0001193125-26-214605
SEC filingProFrac's Q1 2026 revenue fell 25% YoY to $449.6M, with a net loss of $83.5M, driven by lower stimulation services activity and pricing.
ProFrac Holding Corp. reported a challenging first quarter for fiscal 2026, with total revenue of $449.6 million, a 25.1% decline from $600.3 million in the same period last year. The decrease was primarily driven by a 22% drop in Stimulation Services revenue to $407.0 million, reflecting lower average active fleets, reduced pricing, and cold weather disruptions in January. This was partially offset by a 78% surge in Proppant Production revenue to $119.6 million, driven by a shift in intercompany sales mix from mine-gate to wellsite pricing that began in Q2 2025. Manufacturing revenue fell 26% to $48.4 million due to decreased intercompany demand, while Flotek revenue rose 27% to $72.3 million on higher intercompany volumes.
Gross profit (revenue less cost of revenues excluding D&A) contracted sharply to $95.2 million (21.2% margin) from $180.9 million (30.1% margin), a decline of 890 basis points. The margin compression was most severe in Proppant Production, where cost of revenues jumped 151% to $108.5 million, outpacing revenue growth due to higher wellsite delivery costs and a mix shift toward brokered volumes. Stimulation Services gross costs declined 10% but not enough to offset revenue declines.
Operating income swung to a loss of $46.4 million from a profit of $16.0 million, translating to an operating margin of -10.3% versus 2.7% a year ago (trend of -1,300 bps). Selling, general and administrative expenses fell 19% to $43.6 million, but depreciation and amortization remained high at $97.1 million. Net loss attributable to ProFrac Holding Corp. widened to $83.5 million from $17.5 million, with basic EPS of $(0.47) versus $(0.12).
Total assets decreased slightly to $2,550.6 million at March 31, 2026 from $2,573.1 million at December 31, 2025. Cash and cash equivalents rose to $33.5 million from $22.9 million, driven by financing activities. Net debt (total principal $1,085.6 million less cash) stood at $1,052.1 million, up from $1,025.2 million at year-end 2025. The company amended its ABL credit facility on March 3, 2026, reducing maximum availability to $275 million and extending maturity to September 2027, while increasing the minimum availability covenant to $45 million. As of March 31, 2026, the ABL had $116.1 million drawn and $15.6 million in letters of credit, leaving approximately $80 million available.
Stockholders' equity fell to $714.6 million from $811.9 million, primarily due to the net loss and a deemed distribution of $15.9 million related to equipment purchase from a related party. The Alpine subsidiary's term loan requires compliance with a maximum leverage ratio of 2.00x starting March 31, 2028; management believes it can meet or modify the covenant.
Cash flow from operations was $9.3 million in Q1 2026, down from $38.7 million in the prior year, as lower earnings and working capital changes (notably an increase in accounts receivable of $52.8 million) weighed on cash generation. Capital expenditures totaled $40.7 million, resulting in negative free cash flow of $31.4 million (versus -$13.8 million in Q1 2025). The company funded the gap through net debt issuance of $25 million in senior notes and net draws on its ABL facility.
Full-year capex guidance of $155 million to $185 million implies a significant ramp in remaining quarters, which may pressure liquidity if cash flow does not improve. However, management believes existing cash, operating cash flow, and available credit will be sufficient for at least 12 months.
Management attributed the weak start to adverse weather in January and lower industry activity. However, February and March showed sequential improvement. The conflict in the Middle East has created supply disruptions, and the company is in active discussions with customers for improved pricing. Cost control measures implemented in the second half of 2025 are expected to continue supporting margins. Specific forward guidance was limited to capex; no revenue or earnings outlook was provided.
Key risks include further declines in customer spending, potential inflation from geopolitical tensions, and the upcoming Alpine debt covenant. Opportunities include potential pricing improvements and ongoing operational efficiency gains.
Segment Adjusted EBITDA, the key profitability measure used by the CODM, fell to $54.0 million from $129.5 million. Stimulation Services Adjusted EBITDA dropped 69% to $32.0 million, while Proppant Production fell 64% to $6.5 million. Manufacturing Adjusted EBITDA improved 70% to $6.8 million, and Flotek rose 41% to $11.3 million. The decline in total Adjusted EBITDA was driven by lower fleet utilization and pricing in the core fracturing business.
Related party transactions remained significant, with $53.3 million in expenditures in Q1 2026 (down from $60.4 million). Notable was a $17.6 million equipment purchase from MG Bryan, settled partly via accounts receivable and a $15.9 million deemed distribution. The company also issued 1.1 million shares of common stock to settle $5.0 million in management fees owed to Wilks Brothers.
Preferred stock dividends are paid-in-kind at 8% annually, totaling $1.4 million in accretion to redemption value. No common dividends were declared.
In summary, ProFrac's first quarter reflected headwinds from lower oilfield activity and pricing, though management is positioning for improvement through pricing discussions and cost discipline. The balance sheet remains manageable but requires close monitoring of debt covenants and cash generation.