ProFrac Holding Corp. is a leading manufacturer of hydraulic fracturing equipment serving the global oil and gas industry with a focus on North American and Australian markets.
Despite recent earnings misses, ACDC's robust operating cash flow of $367.3M demonstrates its ability to generate liquidity independent of accounting net income. The company has maintained a strong balance sheet with $1.24B in paid-in capital and is positioned to capitalize on the cyclical recovery of North American energy production. Investors may view current valuations as attractive given the potential for margin expansion as the oil patch recovers from recent downturns.
The sharp deterioration in profitability, with net income dropping to $-207.8M and revenue falling 20% year-over-year, raises concerns about demand destruction in the energy sector. The company carries a heavy debt burden of $1.19B in long-term liabilities against only $14.8M in ending cash, creating a precarious liquidity situation if oil prices remain depressed. Persistent losses and high capital expenditures without corresponding revenue growth suggest the business model is currently unable to sustain itself under current market conditions.
ProFrac Holding Corp. (ACDC) designs, manufactures, and sells hydraulic fracturing equipment to the oil and gas industry. Operating primarily in the United States, Canada, and Australia, the company provides critical wellhead systems and pressure control equipment essential for safe and efficient energy extraction. With total revenue of $2.19B and significant capital expenditures of $255M, ACDC serves clients across major North American shale basins.
Management is navigating a challenging period where revenue contracted to $2.19B from $2.63B in 2023, resulting in a significant net loss of $-207.8M. Despite generating strong operating cash flow of $367.3M, the company utilized this liquidity heavily for investing activities of $-372.3M and managing debt obligations including revolver repayments. The decline in profit from continuing operations highlights the impact of potential inventory adjustments or one-time restructuring costs associated with their capital-intensive expansion.
The global hydraulic fracturing equipment industry is highly cyclical and tightly correlated with upstream oil and gas production volumes in North America and Australia. Market participants face intense competition but must maintain rigorous safety standards, creating barriers to entry that favor established players like ProFrac. Recent trends show revenue contraction as drilling activity slows, leading to reduced capital spending by energy companies.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $2.43B | $2.63B | $2.19B |
| Cost of Revenue | $2.43B | $1.71B | $1.50B |
| Gross Profit | $0 | $924.8M | $695.8M |
| Operating Expenses | $-412.4M | $758.2M | $756.2M |
| Operating Income | $412.4M | $166.6M | $-60.4M |
| G&A | $243.1M | $268.5M | $204.6M |
| Stock-Based Comp | $67.4M | $29.8M | $7.3M |
| D&A | $267.3M | $438.4M | $442.2M |
| Amortization | $5.6M | $35.2M | $36.3M |
| Other OpEx | $-655.5M | $489.7M | $551.6M |
| Non-Operating Income | $-60.6M | $-224.6M | $-154.4M |
| Interest Expense | $59.5M | $154.9M | $156.6M |
| Pre-Tax Income | $351.8M | $-58.0M | $-214.8M |
| Income Tax | $9.1M | $1.2M | $-7.0M |
| Continuing Ops | $342.7M | $-59.2M | $-207.8M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $342.7M | $-59.2M | $-207.8M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $342.7M | $-59.2M | $-207.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $865.4M | $638.1M | $574.1M |
| Cash & Equivalents | $35.1M | $25.3M | $14.8M |
| Accounts Receivable | $535.5M | $346.1M | $312.7M |
| Inventory | $249.5M | $236.6M | $201.1M |
| Prepaid Expenses | $43.2M | $23.3M | $29.4M |
| Other Current Assets | $2.1M | $6.8M | $16.1M |
| Long-Term Assets | $2.07B | $2.43B | $2.41B |
| PP&E (Net) | $1.40B | $1.78B | $1.76B |
| Intangibles | $203.1M | $173.5M | $148.9M |
| Goodwill | $240.5M | $325.9M | $302.0M |
| Operating Leases | $112.9M | $87.2M | $158.6M |
| LT Investments | $58.6M | $28.9M | $7.5M |
| Other LT Assets | $56.7M | $38.1M | $35.8M |
| Total Assets | $2.93B | $3.07B | $2.99B |
| Current Liabilities | $668.1M | $648.9M | $660.0M |
| Accounts Payable | $339.4M | $319.0M | $324.3M |
| Current Debt | $127.6M | $126.4M | $164.6M |
| Current Leases | $36.0M | $24.5M | $26.0M |
| Deferred Revenue | — | $7.3M | $7.4M |
| Taxes Payable | $700.0K | $1.5M | $1.9M |
| Other Current Liab | $49.0M | $104.6M | $68.6M |
| Long-Term Liabilities | $914.8M | $1.09B | $1.19B |
| Long-Term Debt | $797.8M | $942.1M | $944.4M |
| LT Operating Leases | $81.0M | $67.8M | $137.1M |
| Other LT Liab | $36.0M | $83.3M | $107.0M |
| Total Liabilities | $1.58B | $1.74B | $1.85B |
| Shareholders' Equity | $1.35B | $1.33B | $1.14B |
| Paid-In Capital | — | $1.23B | $1.24B |
| Retained Earnings | $-1.19B | $-16.0M | $-235.9M |
| Total L&E | $2.93B | $3.07B | $2.99B |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $342.7M | $-59.2M | $-207.8M |
| Non-Cash Adjustments | $-326.2M | $983.5M | $723.2M |
| Working Capital Changes | $398.7M | $-370.8M | $-148.1M |
| Cash from Operations | $415.2M | $553.5M | $367.3M |
| Capital Expenditures | $356.2M | $267.0M | $255.0M |
| Cash from Investing | $-1.03B | $-715.8M | $-372.3M |
| Debt Issuances | $818.9M | $1.22B | $136.7M |
| Debt Repayments | $531.7M | $946.7M | $157.2M |
| Cash from Financing | $645.9M | $149.7M | $-5.5M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $32.5M | $-12.6M | $-10.5M |
| Beginning Cash | $5.4M | $37.9M | $25.3M |
| Ending Cash | $37.9M | $25.3M | $14.8M |
The company's revenue is driven by sales of wellhead systems, pressure control equipment, and related services to major oilfield service providers and energy companies. Financials indicate heavy investment in capital expenditures ($255M) relative to cost of revenue ($1.50B), suggesting a capital-intensive manufacturing model focused on high-value industrial machinery rather than diversified product lines.
The company faces significant volatility due to fluctuations in oil and gas commodity prices which directly impact customer spending on capital projects. ACDC reported a substantial net loss of $-207.8M and a negative operating profit of $-60.4M, indicating potential liquidity pressures or high legacy costs. High debt levels, including $944.4M in long-term debt and $164.6M in current portion, combined with recent revolver activity, pose refinancing risks if credit markets tighten.
ACDC leverages deep technical expertise in hydraulic systems to offer proprietary equipment that ensures operational safety and efficiency in demanding oilfield environments. The company benefits from strong relationships with major energy clients, evidenced by its ability to manage a $1.50B cost of revenue base. Its global footprint across the US, Canada, and Australia provides geographic diversification within the North American-centric energy sector.
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.