ProPetro Q3 Revenue Rises 16% as PROPWR Spending Weighs on Cash Flow

ProPetro Holding Corp. (NYSE: PUMP) returned to profitability in the third quarter of 2026 as higher activity across its completions services and progress at its PROPWR power-generation business lifted revenue and adjusted earnings. The company also accelerated spending on PROPWR, driving total free cash flow into negative territory despite positive cash generation from the core completions business.

Revenue rose 16% sequentially to $355 million from $306 million in the second quarter. Net income was $13 million, or $0.09 per diluted share, compared with a net loss of $8 million, or $0.07 per share, in the prior quarter.

Adjusted EBITDA, a non-GAAP measure, increased 33% to $59.6 million from $44.8 million. The third-quarter figure included $16 million of operating lease expense related to the company’s FORCE electric hydraulic fracturing fleets, unchanged from the second quarter.

Management attributed the stronger results to higher revenue and activity across the completions service lines, improved completions revenue and adjusted EBITDA, and a meaningful increase in earnings from PROPWR as the business advanced its commercial and operational execution.

PROPWR investment weighs on free cash flow

Cash flow from operations declined to $46.3 million from $66 million in the second quarter. ProPetro said the decrease largely reflected working capital, which used about $15 million of cash in the third quarter after providing approximately $20 million in the preceding period. Higher adjusted EBITDA partially offset that swing.

Total free cash flow was negative $75.7 million, compared with positive $7.7 million in the second quarter, as net cash used in investing activities increased to $122.1 million. Excluding PROPWR, the completions business generated $5 million of free cash flow, down from $51.1 million in the prior quarter.

Capital expenditures incurred reached $171.5 million, up from $70.6 million in the second quarter. For the first nine months of 2026, the company incurred $327.1 million of capital expenditures and recorded negative total free cash flow of $106.2 million. The completions business generated $53 million of free cash flow over the same nine-month period.

ProPetro ended the quarter with $934 million of total liquidity, up from $905 million at the end of the second quarter. That amount included cash and available borrowing capacity, as well as net proceeds from the $690 million convertible-note offering completed in May 2026.

Contracted PROPWR capacity reaches about 510 MW

PROPWR, ProPetro’s behind-the-meter power business, has approximately 510 megawatts under contract after securing agreements with Targa Resources for about 230 MW of Permian Basin power capacity. Full deployment under the Targa contracts is expected in early 2028.

The business has also supplied power to a Midwest hyperscale data center since June 2026 and operates revenue-generating equipment across several Permian Basin microgrid installations. ProPetro said it is advancing negotiations for multiple additional data-center opportunities, including several hundred megawatts in advanced discussions, though no contracts were announced for those potential projects.

Under a strategic framework agreement with Caterpillar, PROPWR has access to as much as 2.1 gigawatts of additional capacity. Combined with about 550 MW previously ordered, the company expects approximately 2.6 GW of equipment to be delivered by the end of 2031 and fully deployed in 2032. ProPetro targets more than 500 MW of deployed capacity in early 2028 and plans to develop larger PWR~PLANT projects during 2027 and 2028.

The company has raised about $1.5 billion over the past two years to support PROPWR’s expansion. Management said it would continue to approach capital decisions opportunistically as it executes the growth strategy.

Completions fleet shifts toward natural gas

ProPetro generates all of its completions-business revenue in the Permian Basin. A majority of its active hydraulic horsepower is under contract, and most active capacity uses next-generation equipment that burns natural gas, including FORCE electric fleets, Tier IV dual-fuel fleets and Direct Drive gas units.

Four FORCE fleets are operating under contract, including one large fleet containing equipment equivalent to two fleets. ProPetro said these fleets provide full diesel displacement, fuel savings, lower emissions and reduced operating expenses. The company also plans targeted Direct Drive investments in select Tier IV dual-fuel fleets during 2026, which it expects to reduce future capital requirements for conventional fleet investments and refurbishments.

The PROPWR deployment schedule remains subject to securing customer contracts, receiving equipment on time and successfully deploying that equipment. ProPetro noted that delivery generally precedes deployment by six to 12 months. Other identified uncertainties include oil-price volatility, changes in power-generation supply and demand, customer acceptance of the new service line, cost overruns, inflation, tariffs, financing conditions and broader geopolitical and economic risks.