294 $ 11,200 $ 5,381 $ 366 $ — $ 38,241 Adjusted EBITDA for reportable segments $ 270,505 $ 43,857 $ 26,539 $ ( 370 ) $ — $ 340,531 Depreciation and amortization (3) $ 194,557 $ 20,633 $ 8,819 $ — $ 100 $ 224,109 Property and equipment impairment expense (4) $ 188,601 $ — $ — $ — $ — $ 188,601 Goodwill impairment expense (5) $ — $ 23,624 $ — $ — $ — $ 23,624 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 85 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. REPORTABLE SEGMENT INFORMATION (Continued) Hydraulic Fracturing Wireline Cementing Power Generation Reconciling Items Total Year ended December 31, 2023 Service revenue (1) $ 1,280,523 $ 229,599 $ 120,277 $ — $ — $ 1,630,399 Cost of service - labor $ 239,037 $ 58,212 $ 27,871 $ — $ — $ 325,120 Cost of service - expendables $ 258,004 $ 61,883 $ 52,008 $ — $ — $ 371,895 Cost of service - other direct costs $ 389,115 $ 35,262 $ 10,409 $ — $ — $ 434,786 General and administrative expenses excluding nonrecurring and non cash items for reportable segments $ 27,559 $ 12,311 $ 5,324 $ — $ — $ 45,194 Adjusted EBITDA for reportable segments $ 366,809 $ 61,930 $ 24,665 $ — $ — $ 453,404 Depreciation and amortization (3) $ 194,745 $ 18,762 $ 5,879 $ — $ 222 $ 219,608 Capital expenditures incurred $ 294,377 $ 12,203 $ 3,440 $ — $ — $ 310,020 Goodwill $ — $ 23,624 $ — $ — $ — $ 23,624 Total assets (2) $ 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. Revenue recognized at a point in time under our Hydraulic Fracturing reportable segment was $ 7.9 million, $ 14.8 million and $ 16.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. All revenue under our Wireline reportable segment is recognized over time. 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. In order to conform to current period presentation, we have reclassified the corresponding amounts of $ 12.4 million and $ 38.7 million from loss on disposal of assets to depreciation for the years ended December 31, 2024 and 2023, respectively. (4) Represents noncash property and equipment impairment expense on our Tier II Units. There was no property and equipment impairment expense for the years ended December 31, 2025 and 2023. (5) Represents noncash impairment of goodwill in our Wireline operating segment. There was no goodwill impairment expense during the years ended December 31, 2025 and 2023. 86 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. 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, 2025 2024 2023 Service Revenue Hydraulic Fracturing $ 929,210 $ 1,092,000 $ 1,280,523 Wireline 209,034 203,182 229,599 Cementing 130,266 149,411 120,277 Power Generation 1,538 — — Total service revenue for reportable segments 1,270,048 1,444,593 1,630,399 Elimination of intersegment service revenue ( 890 ) ( 307 ) — Total consolidated service revenue $ 1,269,158 $ 1,444,286 $ 1,630,399 Cost of Services Hydraulic Fracturing - labor $ 189,602 $ 233,156 $ 239,037 Hydraulic Fracturing - expendables 137,925 149,809 258,004 Hydraulic Fracturing - other direct costs 375,066 417,237 389,115 Wireline - labor 54,134 53,609 58,212 Wireline - expendables 60,611 56,533 61,883 Wireline - other direct costs 41,727 37,983 35,262 Cementing - labor 29,349 35,353 27,871 Cementing - expendables 62,011 67,986 52,008 Cementing - other direct costs 12,028 14,151 10,409 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 Elimination of intersegment cost of services ( 890 ) ( 307 ) — Total consolidated cost of services $ 968,175 $ 1,065,514 $ 1,131,801 General and Administrative Expenses Hydraulic Fracturing $ 18,051 $ 21,294 $ 27,559 Wireline 10,999 11,200 12,311 Cementing 4,867 5,381 5,324 Power Generation 6,506 366 — Total general and administrative expenses excluding nonrecurring and noncash items for reportable segments 40,423 38,241 45,194 Unallocated corporate administrative expenses 52,117 57,288 49,444 Stock-based compensation 16,946 17,288 14,450 Business acquisition contingent consideration adjustments ( 4,900 ) ( 2,600 ) — Other general and administrative expense 339 1,782 2,969 Retention bonus and severance expense 2,633 2,324 2,297 Total consolidated general and administrative expenses $ 107,558 $ 114,323 $ 114,354 87 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. REPORTABLE SEGMENT INFORMATION (Continued) Year Ended December 31, 2025 2024 2023 Adjusted EBITDA Hydraulic Fracturing $ 208,566 $ 270,505 $ 366,809 Wireline 41,563 43,857 61,930 Cementing 22,011 26,539 24,665 Power Generation ( 11,580 ) ( 370 ) — Total Adjusted EBITDA for reportable segments 260,560 340,531 453,404 Unallocated corporate administrative expenses ( 52,117 ) ( 57,288 ) ( 49,444 ) Depreciation and amortization (1) ( 174,896 ) ( 224,109 ) ( 219,608 ) Property and equipment impairment expense (2) — ( 188,601 ) — Goodwill impairment expense (3) — ( 23,624 ) — Interest expense ( 8,238 ) ( 7,815 ) ( 5,308 ) 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 ) Business acquisition contingent consideration adjustments 4,900 2,600 — Other income (expense), net (4) 9,709 5,531 ( 9,533 ) Other general and administrative expense (5) ( 339 ) ( 1,782 ) ( 2,969 ) Retention bonus and severance expense ( 2,633 ) ( 2,324 ) ( 2,297 ) Net income (loss) $ 824 $ ( 137,859 ) $ 85,634 Assets Hydraulic Fracturing $ 841,180 $ 961,485 $ 1,189,526 Wireline 162,225 156,349 198,957 Cementing 69,396 73,935 78,475 Power Generation 201,481 — — Total assets for reportable segments 1,274,282 1,191,769 1,466,958 Unallocated corporate assets 16,608 31,876 13,354 Total assets $ 1,290,890 $ 1,223,645 $ 1,480,312 (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. (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. (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: 88 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. REPORTABLE SEGMENT INFORMATION (Continued) Year Ended December 31, 2025 2024 2023 Customer A 24.9 % 19.7 % 18.2 % Customer B 13.7 % 2.5 % 0.0 % Customer C 12.1 % 10.6 % 9.6 % Customer D 11.2 % 14.9 % 6.2 % Customer E 0.0 % 6.6 % 19.7 % The above customers are third-party customers. Revenue from these customers was derived from our Hydraulic Fracturing, Wireline and Cementing segments. 12. 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) Year Ended December 31, 2025 2024 2023 Numerator (both basic and diluted) Net income (loss) relevant to common stockholders $ 824 $ ( 137,859 ) $ 85,634 Denominator Denominator for basic net income (loss) per share 103,838 105,469 113,004 Dilutive effect of stock options — — — Dilutive effect of performance stock units 502 — 42 Dilutive effect of restricted stock units 1,058 — 370 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 Stock options 164 179 286 Restricted stock units 14 1 82 Performance stock units 463 — 411 Total 641 180 779 89 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. SHARE REPURCHASE PROGRAM 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. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management's assessment of the intrinsic value of the Company's common stock, the market price of the Company's common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, and other considerations. 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 December 2026. The 1% U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations applies to our share repurchase program. All shares of common stock repurchased under the share repurchase program are canceled and retired upon repurchase. The Company accounts for the purchase price of repurchased shares of 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. Thereafter, any excess purchase price will be recorded as a reduction of retained earnings. 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. 14. STOCK‑BASED COMPENSATION Stock Option Plan In March 2013, we approved the Stock Option Plan of ProPetro Holding Corp. (the “Stock Option Plan”) pursuant to which our Board may grant stock options to our consultants, directors, executives and employees. No awards have been granted under the Stock Option Plan following our Initial Public Offering, and no further awards will be granted under the Stock Option Plan. As of December 31, 2025, there were no awards outstanding under the Stock Option Plan. 2017 Incentive Award Plan In March 2017, our shareholders approved the ProPetro Holding Corp. 2017 Incentive Award Plan (the “2017 Incentive Plan”) pursuant to which our Board was authorized to grant stock options, RSUs, PSUs, or other stock-based and cash awards to consultants, directors, executives and employees. The 2017 Incentive Plan originally authorized up to 5,800,000 shares of common stock to be issued with respect to awards granted pursuant to the plan. No awards have been granted under the 2017 Incentive Plan following approval of the 2020 Incentive Plan (as defined below), and no further awards will be granted under the 2017 Incentive Plan. 2020 Long Term Incentive Plan In October 2020, our shareholders approved the ProPetro Holding Corp. 2020 Long Term Incentive Plan (the “2020 Incentive Plan”) pursuant to which our Board may grant stock options, RSUs, PSUs, or other stock-based and cash awards to consultants, directors, executives and employees. The 2020 Incentive Plan authorized up to 4,650,000 shares of common stock to be issued under awards granted pursuant to the plan. The 2020 Incentive Plan became effective on October 22, 2020, and as of such date no further awards will be granted under the 2017 Incentive Plan. In May 2023, our stockholders approved the Amended and Restated ProPetro Holding Corp. 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.” 90 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. STOCK‑BASED COMPENSATION (Continued) Stock Options On March 16, 2017, we granted 793,738 stock option awards to certain key employees, officers and directors pursuant to the 2017 Incentive Plan which were scheduled to vest in four substantially equal annual installments, subject to a continuing service requirement. The contractual term for the options awarded is 10 years. The fair value of each stock option award granted was estimated on the date of grant using the Black-Scholes option-pricing model. There were no new stock option grants during the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025, there was no aggregate intrinsic value for our outstanding or exercisable stock options because the closing stock price as of December 31, 2025, was below the cost to exercise the options. No stock options were exercised during the year ended December 31, 2025. The weighted average remaining contractual term for the outstanding and exercisable stock options as of December 31, 2025, w as 1.2 years and 1.2 years, respec tively. A summary of the stock option activity during the year ended December 31, 2025, is presented below (in thousands, except for exercise price): Number of Shares Weighted Average Exercise Price Outstanding at January 1, 2025 179 $ 14.00 Granted — $ — Exercised — $ — Forfeited — $ — Expired ( 18 ) $ 14.00 Outstanding at December 31, 2025 161 $ 14.00 Exercisable at December 31, 2025 161 $ 14.00 Restricted Stock Units 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. Each RSU represents the right to receive one share of common stock. The grant date fair value of the RSUs is based on the closing share price of our common stock on the date of grant. 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. 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. 91 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. STOCK‑BASED COMPENSATION (Continued) The following table summarizes the RSUs activity during the year December 31, 2025 (in thousands, except for fair value): Number of Shares Weighted Average Grant Date Fair Value ("FV") Outstanding at January 1, 2025 3,001 $ 8.54 Granted 1,785 $ 7.31 Vested ( 1,573 ) $ 9.11 Forfeited ( 335 ) $ 7.76 Canceled — $ — Outstanding at December 31, 2025 2,878 $ 7.56 Performance Stock Units 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. 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. 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. The following table summarizes information about PSUs activity during the year ended December 31, 2025 (in thousands, except for fair value): Period Granted Target Shares Outstanding at January 1, 2025 Target Shares Granted Target Shares Vested Target Shares Forfeited Target Shares Outstanding at December 31, 2025 2022 301 — ( 220 ) ( 81 ) — 2023 431 — — ( 68 ) 363 2024 633 — — ( 105 ) 528 2025 — 950 — ( 3 ) 947 Total 1,365 950 ( 220 ) ( 257 ) 1,838 Weighted Average Fair Value Per Share $ 12.77 $ 9.76 $ 19.99 $ 13.59 $ 10.24 The total stock compensation expense for the years ended December 31, 2025, 2024 and 2023 for all stock awards was approximately $ 16.9 million , $ 17.3 million and $ 14.5 million, respectively, and the associated tax benefit related thereto was $ 3.6 million, $ 3.6 million and $ 3.0 million, respectively. 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. 92 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. INCOME TAXES The components of the provision for income taxes are as follows: (in thousands) Year Ended December 31, 2025 2024 2023 Federal: Current $ 2,530 $ 836 $ — Deferred 1,915 ( 33,756 ) 28,109 4,445 ( 32,920 ) 28,109 State: Current 804 1,115 2,028 Deferred 1,748 420 ( 269 ) 2,552 1,535 1,759 Total income tax (benefit) expense $ 6,997 $ ( 31,385 ) $ 29,868 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 U.S. federal statutory tax rate $ 1,642 21.0 % State and local income tax, net of federal (national) income tax effect (1) 2,044 26.2 % 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, 2024 2023 Taxes at federal statutory rate $ ( 35,541 ) $ 24,256 State taxes, net of federal benefit 1,194 2,092 Section 162(m) limitation 534 2,089 Stock-based compensation 2,168 1,718 Valuation allowance — ( 780 ) Other 260 493 Total income tax (benefit) expense $ ( 31,385 ) $ 29,868 93 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. 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 Texas 678 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: (in thousands) December 31, 2025 2024 Deferred income tax assets: Accrued liabilities $ 3,629 $ 3,291 Allowance for credit losses — — Goodwill and other intangible assets 5,894 6,718 Stock‑based compensation 1,465 2,083 Net operating losses 30,423 40,546 Lease liabilities 17,019 20,940 Other 21 877 Total deferred income tax assets 58,451 74,455 Valuation allowance ( 1,450 ) ( 577 ) Total deferred income tax assets — net $ 57,001 $ 73,878 Deferred income tax liabilities: Property and equipment ( 101,267 ) ( 110,856 ) Prepaid expenses ( 2,219 ) ( 1,691 ) Right-of-use assets ( 16,948 ) ( 21,101 ) Total deferred income tax liabilities ( 120,434 ) ( 133,648 ) Net deferred income tax liabilities $ ( 63,433 ) $ ( 59,770 ) On July 4, 2025, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 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. federal NOLs, all of which will have an unlimited carryforward. 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. The Company’s 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. 94 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. INCOME TAXES (Continued) 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 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. 16. RELATED-PARTY TRANSACTIONS Operations and Maintenance Yards 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. ExxonMobil and Pioneer On December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property from the Pioneer Pressure Pumping Acquisition. In connection with the Pioneer Pressure Pumping Acquisition, Pioneer received 16.6 million shares of our common stock and approximately $ 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. 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, 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. 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. 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 . 95 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16. RELATED-PARTY TRANSACTIONS (Continued) Big 4 and Former Employee On November 1, 2024, we sold our cementing business located in Vernal, Utah, to Big 4 which is 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 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. 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 $ 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. 17. LEASES 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 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 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. 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. Further, our Electric Fleet Leases have options to purchase the underlying equipment at the end of their initial term of approximately three years or at the end of each renewal period. However, in management's judgment the exercise of neither the renewal options nor the purchase options are reasonably assured for any lease. 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 spaces are included in our Wireline and Power Generation reportable segments and our corporate administrative function. December 31, (in thousands) 2025 2024 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 Description of Lease We have a three-year equipment lease contract (the “Power Equipment Lease”) for certain power generation equipmen t. In addition t o the contractual lease period, the contract includes an optional renewal for one year , and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change. The right-of-use assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. We accounted for the Power Equipment Lease as a finance lease. 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. 96 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. LEASES (Continued) December 31, (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 Lease Costs The components of lease costs are as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Operating lease cost $ 63,674 $ 48,759 $ 6,636 Finance lease cost: Amortization of right-of-use assets 18,526 18,966 5,163 Interest on lease liabilities 1,620 2,892 1,014 Total finance lease cost 20,146 21,858 6,177 Variable lease cost 4,802 3,950 144 Short-term lease cost 589 833 830 Short-Term Leases 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 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 Supplemental cash flow information related to leases are as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Cash paid for amounts included in the measurements of lease liabilities: Operating cash flows from operating leases $ 46,156 $ 34,688 $ 4,573 Operating cash flows from finance lease 1,620 2,892 1,014 Financing cash flows from finance lease 18,513 17,676 4,663 Noncash lease obligations arising from obtaining right-of-use assets related to: Operating leases (1) 25,970 70,856 56,108 Finance lease (2) — 2,230 52,612 (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 97 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. 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: December 31, 2025 2024 2023 Weighted average remaining lease term: 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: Operating leases 6.6 % 7.0 % 7.1 % Finance leases 7.3 % 7.3 % 7.3 % The discount rates used for our operating and finance leases are determined based on the weighted average annual interest rate on our ABL Credit Facility effective at the time of inception or modification of each lease. Maturity Analysis of Lease Liabilities The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for operating leases as of December 31, 2025 are as follows: (in thousands) Operating Leases Finance Leases 2026 $ 47,426 $ 12,767 2027 23,545 — 2028 12,122 — 2029 1,150 — 2030 741 — Total undiscounted future lease payments 84,984 12,767 Amount representing interest ( 5,771 ) ( 325 ) 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 98 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. 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. 18. COMMITMENTS AND CONTINGENCIES Commitments We entered into certain commitments for fixed assets, consumables and services incidental to the ordinary conduct of our business, generally for quantities required for our operations and at competitive market prices. These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements. 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. See “Note 8. 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, 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 . We also entered into the Power Equipment Lease. 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. The agreements with the Sand Suppliers require that the Company purchase a minimum volume of sand, based primarily on a certain percentage of our sand requirements from our customers or in certain situations based on predetermined fixed minimum volumes, otherwise certain penalties (shortfall fees) may be charged. 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 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. 99 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18. COMMITMENTS AND CONTINGENCIES (Continued) Contingent Liabilities Legal Matters We have been named in various claims, lawsuits or threatened actions in the ordinary course of our business. We intend to defend these matters vigorously; however, litigation is inherently unpredictable, and the ultimate outcome or effect of any claim, lawsuit or action cannot be predicted with certainty. As a result, there can be no assurance as to the ultimate outcome of any litigation matter. Any claims against us, whether meritorious or not, could cause us to incur significant costs and expenses and require significant amounts of management and operational time and resources. With respect to each matter or exposure, we have made an assessment, in accordance with GAAP, of the probability that the resolution of the matter would ultimately result in a loss. When we determine that an unfavorable resolution of a matter is probable and such amount of loss can be estimated, we record a liability at the time that both of these criteria are met. Our management believes that we have recorded adequate accruals for any liabilities that may reasonably be expected to result from these matters. In the opinion of our management, no pending or known threatened claims, actions or proceedings against us are expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. Environmental and Equipment Insurance The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. The Company cannot predict the future impact of such standards and requirements, which are subject to change and can have retroactive effectiveness. The Company continues to monitor the status of these laws and regulations. Currently, the Company has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of the Company's business, material costs could be incurred in the near term to maintain compliance. 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. 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, 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, 2025, the audit was nearing completion and the Company accrued an estimated settlement expense of $ 0.8 million . 19. VARIABLE INTEREST ENTITY A VIE is an entity with any of the following characteristics: (i) the entity does not have enough equity to finance its activities without additional financial support, (ii) the equity holders, as a group, lack the characteristics of a controlling financial interest or (iii) the entity is structured with non-substantive voting rights. Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any. The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. On November 1, 2024, we sold our cementing business located in Vernal, Utah, to a Big 4, which is 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 was secured by substantially all assets of Big 4 and the former employee’s ownership interests in and distributions from the entity. 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. 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 100 PROPETRO HOLDING CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 19. 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 did not have any control over such activities. Such power is held by Big 4’s sole owner. 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 as of December 31, 2024, under other current assets and other noncurrent assets, respectively. 20. 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 . 101 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.