| Business Segments |
16. BUSINESS SEGMENTS
The Company's segments are determined as those operations whose results are reviewed regularly by the chief operating decision maker ("CODM"), who is our Executive Chairman, in deciding how to allocate resources and assess performance. Our CODM manages our business segments primarily by the type of product or services provided. We have four reportable segments which we operate within the United States of America: Stimulation Services, Proppant Production, Manufacturing and Flotek. Amounts in the other category reflect our business activities that are not separately reportable, which includes Livewire Power, LLC (“Livewire”), which we launched in the fourth quarter of 2024. Livewire enables onsite power generation services for oilfield and non-oilfield customers that require off-grid power solutions. In 2025 our Flotek operating segment was identified as a reportable segment due to the quantitative thresholds for reportable segments. Prior-period segment information has been recast to conform to the current presentation.
The CODM assesses the performance of the segments based on segment adjusted EBITDA, which is defined as our net income (loss) before (i) interest expense, net, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) (loss) gain on disposal of assets, net, (v) stock-based compensation, and (vi) other charges, such as certain credit losses, gain (loss) on extinguishment of debt, gain (loss) on investments, acquisition and integration expenses, litigation expenses and accruals for legal contingencies, acquisition earnout adjustments, severance charges, goodwill impairments, gains on insurance recoveries, transaction costs, third-party supply commitment charges, lease termination costs and impairments of long-lived assets.
We account for intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices.
Summarized financial information for our reportable segments is as follows:
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|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
Stimulation Services |
|
|
Proppant Production |
|
|
Manufacturing |
|
|
Flotek |
|
|
Other |
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Eliminations |
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Total |
|
Year Ended December 31, 2025: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers — services |
|
$ |
1,681.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
10.8 |
|
|
$ |
1,692.7 |
|
External customers — product sales (1) |
|
|
— |
|
|
|
121.2 |
|
|
|
37.5 |
|
|
|
90.4 |
|
|
|
— |
|
|
|
— |
|
|
|
249.1 |
|
Intercompany (2) |
|
|
1.1 |
|
|
|
214.8 |
|
|
|
174.8 |
|
|
|
153.2 |
|
|
|
17.2 |
|
|
|
(561.1 |
) |
|
|
— |
|
Total Revenue |
|
$ |
1,682.9 |
|
|
$ |
336.0 |
|
|
$ |
212.3 |
|
|
$ |
243.6 |
|
|
$ |
17.3 |
|
|
$ |
(550.3 |
) |
|
$ |
1,941.8 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization |
|
|
1,368.1 |
|
|
|
259.3 |
|
|
|
174.1 |
|
|
|
174.8 |
|
|
|
16.6 |
|
|
|
(538.3 |
) |
|
|
1,454.6 |
|
Selling, general and administrative, excluding stock-based compensation |
|
|
108.9 |
|
|
|
19.7 |
|
|
|
19.7 |
|
|
|
30.9 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
180.1 |
|
Other expense (income) |
|
|
(2.6 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3.0 |
) |
Adjusted EBITDA (3) |
|
$ |
208.5 |
|
|
$ |
57.1 |
|
|
$ |
18.5 |
|
|
$ |
38.2 |
|
|
$ |
(0.2 |
) |
|
$ |
(12.0 |
) |
|
$ |
310.1 |
|
Depreciation, depletion and amortization |
|
|
321.5 |
|
|
|
76.6 |
|
|
|
15.3 |
|
|
|
3.5 |
|
|
|
1.8 |
|
|
|
(2.4 |
) |
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|
416.3 |
|
Investment in property, plant & equipment |
|
|
144.7 |
|
|
|
23.3 |
|
|
|
1.9 |
|
|
|
8.9 |
|
|
|
3.0 |
|
|
|
(11.9 |
) |
|
|
169.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
As of December 31, 2025: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash and cash equivalents |
|
$ |
14.0 |
|
|
$ |
1.1 |
|
|
$ |
2.1 |
|
|
$ |
5.7 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22.9 |
|
Total current assets |
|
|
403.1 |
|
|
|
78.5 |
|
|
|
315.7 |
|
|
|
110.4 |
|
|
|
3.5 |
|
|
|
(427.7 |
) |
|
|
483.5 |
|
Property, plant, and equipment, net (4) |
|
|
669.4 |
|
|
|
725.6 |
|
|
|
42.7 |
|
|
|
29.6 |
|
|
|
10.4 |
|
|
|
(13.4 |
) |
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|
1,464.3 |
|
Total assets |
|
|
2,795.6 |
|
|
|
1,115.8 |
|
|
|
455.8 |
|
|
|
266.2 |
|
|
|
37.0 |
|
|
|
(2,097.3 |
) |
|
|
2,573.1 |
|
Current portion of long-term debt |
|
|
94.1 |
|
|
|
48.5 |
|
|
|
3.6 |
|
|
|
3.5 |
|
|
|
— |
|
|
|
— |
|
|
|
149.7 |
|
Long-term debt |
|
|
554.8 |
|
|
|
266.4 |
|
|
|
14.6 |
|
|
|
39.8 |
|
|
|
— |
|
|
|
— |
|
|
|
875.6 |
|
Total liabilities |
|
|
1,855.2 |
|
|
|
425.2 |
|
|
|
378.0 |
|
|
|
114.2 |
|
|
|
41.9 |
|
|
|
(1,122.1 |
) |
|
|
1,692.4 |
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Stimulation Services |
|
|
Proppant Production |
|
|
Manufacturing |
|
|
Flotek |
|
|
Other |
|
|
Eliminations |
|
|
Total |
|
Year Ended December 31, 2024: |
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Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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External customers — services |
|
$ |
1,886.7 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,886.7 |
|
External customers — product sales (1) |
|
|
— |
|
|
|
181.5 |
|
|
|
50.8 |
|
|
|
71.3 |
|
|
|
0.6 |
|
|
|
— |
|
|
|
304.2 |
|
Intercompany (2) |
|
|
27.7 |
|
|
|
65.0 |
|
|
|
172.0 |
|
|
|
121.1 |
|
|
|
2.5 |
|
|
|
(388.3 |
) |
|
|
— |
|
Total Revenue |
|
$ |
1,914.4 |
|
|
$ |
246.5 |
|
|
$ |
222.8 |
|
|
$ |
192.4 |
|
|
$ |
3.1 |
|
|
$ |
(388.3 |
) |
|
$ |
2,190.9 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization |
|
|
1,394.8 |
|
|
|
137.6 |
|
|
|
190.5 |
|
|
|
147.5 |
|
|
|
5.0 |
|
|
|
(380.3 |
) |
|
|
1,495.1 |
|
Selling, general and administrative, excluding stock-based compensation |
|
|
123.6 |
|
|
|
23.3 |
|
|
|
24.6 |
|
|
|
24.8 |
|
|
|
1.0 |
|
|
|
— |
|
|
|
197.3 |
|
Other expense (income) |
|
|
(2.7 |
) |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2.6 |
) |
Adjusted EBITDA (3) |
|
$ |
398.7 |
|
|
$ |
85.6 |
|
|
$ |
7.6 |
|
|
$ |
20.1 |
|
|
$ |
(2.9 |
) |
|
$ |
(8.0 |
) |
|
$ |
501.1 |
|
Depreciation, depletion and amortization |
|
|
348.5 |
|
|
|
77.8 |
|
|
|
13.8 |
|
|
|
2.8 |
|
|
|
— |
|
|
|
(0.7 |
) |
|
$ |
442.2 |
|
Investment in property, plant & equipment |
|
|
216.8 |
|
|
|
23.5 |
|
|
|
8.6 |
|
|
|
1.6 |
|
|
|
9.2 |
|
|
|
(4.7 |
) |
|
$ |
255.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
8.7 |
|
|
$ |
— |
|
|
$ |
1.7 |
|
|
$ |
4.4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14.8 |
|
Total current assets |
|
|
466.9 |
|
|
|
71.4 |
|
|
|
255.3 |
|
|
|
89.9 |
|
|
|
5.4 |
|
|
|
(314.8 |
) |
|
|
574.1 |
|
Property, plant, and equipment, net (4) |
|
|
839.3 |
|
|
|
817.6 |
|
|
|
82.5 |
|
|
|
16.7 |
|
|
|
9.2 |
|
|
|
(4.1 |
) |
|
|
1,761.2 |
|
Total assets |
|
|
2,911.3 |
|
|
|
929.5 |
|
|
|
443.2 |
|
|
|
204.7 |
|
|
|
44.9 |
|
|
|
(1,545.5 |
) |
|
|
2,988.1 |
|
Current portion of long-term debt |
|
|
87.5 |
|
|
|
65.5 |
|
|
|
6.8 |
|
|
|
4.8 |
|
|
|
— |
|
|
|
— |
|
|
|
164.6 |
|
Long-term debt |
|
|
649.1 |
|
|
|
278.0 |
|
|
|
17.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
944.4 |
|
Total liabilities |
|
|
1,891.4 |
|
|
|
124.2 |
|
|
|
360.7 |
|
|
|
56.2 |
|
|
|
47.7 |
|
|
|
(631.7 |
) |
|
|
1,848.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers — services |
|
$ |
2,274.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,274.2 |
|
External customers — product sales (1) |
|
|
— |
|
|
|
270.2 |
|
|
|
19.0 |
|
|
|
66.6 |
|
|
|
— |
|
|
|
— |
|
|
|
355.8 |
|
Intercompany (2) |
|
|
17.0 |
|
|
|
113.1 |
|
|
|
157.1 |
|
|
|
126.4 |
|
|
|
— |
|
|
|
(413.6 |
) |
|
|
— |
|
Total Revenue |
|
$ |
2,291.2 |
|
|
$ |
383.3 |
|
|
$ |
176.1 |
|
|
$ |
193.0 |
|
|
$ |
— |
|
|
$ |
(413.6 |
) |
|
$ |
2,630.0 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization |
|
|
1,668.9 |
|
|
|
171.6 |
|
|
|
147.0 |
|
|
|
166.2 |
|
|
|
— |
|
|
|
(413.6 |
) |
|
|
1,740.1 |
|
Selling, general and administrative, excluding stock-based compensation |
|
|
147.0 |
|
|
|
13.8 |
|
|
|
14.6 |
|
|
|
28.4 |
|
|
|
— |
|
|
|
— |
|
|
|
203.8 |
|
Other expense (income) |
|
|
(2.1 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2.3 |
) |
Adjusted EBITDA (3) |
|
$ |
477.4 |
|
|
$ |
198.1 |
|
|
$ |
14.5 |
|
|
$ |
(1.6 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
688.4 |
|
Depreciation, depletion and amortization |
|
|
363.0 |
|
|
|
68.1 |
|
|
|
4.2 |
|
|
|
3.1 |
|
|
|
— |
|
|
|
— |
|
|
$ |
438.4 |
|
Investment in property, plant & equipment |
|
|
221.8 |
|
|
|
40.9 |
|
|
|
3.3 |
|
|
|
1.0 |
|
|
|
— |
|
|
|
— |
|
|
$ |
267.0 |
|
(1)
Our Proppant Production segment recognized noncash revenue associated with acquired contract liabilities of $7.6 million, $43.7 million and $57.5 million in 2025, 2024 and 2023, respectively.
(2)
Flotek recorded $27.4 million. $32.5 million and $20.1 million of revenue in 2025, 2024 and 2023, respectively, related to contract shortfalls because the Stimulation Services segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(3)
Adjusted EBITDA for the stimulated services segment included an intercompany supply commitment charge of $27.4 million, $32.5 million and $20.1 million in 2025, 2024 and 2023, respectively, because this segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(4)
In April 2025, Flotek acquired certain gas conditioning equipment from our Stimulation Services segment for total consideration of $107.5 million and our Stimulation Services segment leased these assets back from Flotek for a six year term. We believe this Flotek partnership provides ownership exposure to a highly-scalable gas quality and asset integrity business. The effects of this sale-leaseback transaction have been eliminated from our consolidated financial statements.
The following table reconciles consolidated Adjusted EBITDA to net income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
Adjusted EBITDA of reportable segments |
|
$ |
310.1 |
|
|
$ |
501.1 |
|
|
$ |
688.4 |
|
Interest expense, net |
|
|
(138.8 |
) |
|
|
(156.6 |
) |
|
|
(154.9 |
) |
Depreciation, depletion and amortization |
|
|
(416.3 |
) |
|
|
(442.2 |
) |
|
|
(438.4 |
) |
Income tax benefit (expense) |
|
|
12.9 |
|
|
|
7.0 |
|
|
|
(1.2 |
) |
Gain (loss) on disposal of assets, net |
|
|
(18.1 |
) |
|
|
(0.3 |
) |
|
|
1.7 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
(0.8 |
) |
|
|
(33.5 |
) |
Acquisition earnout adjustment |
|
|
— |
|
|
|
— |
|
|
|
6.6 |
|
Provision for credit losses, net of recoveries |
|
|
(13.7 |
) |
|
|
— |
|
|
|
(0.1 |
) |
Stock-based compensation (1) |
|
|
(10.4 |
) |
|
|
(7.3 |
) |
|
|
(10.1 |
) |
Stock-based compensation related to deemed contributions (1) |
|
|
— |
|
|
|
— |
|
|
|
(19.7 |
) |
Lease termination |
|
|
(1.1 |
) |
|
|
— |
|
|
|
— |
|
Transaction costs |
|
|
(8.0 |
) |
|
|
(3.9 |
) |
|
|
— |
|
Severance charges |
|
|
(0.4 |
) |
|
|
(2.5 |
) |
|
|
(1.1 |
) |
Acquisition and integration costs |
|
|
(0.2 |
) |
|
|
(7.8 |
) |
|
|
(21.8 |
) |
Supply commitment charges |
|
|
— |
|
|
|
(9.6 |
) |
|
|
— |
|
Impairment of long-lived assets and goodwill |
|
|
(52.6 |
) |
|
|
(74.5 |
) |
|
|
(2.5 |
) |
Inventory write-down |
|
|
(0.8 |
) |
|
|
— |
|
|
|
— |
|
Gain (loss) on insurance recoveries |
|
|
(0.3 |
) |
|
|
4.9 |
|
|
|
— |
|
Litigation expenses and accruals for legal contingencies |
|
|
(11.0 |
) |
|
|
(15.7 |
) |
|
|
(34.1 |
) |
Gain (loss) on investments, net |
|
|
(6.8 |
) |
|
|
0.4 |
|
|
|
(38.5 |
) |
Net loss |
|
$ |
(355.5 |
) |
|
$ |
(207.8 |
) |
|
$ |
(59.2 |
) |
(1)
Stock-based compensation and stock-based compensation related to deemed contributions are reported in “Selling, general and administrative” in the consolidated statements of operations and are not allocated to the segments.
|