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Image source: The Motley Fool. Wednesday, Aug. 5, 2026, at 10 a.m. ET Chief Executive Officer - Ryan Gillis Ezell Chief Financial Officer - J. Bond Clement Operator: Good morning, ladies and gentlemen, and welcome to the Flotek Second Quarter 2026 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call, you require immediate assistance, please press 0 for the operator. This call is being recorded on August 5, 2026. And now I would like to turn the conference over to Mike Critelli. Please go ahead. Mike Critelli: Thank you, and good morning. We are thrilled to have you with us for Flotek's second quarter 2026 earnings conference call. Today, I am joined by Ryan Gillis Ezell, Chief Executive Officer and J. Bond Clement, Chief Financial Officer. We will begin with prepared remarks on our operations and financial performance followed by Q&A. Yesterday, we released our second quarter results updated full year guidance and an updated investor presentation, all available on our Investor Relations website. This call is being webcast with a replay available shortly afterward. Please note that today's comments may include forward looking statements. These are subject to risks and uncertainties. That could cause actual results to differ materially from our projections. For a full discussion of risk factors, review our earnings release and most recent SEC filings. Please also refer to the reconciliations in our earnings release and investor presentation for non GAAP measures. With that, I will turn the call over to our CEO, Ryan Gillis Ezell. Ryan Gillis Ezell: Thank you, Mike, and good morning, everyone. We appreciate your interest in Flotek, and your participation today as we review our second quarter 2026 operational and financial results. In the second quarter, Flotek continued its transformational growth storyline through the execution of its corporate strategy. Driven by the powerful convergence of innovative real time data and chemistry solutions as shown on slide 3, Flotek has laid the foundation for a data driven growth trajectory built on diverse recurring revenue high margin services, and proprietary technologies that create value for our customers and improve returns for our shareholders. The strategic transition of the company into a Data-as-a-Service business model continues to gain momentum while expanding the total addressable market for the company. As a result, Flotek's data analytics segment grew exponentially while our Differentiated Chemistry segment outpaced the market in a challenging environment through an unwavering commitment to safety, service quality, innovation, and total value creation. With that, I would like to touch on some key highlights for the second quarter that Bond will discuss later in the call. Company total revenue approached $100 million up 70% from the second quarter of 2025 and the strongest quarterly performance in the last 10 years. Data analytics achieved its highest quarterly revenue in company history shattering the first quarter 2026 record by 85%. Chemistry technology revenue increased 53% with international chemistry revenue reaching 10.6 million representing 93% of full year 2025 international chemistry revenue of $11.4 million. Company gross profit climbed 65% versus the second quarter of 2025. it is impactful to note that data analytics accounted for 51% of company gross profit versus 26% in the prior year quarter marking a major milestone in Flotek's transformation as it became the largest contributing segment to gross profit. Total company adjusted EBITDA grew 109% year over year, totaling $16.8 million On Monday, we also announced a 10-year $400 million contract award to support PREPA's 400 megawatt Puerto Rico gas power utilities project referenced on slide 4. Finally, the company updated its 2026 guidance with the new midpoint being 45%, 49% increases versus 2025 actuals on revenue and EBITDA, respectively. This update builds upon a multiyear trend of revenue and profitability growth as the company executes on its strategic initiatives to provide long term resiliency and profitability as shown on slide 6. Most importantly, these results were achieved with 0 lost time incidents in the field of operations. I want to thank all of our employees for their hard work and commitment to safety and service quality in achieving these outstanding results. Now turning to the larger picture for the energy and infrastructure sector, we continue to believe that the ongoing situation in the Middle East will have impactful and potentially long term implications on global supply and energy security that will demand action. The industry continues to exhibit a shift in supply side dynamics that is recalibrating the risk profile of regional supply while fundamentally establishing a higher baseline for energy security. We expect increased investment in localized oil and gas developments while geographies that do not possess resources look to rapidly diversify energy security exposure. All of these factors point towards a stronger commodity pricing environment for increased upstream activities. Layering in the expanding power demand driven by AI data centers, and industrial reshoring combined with the reliability issues of an aging transmission infrastructure the expectations for tailwinds within the energy sector further strengthen. Our legacy pressure pumping customers continue to capitalize on the portfolio diversification opportunity provided by the demand for remote power generation. Flotek is poised to support emerging customers with products and services that help protect their assets while optimizing their operational performance and fuel efficiency. With multiyear waiting lists for turbines and reciprocating engines, protecting these capital intensive investments is critical along with enabling reliability standards that exceed the greater than 99% uptime requirements. Transitioning from the macro view, let's dive into details starting with slide 8. I wanna spotlight the transformational growth in our data analytics segment We saw total segment revenues up 223% year over year and second quarter 2026 service revenues exceeding total segment revenues from the year ago quarter. This strong growth is powered by our flagship upstream applications, power services and digital valuation. Both of which are generating significant contracted wins and robust recurring revenue backlog shown on slide 9. Out of this, we saw our PREPA 10 year 400 megawatt utilities power support contract generating over $400 million per year backlog through 2036. By the first quarter of 2027, Flotek expects to support over 5 gigawatts of power through measurement or control by our proprietary Powertech platform. This further validates the demand and scalability of our innovative technologies in the behind the meter power space. We are also actively engaged in a potential phase 2 extension of the Montana power services contract. Finally, we had the successful utilization of our state of the art Smart Skid to optimize gas quality with real time blending of fuel gas and CNG for major IOC. This is the first application of its kind. The momentum gained from these wins has expanded our expected contracted backlog to over $500 million. Our services led this growth further reinforcing our shift towards high margin, recurring revenue streams. The Powertech platform has evolved from a novel analytical approach into a transformative solution for the energy and infrastructure sector. What began as advanced analytics has grown into a comprehensive end to end fuel management platform, redefining performance standards and operations within the sector as shown on Slide 10. Our expanding portfolio of patents and field proven use cases position Flotek as a leader across the natural gas value chain. Looking at Slide 11 and when considering the velocity of our measurement, we deliver unmatched real time fuel monitoring conditioning, blending, and engine control to optimize performance and safety for behind the meter distributed power operations. The success of Flotek's power services applications is expanding rapidly as we expect to have proprietary real time analyzers of more than 50% of the currently active North American e-frac and natural gas powered fleets by year end. Additionally, on August 3, 2026, Flotek announced its second contract within the utilities infrastructure sector seen on slide 4. Leveraging our patented PWRtek platform Flotek entered into a 10-year agreement to support natural gas-fired grid enhancement initiatives for the Puerto Rico Electric Power Association, which is the electric utility for the Commonwealth of Puerto Rico. Under the agreement, Flotek expects to generate a revenue backlog of approximately $400 million through rental of gas fired power generation equipment together with the deployment of the company's proprietary smart conditioning and distribution systems. Flotek has partnered with Power Expectations which leads the group executing the emergency temporary power generation project. The initiative is expected to deploy 400 megawatts of natural gas fired power generation capacity to address Puerto Rico's ongoing energy crisis. Flotek is providing its proprietary PWRtek platform including 400 megawatts of primary power generation capacity and 6 pairs of Smart Skids with advanced conditioning, real time analytics, and gas distribution systems working alongside experienced local partners for on ground execution and project management. Support equipment is expected to begin deployment in the fourth quarter of 2026 with the initial power generation equipment and conditions and distribution skids expected by the end of the first quarter of 2027. Now let's transition to Slide 13, where we will dive into our second upstream application, digital valuation. This groundbreaking use case sets a new standard in the oil and gas industry. Delivering unprecedented transparency and minimizing enterprise risk for producing wells like never before through real time digital valuation. We believe the expect speed accuracy, durability, and qualification under the rigorous measurement standards outlined in GPA 72 will provide a significant advantage in discussions with prospective customers as we aggressively expand this manufacturing and field deployment. In March 2026, the XSPCT analyzer was named product of the year at the 2026 Analyzer Technology Conference further exemplifying its differentiated capabilities. In the first quarter of 2026, we ended the quarter with 57 digital valuation measurement devices deployed or contracted for delivery. And that number has grown 56% to 89 as of the end of the second quarter of 2026. The execution of our transformational strategy to grow the data analytics segment through upstream applications is gaining traction. But what is most important is what it means for our stakeholders and our investors. First, our DaaS-driven strategy ensures predictable recurring revenue and cash flow. Delivering stability and long term value. Secondly, our proprietary data technologies and superior measurement accuracy enable velocity and decision control that establish a high barrier to entry. Secure client loyalty, and support our value based service model. And third, long term high margin subscriptions position Flotek for sustained growth and margin expansion. Driving significant shareholder value over time. Now lastly, our chemistry technology segment continues to deliver robust performance driven by the differentiation of our prescriptive chemistry management services and our expanding international presence. Slide 16 highlights the resilient performance of our chemistry segment which delivered a 53% increase in total revenue for the second quarter of 2026 compared to the second quarter of 2025 despite a 5% decline in the average North American frac fleet count over the same period. According to Primary Vision data. This was the strongest quarter of chemistry sales since 2017. And exceeded our expectations as our work in the Middle East pulled forward, driving strong performance in the month of June. International revenue totaled 10.6 million up 172% from a year ago with the company expecting continued growth in the international chemistry sales in the second half of 2026. it is evident that our chemistry team has executed our strategy flawlessly. As we move into the second half of 2026, opportunities leveraging the convergence of prescriptive chemistry management and data services moved to the forefront through high margin services that improve operator ROI. These advanced DaaS-driven services include Smart COMBAT units, real time flowback monitoring, and implementation of prescriptive geological targeting. Looking ahead, I am more confident than ever in Flotek's momentum and our ability to drive sustained profitable growth as we execute our transformative corporate strategy. We are firmly positioning Flotek as a high growth technology leader in the energy and infrastructure sectors accelerating innovation through the powerful integration of real time data analytics and advanced chemistry solutions that are tailored precisely to our customers' evolving needs. Now I will turn the call over to J. Bond Clement to provide key financial highlights. J. Bond Clement: Thanks, Ryan. Good morning, everyone. Clearly, this was an exceptional quarter compared to both the prior year and the first quarter. As Ryan indicated, second quarter revenue exceeded our expectations by a wide margin. I wanted to provide a little color as to how the quarter came together. Second quarter revenue growth benefited from a very strong month of chemistry business in June. We recognized nearly $31 million of chemistry revenue in June alone. For perspective, that represents more than 50% of the total chemistry revenue generated during the entire first quarter of 2026. On the strength of our international business, our external customer chemistry revenue in just the month of June totaled $15.2 million which exceeded the external customer chemistry revenue for the entire first quarter. As a result, external chemistry revenue increased 111% sequentially and accounted for nearly 60% of the company's total second quarter revenue growth of $29 million compared with the first quarter. Our updated guidance builds in a more normalized pace for domestic external customer chemistry revenue in the back half of the year, as compared to the second quarter due to the transactional nature of the business. However, in terms of international work, we have inventory shipments expected to arrive in country during August and potentially September that we believe will allow international revenues to remain strong. We expect both chemistry and data analytics segment revenue for each of the third and fourth quarters to outpace our first quarter results. Because we have not yet secured the Phase 2 extension of our Montana Power Services contract, our guidance assumes no revenue from that contract during the fourth quarter, as noted on slide 12, we are currently in extension discussions with the various parties to that agreement. In addition, our guidance does not yet consider any financial impact in 2026 from the Puerto Rico contract announced Monday as we continue to work on initial deployment timelines. As shown on slide 6, we are estimating total revenue to range between $340 million and $350 million with adjusted EBITDA in a range of $47 million to $51 million As Ryan pointed out, the midpoints of these ranges imply significant growth in each metric as compared to 2025. Just as a reminder for everyone, our adjusted EBITDA guidance does not add back non cash amortization of contract assets. Which is expected to total approximately $9 million during 2026. Moving from guidance to quarterly results. Total revenues for the quarter increased $41 million year over year. Aided by the strong June chemistry sales previously discussed 68% of the total revenue growth as compared to the second quarter of last year was attributable to chemistry while 32% was related to data. Chemistry segment related party revenues were up 64% from last year's quarter while external customer revenue increased 38%. As Ryan noted, international chemistry revenue totaled 10.6 million during the quarter, which is up from $4 million a year ago and up from just $1.9 million in the first quarter. Data analytics delivered another record quarter. Segment revenue represented 19% of total company revenue in the quarter, up from 10% a year ago. As outlined on slide 9, we continue to gain momentum with external customer data analytics sales. 63% of second quarter data analytics revenue was derived from external customers, as compared to 44% in the year ago quarter. The increase in externally derived revenues was driven by our Montana Power Services contract that contributed nearly $6 million in revenue during the quarter as well as a $2.5 million sequential increase in our upstream power services business that continues to expand to external customers. Looking forward to 2027, we expect the project in Puerto Rico will increase the percentage of revenue derived from external data customers. Total company gross profit increased 65% as compared to the year ago quarter. As a percentage of revenue, gross profit totaled 24% during the quarter, which was down less than 100 basis points versus the year ago quarter. Despite the nearly $7 million decline in the order shortfall penalty as compared to the second quarter of last year. G&A expenses increased 14% year over year Excluding stock comp, G&A was only up 7% versus the year ago quarter. As revenues continue to scale, we have seen meaningful leverage in our G&A expenses. Total G&A expense declined to less than 8% of revenue in the second quarter of this year, compared to nearly 12% in the year ago quarter. This marks the lowest quarterly G&A rate as a percentage of revenue that we have achieved in at least the last decade. Net income for the quarter was $10 million or $26 per share compared to $1.8 million or $0 per share in the prior year quarter. Our June 30 balance sheet reflects the increased activity during the quarter particularly the strong month of sales in June. While our ABL balance was elevated at June 30 relative to funding working capital needs, Borrowings outstanding as of this morning on our ABL had been reduced to 0. First half results were impressive with revenue up 49%, adjusted EBITDA up 81% versus the first half of last year. We have delivered strong growth while maintaining a different disciplined balance sheet and low leverage. As shown on slide 19, using the midpoint of the updated adjusted EBITDA guidance, our leverage ratio is less than 1x based on net debt outstanding as of June 30. We believe this positions us to continue executing our growth initiatives, while maintaining financial flexibility. With that, I will turn it back to Ryan for closing remarks. Ryan Gillis Ezell: Thanks, J. Bond Clement. Our second quarter results extend our multi year track record of consistent improvement as we continue transforming Flotek into a data driven technology leader. The data analytics segment delivered strong growth highlighted by triple digit increases in service revenue expanding recurring revenue streams and a robust multiyear contracted backlog now exceeding $500 million Together, with our resilient prescriptive chemistry management services, Flotek is well positioned to gain additional market share and drive further top and bottom line improvement with substantial upside opportunities in our data driven services. We remain committed to shaping the industry's digital and sustainable future by leveraging chemistry as our common value creation platform. With our proven execution, expanding high margin capabilities, and clear pathway, to scaled growth Flotek is poised for the next phase of value creation for our investors. Operator? Ready to open the floor for questions. Operator: Thank you. Ladies and we will now begin the question-and-answer session. Should you have a question, please press star followed by the number 1 on your touch tone phone, and you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. 1 moment, please, for your first question. So your first question comes from the line of Rob Brown of Lake Street Capital Markets. Your line is now open. Rob Brown: Good morning. Congratulations on all the progress. Ryan Gillis Ezell: Yeah. Good morning. Rob Brown: First question is on the on kind of the overall power infrastructure business. The Puerto Rico contract was a great add. Could you kind of comment on the overall pipeline in that business? And maybe just some color on other what other kinds of projects are out there in terms of the pipeline you are pursuing? Ryan Gillis Ezell: Yeah. You know, we look at it right now. Right now, I would say that our power services pipeline, particularly related to utilities, infrastructure, and data centers are the highest it is been in the history of the company. And, you know, this recent award with PREPA is an example of the type of pipeline that we have a series of different opportunities that we are in various stages of bidding and processing around that. what is exciting is we have now moved measurement devices. We are actually monitoring real time gas fired traditional power plants, some in the Northeast. A couple here, they are moving in Texas. We have also expanded our measurement services into data center growth. It was this I mentioned that project about the real time blending and control for 1 of the major IOCs, this is an area that is gonna be targeted for data center growth for some of the larger behind the meter power generation, companies. And so we are seeing a significant pipeline there. I would say you know, when you look at a combined value of well over $1 billion now, on the pipeline potential and at various stages of bidding, negotiation, etcetera. So exciting time to see what we are doing here at Flotek and I think it is also important to note that you know, since the starting of our power tech segment in the second quarter of last year, We have now grown we will be doing measurement and or some variance of control and distribution on almost 5 gigawatts of power. So it is an exciting growth platform for Flotek and for the future as it continues to gain rapid growth and scalability. Rob Brown: Okay. Excellent. And then just more detail on the Puerto Rico contract. It sounds like you are doing a combination of gas control and power generation. Could you just elaborate on the on the power generation side when that activity kicks in and how that is going to gonna fit into the mix of what you are doing. Ryan Gillis Ezell: Yeah. You know, I would say this was so new where we released that. We are going to be giving us some updated numbers on guidance on when we think those financials begin to hit You will really start to see those play in the first quarter of 27 maybe a little bit of mobilization pieces here in the back part of Q4. Our initial 40 megawatts of prime generation will move pretty quick. it is kind of a baseline startup piece there. As well as all of our conditioning and distribution setup. I think, you know, what we talk about is the conservative financials around the baseline of the contract. When you look at the infrastructure needs inside Puerto Rico, they are actually out looking at growing almost 3 gigawatts of power as they are trans-- moving over from I would say, coal and or diesel type burned fuel facilities to nat gas So not only is this initial 400 megawatts a great opportunity for us, I think we will have quite a few other opportunities to expand our work there. what is unique is this is gonna be a LNG transition to CNG potentially combined with I would say, biogas, some from landfills, And so this is where you start to see the unique real time monitoring and real time blending technologies of Flotek. Become extremely differentiated and why you know, it puts us at a forefront of being able capture this kind of work. But I, you know, I think that we will get some further updates on timing, and maybe potential scope increase as we get closer to the kickoff point in Q4. Rob Brown: Okay. Thank you. I will turn it over. Operator: And your next question comes from the line of Jeffrey Scott Grampp of Northland Capital. Please go ahead. Jeffrey Scott Grampp: Morning, guys. Congrats on all the recent positive news this week. Ryan Gillis Ezell: Yes, guys. Was Good. Jeffrey Scott Grampp: Thanks. Was curious to get maybe a little more backstory on, your involvement with this Puerto Rico contract. My understanding is this project's been in the works for a bit here, and, potentially, I do not maybe you guys were involved in some of the earlier stages while that was being negotiated, but, like, what is the backstory on, you know, how you guys became aware of this project or how the you know, your partner became aware of you just kinda curious how that evolved and how you guys ultimately kinda conveyed that value add to win the deal. Thanks. Ryan Gillis Ezell: Yeah. You know, it is a it is it is an interesting evolution. Piece, would say, Jeffrey, is that as we have begun know, we started out with this initial work in Montana, supporting some of the government driven contracts. This has evolved. there is some additional pursuit around that. And some of the contacts that we have spoken to there I would say, you know, there is a there is a basket of various opportunities to support land service contracts, utility backup, and then when you look at the government, US government support a the Puerto Rico, I mean, technically, they are backing the majority of a lot of this work. Through the financial FMOB, call it financial management oversight board. In combination with 3 PPO and PREPA. And so we had been brought in actually initially to look at gas fired power generation from US government defense contract sites and they were aware of our technologies. And as the opportunity is expanded, as I mentioned under the umbrella, some of that 3 gigawatt gas fired power transition there our technology was brought into play. In terms of is they wanna look at not only doing that LNG to CNG transition, but also the incorporation of potential biogas and our ability to monitor real time blend, control, and distribute became an extremely strong value proposition. And this, this did not happen overnight. This was a multiple quarter pursuit and testing component in there. And so you know, kudos to the team led by you know, Thomas Redlinger and our engineering staff at pursuing this and getting it done. And I think it is gonna continue to open multiple doors as people start to kind of put on the center stage of capabilities of the PWRtek platform. Jeffrey Scott Grampp: Got it. Appreciate those details. For my follow-up, I wanted to understand this metric you guys put in the release that this 5 gigawatts that are under measurement or control. Can you contextualize that, Ryan? From a revenue perspective? I know the Yeah. Revenue exposure can vary depending on the exact scope of work there. But, just trying to, I guess, triangulate the financial impact of that 5 gigawatts and at the risk of being greedy, maybe if you can split that out between oil and gas exposure versus other end markets you guys are penetrating. Ryan Gillis Ezell: Hey, you are trying to give me a pull up. Hamstring on guidance here. Yeah. So what I will try to do is I will walk you through a little bit about how we get to 5 gigawatts. Right? And then I because it is hard to directly extrapolate the revenue because if you look at in the very appendix part of our deck, we talk about the sales pursuit where we go to measurement and then that transitions into control and then the longer term piece with distribution. So what we have got what we have secured is we have secured measurement devices in over 50% of power generation e-frac and natural gas fired fleets here in The US on the e-frac side of business. Those run anywhere from 35 to 40 megawatts per location. or do some form of measurement and or measurement and control. Obviously, if we are doing just plain measurement versus measurement control and distribution, the revenue streams are different. So I am going to kind of shy away from giving direct revenue on that, but that helps you understand-- this I would say it is roughly 75 plus or plus or minus 1 or 2 I would say measurement and or control sites on almost 40 gigawatts per site to get your baseline number. Yeah. And then we turn around, and we have got if you take the natural gas fire power plant facilities like CPV Fairview and a couple other ones, those are just under 2 gigawatts of power that we are looking at. And what we are doing there traditionally is have a measurement device looking at unconventional shale gas We are trying to figure out do they knock condensates out, or what do they do there? Most of these have an ethane capacity problem, and we are trying to figure out do they cryo drop it, or do they let it burn through and how much are we gonna take on a derating capacity at those facilities. So that contributes just under 2 gigawatts, and then you have got this recent prep of 400 megawatt award, which puts us right at 5 gigawatts. And then, you know, we talked about our robust pipeline, but that is how it kind of builds up. Each 1 of them has a little bit different revenue bill because I do not want to say they are complicatedly customized, but depending on what level of condition and or distribution or a primary power is pulled in there with it that you see a variance in how the revenue evolves there. But as you can imagine, there is significant upside because as we transition from med measurement to measurement plus control and the control plus distribution, the revenue per location increases dramatically. Jeffrey Scott Grampp: Got it. that is awesome details. And, the Hammy made it through that explanation. I will I will hop back in queue. Operator: that is great. And your next question comes from the line of Gerry Sweeney of Roth Capital. Please go ahead. Gerard Sweeney: Hey. Good morning, Ryan, J. Bond Clement, and Mike. Thanks for taking my call this morning. Ryan Gillis Ezell: Hey, Gerard. J. Bond Clement: Hey, Gerard. Gerard Sweeney: I had a question. You know, obviously, on the on the data analytics side, you have power, you have valuation, you have the reef the e-frac fleet opportunity. You know, these markets are expanding. I think you are getting a better understanding of the opportunity. You know, is there anything you need to do invest in to maybe attack this market faster, solidify your position, you know, grow a bigger pipeline to drive more, you know, more consistent potential consistency with unlocking opportunities. Ryan Gillis Ezell: Yeah. Gerard, that is a very interesting question. I will try to dissect this as number 1. When we look at it from a rapid organic growth penetration, and scalability, We have now invested going on 13 plus million dollars in CapEx into monitoring equipment, conditioning equipment, distribution equipment, If you were to take every year that I have been at Flotek and add them together and multiply it times 2, we have a spent that much CapEx. And this has been solely in growing the power services digital valuation businesses. I look for that number to continue expand even further in the back half of the year,. As we continue to put CapEx on these, as is the right thing for us to do and reinvest in cash flow just from the fact of the ROI is very, very solid for the company. Also, there is other opportunities, I think, for us as we look at you know, we mentioned some of these contracts that we are picking up on utilities. We do not wanna be as pure play power provider, but I think there is opportunities for us to supplement the partners that we work with also the mobilization power. So there is an opportunity there for us to potentially grow some of our I would say, organic power services, say, 50 to a 100 megawatts just to have to help stabilize the work that we do with the bigger behind the meter power generation people. And then I also think there is some opportunities for M&A and or consolidation. For some people that are trying to do some level of gas monitoring or conditioning albeit not in real time or more mechanical in nature. there is opportunities there that we could take some of their existing equipment and utilize our proprietary blending technology and measurement to upgrade the equipment into a more advanced form of a form of monitoring depending on the vertical application there. So I think, you know, those are, I would say, 3 primary pathways we are looking at accelerating the growth. You know, we were speaking to the board at This growth is kind of choppy. I mean, when you start picking up 100, 500 megawatt awards, you know, you have got we gotta start with pre investing and have some of those assets. Luckily for us, most of our measurement and or conditioning assets, can build in 4 weeks, 5 weeks. So we get pretty quick turnaround, but I hope that gives you a little bit of color on what we are doing to expand the business and grow the opportunities that we are getting. Gerard Sweeney: Yeah. that is helpful. I mean, obviously, you get sometimes these big chunky opportunities but even on the digital valuation, keeping growing those consistently, I think builds in some of the opportunity as well. Technology, you know, how does this separate you or create advantages in the power market? Are more and more potential customers or clients or partners recognizing this And how do you actually expand this or sort of highlight it per se? Ryan Gillis Ezell: So I would say that, you know, we have started our pursuits with heavily in a lot of the behind the meter guys that we knew had started in the e-frac space has now moved into the major top 10 behind the meter power suppliers, and we started doing measurements. A good example in this slide deck, we have representation of the of the real time gas and gas blending. And if you look in there, that specific patented technology for us And there is a graph on there that shows fuel gas being conditioned by 1 of these mobile gas power plants. Or shall I say, gas conditioning plants. And even when it comes out of that, it is still variable in quality. And what you can see us tracking is the variance in the methane number of that gas with how we open and close automatically by the measurement device, the blending valve to put the CNG in, And then after doing that, we level out. The MN number directly to what is prescribed for the turbine or the recip. In this particular case, it was a turbine. And up until us coming out there, that turbine was shutting down They had multiple hours of NPT. It was shutting down once or twice a week. We went out on location, and we were out there for 6 weeks and did not have 1 single shutdown. And then you start to see the value creation component around improved fuel efficiency by doing this. what is really important is the maintenance cycle improvements, which saves a lot of money Some of these turbines and recaps are wearing out faster than what they thought because of the wear and tear. On variability and gas quality. And then also the derating capacity where you have less equipment on location, And then finally, the value creation of carbon credits from less emissions. And so you know, when you look at the velocity measurement in this level of speaking directly to the control modules on the engines, We have a very, very, very differentiated set of technologies And know, as we are building these skids, every single 1 of them are going out contracting on location. So we are really excited about it. And this was the first of its kind being able to do that. So it is an exciting piece, and I would say that these type of case studies, we are gonna continue to put them out and put impact in number on the ROI and the value creation from them as we begin to accelerate our adoption within the market space. Gerard Sweeney: Got it. I appreciate it. I will jump back in queue. Thanks, guys and congratulations. Thanks, Jerry. Operator: Your next question comes from the line of Josh Sullivan of Jones Trading. Please go ahead. Analyst: Good morning. Congratulations on the quarter here. Ryan Gillis Ezell: Good morning, Josh. I wanted to follow-up on that comment you know, potential to acquire some of the mechanical conditioning operators How large is the mechanical market just so we can think of and frame of reference? You know, I it in terms of I would say in terms of dollars, it is it is kind of it is kind of hard to say on what some of them call their self doing. Because it depends on some of them are just doing what I would call traditional filtration. And knocking sands and or debris, etcetera. Some people move into a more of a JT skid type applications at different parts, but you know, most of the time when you see fuel gas utilization being run directly to frac fleets, there is traditionally some type of filtration usage ahead of it. Now the problem is that they never can really detect what quality of the gas is in real time nor can they effectively blend it If they were trying to blend it with real time measuring, that would be a violation of our technology patent. So but I would say there is there I think that when you look at the amount of capital investment that is in the area that every frac every e-frac fleet that is running field gas and probably running some form of CNG should have at least a Smart Skid type on there, which is a low rental cost considering. The ROI that you get on fuel improvements, and protection of the equipment. And so you know, right now, there is probably a 110 to 120 locations that is possible for it. Or full conditioning and distribution. And, you know, we have got some measurement device on about 75 of those. And you know, I think that puts us in a good place to continue to grow. The most exciting part is these are the same companies in the majority of space that are moving into behind the meter. Our generation, they have created their own interior, some spin off of their company. And this type of technology is moving directly with them. And what is even more exciting about it is you know, people have traditionally thought you did not need some type of monitoring conditioning even if you have pipeline gas going to data centers. But we have shown that to not be the case because we see that variance in quality in our natural gas fired power facilities. Plus the premature damage on the turbines over a long time. The derating problems, and all the other issues that we can really help to help to solve. And I guess just to on that point, on all the advantages you guys are bringing to the behind the meter conversation, how much inbound are you guys getting versus outbound work are you doing You know, is the word out you know, to your to your point on some of those dynamics you are really helping out on? Or just curious on the inbound at this point. You know, it is a it is traditionally what we are starting see now is we are seeing a growing amount of inbound when there you know, companies are to point up. These turbines are shut down and reset, and it takes multiple hours to get them back up and running. And a lot of the inbound we see is where we have already got measurement devices out there. They wanna go to the next level of customization. And now we are we are also was I would say even more excited is we are starting to see more on the I would say, infrastructure side piece around utilities contractors on inbound pieces coming there. They have seen, you know, what our technologies can do for protecting assets. And then we are seeing some more of the data center inbounds. We are continuing to expand our, I will say, sales and, pursuit teams in the field. Right now, you know, we will double those by the end of the year. And we will continue to add as we see the market piece come. The other side that is been interesting, we are seeing a strong inbound zone, is the OEM engine builders that we mentioned prior We did not talk about in our prepared comments here, but we have we built the specific XSPCT FG units amount directly to reciprocating engines to control fuel quality and adjust timing and firing on those engines. Those tests are going really well in the field. And we are getting constant. Inbounds from OEMs to test that type of equipment on their various engine types. So you know, it is an exciting time for us. I think we are we are kind of at that precipice to where the pursuits outward are now being overcome by what we are seeing on inbounds. Analyst: Good to hear. Well, congratulations on the quarter, and thanks again for taking the questions. Yes. Thank you. Operator: Your next question comes from the line of Blake McLean of Daniel Partners. Please go ahead. Analyst: Hey. Good morning, guys. Thanks for taking my call here. Ryan Gillis Ezell: Hey, Blake. Thought yeah, I thought I maybe I would switch gears a little bit and talk about chemistry and specifically some of the international success that you guys have had. I think it is been kind of a theme that we have seen across the space this quarter. Traditionally, sort of more North America focused OFS names, redeploying resources and equipment into international markets. So I thought maybe I would just ask you to talk about that opportunity set. More broadly and maybe comment how you how you think about that split going forward? Yeah. You know, it is a it is an interesting strategic piece for us. Flotek, and that We probably got over 3.5 4 years invested in the evolving growth of our international business. We you know, 1 of the things that I will say since I came here was focusing on you know, if you have these a lot of these OFS components of the business, it is much better to have and have a broad, diverse domestic and international piece to stabilize you know, different points in commodity pricing cycles because it used to be if 1 was strong, 1 was weak, and they kinda kept a little balance to 1 another. Plus, on these long on these international contracts, they attest to me typically will be of a longer duration less transactional in nature, a little bit better on a forecastable side. And so what we had, you know, done in Middle East and I will tell you, you know, Leon Chad done a fantastic job at driving this pursuit with Jamal Al-Wabel, our team in the Middle East. At for these pursuits to get the technologies approved tested, and continued pursuits, this mobilization through disruptions we have seen at The Middle East. You have seen this play out now. We moved up to we are on 4 frac fleets in the Jafarah field. Providing chemistry. Right now, we have that potential that bend us to expand to 6 by the end of the year. And so, you know, you see a little bit play out on our balance sheet. At the end of the quarter numbers. You see saw us pull revenue number ahead of what we thought would have been in the normal forecast. Which, you know, kind of exceeded our expectations in a good way. Put the supply chain under some strain. But Shane and the team did a great job. It getting that through. So I think you will continue to see strong numbers from The Middle East to back half of the year with potential upside if we expand by another 2 fleets. The good news about that scope of work is you know, that scope under this fair contract will go for another 4.5 plus years. And so that gives a good runway piece there. Another interesting part is I think there will be some other unconventional areas or indoor gas fields that will follow suit on the design of how that executes. And we are actively promoting our technology systems in those other countries and geographies. We are seeing that start to play out in Latin America as well. Moving not only our chemistries down there, but now we are also building data analytics equipment there as well as our real time chem ed units there. For applications in Latin America. And I would say that in the Middle East, we have deployed a series of data analytics equipment there for gas monitoring, RVP measurements, transmix, and those are all approved technologies aside ADNOC and Aramco. So it is it is a lot of exciting pieces there. And I think we are in the real early innings of our international growth. And I think you are gonna see that start to proliferate or have the potential to proliferate in the back half of the year, and further in 2027. Analyst: Got it. Got it. Alright. Good stuff. I appreciate all the color this morning, guys. Yeah. Thank you. Thanks, Blake. Operator: Your next question comes from the line of Bo Fratt of AGP. Please go ahead. Analyst: Hey, good morning. I have a couple of questions. The first question I had was if you could just talk about your guidance. For the year and mainly on the revenue side. If I back out the first half revenues, it looks like the second half revenues are gonna be below the second quarter level. Can you just talk about some of the factors that make the second half revenue look a little bit lighter than the first you know, first half revenue. J. Bond Clement: Yeah. So, I mean, the second half, you know, if you look at just extrapolation, the second half is gonna be bigger than first half, Paul. We are just trying we made the comment during the call that we did, you know, kind of a huge month of external chemistry on the domestic side, a huge quarter at $20 million. So we are just moderating our outlook on the back half of the year given that we know there was a couple of customers who moved work from July into June that sort of front loaded 2Q. You look at the variability in that external chemistry line, we did 12.8 million in the first quarter. And then jumped up to $20 million in the second quarter. So we are sort of normalizing that in the back half. As sort of an average between those 2 quarters. that is probably the biggest change And the other piece that we pointed out in our call commentary we currently do not have anything forecasted in the in the fourth quarter relative to the Montana Power Services contract, did about $6 million of revenue in 2Q. And an extension of the Montana contract, you know, is that the sort of run rate that you potentially are looking at with an extension? 6 million a quarter? Correct, Yeah. Correct. For the time being, Yep. And can you just roughly frame out the, you know, $340 million to $350 million of revenue guidance for the year and split it between data analytics and chemistry? Yeah. So you know, without giving you specific numbers, obviously, we do expect our data analytics data analytics segment to grow revenue sequentially in the back half. With the exception of the fourth quarter. Again, we think we get that extension done. Then we will see sequential growth in both the third and fourth quarters on data. We are holding pro frac sort of flat with where the numbers have been in the first half on an average. International, we are assuming continued strong quarter similar to what we put up in the second quarter. And then on the domestic piece, as I mentioned, we are we are moderating the back half outlook due to the transition transactional nature. So if you kinda look at it on an average of 1Q and 2Q, as a framework for what we are looking at third quarter and fourth quarter. Okay. that is really helpful. And then from a cash standpoint, if you could just talk about the working capital draw that you saw of the first half. I think it is like what, about 36 million And sort of does that unwind over the second half of the year? And then also, Ryan said before that the CapEx number is going to go up You know, I had built in, like, 5 million a quarter from here on out. Or here on out, is that roughly a good estimate for CapEx going forward on a quarterly basis? Yeah. Just keep in mind, the CapEx is not going to show up on the cash flow statement because remember, we had about $12.5 million of the shortfall payment at the end of 25. That we transitioned into a construction credit, if you will, So from a cash perspective, that equipment is being constructed currently on a non cash basis because ProFrac is essentially paying us an OSP through equipment. So you will not see that come through on the cash flow statement, but I will tell you during the second quarter, we utilized about 3 million of that order shortfall payment even though it does not show up on the cash flow statement. It does show up on the balance sheet. And we already have POs in place for the remaining kind of 10 million ish that is in progress right now and coming out sort of on a on a monthly basis. But, yeah, we did have some pretty big working capital headwinds during the quarter, obviously. Supported a big, big a big growth trajectory in the second quarter. As we look this morning, as I mentioned, our ABL balance is down to zero as we have monetized a lot of the receivables that we have built up there at the end of the quarter. Okay. that is helpful. And then if I could just look at the comments that you made about the 5 gigs of either measurement and control next year by the first quarter. We know 400 megawatts equals 40 million and the power plant component, I think, is 2 gigs. Is there a revenue number associated with that? That you would like to offer and then the measurement, you know, the measurement controls, I think, is a lot lower, but just sort of to get a flavor on sort of the potential revenue impact from that 5 gigs of measurement and control in the first quarter? Yeah. So the not to give I am not gonna we will not give any revenue numbers on those. About it already. Ryan Gillis Ezell: But what I would say is on the some of these older, like, what I would say just pure gas fired power plants would big power density turbines, mostly just doing measurement. Right? there is not a significant amount of control on those now. As we are getting some of the more advanced designs because those were built. You know, these started pretty good while back. Some of our first ones, we began monitoring. As we are looking at some of these more advanced combined cycle and we are seeing improved efficiencies, they will have measurement and potential additional control. So but, you know, we are we are we are not gonna really give out the numbers directly on what those are. Analyst: Yeah. Understood. I will try to back into them. And then could you talk about the gross margin profile on the PREPA contract, dollars 40 million a year kicking in really the second quarter 27 because you are going to-- you stated you have about 30 million built in for 2027 that goes up to $2.04 billion in 2028. what is the margin profile look like? J. Bond Clement: Hey, Paul. We are gonna defer on the margin question. As well for now. We like to give a more holistic update relative to financials as we sink our teeth in a bit more. I would tell you initially, we are thinking the initial power that we will provide will be on a rental basis similar that we are doing on the Montana project, which will carry lower margins than if we own the equipment. But we are still working through when we might transition from a rental model to a power owned perspective, which changes the margin profile. Analyst: Great. Thanks for your help. Operator: Your next question comes from the line of Eric Benjamin Swergold of Firestorm Capital. Please go ahead. Eric Benjamin Swergold: Good morning, gentlemen. I cannot believe that just a few years ago, I was sitting near a conference room and you were doing 10 million a quarter and had your back against the wall. And now you are doing a $100 million in a quarter. Congratulations. And not to put you not to put your feet to the fire on 1, but we talked a little bit this morning about generators versus turbines, and there is been a lot of discussion getting about getting built into generators How about getting built into some of the turbines from the biggest turbine manufacturers as a built in option from the get go on those? Thanks. Ryan Gillis Ezell: Yeah. So that is a great a great question, Eric. I think I think that is the natural evolution pieces. A lot of the original, I would say, the high power density turbines have traditionally required a they have, like, a long standing agreement with some of the gas chromatography suppliers to do that even though they know they do not take fast measurements they are lucky to get a measurement every couple hours. They are we have we have had some initial inbounds around that potential component. Now it was always funny because you know, they there was a discussion over turbines can burn anything. Well, that is probably true. But when you start looking at the amount that are on location, and the impact of derating, and how we can help that overall fuel efficiency over them running in the in the long term. And then you combine that with the improved maintenance schedules we present a very, very, very strong value proposition and ROI. At our equipment being included as not only an OEM, but as a conditioning package in the front end. And so I would tell you that they are they are evolving similar to what we saw on the recip side of the business. it is been a little it has not been as fast but that is evolving. Eric Benjamin Swergold: Great. that is very helpful. Well, congratulations. Thank you very much for your hard work. Thank you, the entire team. Thanks to Bon for sticking in there when it was really bleak. Thanks to Mike for really helping out with the PowerTech side. You guys have done a fabulous job. Thanks very much. Appreciate it. Thank you. Operator: And your next question comes from the line of Jeffrey Scott Grampp of Northland Capital. Please go ahead. Jeffrey Scott Grampp: Hey, guys. Thanks. I just had 1 more, quick follow-up. Ryan, the, integrating the data and the chemistry side, sounds pretty interesting. I do not know if you guys have talked too much about kind of early time success or revenue contribution there. I mean, it makes a ton of sense to, blend those 2 together. But just wondering if you can expand on kind of timing of ramping up some of those opportunities or where kind of the stage of conversation is at with respect to customers adopting that, a little bit more extensively? Ryan Gillis Ezell: Yeah. You know, you know, Jeffrey, I gotta be honest. You made my day asking about how chemistry and data works together. Because that is been 1 of the key value creation platforms that we talk about, the convergence of the 2 segments of the business. I am extremely happy to report that we have now gotten deployment of direct XSPCT units on wells that we have done chemistry completion on. This is the core backbone of us, number 1, not only validating that our targeted chemistry improves uplift because we can see the chemistry that comes out of the hole in combination with the initial production on that initial production wedge, we are able to see not only the quality of the liquids, but also gas. And we can see any NGLs that potentially be lost massive value creation there. But more importantly, it is evolved into what we are almost calling reservoir mapping or DNA fingerprinting of higher end hydrocarbons that we are targeting our PCM treatment to release. Which is we are actually looking at the lab, designing to do that, and then we validate that flow And so even on a say an a flow rate that has the same BTU because we can see the real time speciation in the shift in hydrocarbon quality there is a higher value for that producing oil. And so this is unlocking tremendous value from multiple customers that we moved in from basically, a benchtop discussion to full field deployment. And that is gaining a significant amount of traction. And if you think about on a higher scale in the industry, you have got the large IOCs of the world between Conoco, Chevron, Ovintiv, and you guys talking about their particular surfactant design, targeted chemistry designs, you know, we have been per se preaching that gospel for over a decade and a half, and not only do I feel Flotek is the best in the business at delivering this type of service, We now have the differentiated high velocity high accuracy measurement devices to show how effective that service is. And that benefits the entire energy and infrastructure chain is now we have measurement devices that can look at every aspect of the value chain up and down inside hydrocarbon production. And improve the overall efficiency. And I think you are gonna see this have dramatic uptake and really accelerate our digital valuation business hand in hand with our prescriptive chemistry management. So we are super excited about it. Jeffrey Scott Grampp: That sounds awesome. I look forward to following the details there and congrats on everything. Thanks, guys. Yep. Operator: And there are no further questions at this time. I will now turn the call over to Mike Critelli. Please go ahead. Mike Critelli: Thanks again for joining our call. Please join us at some of our investor events on August 7, seventeenth to the nineteenth at EnerCom Denver, where we will be presenting another updated investor presentation. On September 10 at Lake Street's tenth annual best Ideas Growth Conference in New York City. And then join us on November 10 and 11 at the Daniel Energy Partner's Annual Permian Barbecue, where we hope to compete for best barbecue dish. For other events and the latest info, look at the events section of our website. And with that, I will hand it over to Ryan. Ryan Gillis Ezell: So we would like to thank everyone for joining us today for the continued support of the organization. And we look forward to bringing you positive updates in the back half of the year,. Thank you for joining. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Flotek Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Flotek Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Flotek (FTK) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Flotek Industries, Inc.? Here are five stocks we like better. Record second-quarter performance: Revenue rose 70% year over year to nearly $100 million, while adjusted EBITDA increased 109% to $16.8 million and net income reached $10 million. Data analytics and power services accelerated: Data analytics revenue grew 223% and generated 51% of total gross profit. Flotek’s contracted backlog exceeded $500 million, with a pipeline of more than $1 billion and a 10-year Puerto Rico project expected to add approximately $400 million in backlog. Guidance was raised: Flotek now expects 2026 revenue of $340 million to $350 million and adjusted EBITDA of $47 million to $51 million, supported by strong international chemistry sales and low leverage below one times adjusted EBITDA. Flotek Industries (NYSE:FTK) reported second-quarter results marked by record data analytics revenue, strong international chemistry sales and higher profitability, while outlining a growing pipeline for its power-services technology. Total revenue approached $100 million in the second quarter, up 70% from the year-earlier period and representing the company’s strongest quarterly performance in a decade, Chief Executive Officer Ryan Ezell said. Gross profit rose 65% year over year, while adjusted EBITDA increased 109% to $16.8 million. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Net income was $10 million, or $0.26 per share, compared with $1.8 million, or $0.05 per share, a year earlier, according to Chief Financial Officer Bond Clement. Revenue increased by $41 million year over year, with chemistry contributing 68% of the increase and data analytics accounting for the remaining 32%. Flotek’s data analytics segment posted revenue growth of 223% from the prior-year quarter, with segment revenue representing 19% of company revenue, up from 10% a year earlier. Ezell said data analytics accounted for 51% of total company gross profit, compared with 26% in the prior-year period, making it the company’s largest gross-profit contributor. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The business includes power services and digital valuation applications built around Flotek’s PWRtek platform and XSPCT Analyzer. Clement said 63% of second-quarter data analytics revenue came from external customers, compared with 44% a year earlier. The Montana Power Services contract contributed nearly $6 million in quarterly revenue, while upstream power-services revenue increased by $2.5 million sequentially. Ezell said Flotek expects to support more than 5 gigawatts of power through measurement or control using its technology by the first quarter of 2027. This figure includes measurement and control services for natural-gas-powered hydraulic fracturing fleets, conventional gas-fired power plants and the company’s recently announced Puerto Rico project. → No Hangover: Revisiting Microsoft One Week After Earnings Flotek also reported that its contracted backlog exceeded $500 million. Ezell said the company’s utility, infrastructure and data-center power-services pipeline was at its highest level to date, with a combined potential value of more than $1 billion across opportunities in various stages of bidding and negotiation. On Aug. 3, Flotek announced a 10-year agreement related to a 400-megawatt natural-gas-fired grid-enhancement project for the Puerto Rico Electric Power Authority, or PREPA. Under the agreement, Flotek expects approximately $400 million of revenue backlog through 2036 from renting gas-fired generation equipment and deploying its conditioning, analytics and gas-distribution skid systems. The company is partnering with Power Expectations, which leads the group executing the emergency temporary power-generation project. Flotek expects support-equipment deployment to begin in the fourth quarter of 2026, followed by initial power-generation equipment and conditioning and distribution skids by the end of the first quarter of 2027. Ezell said the Puerto Rico initiative will use Flotek’s technology to monitor, blend and distribute fuel, including a potential transition from liquefied natural gas to compressed natural gas and possible use of biogas. He also said Puerto Rico is pursuing a broader shift from coal- and diesel-fired generation toward natural gas, which could create additional opportunities beyond the initial 400-megawatt project. Clement said the Puerto Rico contract was not included in Flotek’s 2026 financial guidance because deployment timing is still being finalized. The company also excluded potential fourth-quarter revenue from a Phase II extension of its Montana Power Services contract, which remains under discussion. Clement said the Montana project generated about $6 million of revenue during the second quarter and could continue at roughly that quarterly run rate if extended. Flotek’s chemistry technologies segment increased revenue 53% from the year-earlier quarter despite a 5% decline in the average North American fracturing fleet count, according to Primary Vision data cited by the company. Ezell said the segment delivered its strongest quarterly sales performance since 2017. June was particularly strong, with nearly $31 million in chemistry revenue, Clement said. External-customer chemistry revenue totaled $15.2 million in June alone, exceeding the external revenue generated during the entire first quarter. International chemistry revenue reached $10.6 million, up 172% from a year earlier and compared with $1.9 million in the first quarter. Management attributed part of the strength to work pulled forward in the Middle East. Ezell said Flotek is serving four fracturing fleets in the Jafurah field and sees potential to expand to six fleets by year-end. He said that work has a remaining duration of more than four years, while the company is also pursuing chemistry and data analytics opportunities in Latin America and other international markets. Clement said the company expects international chemistry revenue to remain strong in the second half, supported by inventory shipments expected to arrive in-country during August and potentially September. However, Flotek expects a more normalized pace for domestic external chemistry revenue after work shifted from July into June. Flotek updated its full-year outlook, projecting revenue of $340 million to $350 million and adjusted EBITDA of $47 million to $51 million. The midpoints represent increases of 45% and 49%, respectively, from 2025 results, management said. The company expects both chemistry and data analytics revenue in each of the third and fourth quarters to exceed first-quarter levels. Adjusted EBITDA guidance does not add back non-cash amortization of contract assets, which Flotek expects to total about $9 million in 2026. General and administrative expense increased 14% year over year, but rose 7% excluding stock-based compensation. G&A declined to less than 8% of revenue from nearly 12% a year earlier, which Clement said was the company’s lowest quarterly G&A rate in at least a decade. Flotek’s asset-based lending balance had been reduced to zero as of the call after being elevated at June 30 to fund working-capital needs associated with strong June sales. Using the midpoint of adjusted EBITDA guidance and June 30 net debt, Clement said the company’s leverage ratio was below one times. Flotek Industries, Inc (NYSE: FTK) is a Houston-based oilfield services provider specializing in innovative chemical technologies for the upstream energy sector. The company develops, manufactures and markets specialty drilling fluids, completion fluids and production chemicals that enhance drilling efficiency, optimize well performance and mitigate operational risks. Flotek's solutions are designed to improve drilling rates of penetration, reduce nonproductive time and address challenging downhole environments, including high-pressure/high-temperature wells and sour service conditions. Flotek's operations are organized into three core business segments: Drilling & Completion Fluids, Production Chemicals & Process Management, and Water Solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Flotek Industries Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved the strongest quarterly revenue in a decade, driven by the convergence of real-time data analytics and differentiated chemistry solutions. Data Analytics segment reached a major milestone, contributing 51% of company gross profit compared to 26% in the prior year quarter. Chemistry Technology revenue grew 53% year-over-year, significantly outpacing the market despite a 5% decline in the average North American frac fleet count. International chemistry revenue reached $10.6 million in Q2, nearly matching the total international revenue for the entire 2025 fiscal year. Strategic pivot toward a Data-as-a-Service (DaaS) model is expanding the total addressable market and shifting the portfolio toward high-margin, recurring revenue streams. Management attributes growth to the increasing demand for remote power generation and the critical need to protect capital-intensive turbine and engine investments. The integration of prescriptive chemistry and data analytics is enabling 'reservoir mapping' to validate hydrocarbon uplift and optimize operator ROI. Updated 2026 guidance assumes a 45% increase in revenue and a 49% increase in EBITDA at the midpoints compared to 2025 actuals. Expects to support over 5 gigawatts of power through measurement or control by the first quarter of 2027 via the proprietary PWRtek platform. Guidance for the second half of 2026 assumes a more normalized pace for domestic chemistry revenue due to the transactional nature of that business. The 10-year, $400 million Puerto Rico contract is expected to begin deployment in Q4 2026, with primary financial impacts starting in Q1 2027. Assumes no revenue from the Montana Power Services contract in Q4 2026 pending the finalization of a Phase 2 extension currently under negotiation. Contracted backlog has expanded to over $500 million, providing long-term visibility and stability for the Data Analytics segment. The company utilized approximately $3 million of an order shortfall payment credit for equipment construction, which does not appear on the cash flow statement. G&A expenses as a percentage of revenue declined to less than 8%, the lowest rate in at least a decade, reflecting significant operational leverage. Management highlighted the Middle East as a key growth driver, with work pulling forward into June and potential to expand from 4 to 6 frac fleets by year-end. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The power services pipeline, particularly for utilities and data centers, is at an all-time high with a combined potential value exceeding $1 billion. Management is seeing significant inbound interest for real-time blending and control technologies to prevent NPT (non-productive time) in power generation. The project involves transitioning from coal/diesel to natural gas, utilizing Flotek's ability to monitor and blend LNG, CNG, and potentially biogas in real-time. Initial deployment involves 400 megawatts, but management sees potential to support a broader 3-gigawatt power transition in the region. Flotek has invested over $13 million in CapEx for monitoring and conditioning equipment, with plans to continue reinvesting cash flow due to high ROI. Management is open to M&A or consolidation opportunities to acquire mechanical conditioning operators and upgrade their equipment with proprietary digital tech. The company is deploying XSPCT units on wells to validate that targeted chemistry improves production uplift, effectively 'fingerprinting' hydrocarbons. This integrated approach allows operators to see real-time speciation and shifts in hydrocarbon quality, unlocking value beyond simple BTU measurements.

This article first appeared on GuruFocus. Total Revenue: Approached $100 million, up 70% year-over-year, the strongest quarterly performance in 10 years. Data Analytics Segment Revenue: Up 223% year-over-year, achieving the highest quarterly revenue in company history. Chemistry Technologies Revenue: Increased 53% year-over-year, with international chemistry revenue reaching $10.6 million. Gross Profit: Climbed 65% year-over-year; gross margin totaled 24% of revenue. Adjusted EBITDA: Grew 109% year-over-year, totaling $16.8 million. Net Income: $10 million, or $0.26 per share, compared to $1.8 million, or $0.05 per share, in the prior-year quarter. G&A Expenses: Increased 14% year-over-year; declined to less than 8% of revenue, the lowest quarterly rate in at least a decade. 2026 Guidance: Total revenue expected between $340 million and $350 million; adjusted EBITDA expected between $47 million and $51 million. Warning! GuruFocus has detected 12 Warning Signs with FTK. Is FTK fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue approached $100 million in Q2 2026, up 70% year-over-year, marking the strongest quarterly performance in a decade. Data analytics segment revenue grew 223% year-over-year, with service revenues exceeding total segment revenues from the prior-year quarter. Secured a 10-year, $400 million contract with PREPA for Puerto Rico's 400-megawatt gas power project, expanding contracted backlog to over $500 million. International chemistry revenue surged 172% year-over-year to $10.6 million, with strong growth expected to continue in the second half of 2026. Adjusted EBITDA grew 109% year-over-year to $16.8 million, with leverage ratio below 1x and ABL borrowings reduced to zero as of the call date. Data analytics became the largest contributor to gross profit, accounting for 51% of total company gross profit, up from 26% in the prior-year quarter. Digital valuation device deployments grew 56% sequentially to 89 units, with the ExPEC Analyzer named Product of the Year at the 2026 Analyzer Technology Conference. Company achieved zero lost time incidents in field operations during the quarter. Updated 2026 guidance implies 45% revenue growth and 49% EBITDA growth versus 2025 actuals. Power services pipeline exceeds $1 billion, with expectations to support over 5 gigawatts of power by Q1 2027. Gross profit margin declined slightly to 24% in Q2 2026, down less than 100 basis points year-over-year, partly due to a $7 million decline in order shortfall penalty. Guidance for the second half of 2026 assumes a more normalized pace for domestic chemistry revenue, which may be lower than the exceptional Q2 levels. The company's guidance does not include any financial impact from the Puerto Rico contract in 2026, and the Montana Power Services contract extension is not yet secured, with no revenue assumed from it in Q4. Working capital needs increased significantly during the quarter, leading to an elevated ABL balance at June 30, though it was reduced to zero by the call date. The company faces potential supply chain strain from the strong international chemistry demand, which could impact delivery timelines. The transition to a data-as-a-service model requires significant capital expenditure, with over $13 million invested in monitoring and conditioning equipment, which may pressure near-term cash flows. The company is still in early stages of integrating data analytics with chemistry services, with limited revenue contribution from these converged offerings so far. The Puerto Rico contract's initial power generation will be on a rental basis, which carries lower margins than owned equipment, potentially impacting profitability. The company's growth is dependent on the successful execution of large, chunky contracts, which can be lumpy and unpredictable. The company faces competition from traditional gas chromatography suppliers in the turbine market, which may slow adoption of its real-time monitoring technology. Q: Can you comment on the overall pipeline in the power infrastructure business and what other projects are out there?A: Ryan Ezell, CEO, stated that the power services pipeline, particularly for utilities, infrastructure, and data centers, is at its highest point in company history. He noted a combined pipeline value of well over $1 billion at various stages of bidding and negotiation. The company is expanding beyond measurement into real-time monitoring for traditional gas-fired power plants and data center growth, and expects to support over 5 gigawatts of power through its PowerTech platform by Q1 2027. Q: Can you elaborate on the power generation side of the Puerto Rico contract and when that activity kicks in?A: Ryan Ezell, CEO, explained that the initial 40 megawatts of prime generation will move quickly, with financial impacts expected to play in during Q1 2027, with some mobilization in Q4 2026. He highlighted that Puerto Rico is looking to grow almost 3 gigawatts of power, transitioning from coal and diesel to gas, presenting expansion opportunities. The project involves LNG to CNG transition, potentially combined with biogas, which leverages Flotek's unique real-time monitoring and blending technologies. Q: What is the backstory on how you became involved with the Puerto Rico contract and how did you convey the value add to win the deal?A: Ryan Ezell, CEO, detailed that the involvement evolved from initial work in Montana supporting government-driven contracts. Flotek was brought in initially to look at gas-fired power generation for U.S. government defense contracting sites, and as opportunities expanded under Puerto Rico's 3-gigawatt gas-fired power transition, their technology for LNG to CNG transition, biogas incorporation, and real-time blend, control, and distribution became a strong value proposition. The pursuit took multiple quarters, involving testing and collaboration with partners like Power Expectations. Q: Can you contextualize the 5 gigawatts under measurement or control from a revenue perspective and split it between oil and gas exposure versus other end markets?A: Ryan Ezell, CEO, declined to give direct revenue figures but broke down the composition: roughly 75 measurement and/or control sites on e-frac and natural gas-powered fleets (35-40 megawatts per site), just under 2 gigawatts from natural gas-fired power plant facilities like CPV Fairview, and the recent 400-megawatt PREPA award, totaling approximately 5 gigawatts. He noted that revenue per location varies significantly based on the level of service (measurement vs. control vs. distribution), with significant upside as they transition to higher-value services. Q: Is there anything you need to invest in to attack the data analytics market faster and solidify your position?A: Ryan Ezell, CEO, outlined three primary pathways: continued organic growth through CapEx investments (over $13 million invested in monitoring, conditioning, and distribution equipment), potential expansion of organic power services to 50-100 megawatts to stabilize work with behind-the-meter power generation partners, and M&A opportunities to consolidate mechanical conditioning operators by upgrading their equipment with Flotek's proprietary blending and measurement technology. He noted that most measurement and conditioning assets can be built in four to five weeks. Q: How does your technology separate you in the power market, and are more customers recognizing this?A: Ryan Ezell, CEO, highlighted a case study where Flotek's patented real-time gas conditioning and blending technology prevented turbine shutdowns that were occurring once or twice weekly. By automatically adjusting blending valves based on methane number variance, they achieved zero shutdowns over six weeks, improved fuel efficiency, extended maintenance cycles, reduced derating capacity, and created carbon credits. He noted growing inbound interest from utilities, data centers, and OEM engine builders, with plans to double the sales and pursuit teams by year-end. Q: How large is the mechanical conditioning market, and what is the opportunity for Flotek?A: Ryan Ezell, CEO, explained that most fuel gas utilization for frack fleets uses traditional filtration, but lacks real-time quality detection and blending capabilities. He estimated there are roughly 110-120 locations suitable for full conditioning and distribution, with Flotek having measurement devices on about 75 of those. The exciting part is that these same companies are moving into behind-the-meter power generation, and Flotek's technology is moving with them, even for pipeline gas applications where quality variance causes premature turbine damage. Q: How much inbound interest are you receiving versus outbound work, and is the word getting out?A: Ryan Ezell, CEO, stated that inbound interest is growing significantly, particularly from companies experiencing turbine shutdowns and from the infrastructure side with utilities contractors. They are also seeing strong inbound from OEM engine builders for their reciprocating engine control units. He noted that outbound pursuits are now being overcome by inbound requests, and the company is doubling its sales and pursuit teams by year-end to capitalize on this momentum. Q: Can you talk about the international chemistry success and how you think about the domestic/international split going forward?A: Ryan Ezell, CEO, highlighted over 3.5-4 years of investment in international growth, particularly in the Middle East. Flotek is currently on four frac fleets in the Jafara field, with potential to expand to six by year-end. The scope of work under this contract will continue for another 4.5+ years, providing a strong runway. He also noted active promotion in Latin America, with data analytics equipment and real-time chem ad units being deployed, and approved technologies inside ADNOC and Aramco for gas monitoring and RVP measurements. Q: Can you talk about the guidance for the year, particularly why second-half revenue looks lighter than the first half?A: J. Bond Clement, CFO, explained that the second half will actually be bigger than the first half, but they are moderating the outlook due to a huge month of external chemistry in June ($20 million) that included work moved from July into June. They are normalizing the back half as an average between Q1 ($12.8 million) and Q2 ($20 million) for external chemistry. Additionally, guidance does not include any revenue from the Montana Power Services contract in Q4, which contributed about $6 million in Q2, pending a potential Phase II extension. Q: Can you roughly frame out the $340-350 million revenue guidance split between data analytics and chemistry?A: J. Bond Clement, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

HOUSTON, Aug. 4, 2026 /PRNewswire/ -- Flotek Industries, Inc. ("Flotek" or the "Company") (NYSE: FTK) today announced operational and financial results for the quarter ended June 30, 2026. As a result of strong year-to-date results combined with the Company's outlook on the remainder of the year, Flotek increased its previously issued 2026 guidance. A summary of key financial metrics is as follows (in thousands, except 'per share' amounts): Second Quarter 2026 Highlights Total revenue grew 70% as compared to the second quarter of 2025. Data Analytics achieved record quarterly revenue of $19.2 million, with external customers representing 63% of segment revenue. Chemistry Technologies quarterly revenue totaled $80.2 million, the highest since 2017. Data Analytics comprised 51% of total gross profit versus 26% in the prior-year quarter. Net income and diluted net income per share increased 463% and 420%, respectively, as compared to the year-ago quarter. Adjusted EBITDA(1) totaled $16.8 million, a 109% increase from second quarter 2025. Announced a 10-year, $400 million power services contract to support 400 MW Puerto Rico gas power project. 2026 Guidance Update Based on results through the first half of 2026 and the Company's current expectations, Flotek is increasing its guidance metrics for 2026 as follows (in millions): The Company's updated 2026 guidance above does not include any potential impact from the Puerto Rico Power Services (PREPA) contract announced on August 3, 2026. The Company is working closely with the customer and other service providers to finalize the initial deployment schedule. Management Commentary Chief Executive Officer Dr. Ryan Ezell commented, "We delivered outstanding second-quarter results with each segment generating strong year-over-year growth. Data Analytics generated second-quarter 2026 gross profit of $12 million, representing 51% of total Company gross profit. For the first time, Data Analytics surpassed Chemistry as the largest contributor to overall gross profit, underscoring the continued momentum and scalability of the segment. Including our related-party revenues, domestic chemistry revenue increased 43% and international chemistry grew 172% compared with the second quarter of 2025 marking the segment's highest quarterly revenue in nearly 10 years. Our second-quarter performance exemplifies the execution of our corporate strategy and strengthens the momentum of Flotek's industrialized pivot to a data-driven technology leader. Our recently announced contract award to support power initiatives in Puerto Rico validates our ongoing efforts to expand our portfolio of technologies beyond oil and gas, as we believe our real-time measurement solutions can play an important role in meeting the rapidly growing demand for behind the meter power generation and other differentiated industrial and infrastructure verticals. We believe these pursuits will significantly expand our addressable market and accelerate our pivot toward a more diversified and balanced platform." Second Quarter 2026 Financial Results Revenue: Flotek reported total revenues of $99.4 million for the second quarter of 2026, an increase of 70% compared to total revenues of $58.4 million for the second quarter of 2025.Revenue during the quarter included a 53% increase in Chemistry revenue and a 223% increase in Data Analytics revenue as compared to the 2025 quarter. International Chemistry revenue totaled $10.6 million during the second quarter, as compared to $3.9 million in the year-ago period reflecting the Company's ongoing work in the Middle East. Data Analytics revenue during the quarter included $5.9 million related to the Company's utility infrastructure support agreement announced in March 2026.Revenue related to the minimum purchase requirements (the "Minimum Purchase Requirements") under the Company's long-term supply agreement with ProFrac Services, LLC, totaled $1.2 million and $7.8 million, during the second quarters of 2026 and 2025, respectively. The reduction in the Minimum Purchase Requirement during the current quarter was due to increased related party Chemistry revenue versus the year-ago quarter. Segment Revenue Summary (in thousands) Gross Profit: The Company generated gross profit of $23.8 million during the second quarter of 2026, or 24% of revenue, compared to $14.4 million during the second quarter of 2025, or 25% of revenue. Selling, General and Administrative ("SG&A") Expense: SG&A expense totaled $7.7 million for the second quarter of 2026, or 8% of revenue, compared to $6.8 million during the second quarter of 2025, or 12% of revenue. The increase in current quarter SG&A expense was primarily the result of higher non-cash stock compensation costs. Net Income and EPS: Flotek reported net income of $10.0 million, or $0.26 per diluted share, for the second quarter of 2026. This compares to net income of $1.8 million, or $0.05 per diluted share, for the second quarter of 2025. Second quarter 2025 net income and per share amounts were negatively impacted by $4.2 million of transaction costs associated with the PWRtekTM asset acquisition. Adjusted EBITDA (Non-GAAP)(1): Adjusted EBITDA totaled $16.8 million in the second quarter of 2026 as compared to $8 million in the second quarter of 2025. Adjusted EBITDA calculations for the second quarter of 2026 and 2025 do not add back non-cash amortization of contract assets totaling $2.4 million and $1.4 million, respectively. Conference Call Details The Company plans to host its earnings conference call on Wednesday, August 5, 2026, at 9:00 a.m. CDT (10:00 a.m. EDT). Participants may access the call through Flotek's website at https://ir.flotekind.com/events, by telephone toll free at 1-800-836-8184 (international toll: 1-646-357-8785), or by using the following link to access the webcast: https://app.webinar.net/dYJWBo8V8lL approximately five minutes prior to the start of the call. Following the conclusion of the conference call, a recording of the call will be available on the Company's website. About Flotek Industries, Inc. Flotek Industries, Inc. is a leading chemistry and data technology company focused on servicing the Energy industry. The Company's top tier technologies leverage near real-time data to deliver innovative solutions to maximize customer returns. Flotek has an intellectual property portfolio of over 130 patents, 20+ years of field and laboratory data, and a global presence in more than 59 countries. Flotek has established collaborative partnerships focused on sustainable and optimized chemistry and data solutions, aiming to reduce the environmental impact of energy on land, air, water and people. Flotek is based in Houston, Texas and its common shares are traded on the New York Stock Exchange under the ticker symbol "FTK." For additional information, please visit www.flotekind.com. Forward-Looking Statements Certain statements set forth in this press release constitute forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding Flotek Industries, Inc.'s business, financial condition, results of operations and prospects. Words such as will, continue, expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this press release. Although forward-looking statements in this press release reflect the good faith judgment of management, such statements can only be based on facts and factors currently known to management. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. These statements include, without limitation, statements regarding expected revenues under the Company's long-term contracts, the total term of such contracts, the timing of the scaling and deployment of equipment, the total power capacity and operating performance of equipment once deployed, and the Company's ability to perform under and satisfy the terms and conditions of its contracts. Factors that could cause actual results to differ materially from anticipated results include risks related to the Company's projects that are outside the Company's control, including, without limitation, securing fuel supply, international logistics, obtaining permits and governmental approvals, satisfying financial requirements, third-party equipment delivery, construction execution and scheduling, meeting execution deadlines, integrating systems, political and regulatory developments, geopolitical instability or armed conflicts, and severe weather events. Further information about the risks and uncertainties that may impact the Company are set forth in the Company's most recent filing with the Securities and Exchange Commission on Form 10-K and Form 10-Q (including, without limitation, in the "Risk Factors" section thereof), and in the Company's other SEC filings and publicly available documents. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this press release. View original content to download multimedia:https://www.prnewswire.com/news-releases/flotek-increases-2026-guidance-as-data-analytics-delivers-record-quarterly-revenue-302842947.html

Flotek Industries (FTK) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this oilfield services company would post earnings of $0.13 per share when it actually produced earnings of $0.12, delivering a surprise of -7.69%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Flotek Industries, which belongs to the Zacks Chemical - Specialty industry, posted revenues of $99.37 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 46.70%. This compares to year-ago revenues of $58.35 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Flotek Industries shares have added about 55.3% since the beginning of the year versus the S&P 500's gain of 11%. While Flotek Industries has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Flotek Industries was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.17 on $71.47 million in revenues for the coming quarter and $0.60 on $281.55 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Specialty is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Ecovyst (ECVT), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This specialty chemical producer is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of +58.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ecovyst's revenues are expected to be $231.01 million, up 15.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flotek Industries, Inc. (FTK) : Free Stock Analysis Report Ecovyst Inc. (ECVT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Flotek Industries, Inc.'s (NYSE:FTK) robust earnings report didn't manage to move the market for its stock. Our analysis suggests that shareholders have noticed something concerning in the numbers. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. For the year to March 2026, Flotek Industries had an accrual ratio of 0.24. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing. Even though it reported a profit of US$29.8m, a look at free cash flow indicates it actually burnt through US$2.5m in the last year. It's worth noting that Flotek Industries generated positive FCF of US$4.4m a year ago, so at least they've done it in the past. Unfortunately for shareholders, the company has also been issuing new shares, diluting their share of future earnings. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. As it happens, Flotek Industries issued 22% more new shares over the last year. That means its earnings are split among a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. Check out Flotek Industries' historical EPS growth by clicking on this link. Three years ago, Flotek Industries lost money. On the bright side, in the last twelve months it grew profit by 108%. On the other hand, earnings per share are only up 74% over the same period. And so, you can see quite clearly that dilution is influencing shareholder earnings. In the long term, earnings per share growth should beget share price growth. So it will certainly be a positive for shareholders if Flotek Industries can grow EPS persistently. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. As it turns out, Flotek Industries couldn't match its profit with cashflow and its dilution means that earnings per share growth is lagging net income growth. Considering all this we'd argue Flotek Industries' profits probably give an overly generous impression of its sustainable level of profitability. So while earnings quality is important, it's equally important to consider the risks facing Flotek Industries at this point in time. For example, we've found that Flotek Industries has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis. In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Interested in Flotek Industries, Inc.? Here are five stocks we like better. Flotek’s first-quarter results improved sharply, with revenue up 27%, gross profit up 25%, and adjusted EBITDA up 44% year over year. Management said the company’s shift toward a Data-as-a-Service model is gaining momentum. Data Analytics is becoming the main growth engine, with segment revenue up 295% and gross profit margin rising to 75%. The business now accounts for 50% of company gross profit, up from 8% a year ago, and backlog has expanded to $34.1 million for the rest of 2026. Flotek raised 2026 guidance and highlighted new growth opportunities, projecting revenue of $270 million to $290 million and adjusted EBITDA of $36 million to $41 million. The company also pointed to expansion in Power Services, digital valuation deployments, and a pipeline of power/data-center opportunities. Flotek Industries (NYSE:FTK) reported higher first-quarter revenue and adjusted EBITDA as rapid growth in its Data Analytics segment offset weaker external chemistry sales and helped advance the company’s transition toward recurring, higher-margin technology services. On the company’s first-quarter 2026 earnings call, Chief Executive Officer Ryan Ezell said Flotek’s strategic shift toward a Data-as-a-Service model “continues to gain momentum,” supported by real-time data tools and chemistry solutions aimed at energy and infrastructure customers. → Wells Fargo’s Comeback Is Real—But Not Risk-Free Total revenue increased 27% compared with the first quarter of 2025, while gross profit rose 25% and adjusted EBITDA increased 44%, according to management. Ezell said Data Analytics revenue grew 295% year over year, reaching the highest quarterly level in that segment’s history. Chemistry Technologies revenue rose 13% despite what the company described as three-year lows in North American completions activity. “Data analytics accounted for 50% of the company’s gross profit versus 8% in the prior year’s quarter, marking a major milestone in Flotek’s transformation,” Ezell said. → Rocket Lab Posts Record Q1 Revenue, Raises Q2 Guidance Ezell highlighted particularly strong growth in Data Analytics service revenue, which he said increased 785% from the prior-year period. The segment’s gross profit margin rose to 75%, compared with 38% a year earlier. Flotek said growth in the segment is being driven by its Power Services platform, which the company calls PowerTech, and its Digital Valuation offering. The company reported several recent contract wins, including a 27-unit order from a large oilfield services customer with a distributed power fleet, a 15-unit order from a major midstream customer for real-time crude and condensate quality measurement, and a smart skid rental deployment for a major international oil company to optimize gas quality through real-time blending of field gas and compressed natural gas. → The Great Crypto Thaw: Regulation Ignites an Infrastructure Boom Ezell said those wins expanded Flotek’s expected backlog for the remainder of 2026 to $34.1 million and its three-year expected backlog to more than $90 million. The company also said it expects to have proprietary real-time analyzers on more than 50% of the currently active North American e-frac and natural gas-powered fleets by year-end. In response to an analyst question, Ezell said the company’s approach is to first place measurement equipment in the field, then pursue conditioning and optimization opportunities. Management also discussed Flotek’s move into utility and distributed power applications. Ezell said the company has begun Phase I of a utilities infrastructure project tied to federal disaster recovery initiatives, mobilizing 12 megawatts of distributed power along with proprietary gas conditioning and distribution equipment to an infield staging area. First power is expected in the third quarter of 2026. Chief Financial Officer Bond Clement said Flotek expects 2026 revenue from the disaster recovery Power Services contract to total approximately $12 million before considering any contract extension. During the question-and-answer session, Ezell said the company believes the project could ultimately involve 25 megawatts to 30 megawatts across two primary sites, with a potential second phase more likely to move into 2027. He also said Flotek is pursuing more than 200 megawatts of additional power generation and conditioning opportunities tied to data centers and other behind-the-meter power applications, although he described many of those as longer-cycle opportunities more likely to generate revenue in 2027. Flotek also pointed to progress in Digital Valuation, which uses its XSPCT spectrometer for real-time measurement in custody transfer processes. Ezell said the XSPCT became the first optical instrument to meet the reproducibility and repeatability requirements of GPA 2172, also known as API 14.5, in the fourth quarter of 2025. The instrument was also named Product of the Year at the 2026 Analyzer Technology Conference. Since completing a Digital Valuation pilot program in the third quarter of 2025, Flotek ended 2025 with 25 active units deployed. Ezell said that number has more than doubled to 57 units currently deployed or contracted for delivery. In the Q&A session, he said the company is targeting roughly 150 units by year-end and said larger midstream customer orders could cause deployments to grow in a nonlinear fashion. Flotek’s Chemistry Technologies segment posted a 13% revenue increase from the prior-year quarter. Ezell said the performance came despite a 21% decline in the average North American frac fleet count over the same period, citing Primary Vision data. Clement said related-party revenue increased by about $21 million, or approximately 70%, from the year-ago quarter. Of that increase, roughly $14 million was related to chemistry revenue, while about $7 million came from the PowerTech lease agreement. External customer chemistry revenue declined 33% year over year, though it was flat sequentially. Management said it expects external chemistry revenue to improve in the second quarter as customer engagement increases. Ezell said available high-end pressure pumping equipment has tightened, particularly for Tier 4 dual-fuel, direct-drive natural gas and e-frac fleets. He also pointed to expected growth from Middle East deployments after logistics delays limited international chemistry revenue in the first quarter. For 2026, Flotek issued guidance for total revenue of $270 million to $290 million and adjusted EBITDA of $36 million to $41 million. Clement said the midpoints imply growth of 18% and 17%, respectively, compared with 2025. Net income for the first quarter was $4.7 million, or $0.12 per share, compared with $5.4 million, or $0.17 per share, in the prior-year quarter. Clement attributed the decline primarily to higher depreciation and interest expense related to the PowerTech acquisition that closed in the second quarter of 2025, along with a higher effective tax rate and a higher share count. Clement said the company expects its effective tax rate to be in the range of 23% to 26% going forward, with the vast majority non-cash. He also said Flotek had a leverage ratio of about 1x using the midpoint of 2026 adjusted EBITDA guidance and net debt as of March 31. Ezell said the company believes broader energy market conditions are improving, citing geopolitical uncertainty, growing power demand from artificial intelligence and data centers, and aging transmission infrastructure. He said Flotek remains focused on expanding high-margin data services while maintaining its chemistry business as a foundation for customer relationships. Flotek Industries, Inc (NYSE: FTK) is a Houston-based oilfield services provider specializing in innovative chemical technologies for the upstream energy sector. The company develops, manufactures and markets specialty drilling fluids, completion fluids and production chemicals that enhance drilling efficiency, optimize well performance and mitigate operational risks. Flotek's solutions are designed to improve drilling rates of penetration, reduce nonproductive time and address challenging downhole environments, including high-pressure/high-temperature wells and sour service conditions. Flotek's operations are organized into three core business segments: Drilling & Completion Fluids, Production Chemicals & Process Management, and Water Solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Flotek Industries Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Image source: The Motley Fool. Nov. 5, 2025 at 10 a.m. ET Chief Executive Officer — Ryan Ezell Chief Financial Officer — J. Bond Clement Operator — Delbert Rose Need a quote from a Motley Fool analyst? Email [email protected] Ryan Ezell: Thank you, Delbert, and good morning. We appreciate everyone's interest in Flotek and for joining us today as we discuss our third quarter of 2025 operational and financial results. In the third quarter, we saw North American operators maintain the cautious posture initiated in the second quarter as they continue to navigate the return of OPEC+ spare capacity and persistent global trade uncertainty. Despite the dynamic geopolitical and macroeconomic challenges that have injected uncertainty within the market, the Flotek team remains steadfast at the execution of our corporate strategy, driving transformation and delivering our 12th consecutive quarter of adjusted EBITDA improvement. As referenced on Slide 4, Flotek extended its track record of transforming the company into a Data-as-a-Service business model as our industrial pivot continues to gain momentum while expanding the total addressable market for future growth of the company. Furthermore, we increased market share in both of our complementary business segments with an unwavering commitment to service quality and value creation for our customers and shareholders through the convergence of innovative data and chemistry solutions. With that, I'd like to touch on some key highlights for the quarter referenced on Slide 7 that Bond will discuss later in the call. Total revenue during the quarter rose 13% versus third quarter 2024, highlighted by a 232% increase in data analytics revenue, which is our strongest quarter ever and a 43% increase in external chemistry revenue. Gross profit climbed 95% versus third quarter 2024, with third quarter 2025 gross profit margin rising to 32%. Net income totaled $20.4 million, while adjusted EBITDA was up 142% versus third quarter 2024 and up more than 20% sequentially. On October 29, 2025, Flotek announced that the XSPCT analyzer was the first optical spectrometer to comply with oil and gas custody transfer standards known as GPA 2172, further empowering our ability to build high-margin revenue backlog in the Data Analytics segment. Finally, we increased our 2025 total revenue and adjusted EBITDA guidance ranges by 6% and 3%, respectively. Above all, these milestones were achieved with 0 lost time incidents in the field of operations. I also want to spotlight our differentiated prescriptive chemistry management service team, which has remarkably maintained over 3,500 days with no OSHA recordables or lost time incidences. You combine that with the recent achievements at MTI in the third quarter of 2025 saw Flotek achieve its lowest EMR score in company history. I'd like to thank all of our employees for their hard work and commitment to safety and service quality in achieving these outstanding results. Now turning to the larger picture for the energy and infrastructure sector shown on Slide 9. We share the vantage point that the fundamentals for hydrocarbon demand will continue to grow over the long term. Substantial investment will be required to maintain current production levels, much less to increase production sustainably to meet expanding requirements of power demand driven by AI, data centers and industrial reshoring, combined with the reliability issues of an aging transmission infrastructure. As our legacy pressure pumping customers diversify into the power generation business to capitalize on this demand opportunity, Flotek is poised to support them and emerging customers with products and services that help protect their investment in power generation equipment. With multiyear waiting list for turbines and reciprocating engines, protecting these capital-intensive investments is critical, along with enabling reliability standards that exceed the greater than 99% uptime requirements. With this outlook in mind and referencing Slide 10, I've never been more invigorated about Flotek's future as we strengthen our position as a technology leader, spearheading innovation and delivering tailored data and chemistry solutions that meet our customers' specific needs. We are committed to shaping the industry's digitalized future by leveraging chemistry as the common value creation platform. Now let's dive into the details, referencing Slide 11 of the earnings investor deck. Today, I want to spotlight the remarkable progress in our Data Analytics segment, which saw service revenues increase 625% in Q3 2025 versus Q3 2024, elevating gross profit to 71% in Q3 2025 versus 44% in the same quarter a year ago. This transformational growth in data-driven service revenue is empowered by 3 upstream technology applications: power services, digital valuation and flare monitoring, all of which are fueling significant advancements for our organization while generating recurring revenue backlog. The first is our transformative power services, which has evolved from a novel analytical approach into a transformative solution for the energy infrastructure sector that we call PWRtek. What began as advanced analytics has grown into a comprehensive end-to-end fuel management platform, redefining performance standards and operations within the sector. Looking at Slide 12. At the heart of PWRtek is our Verax analyzer, which goes beyond data collection to deliver custody transfer grade measurements. It provides precise BTU methane number and volume reporting for royalties, invoicing and performance guarantees. Complementing this is our patented ESD trailers actively remove liquids and contaminants, conditioning high BTU hydrocarbon feeds to meet exact turbine or engine performance specifications. Because every site and grid condition are unique, we have integrated Coriolis metering, automated CNG blending and seamless backup connections, allowing operators to switch fuels or go off grid with a single button resolving major constraints to the development of data center and grid power infrastructure. But Biotech is more than just technology. It's about control. Operators interact effortlessly through an on-trailer HMI or a unified web portal that is accessible on desktop, tablet or smartphone. Our cloud-based portal enables the monitoring of live BTU trends, H2S alerts, Coriolis flow meter readings and automated CNG blend controls, combined with custom alarm thresholds to automatically isolate all-spec hydrocarbon feeds and protect high-value turbines or engines from catastrophic damage, thus minimizing downtime and operational risk while enhancing safety. All data flows securely through our patented edge-to-cloud pipeline, ensuring 0 manual intervention, end-to-end encryption, full audit trails and compliant custody transfer recordkeeping. Finally, our over 35 data analytics patents position Flotek as a leader across the natural gas value chain. When considering our capabilities for advanced fuel blending, zero emissions analytics, custody transfer grade flow cell measurements, wireless ESD actuation and secure edge-to-cloud data transmission, we deliver unmatched monitoring, control and safety for field gas operations. In April of 2025, we acquired 30 patented real-time gas monitoring and dual fuel optimization assets. We are proud to report that the integration of these assets has gone seamlessly and all units are in service as of today, which is ahead of our original schedule. Now let's transition to Slide 13, where we'll dive into our second upstream application, digital valuation. This groundbreaking use case sets a new standard in the oil and gas industry, delivering unprecedented transparency and minimizing enterprise risk for producing wells like never before through a real-time digital twinning of the custody transfer processes. By monitoring hydrocarbon quality and composition in real time, we have unlocked a new market for the industry and for Flotek. On October 29, 2025, Flotek reported a historic milestone in natural gas measurement. The XSPCT spectrometer became the first optical instrument to achieve the stringent reproducibility and repeatability requirements of the oil and gas industry standard for custody transfer, GPA 2172 and API 14.5. The XSPCT measurement unit is designed to enable more accurate volume and composition of data, thereby delivering greater transparency for royalty owners, operators and midstream companies than traditional methods. We believe the XSPCT speed, accuracy, durability and qualification under the rigorous measurement standards outlined in GPA 2172 will provide a significant advantage in discussions with prospective customers as we aggressively expand this manufacture and field deployment. Let's move to our third upstream application, the VeraCal flare monitoring solution. We continue to see operational demand in the third quarter of 2025 as we navigate the rapidly changing regulatory landscape by partnering with operators and flare developers to deliver value that goes beyond just compliance and unlocks new efficiencies and environmental benefits to our clients. It's clear that our transformational strategy to grow the data analytics segment through upstream applications is gaining traction. But what is most important is what it means for our stakeholders and investors. Our DaaS-driven strategy ensures predictable recurring revenue and cash flow, delivering stability and long-term value. Our proprietary data technology is a superior measurement accuracy enable velocity and decision control that establish a high barrier to entry, secure client loyalty and support our value-based service model. In long time, high-margin subscriptions position Flotek for sustained growth and margin expansion, driving significant shareholder value over time. And lastly, our Chemistry Technologies segment continues to deliver robust performance, driven by the differentiation of our prescriptive chemistry management services and our expanding international presence. Slide 17 underscores the resilient performance of our Chemistry segment with 54% growth in external chemistry revenues and 21% increase in total chemistry revenues for 3 months ended in 2025 versus 3 quarters or 9 months ended 2024, despite a 24% decline in active frac fleets during the same period. While we anticipate potential commodity price volatility through the remainder of 2025, we do see indicators for cautious optimism in 2026. This presents a strategic opportunity to expand our market share by accelerating the adoption of our prescriptive chemistry management solutions and enhancing asset value for our customers. It's evident that our chemistry team has executed our strategy flawlessly despite the near- to medium-term headwinds. While uncertainties around near-term activity levels persist due to macro factors that could affect the completion chemistry market, we remain focused on defining these challenges, delivering differentiated chemistry and data services to provide our customers with industry-leading returns on their investment. We're confident that our expanding suite of services positions us to deliver superior solutions to a variety of our industry's most challenging problems while maximizing our customers' value chain. Now I'll turn the call over to Bond to provide key financial highlights. J. Clement: Thank you, Ryan. Good morning, everyone. I'm excited to discuss our third quarter numbers released yesterday afternoon. Our results were positively impacted by the first full quarter of cash flow contribution from our PWRtek assets. The $6.1 million in PWRtek revenues during the quarter drove a 50% sequential increase in data analytics revenue. Data analytics gross profit margin totaled 71% during the quarter. That was up 800 bps sequentially as gross margins relative to the PWRtek assets specifically came in at 89%. The increased data analytics contribution, along with an increase in the chemistry shortfall penalty, combined to raise total company gross profit margin to 32% for the quarter. As noted in the release, all of the PWRtek assets are now in service, so we expect fourth quarter revenues to increase further to approximately $6.8 million. As shown on Slide 11 in yesterday's deck, since closing the acquisition in April, our PWRtek assets are a clear catalyst for margin and profitability expansion, driving improvements not only within the Data Analytics segment, but also at the corporate level. Emphasizing PWRtek's impact and as shown on Slide 6, during the third quarter of last year, the Data Analytics segment contributed just 13% of total company gross profit versus 35% during the third quarter of this year. As a reminder, based on the contractual terms in the lease agreement, PWRtek revenues in 2026 are expected to be north of $27 million or an approximate 70% increase from 2025. So we fully expect these assets to be a significant part of our 2026 results. Looking at the quarter, revenue during the quarter was up 13% from the year ago, and as Ryan said, was driven by the Data Analytics segment. As compared to the year ago quarter, we saw a massive increase in service revenues driven by PWRtek. Data Analytics segment revenue represented 16% of total company revenue in the third quarter, which is up from 5% in the year ago quarter. In addition, third quarter revenues from the Data Analytics segment equaled the entire segment revenue for all of 2024. During the quarter, total chemistry revenues were flat versus the '24 quarter, but on a year-to-date basis, as shown on Slide 17, total chemistry sales are up 17% from last year. More importantly, we have made substantial progress in diversifying our chemistry sales. Excluding the chemistry order shortfall penalty, 53% of third quarter 2025 chemistry sales were to external customers, and that's up from 35% in the year ago quarter. As it relates to international sales, they totaled $10 million through the first 9 months of 2025, which is up about 122% from the year ago period. SG&A costs during the quarter were up versus the third quarter of last year due to higher personnel costs, including stock comp as well as increased professional fees, some of which are related to the company's first-time requirement for an integrated audit. On a percentage of revenue basis, G&A was 13% this quarter versus 11% in the year ago quarter. We do expect G&A to trend down in the fourth quarter as compared to the third quarter. Net income for the quarter totaled $20.4 million or $0.53 per diluted share as compared to $2.5 million or $0.08 per share in the year ago quarter. Current quarter net income did include a $12.6 million tax benefit, primarily associated with the partial release of the company's valuation allowance on its deferred tax assets. While the tax benefit is noncash, it is a positive development that illustrates the company's expectation of future profitability along with its outlook on utilizing deferred tax assets. As shown on Slide 8, during the third quarter, we continued our streak with respect to growing adjusted EBITDA. Our third quarter 2025 adjusted EBITDA was 24% higher sequentially. And through the first 9 months, adjusted EBITDA is running more than 110% higher than the 9-month 2024 period. Similar to the gains we saw in gross profit margin, our third quarter adjusted EBITDA margin increased by 500 bps sequentially, primarily as a result of the increased contribution from our mobile power support assets, PWRtek. In yesterday's release, we increased our 2025 guidance ranges on both total revenue and adjusted EBITDA, which we've summarized on Slide 8. The midpoint of our revised guidance implies 2025 revenue growth of 19% and adjusted EBITDA growth of 85% as compared to last year. Again, using the midpoint of both metrics, it implies a 17% adjusted EBITDA margin for 2025 as compared to 11% in 2024, further underscoring the positive margin impact attributable to the PWRtek assets. Wrapping up my comments on the financials, the third quarter built upon a very strong second quarter, highlighted by continued growth in margins and profitability. We remain focused on continuing to rebalance our profitability mix, transitioning from chemistry technologies as the primary contributor today to data analytics as the leading driver in the near future. With that, I'll turn the call back to Ryan for closing remarks. Ryan Ezell: Thanks, Bond. The third quarter 2025 results build upon our now multiyear track record of consistently posting improved financials as we successfully transformed the organization to enter a new data-driven frontier. Our 2025 guidance points to the execution of our corporate strategy, leveraging chemistry as the common value creation platform. Looking at Slide 18, I remain convinced we are still in the early innings of Flotek's transformation as we continue to grow and maximize returns for our customers and shareholders across the entire value chain of the energy landscape. Our transformative and strategic entry into the energy infrastructure sector is expected to provide a significant increase in high-margin data analytics revenue and cash flow for years to come. Through the growth of our upstream applications, we anticipate the Data Analytics segment will contribute to over half of the company's profitability in 2026. We continue to secure long-term contracts for both our Chemistry Technologies and Data Analytics segments, bolstering confidence in Flotek's ability to deliver stable revenue and profitability while effectively shielding our business from the impacts of commodity price fluctuations. Finishing with Slide 19, we believe no other company in our industry is better positioned to deliver the cutting-edge technologies needed to tackle the unique challenges of our energy and infrastructure sectors. I'm incredibly proud of our progress and confident in our team's ability to execute moving forward. Given the growth potential for our Chemistry Technologies and Data Analytics segments, we see Flotek as a compelling investment opportunity. Thank you for your continued support, and we're eager to share our vision for Flotek's future and look forward to updating you on our progress in the quarters ahead. Operator, we're ready to open the floor for questions. Operator: [Operator Instructions] Your first question comes from Jeff Grampp with the company Northland. Jeffrey Grampp: I wanted to start first on digital valuation. So I saw on the slide deck, there's a goal to get to 25 units to 35 units by year-end, and then there's over 200 installations kind of, I guess, in the pipeline, if you will, with those customers. What's the major factor from your guys' perspective determining the cadence of that ramp to get from that 30-ish to -- it sounds like the goal is kind of over 200. I don't know if that's near term, medium term. Just hoping for a little more granularity on that -- those data points. Yes. Ryan Ezell: So Jeff, this is Ryan. We look at it as there's kind of 2 to 3, I wouldn't say hurdles, but progressions that have to take place in terms of what we do from digital valuation. We spoke on in earlier quarters this year around some of the successful pilot programs that we had ongoing in 3-plus basins here in the North America land. We've seen those all turn over and are no longer in pilot phase. They're more in commercial phase. So that's one of the driving factors that we'll now start to see multiple unit deployment starting here at the back part of Q4, and that will roll into some of these 200-plus sites we see in 2026. There's also a little bit of piece of looking at the exact location for where they go because the different operators are looking at 2 to 3 different things they do well. A big value creation point is where when we bring on the production wedge component there at a gathering site, that's one key location that's typically garnering the initial most interest. And then we move into the actual pure 2172 addressing method around custody transfer pieces. So it's just -- it's kind of like walking over that heel to turnover. The pilot phases are complete. We've now seen full commercialization. We've increased the level of manufacturing. We don't feel we'll have any issues addressing the total number. We've already pre-bought all of the materials and are completely building now. And so what we're doing now is working out final Ts and Cs on customer rollout. So we expect it to be steady output closing this year and in '26 with increases in total number quarter-by-quarter, if that gives a little bit of better granularity. Jeffrey Grampp: Yes, that's perfect, Ryan. And just to, I guess, make sure I was understanding one of your comments right. So it sounds like the issue is -- issue is not the right word, but the inflection point more pertains to customer decisions around where exactly to deploy these, not if to deploy these. Is that fair? Ryan Ezell: Correct. Yes, that is correct. And so you look at it -- and it kind of goes through a progression, right? The big input we first see is when they're bringing new wells on production because we can see every minute change in production quality and then it goes into monitoring the well over a long period. And so it's kind of like -- as you can imagine, each customer operator and/or midstream client is looking for the maximum ROI on the initial deployments and then it works its way down the value chain. So that's mostly what we're doing is we'll pick up a customer. It takes a few weeks to go through the technical install pieces, test out how it does. Typically, production wedges are the big pieces we look at first. and then we move into the day-to-day monitoring or what we call creating -- you're essentially making, Jeff, a digital twin of the manual custody transfer sampling process, which is faster, more accurate and more durable in the long term and actually cheaper in the long term as well. Jeffrey Grampp: Got it. Those are great details. I appreciate that. My follow-up is on the power gen side with PWRtek. Can you update us on kind of customer conversations for third-party power services and any kind of outlook on when you can get some deployments there? Ryan Ezell: Yes. So we actually -- I would say, Jeff, excluding what we've done on the PWRtek deal with our initial contract, year-to-date, we've done an additional $2.1 million of revenue secured already after just having the equipment for a quarter. And I'd like to reference you like Slide 12. We try to give a little bit of a schematic to where -- what's going on in the business location in terms of how our sales process works. That first step is proving the measurement out. So that $2.1 million has been solely related to us sending Veraxs or XSPCT to location to monitor the gas and prove the fact to most of these people who are running either turbines or reciprocating engines that, look, we can see your gas quality coming in and out of any type of current manual treatment that you're doing and improve that. And those have gone really well. We've actually seen 6 new customers outside of our deal with ProFrac adopt that already in Q3 with multiple units testing for each one of them. The next phase of that goes into control, where they look at applying a smart filtration skid or an ESD monitoring unit, and we determine do they need H2S, do they need CO2? Do they need an MRU? Do they need these different pieces at what level of conditioning they need? And the final piece is issuing distribution and full control. And we've seen great success at working directly, feeding information directly to reciprocating engines and adjusting temperature and gas quality for turbines. So we're making great progress, in my opinion, on this. Now what's also interesting, Jeff, is these sales work a little different, depending on the vertical with inside power generation that you're working and how fast the sale takes place. And they're a little -- I would say they have a little slower turnover period than our traditional frac monitoring power gen and/or chemical sales, which work on a pretty quick sales cycle, almost pad to pad in some cases. So -- and I think you'll see some of the other, I would say, power service providers commenting on the sales cycle is a little bit different. The pursuit is a little bit different. But if you look at what we laid out here on Slide 12, we really laid a pathway of sales out, and we made great progress in our first phase of the measurement, and we're now transitioning to control the multitude of those clients. And I would say those client bases are legacy pressure pumping type customers, data center development and building customers and also biogas generation customers. So working in a multitude of verticals depending on the installation time and the equipment provided. Operator: Our next question comes from Gerry Sweeney, ROTH Capital Partners. Gerard Sweeney: I apologize. I was jumping back between a couple of calls here, so I may have missed some stuff. But Bond, I think you said how much did you say PWRtek is projected to do next year? Was it $26 million or $27 million? J. Clement: Yes, it's $27.4 million next year and for each of the next 5 years or so years. And then in the sixth year of the lease agreement, it reverts to whatever the prevailing market rates are. But for the first 5 years, it's fixed rates and the math is $27.4 million a year of revenue. Gerard Sweeney: So that was just for the acquired assets with your partner. That obviously doesn't apply any growth for the power side. J. Clement: That's correct. So that excludes the $2 million that Ryan just mentioned on the previous question relative to non-PWRtek power services is not included in that number. That's just the 30 trailers. Gerard Sweeney: Got it. And obviously, what was it -- I still call it custody control, but I think you sort of renamed it. But obviously, I think that's a focus. But how do you start expanding into the power side? Do you have enough skids, monitors, et cetera, manufacturing capacity sales? Can you walk us through sort of how you start to drive additional growth on that front? Ryan Ezell: Yes. So kind of alluded, I go back to referencing to Slide 12 again, Gerry. Our first step is proving out what the heart of PWRtek and Power Generation services is, and that's our ability to do the real-time gas measurement. Now depending on the type of equipment, whether it's reciprocating engine and/or a turbine is what measurement, whether you're looking at BTU number, methane number, Wobbe index, different components, high heating value, low heating value, et cetera, our equipment does all of that. And it's proving out what the brain of PWRtek does is our initial step. As I told Jeff earlier, we picked up 5 new customers for that in Q3 alone and testing multiple Verax and/or expat units on location to drive that part. The next piece is once we get a defined point of gas quality, we move into the next part of control as in the ESD trailers or smart filtration skids or H2S monitoring, all the different pieces that bolt on to really condition that gas to optimum output for the turbine and/or reciprocating engine. We've also moved into being able to -- because we can see BTU or methane number in real time, we have the capabilities to automatically tune a reciprocating engine, which has never been done in the industry before. And we've been working that aggressively in Q3. And so that's where it leverages into the next point of the sale. And finally is our state-of-the-art distribution trailers. And so it takes -- it's like a methodology that we go through in doing it. And we progressed through what I call Phase 1 pretty aggressively in Q3, and we'll see further expansion into control and distribution in Q4 and all of 2026. Now addressing capital needs, we've got plenty of measurement devices. We kind of preloaded XSPCT Verax units for that. We've built an initial 4 ESD trailers that are coming out, and we'll be issuing POs for additional distribution trailers here in Q4. And we've got probably the most -- well, not probably, the most aggressive capital delivery plan in Flotek probably in the last decade as we roll into 2026 to drive the deployment to ensure that we can address the needs of the growing customer base of not only some of our legacy pressure pumping customers that's made that transition, but also some new and emerging customers that are out there in the pure mobile power generation piece, and we look at the fixed installation and the biogas treatment facilities as well. Gerard Sweeney: Got it. Jumping back to the custody control or custody transfer, I'm sorry, the GPA 2172, there's a little bit of talk about maybe getting regulations moved around change that would be beneficial for XSPCT and custody transfer. Does that -- clearing that hurdle, GPA 2172 help that and maybe give a little bit of details maybe what the opportunity is? Ryan Ezell: Yes. Like the GPA 2172 that also relates to API 14.5 was the specific hurdle that had to be addressed. It is the backbone of what actually allows you to say we have a true digitized or digitalized custody transfer model in that it sets the standard of, hey, you have, you can use gas chromatography on another acceptable method, which is the optical spectroscopy. But for the optical spectroscopy to be allowed, it has to meet reproducibility and repeatability of what a GC standard is, and we exceeded all of those capabilities with the XSPCT unit, which is pretty amazing, being it's the first optical spectroscopy unit in the world to be able to do that. And so that kind of takes away a majority of a lot of -- particularly the midstream guys ask us, hey, is it compliant with 2172 and it is now. And so that was a big deal about being able to do that. And in all honesty, we had to progress in a lot of our pilot testing earlier in the year to get access to be able to do that to live streams. And so that was some of the big parts that we were able to close up here in the quarter, and we're extremely excited about it. Operator: Our next question comes from Don Crist, Johnson Rice. Donald Crist: Most of my questions on the power side or the data analytics side have been answered. But I did want to ask about on the chemical side, particularly international chemicals. Your customer got a big contract with Saudi, the other day and didn't know how that would kind of play into your future relationship with them. It seems like they're going to be growing rapidly. And I don't know if you all are going to participate in any meaningful way there? Ryan Ezell: Yes, Don, that's a great insight and a great question as our head teams are over in ADIPEC and following this week in Saudi as well to discuss the impacts of the business expansion with our -- what I consider to be our largest customer in the Middle East. And if you look at -- we mentioned around how that international revenues year-to-date are up 122%. Getting ready for some of this initial work is what led up to those revenue increases. We saw that slow down as that mega tender for Aramco was completed. And with our customer picking up the majority, well, I guess, 100% of that hydraulic fracturing scope, we do expect to see business pick up in the back half of Q4 and heavily in 2026, which is -- you've talked Bond and I acknowledging over this for the past year. This is what we've been positioning Flotek for is this type of growth in the Middle East. And we haven't given any guidance on specific expectations around there, but we do expect it to be very positive for us. Operator: Our next question comes from Josh Jayne, Daniel Energy Partners. Joshua Jayne: First question is just on XSPCT. I think in the press release that [Audio Gap] October, could you elaborate a bit more on the cost and efficiency gains for the [Audio Gap] so that the real-time analysis happens every 15 seconds. I just -- how does that alter decision-making for the customer and.[Audio Gap]. Ryan Ezell: Yes. So I'll talk about a couple of things. Let me talk a little bit around efficiency, right? What -- being the fact that we're now past the GPA 2172, we are now able to deliver a custody transfer level grade measurement to a resource owner, an operator or a midstream first buyer essentially almost every 5 seconds versus what was taking 3 months to 6 months to turn those over. More importantly is because you get such a regularity of measurement at such high resolution, we're able to resolve a multitude of the potential manual sampling bias that takes place on the production, which removes a layer of, I would say, fog around it provides a lot of transparency over what the true production and production quality out of each individual target location is. So that -- and typically, what we've seen is anywhere from 3% to 5% bias. What's also important is the fact that we can measure the direct flow line removes the process of manual sampling. So you see cost reduction there. You also manual sampling is never done the same way by anybody. It changes lab to lab. And so there is a variance typically or error introduced by the type of sampling that's done, whether it's pressure drop, temperature issues, et cetera. And so we remove all those components. So there are significant improvements in measurement quality, accuracy, resolution and reduction in variance -- variability. In terms of cost, traditionally speaking, we expect overall between CapEx and maintenance, almost a 50% reduction in cost overall through the process. So as you can see, I mean, this is a transformative step in creating a what I would consider to be a digital twin of -- in a real-time digital twin of the custody transfer process and creating significant efficiency, accuracy and cost gains for the customers. Joshua Jayne: That's very helpful. And then I did want to hit the chemistry business. Continuous fracturing has been discussed on some recent E&P calls. And maybe could you just discuss what you're seeing with respect to what's left for efficiency gains on the pumping side? And I think you highlighted the revenue growth against declining frac count in the chemistry business. But is there -- maybe just you could speak to your outlook for U.S. land in 2026, the ability to grow chemistry revs even if we're sort of flat to down from a fleet standpoint. And do you see more customers using chemistry in the current environment trying to get more out of less with respect to acreage? Ryan Ezell: Yes. So that's a lot to unpack. And so I'll try to do it in 4 or 5 main points. The first thing is around our ability to grow chemistry. Number one, the efforts that we put into stabilizing our revenue streams domestically and internationally is going to provide a solid runway to grow. I think as we kind of alluded to the potential impact of the expansion of our Middle East -- potential impact of our Middle East business is going to be huge for us to provide growth in '26. And then also some other countries that we have opportunities in, in Latin America and as well as Asia Pac, I think, are going to be positive, but probably not nearly as, I would say, material as what the Middle East will be. Secondly, as we move to the domestic component of it, everything that the oil and gas operations from the operator and the oilfield service companies are doing right now plays into the strength of Flotek. They want efficiency. They want maximum return on invested capital. They want maximum returns, and they want cost options that digitalize their entire value chain. And that's where the next frontier for Flotek is the tip of the spear and moving. We've not only been able to improve efficiency just by quality of our PCM services on location, the advanced chemical technologies, but we moved into complete automation by looking at real-time water quality, being able -- we've got our own chemical pumps on location that can adjust on the fly to water quality. We're able to pump concentrates instead of spotting 8 ISOs to 10 ISOs, we can bring 7 totes out to location. So we're doing a multitude of things that impact the overall progress and the efficiency there overall that to me, what we're hoping to do is bridge that gap between Tier 1 and Tier 2 type acreage, right, where you get similar returns out of the Tier 2 production because we look at it from an overall transition, although pumping hours and everything has increased, we've seen a relatively flat utilization of water. I think we're kind of at the floor. We're going to -- we see indicators of positive movement in 2026. But for us to really do that, we've got to continue to be sharp on our game and deliver differentiated technologies that allow us to gain that, what do you say, really competitive market share that we're going to go after. But I will tell you the thing that when I look at it on the long term is -- right now, even with all the efficiency gains, even all the technology things that we've seen here in North America land and the capital discipline, the fact of the matter is we're still at the level of underinvestment. It probably -- for us just to maintain current production, 90% of the spend right now is going just to do that. And the quality of the production has been steadily declining overall since probably the end of 2021. And so sooner or later, we're going to hit a discontinuity that's going to require a shift in terms of investment going back in there. And I do believe that the differentiated capabilities of Flotek from our data-driven real-time monitoring services, combined with our innovative chemistry solutions is going to put us in a great place to help the industry bridge that gap. And I think that gap is getting closer to the point when it's going to kick off. And I think we're in a good position there. So I hope that gives a little bit of color around kind of how I think about that in terms of, one, we've got plenty of room to grow. We're advancing technologies that's going to continue to drive efficiency and get maximum ROI at every well that these operators that work with us are drilling. And then secondly, there's going to be a demand shift that's going to require not only just to maintain production, but also fuel the demand created by electrification, onshoring, reshoring of industrialization and infrastructure support. Operator: Our next question comes from [ Tom Bishop ], BI Research. Unknown Analyst: It sounds like a lot of the components and add-ons that they are available for the PWRtek units. But just in terms of the PWRtek units themselves, I mean, do you have a projection of how many additional units you might build and install in 2026? Ryan Ezell: We haven't given any particular guidance on those numbers yet. I do -- when I look at the health of our pipeline and the continuous expansion of it, our goal would be we say this loosely to get into the doubling the size of our paired fleet by the end of 2026. I think that's a reasonable goal and one that we can potentially exceed. But that's -- when we start to look at capital outlay, we're looking pointed in that direction and doubling that size and some sensitivity pluses and minuses in that direction just to kind of start off. And I think you'll come to see us as we wrap up the year, we start to understand the impacts of natural gas and some of this transition, and we'll give a little bit better guidance towards the end of the year. Unknown Analyst: Sure. But to be clear, you'll -- the $27.24 million is a starting point. Ryan Ezell: That's our... Yes, that's just the base contract with the 15 payers. And our goal would be to work towards doubling that in 2026 in terms of payers and applications. Unknown Analyst: Okay. And then given the deferred tax credit valuation release event, the $12.6 million in Q3, does this mean the company in the future will be showing maybe a larger tax rate for GAAP reporting? Ryan Ezell: Yes, Tom, that's exactly right. We'll go back to a more normalized tax rate now that we've got a forecast of realizability of deferred tax assets. Unknown Analyst: Can you give us -- analysts are going to need this, what kind of a percentage maybe we'd be looking at? Ryan Ezell: I'd say somewhere in the 20% range. Unknown Analyst: Okay. And why is ProFac not able to use the amount of chemistry that they contracted for when your other customers show 43% growth, which is amazing, by the way, given the decline in fleet crews. It sounds like I think -- I'm sorry, go ahead, sorry. It sounds like you booked the revenue at the minimum contract requirement leading to that 28% figure included in the $27 million. And is that then what they pay on an -- as an offset to the PWRtek asset purchase price or what they actually pay? Ryan Ezell: So if -- there's 2 separate agreements we're talking or you're talking about here. We have the lease agreement with PWRtek and then we have the chemistry supply agreement. Under the chemistry supply agreement, ProFrac is obligated to purchase a requisite amount of chemistry on an annual basis. So what we do at each quarter, we assess where they are from a trajectory perspective, and we effectively book a receivable and revenue for what we believe they're going to be under at the end of the year. So that receivable builds up at the end of the year and then it gets released in the first quarter of the following year. So there's really no tie-in per se between the chemistry shortfall penalty, if you will, and the lease agreement other than we do have some offset rights as it relates to some leverage that ProFrac extended in connection with the PWRtek acquisition. Unknown Analyst: Well, earlier, you had said you might offset that against the PWRtek acquisition price, I thought. Is that still the plan? Is that what happens? Ryan Ezell: Yes. sorry. So we've got a deferred liability on the balance sheet for $7.2 million, which was effectively a loan against the 2025 shortfall penalty. So when the order shortfall penalty gets settled up in the first quarter of next year, we'll knock off $7.2 million is effectively part of the consideration from the PWRtek assets. Unknown Analyst: Okay. Good. But why is it that ProFrac can't get to this -- it is always running behind? And is this minimum likely to get renegotiated? Ryan Ezell: That's a great question. And what I would say is when you look at the way the minimums were calculated, it was on volumes of chemistry pumped by an average fleet times a certain number of fleets is where we got to these numbers from. And earlier in the contract, when you saw high hydraulic fracturing fleet demand, we were actually meeting and exceeding the revenue numbers on a monthly basis. And then the back half of 2023, we started to see a correction, efficiency gain in fleet count, but also just a slowing down of the market. And we feel like we're at the trough of where it is right now. We do expect the chemistry sales to ProFrac to improve in Q4 as we picked up quite a bit more work with those guys. And what's interesting is during that shift between the end of 2023 to where we sit today, there was a massive influx at the earlier part into the Permian Basin. The buyers in the Permian Basin run significantly simpler hydraulic fracturing formulations and traditionally basically separate the chemical buy -- from the pressure pumper, particularly in markets where there is an oversupply of equipment and the demand for the horsepower is down. They don't necessarily are not able to enforce the wheel per se and selling a particular type of chemistry. And as we've seen the fleet counts go down, the biggest change in fleet count number has been away from the Permian and into more of these gas-rich basins being the Haynesville and the Northeast, et cetera, where our differentiated solutions make a huge difference. And so it's -- our technology deployment has gotten better and will get better through the back half of this quarter and while we roll into 2026. But a lot of it has to do with buying behaviors of the operator, the geographic location of those operators and where we are in the cycle on hydraulic horsepower demand and leverage pieces. And so what was unique about this 10-year contract is we kind of try to model and build in that robustness. There's capability years through the cycle where they'll exceed and it will actually take away and can take away at sometimes OSP that are gained in different pieces. And so at this point in time, we -- there's been no discussions on changing anything related to that supply agreement or an asset for the company. So -- but just trying to give you a little bit of color on the way the cycle influences the buying powers of the chemistry providers and operators. J. Clement: And Tom, it's important to note that ProFrac did get a significant portion of equity in Flotek in conjunction with that transaction. So that shortfall penalty was always meant to protect the other shareholders in terms of preserving the value of the contract that was exchanged for equity. Unknown Analyst: Okay. And before I let you go, the number of -- you said the international revenue was up 122%, but what's the dollar amount that is running on an annual basis? J. Clement: Yes. Well, year-to-date, it's $10 million, right at $10 million international revenues. Unknown Analyst: Okay. And how much do you expect from the optical spectrometry unit, the -- I forget what all the letters are… I don't know how big a business that is in terms of dollars and what you expect there. J. Clement: Well, that business, not segment, but that application, if you will, generated its first dollars of revenue in the second quarter of this year. So we're effectively first at bat in the first inning of the game on that business. Unknown Analyst: Well, hopefully, it's going to amount to a fair amount. Operator: [Operator Instructions] Our next question comes from Joichi [ Sakai ], Singular Research. Joichi Sakai: Can you hear me? Ryan Ezell: Yes, we got you. Joichi Sakai: Yes. Just on the data analytics, can you give us a sense of where that analytics gross margin would normalize as the installed base kind of matures or the recurring revenues outweigh onetime setup and integration costs? Ryan Ezell: You're talking about our expectation going forward? Yes. So this year, we'll do -- we haven't given guidance really on 2026 as it relates to the various components that drive data analytics revenue. The one thing I'll point you to is, this year, we're going to do, call it, $16 million under that PWRtek agreement. We know those are 89% to 90% margins. Next year, that number jumps by 70%. Obviously, more revenue from this high-margin business is going to, I think, continue to move margins. It's hard to say what the other contributing factors are for revenue next year because we don't have anything like this big long-term contract that's driving the margin growth this year. But we -- I would expect if the PWRtek business is a meaningful part of next year's revenue, it's going to drive the weighted average gross margins higher than 70%, perhaps even closer to 80%. Joichi Sakai: Got you. And just that the post-sale customer support for this product installation, is there -- so you don't foresee any resource constraint or additional cost that will have -- that you'll need for continued future renewal rates? Ryan Ezell: Not at this point in time. I think that we've begun to invest in inventory of the actual measurement devices, whether it be in the Verax or XSPCT expect units. And I think we preloaded and started building out from the PWRtek aspect, multiple ESD and smart filtration skids and we'll be transitioning to additional build-outs of our distribution skids, trying to keep a healthy risk weighting of what we put in the pipeline and what we prebuild versus what's delivered by contract. Luckily for us, even if we had a large, I would say, tender or award come through that would exceed the capacity most of these pieces of equipment we can build in 5 weeks or less on the big pieces of equipment, we can typically turn expected Verax units out within a few days once we get an order. So we should be able to, at this point in time, keep up. I will tell you this, that we have looked at -- when we look at capital outlay and manufacturing production, we're looking at this on a 36 month- to 60-month landscape in terms of bottlenecks that could potentially be created by our current facility capacity more than personnel and/or availability of equipment. And that's some of the things that we're looking at is expansions to -- potential expansions to our facilities in the coming months. Joichi Sakai: Got you. And on the external chemistry side, as your mix kind of shifts, how are the payment delays from your non-anchor clients compared to your legacy business? Ryan Ezell: So I would say all things considered in the components in the market, our North America land customers pay pretty well. We have relatively, I would say, low DSOs compared to the industry. But as expected, our international customers, particularly in the Middle East, typically pay a little slower. Most of the time because the payment terms with some of the service companies work over there with are already extended due to payment terms from ADNOC or Aramco or the Dorra KJO, et cetera, over there. And it kind of adds 20 days to 25 days additional on the average DSO. But right now, the cash flow has been relatively consistent. I will think we're going to -- if we see the significant ramps in our Middle East business, that will consume a little bit of working capital to get that stabilized. We'd see that pool come in, in the first half of '26 and hopefully stabilize by mid-Q2. But we are looking very carefully at that if we see an accelerated ramp for that business with a little bit longer payment terms. So I would say that's probably our -- the big thing on the radar is just the working capital to complete the ramp. Joichi Sakai: Got you. And just my last question on that working capital. If these order volumes kind of spike, would you need any alternative backup for working capital facilities? Or do you have headroom in the lending capacity? Ryan Ezell: Yes. I think we're pretty good right now as it relates to capital. I mean, keep in mind, in the first quarter, we will receive a cash payment relative to the OSP, which I don't know what that's going to be, but net of the $7 million offset could be $20 million to $25 million cash infusion that comes to see us -- we've got plus or minus $15 million of availability under our existing ABL. We currently have very low leverage. So we -- if we needed to, we could explore some capital raising options in the debt markets. And at the end of the day, the stock has done very well. So if we chose to, we have options relative to the equity. So we've got a lot of optionality as it relates to liquidity build, but we think just in terms of managing the initial working capital draw potential on expanded international business, the OSP cash payment in 1Q is going to be fine. Operator: There are no further questions at this time. I will now turn the call over to Delbert Rose. Please continue. Delbert Rose: Yes. Thank you. Join us at some of our upcoming events. The Permian Basin Barbeque Cook-Off from November 11 to 12 in Midland, Texas. The Invest: Houston Second Edition event on November 20 at the JW Marriott in Houston, Texas; Daniel Energy Partners Executive Series, December 3 in New York City, New York; the 14th Annual ROTH Deer Valley event December 10 through the 13 in Park City, Utah, and we will participate in Northland's Virtual Growth Conference on December 16. Ryan Ezell: So thanks, everyone, for joining us today, and we look forward to keeping you abreast of the growth and execution of our digitalization strategy. Operator: All right. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Flotek Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Flotek Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Flotek (FTK) Q3 2025 Earnings Call Transcript was originally published by The Motley Fool