0001680247-26-000060
SEC filingProPetro reported a materially weaker Q1 FY2026, with revenue down 24.7% and operating income reversing to a $8.0M loss, driven by lower Permian Basin rig count, reduced customer activity, pricing pressure, idled fleets, and weather-related disruptions — all while advancing strategic capital investments.
The decline in financial results reflects deteriorating market conditions in the Permian Basin, where the rig count fell to 242 at March 31, 2026 — down from 247 at year-end 2025 — according to Baker Hughes. This reduction contributed directly to less predictable demand for completion services and downward pressure on service pricing. Management attributes the revenue and profitability declines specifically to decreased customer activity, reduced customer pricing, idling of fleets, and inclement weather-related operational disruptions during the quarter.
Revenue for Q1 FY2026 totaled $270.7M, a 24.7% decrease from $359.4M in Q1 FY2025. Operating income reversed to a loss of $8.0M, compared to income of $9.5M in the prior-year period, yielding an operating margin of -3.0%. Net income declined to a loss of $3.6M from income of $9.6M, and diluted EPS was $-0.03 versus $0.09. These outcomes reflect the compounding effect of lower volume, pricing compression, and fixed-cost absorption challenges across the core business.
Net cash provided by operating activities was $2.7M, sharply lower than $54.7M in Q1 FY2025, reflecting both lower earnings and working capital dynamics. Capital expenditures totaled $43.4M, up from $40.9M YoY, supporting routine growth, conversion, and maintenance initiatives. The resulting free cash flow was -$40.6M. Management notes that capital expenditures may increase further if activity levels rise, inflation and supply chain constraints persist, or investments in lower-emissions equipment accelerate.