| Business Segments |
12. 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 and Chief Executive Officer, 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”). Livewire enables onsite power generation services for oilfield and non-oilfield customers that require off-grid power solutions.
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) acquisition and integration expenses, (v) other operating expense, net, (vi) stock-based compensation, and (vii) other charges, such as gain (loss) on extinguishment of debt, gain (loss) on investments, goodwill impairments, 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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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stimulation Services |
|
|
Proppant Production |
|
|
Manufacturing |
|
|
Flotek |
|
|
Total Reportable Segments |
|
Three Months Ended September 30, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers |
|
$ |
421.3 |
|
|
$ |
21.5 |
|
|
$ |
8.9 |
|
|
$ |
56.9 |
|
|
$ |
508.6 |
|
Intersegment revenues (1) |
|
|
— |
|
|
|
79.5 |
|
|
|
44.5 |
|
|
|
59.8 |
|
|
|
183.8 |
|
Total segment revenue |
|
$ |
421.3 |
|
|
$ |
101.0 |
|
|
$ |
53.4 |
|
|
$ |
116.7 |
|
|
$ |
692.4 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization (2) |
|
|
358.8 |
|
|
|
92.9 |
|
|
|
44.8 |
|
|
|
86.1 |
|
|
|
|
Selling, general and administrative, excluding stock-based compensation |
|
|
25.4 |
|
|
|
5.7 |
|
|
|
3.0 |
|
|
|
8.8 |
|
|
|
|
Other income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
Segment adjusted EBITDA |
|
$ |
37.1 |
|
|
$ |
2.4 |
|
|
$ |
5.6 |
|
|
$ |
21.8 |
|
|
$ |
66.9 |
|
Depreciation, depletion and amortization |
|
|
75.4 |
|
|
|
18.3 |
|
|
|
2.7 |
|
|
|
0.9 |
|
|
|
97.3 |
|
Investment in property, plant & equipment |
|
|
34.1 |
|
|
|
5.0 |
|
|
|
0.7 |
|
|
|
2.2 |
|
|
|
42.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers |
|
$ |
342.7 |
|
|
$ |
20.3 |
|
|
$ |
8.6 |
|
|
$ |
23.0 |
|
|
$ |
394.6 |
|
Intersegment revenues (1) |
|
|
0.2 |
|
|
|
56.1 |
|
|
|
39.5 |
|
|
|
34.4 |
|
|
|
130.2 |
|
Total segment revenue |
|
$ |
342.9 |
|
|
$ |
76.4 |
|
|
$ |
48.1 |
|
|
$ |
57.4 |
|
|
$ |
524.8 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization (2) |
|
|
301.5 |
|
|
|
64.1 |
|
|
|
40.0 |
|
|
|
38.2 |
|
|
|
|
Selling, general and administrative, excluding stock-based compensation |
|
|
22.5 |
|
|
|
4.3 |
|
|
|
4.5 |
|
|
|
7.8 |
|
|
|
|
Other income |
|
|
(0.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
Segment adjusted EBITDA |
|
$ |
19.6 |
|
|
$ |
8.0 |
|
|
$ |
3.6 |
|
|
$ |
11.4 |
|
|
$ |
42.6 |
|
Depreciation, depletion and amortization |
|
|
79.6 |
|
|
|
18.3 |
|
|
|
2.8 |
|
|
|
0.4 |
|
|
|
101.1 |
|
Investment in property, plant & equipment |
|
|
27.2 |
|
|
|
7.9 |
|
|
|
1.1 |
|
|
|
— |
|
|
|
36.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant, and equipment, net |
|
|
560.0 |
|
|
|
684.6 |
|
|
|
36.3 |
|
|
|
33.2 |
|
|
|
1,314.1 |
|
Total assets |
|
|
2,743.8 |
|
|
|
1,058.0 |
|
|
|
486.6 |
|
|
|
356.0 |
|
|
|
4,644.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stimulation Services |
|
|
Proppant Production |
|
|
Manufacturing |
|
|
Flotek |
|
|
Total Reportable Segments |
|
Nine Months Ended September 30, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers (3) |
|
$ |
1,257.8 |
|
|
$ |
50.8 |
|
|
$ |
24.7 |
|
|
$ |
118.3 |
|
|
$ |
1,451.6 |
|
Intersegment revenues (1) |
|
|
— |
|
|
|
291.1 |
|
|
|
124.9 |
|
|
|
172.5 |
|
|
|
588.5 |
|
Total segment revenue |
|
$ |
1,257.8 |
|
|
$ |
341.9 |
|
|
$ |
149.6 |
|
|
$ |
290.8 |
|
|
$ |
2,040.1 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization (2) |
|
|
1,073.8 |
|
|
|
311.2 |
|
|
|
121.5 |
|
|
|
214.6 |
|
|
|
|
Selling, general and administrative, excluding stock-based compensation |
|
|
75.6 |
|
|
|
15.5 |
|
|
|
9.6 |
|
|
|
24.0 |
|
|
|
|
Other income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
Segment adjusted EBITDA |
|
$ |
108.4 |
|
|
$ |
15.2 |
|
|
$ |
18.5 |
|
|
$ |
52.2 |
|
|
$ |
194.3 |
|
Depreciation, depletion and amortization |
|
|
225.7 |
|
|
|
55.6 |
|
|
|
8.3 |
|
|
|
2.9 |
|
|
|
292.5 |
|
Investment in property, plant & equipment |
|
|
99.4 |
|
|
|
13.0 |
|
|
|
1.0 |
|
|
|
6.3 |
|
|
|
119.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers (3) |
|
$ |
1,298.5 |
|
|
$ |
95.9 |
|
|
$ |
29.8 |
|
|
$ |
72.5 |
|
|
$ |
1,496.7 |
|
Intersegment revenues (1) |
|
|
0.9 |
|
|
|
125.3 |
|
|
|
139.9 |
|
|
|
101.5 |
|
|
|
367.6 |
|
Total segment revenue |
|
$ |
1,299.4 |
|
|
$ |
221.2 |
|
|
$ |
169.7 |
|
|
$ |
174.0 |
|
|
$ |
1,864.3 |
|
Cost of revenues, exclusive of depreciation, depletion, and amortization (2) |
|
|
1,039.5 |
|
|
|
164.9 |
|
|
|
138.9 |
|
|
|
124.3 |
|
|
|
|
Selling, general and administrative, excluding stock-based compensation |
|
|
86.9 |
|
|
|
15.2 |
|
|
|
15.9 |
|
|
|
21.9 |
|
|
|
|
Other income |
|
|
(2.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.3 |
) |
|
|
|
Segment adjusted EBITDA |
|
$ |
175.3 |
|
|
$ |
41.1 |
|
|
$ |
14.9 |
|
|
$ |
28.1 |
|
|
$ |
259.4 |
|
Depreciation, depletion and amortization |
|
|
244.0 |
|
|
|
57.2 |
|
|
|
11.3 |
|
|
|
1.7 |
|
|
|
314.2 |
|
Investment in property, plant & equipment |
|
|
112.5 |
|
|
|
19.4 |
|
|
|
1.2 |
|
|
|
7.6 |
|
|
|
140.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant, and equipment, net (4) |
|
|
669.4 |
|
|
|
725.6 |
|
|
|
42.7 |
|
|
|
29.6 |
|
|
|
1,467.3 |
|
Total assets |
|
|
2,795.6 |
|
|
|
1,115.8 |
|
|
|
455.8 |
|
|
|
266.2 |
|
|
|
4,633.4 |
|
(1)
Flotek recorded revenue of $0.9 million and $8.7 million for the three months ended September 30, 2026 and 2025, respectively, and $4.8 million and $23.9 million for the nine months ended September 30, 2026 and 2025, respectively, related to contract shortfalls because the Stimulation Services segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(2)
Cost of revenues, exclusive of depreciation, depletion, and amortization, for the Stimulation Services segment included an intercompany supply commitment charge of $0.9 million and $8.7 million for the three months ended September 30, 2026 and 2025, respectively, and $4.8 million and $23.9 million for the nine months ended September 30, 2026 and 2025, respectively, because this segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(3)
Our Proppant Production segment recognized noncash revenue associated with acquired contract liabilities of zero for each of the three months ended September 30, 2026 and 2025, respectively and zero and $7.6 million for the nine months ended September 30, 2026 and 2025, respectively. Refer to Item 8 "Financial Statements and Supplementary Data" in our Annual Report for information about our acquired contract liabilities.
(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 total revenues for reportable segments to consolidated revenues:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Total for reportable segments |
|
$ |
692.4 |
|
|
$ |
524.8 |
|
|
$ |
2,040.1 |
|
|
$ |
1,864.3 |
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
All other revenues |
|
|
4.0 |
|
|
|
3.4 |
|
|
|
10.5 |
|
|
|
14.0 |
|
Elimination of intersegment revenues |
|
|
(185.3 |
) |
|
|
(125.1 |
) |
|
|
(591.8 |
) |
|
|
(373.0 |
) |
Total consolidated revenues |
|
$ |
511.1 |
|
|
$ |
403.1 |
|
|
$ |
1,458.8 |
|
|
$ |
1,505.3 |
|
The following table reconciles total Adjusted EBITDA for reportable segments to consolidated loss before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Total adjusted EBITDA for reportable segments |
|
$ |
66.9 |
|
|
$ |
42.6 |
|
|
$ |
194.3 |
|
|
$ |
259.4 |
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
All other adjusted EBITDA |
|
|
1.1 |
|
|
|
0.6 |
|
|
|
1.4 |
|
|
|
— |
|
Elimination of intersegment profit |
|
|
(2.6 |
) |
|
|
(2.3 |
) |
|
|
(6.9 |
) |
|
|
(10.4 |
) |
Interest expense, net |
|
|
(33.4 |
) |
|
|
(34.5 |
) |
|
|
(99.4 |
) |
|
|
(105.5 |
) |
Depreciation, depletion and amortization |
|
|
(96.7 |
) |
|
|
(103.0 |
) |
|
|
(290.8 |
) |
|
|
(313.7 |
) |
Acquisition and integration costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.2 |
) |
Other operating expense, net |
|
|
(1.0 |
) |
|
|
(11.8 |
) |
|
|
(9.1 |
) |
|
|
(46.0 |
) |
Stock-based compensation (1) |
|
|
(2.1 |
) |
|
|
(4.2 |
) |
|
|
(7.6 |
) |
|
|
(7.3 |
) |
Loss on extinguishment of debt |
|
|
(3.2 |
) |
|
|
— |
|
|
|
(3.2 |
) |
|
|
— |
|
Loss on investments, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6.8 |
) |
Loss before income taxes |
|
$ |
(71.0 |
) |
|
$ |
(112.6 |
) |
|
$ |
(221.3 |
) |
|
$ |
(230.5 |
) |
(1)Stock-based compensation is reported in “Selling, general and administrative” in the unaudited condensed consolidated statements of operations and is not allocated to the segments.
The following table reconciles depreciation, depletion and amortization for reportable segments to the consolidated amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Depreciation, depletion and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
Total for reportable segments |
|
$ |
97.3 |
|
|
$ |
101.1 |
|
|
$ |
292.5 |
|
|
$ |
314.2 |
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
All other |
|
|
0.8 |
|
|
|
1.1 |
|
|
|
2.4 |
|
|
|
1.1 |
|
Eliminations |
|
|
(1.4 |
) |
|
|
0.8 |
|
|
|
(4.1 |
) |
|
|
(1.6 |
) |
Total consolidated depreciation, depletion and amortization |
|
$ |
96.7 |
|
|
$ |
103.0 |
|
|
$ |
290.8 |
|
|
$ |
313.7 |
|
The following table reconciles investment in property, plant, and equipment for reportable segments to the consolidated amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Investment in property, plant, and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
Total for reportable segments |
|
$ |
42.0 |
|
|
$ |
36.2 |
|
|
$ |
119.7 |
|
|
$ |
140.7 |
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
All other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.0 |
|
Eliminations |
|
|
(2.3 |
) |
|
|
1.8 |
|
|
|
(7.6 |
) |
|
|
(10.4 |
) |
Total consolidated investment in property, plant & equipment |
|
$ |
39.7 |
|
|
$ |
38.0 |
|
|
$ |
112.1 |
|
|
$ |
133.3 |
|
The following table reconciles property, plant, and equipment, net to consolidated amounts:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2026 |
|
|
December 31,
2025 |
|
Property, plant, and equipment, net |
|
|
|
|
|
|
Total for reportable segments |
|
$ |
1,314.1 |
|
|
$ |
1,467.3 |
|
Reconciling items: |
|
|
|
|
|
|
All other |
|
|
8.1 |
|
|
|
10.4 |
|
Eliminations |
|
|
(17.0 |
) |
|
|
(13.4 |
) |
Total consolidated property, plant, and equipment, net |
|
$ |
1,305.2 |
|
|
$ |
1,464.3 |
|
The following table reconciles total assets to consolidated amounts:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2026 |
|
|
December 31,
2025 |
|
Total assets |
|
|
|
|
|
|
Total for reportable segments |
|
$ |
4,644.4 |
|
|
$ |
4,633.4 |
|
Reconciling items: |
|
|
|
|
|
|
All other |
|
|
31.2 |
|
|
|
37.0 |
|
Eliminations |
|
|
(2,181.7 |
) |
|
|
(2,097.3 |
) |
Total consolidated assets |
|
$ |
2,493.9 |
|
|
$ |
2,573.1 |
|
|