Cuộc họp công bố kết quả kinh doanh Q3 2026 của ProFrac (ACDC): Dòng tiền tự do cải thiện

Điểm nhấn chính

• ProFrac Holding Corp. đã báo cáo doanh thu quý 3/2026 đạt 511 triệu USD, tăng từ mức 498 triệu USD trong quý 2. EBITDA điều chỉnh giảm từ 69 triệu USD xuống 65 triệu USD, với biên lợi nhuận thu hẹp từ 14% xuống 13%.
• Dòng tiền tự do đã cải thiện lên mức dương 14 triệu USD so với mức âm 8 triệu USD trong quý 2, bất chấp chi tiêu vốn bằng tiền mặt tăng lên khoảng 40 triệu USD.
• Doanh thu mảng Dịch vụ Kích thích vỉa giảm xuống 421 triệu USD do các khoảng trống lịch trình ngoài dự kiến trong tháng 9 làm giảm số giờ bơm trên mỗi đội thiết bị. Ban lãnh đạo cho biết tỷ lệ sử dụng đã cải thiện trong tháng 10 và kỳ vọng số lượng đội thiết bị sẽ trở lại bình thường trong quý 4.
• Doanh thu mảng Sản xuất Chất chèn giảm từ 121 triệu USD xuống 101 triệu USD, trong khi EBITDA điều chỉnh giảm xuống 2,4 triệu USD. Sản lượng thấp hơn ở Tây Texas, áp lực cạnh tranh về giá và đòn bẩy hoạt động suy yếu đã tác động tiêu cực đến kết quả kinh doanh.
• Flotek ghi nhận doanh thu 117 triệu USD và EBITDA điều chỉnh 22 triệu USD, tăng lần lượt từ mức 102 triệu USD và 9 triệu USD trong quý 2.
• Ban lãnh đạo vẫn duy trì quan điểm tích cực về năm 2027, nhờ nguồn cung thiết bị nứt vỉa hạn chế, giá các hợp đồng ký mới tăng lên và số lượng yêu cầu từ khách hàng gia tăng. CEO Matthew Wilks cho biết ông tự tin rằng ProFrac có thể đạt thu nhập ròng dương trong năm 2027.

Dữ liệu tài chính cốt lõi

Kết quả kinh doanh và hoạt động vận hành

Dịch vụ Kích thích vỉa

Doanh thu giảm từ 430 triệu USD trong quý 2 xuống 421 triệu USD, trong khi EBITDA điều chỉnh giảm từ 39 triệu USD xuống 37 triệu USD. Biên lợi nhuận duy trì ở mức khoảng 9%.

Hoạt động trong tháng 9 yếu hơn dự kiến do xuất hiện thêm các khoảng trống lịch trình. Số lượng đội thiết bị nhìn chung tương đương quý 2, nhưng số giờ bơm trên mỗi đội thiết bị đã giảm sau khi đạt một số mức cao nhất trong năm vào đầu quý. Khả năng hấp thụ chi phí thấp hơn cùng chi phí vật liệu và vận hành tăng cao đã triệt tiêu mức tăng giá thực tế.

Ban lãnh đạo cho biết giá các hợp đồng ký mới tiếp tục tăng, dù vẫn thấp hơn mức đỉnh của chu kỳ trước. Việc tái ký hợp đồng diễn ra theo hình thức so le, do đó công ty kỳ vọng mức đóng góp từ việc tăng giá sẽ gia tăng dần trong quý 4 và bước sang năm 2027.

Sản xuất Chất chèn

Doanh thu giảm từ 121 triệu USD xuống 101 triệu USD, và EBITDA điều chỉnh giảm từ 6 triệu USD xuống 2,4 triệu USD. Biên EBITDA thu hẹp từ 5,2% xuống 2,4%.

Tổng sản lượng đạt khoảng 2,5 triệu tấn. Khách hàng bên thứ ba chiếm khoảng 45% sản lượng, so với mức 31% trong quý 2. Giá cả cạnh tranh gay gắt và sản lượng xử lý thấp hơn tại Tây Texas đã gây áp lực lên doanh số và biên lợi nhuận.

Sản xuất Chế tạo

Doanh thu mảng Sản xuất Chế tạo tăng từ 48 triệu USD lên 53 triệu USD. EBITDA điều chỉnh duy trì ở mức khoảng 6 triệu USD, trong khi doanh số bán cho bên thứ ba chiếm 17% doanh thu của phân khúc.

Ban lãnh đạo chỉ ra rằng nhu cầu tích hợp cụm thiết bị phát điện và hoạt động đại tu thiết bị là những động lực hỗ trợ chính. Công ty dự kiến toàn bộ các thiết bị phối trộn chạy điện (e-blender) sẽ được bàn giao trước cuối năm, với hầu hết đi vào vận hành trước cuối năm và một số đợt triển khai kéo dài sang đầu năm 2027.

Flotek

Doanh thu của Flotek tăng từ 102 triệu USD lên 117 triệu USD. EBITDA điều chỉnh tăng từ 9 triệu USD trong quý 2 lên 22 triệu USD, tương đương 19% doanh thu. Doanh số cho bên thứ ba chiếm khoảng 49% doanh thu phân khúc, tăng từ mức 42%.

Triển vọng từ Ban lãnh đạo

ProFrac đã thu hẹp dự báo chi tiêu vốn cho cả năm 2026 xuống khoảng 160 triệu - 180 triệu USD bao gồm cả Flotek, từ mức 155 triệu - 185 triệu USD trước đó. Nếu không tính Flotek, chi tiêu vốn dự kiến là 145 triệu - 165 triệu USD.

Đối với quý 4, ban lãnh đạo dự kiến chi tiêu vốn bảo trì sẽ giảm nhẹ trong khi chi tiêu vốn cho tăng trưởng sẽ tăng lên, chủ yếu do việc triển khai e-blender và nâng cấp động cơ.

Công ty kỳ vọng tỷ lệ sử dụng trong quý 4 sẽ tiếp tục tương đối mạnh, dù chịu ảnh hưởng từ tính mùa vụ thông thường vào cuối năm. Ban lãnh đạo cũng dự báo áp lực mùa vụ sẽ ít hơn các năm trước do nguồn cung thiết bị hạn chế và có rất ít dấu hiệu cho thấy khách hàng cạn kiệt ngân sách.

Đối với năm 2027, ban lãnh đạo kỳ vọng giá cả sẽ đóng góp rõ nét hơn khi các hợp đồng được tái ký. ProFrac sẽ chỉ cân nhắc việc tái kích hoạt các đội thiết bị hoặc bổ sung đội thiết bị chạy bằng khí đốt mới khi có các thỏa thuận dài hạn và mức giá đảm bảo hiệu quả kinh tế cho việc thay thế hoặc đóng mới. Công ty không có kế hoạch đóng mới đội thiết bị theo hình thức đầu cơ.

Rủi ro và các yếu tố cần theo dõi

• Thiết kế hoàn thiện nứt vỉa đồng thời (simul-frac) có thể tạo ra nhiều khoảng trống lịch trình hơn giữa các công việc, ngay cả khi năng suất của khách hàng được cải thiện.
• Chi phí vật liệu, bảo trì, logistics và nhân công vẫn ở mức cao. Ban lãnh đạo dự báo áp lực lạm phát sẽ tiếp tục kéo dài sang năm 2027.
• Sự cạnh tranh từ các dự án trung tâm dữ liệu và phát điện đang thắt chặt thị trường kỹ thuật viên lành nghề.
• Thời gian giao hàng kéo dài đối với động cơ và các linh kiện khác đã làm chậm tiến độ một số phần trong chương trình nâng cấp động cơ và e-blender của ProFrac.
• Giá chất chèn tại Tây Texas vẫn cạnh tranh rất gay gắt, làm hạn chế sản lượng bán, sản lượng xử lý và đòn bẩy hoạt động.
• Tỷ lệ sử dụng thiết bị cao hơn đang đẩy nhanh tốc độ hao mòn và rút ngắn tuổi thọ tài sản, làm tăng tầm quan trọng của việc định giá ở mức đủ để bù đắp chi phí thay thế.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo mô tả thị trường bơm áp lực đang thắt chặt bất thường, với lượng thiết bị dự phòng hạn chế và khách hàng đặc biệt ưa chuộng các đội thiết bị tiết kiệm nhiên liệu. ProFrac đang ưu tiên mức giá và tính bền vững của hợp đồng hơn là gia tăng công suất để theo đuổi các công việc giao ngay.

Ông Wilks cho biết các yêu cầu từ khách hàng bao gồm cả nhu cầu bổ sung thêm và nhu cầu thuê trọn gói đội thiết bị chuyên dụng cho năm 2027. Tuy nhiên, các máy bơm dự phòng có thể được giữ lại để đảm bảo tính dự phòng trong vận hành do động cơ, hộp số và cụm đầu động lực (power end) vẫn khó tìm nguồn cung ứng.

Ban lãnh đạo ước tính rằng đơn giá theo giờ đã giảm khoảng 50% từ đỉnh chu kỳ trước xuống đáy và kể từ đó đã phục hồi khoảng 50% - 60% mức giảm đó. Ông Wilks nhấn mạnh rằng các đội thiết bị hiện đang bơm khoảng 550 - 600 giờ mỗi tháng, so với vùng từ thấp đến giữa khoảng 400 giờ vào năm 2022, làm gia tăng mức độ hao mòn thiết bị.

Theo ban lãnh đạo, khoảng 80% đội thiết bị đang hoạt động trong ngành có khả năng sử dụng khí đốt ở mức độ nhất định, trong khi chỉ một tỷ lệ nhỏ ở mức một con số là các đội truyền động trực tiếp chạy hoàn toàn bằng khí đốt. Hiệu quả kinh tế từ việc tiết kiệm nhiên liệu được hiện thực hóa thông qua mức giá mã lực cao hơn đi kèm yêu cầu tỷ lệ thay thế tối thiểu hoặc các khoản phụ phí nhiên liệu kép riêng biệt.

Toàn văn Biên bản cuộc gọi công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

[Operator Instructions] Please note this conference is being recorded. I'll now turn the conference over to Michael Messina, Senior VP of Finance. Thank you, Michael. You may begin.

Michael Messina

Thank you, Operator. Good morning, everyone. We appreciate you joining us for ProFrac Holding Corp.'s conference call and webcast to review our results for the third quarter ended September 30, 2026. With me today are Matt Wilks, Chief Executive Officer and Executive Chairman, and Austin Harbour, Chief Financial Officer. Following my remarks, management will provide high-level commentary on the operational and financial highlights of the third quarter 2026 before opening up the call to your questions. A replay of today's call will be made available by webcast on the company's website at pfholdingscorp.com. More information on how to access the replay is included in the company's earnings release. Please note that the information reported on this call speaks only as of today, November 5, 2026.

We would advise that any time-sensitive information may no longer be accurate as of the time of transcript reading. Also, comments on this call may contain forward-looking statements within the meaning of the U.S. federal securities laws, including management's expectations of future financial and business performance. These forward-looking statements reflect the current views of ProFrac management and are not guarantees of future performance. Various risks, uncertainties, and contingencies could cause actual results, performance, or achievements to differ materially from those expressed in management's forward-looking statements. A listener or reader is encouraged to read ProFrac's Form 10-K and other filings with the Securities and Exchange Commission, which can be found at sec.gov or on the company's investor relations website section under the SEC Filings tab, to better understand those risks, uncertainties, and contingencies. The comments today also include certain non-GAAP financial measures, as well as other adjusted figures to exclude the contribution of Flotek. Additional details and reconciliations to the most directly comparable consolidated and GAAP financial measures are included in the earnings press release, which can be found on the company's website.

Now over to Mr. Matt Wilks, Chief Executive Officer and Executive Chairman of ProFrac.

Matthew Wilks

Thank you, Michael, and hello, everyone. I'll kick off with some remarks on our overall performance, the broader market environment, and progress on our strategic priorities. I'll then hand it over to Austin, who will take you through the segment results in more detail. The market backdrop heading into 2027 remains one we're genuinely optimistic about. The structural case we've been building around domestic energy security only looks stronger with time. Further, our peer group has remained disciplined, with several dedicating their resources and attention to newer aspects of their business. At the same time, the third quarter was more volatile than we anticipated, with activity in pumping and proppant moving less in a straight line than we would have liked.

Starting with pumping, September brought more calendar white space than we anticipated entering the quarter, which weighed on our activity levels for the month. Part of that reflects more efficient completion designs, including the use of simul-frac completions across multiple wells. Simul-frac can create more open calendar days between jobs, even as productivity improves. We're encouraged that activity improved in October, and we expect to see what we consider a normalized fleet count in the fourth quarter. Our efficiencies, including hours pumped per day, have improved, even with some calendar white space due to customer year-end seasonality built into our fourth quarter plans. Due to market tightness, driven by limited equipment availability and minimal indications of budget exhaustion, we expect less seasonality next quarter than what we have historically experienced. I would note that we also saw some cost pressure earlier in Q3 on the maintenance side, which began to normalize as we exited Q3.

Pricing remains one of the more important levers we have, and the environment for it continues to be favorable. Leading-edge pricing has been rising, but remains well below the highs we saw at the cycle's peak. We're working to carry that through our contracts and RFP structures as deliberately as we can, and we are constructive on the impact we expect to see in 2027. In proppant, lower than anticipated throughput in sales, particularly in West Texas, weighed on the results. We're addressing that directly and are encouraged by the early improvement we're seeing. More broadly, we're taking a disciplined approach across our frac sand footprint. Specifically, we are focused on strategically increasing pricing and throughput.

As we've said before, the operating leverage in this business becomes increasingly evident as we drive higher utilization across our strongest operations, and we continue to believe Proppant is capable of improved free cash flow as those efficiencies show up. Cash flows in the segment are also moving into a more sustainable position, supported by the term loan amendment that Austin will cover. Picking up on the broader market, as I mentioned in my opening remarks, WTI came in [ to the ] plenty of movement in between rather than a steady climb. Since quarter end, prices have pushed even higher, touching $110. The underlying drivers haven't changed. Tensions in the Middle East have continued with renewed attacks on shipping through the Strait of Hormuz in recent weeks and knock-on effects such as elevated tanker and insurance costs. The political outlook on both sides of the conflict makes near-term de-escalation far from certain. The bottom line is that we continue to see a sustained disruption to global supply capacity rather than a short-term shock, with recent market activity reinforcing that view.

As we've said before, periods like this strengthen the case for reliable domestic production. For our business, that remains a meaningful advantage. After several choppy years in our industry, some of our larger, more diversified peers have shifted capital and attention toward power generation and other opportunities where higher returns are expected. We think this is exactly why the pumping market is poised for a period of tightness. Fewer dollars chasing frac equipment, combined with the lead time required to stand up a fleet, makes it harder for opportunistic entrants to replicate the capacity additions that have put pressure on pricing in past cycles. At the same time, older equipment across the industry continues to retire and much of it isn't being replaced, and the equipment that is being replaced is facing some of the longest lead times we have ever experienced, further tightening the market. To that end, higher commodity prices are supporting customer cash flow and their ability to keep programs moving through what's typically a seasonally lower period and has accelerated RFP discussions for 2027 work.

Our approach through that process remains constructive. Our preference is to capture value durably through contracts and RFPs rather than chase the spot market with additional equipment. And that includes focusing on pass-throughs for inflation-sensitive items such as logistics, consumables, materials, and labor so that we're not locked into a status quo margin over current costs. We're also seeing operators begin to look at contracting new-build fleets. And that lead time I just mentioned is part of why those conversations involve meaningful upfront commitments. We're getting close to the point where pricing begins to support new-build economics. So to be clear, we think we have more room to go before we are squarely in that zone.

Consistent with what we said last quarter, we will not build speculatively. We have active dialogue with customers on new builds, and we look to contract on multi-year terms. Our internal manufacturing capability gives us an advantage on timing, but customers are cognizant that they will need to act fast if they want to take an incremental fleet in the next calendar year. On the cost side, we've achieved the targets we set under our cost program introduced late last year, and we're proud of that progress. At the same time, inflation across logistics, consumables, materials, and labor remains a real challenge, and we expect that pressure to continue into the next year. Labor is particularly tight, with data center and power generation build-outs creating meaningful competition for skilled technicians in our markets. We view these pressures as an ongoing cost of doing business, not something we can fully eliminate through efficiency gains.

That makes passing through cost increases as they occur, rather than waiting for periodic resets, all the more important. As I mentioned previously, lead times are and will remain challenging. We're seeing longer lead times on new equipment broadly across our industry, particularly engines, as capacity has shifted to support power generation demand. This has affected the pace of our engine upgrade program somewhat, though it remains underway, as well as the development of our e-blender transition. Thankfully, our internal manufacturing capability continues to give us more control over timing. Speaking of our manufacturing business, it is benefiting from the broader build-out of power infrastructure across the industry.

We're seeing this translate into tangible demand, including power generation packaging work for other operators expanding their own capabilities and rebuild work for another industry participant. These relationships are deepening and creating a source of sustainable demand. It's a genuine strength for our business, and we're proud of the work our manufacturing team continues to deliver. On e-blenders, we expect all units to be delivered by year end and most units to be working by year end, with some deployments carrying into early 2027. The efficiency benefits we outlined when we introduced this program, including lower blender CapEx and operating costs, continue to show up as more of these units come online. Through all of this, our vertically integrated model and asset management platform remains central to how we think about our competitive position, not just this quarter, but across the cycle. With that, over to Austin to walk through the financial impact of the quarter in more detail.

Austin Harbour

Thanks, Matt. In the third quarter, revenues were $511 million, up modestly from $498 million in the second quarter of 2026. We generated $65 million of Adjusted EBITDA with an Adjusted EBITDA margin of 13% compared to $69 million or 14% of revenue in Q2 2026. The change is driven by softer results in Proppant Production and to a lesser extent in Stimulation Services, partially offset by a stronger contribution from Flotek. Free cash flow was positive $14 million in the third quarter, an improvement from negative $8 million in Q2.

Turning to our segments, Stimulation Services revenues were $421 million in the third quarter versus $430 million in the second quarter of 2026. Adjusted EBITDA in Q3 was $37 million versus $39 million in Q2. Margins of 9% were comparable to Q2. Results reflected the September white space Matt described. While our fleet count for the quarter overall remained broadly consistent with Q2, pump hours per fleet softened in September after running near some of our best levels of the year earlier in the quarter. Lower cost absorption due to a less efficient calendar, coupled with increased costs on materials and certain operating expenses, offset price increases realized in the quarter.

Looking ahead, utilization improved in October, and we expect the calendar to remain relatively strong in the fourth quarter with customary year-end seasonality. Pricing, meanwhile, contributed modestly to the quarter, though the benefit from this year's increases is still working its way through on a staggered basis as individual contracts reset. We expect that contribution to build through the fourth quarter, and pricing remains a key driver behind the sequential improvement we're expecting as we go into 2027. On the cost side, we saw elevated materials, maintenance, and labor costs, and are closely monitoring labor, logistics, and equipment as we move forward.

Q3 Proppant Production generated $101 million of revenue versus $121 million in the second quarter of 2026. Approximately 45% of volumes were sold to third-party customers during the third quarter versus 31% in Q2. Adjusted EBITDA for the Proppant Production segment was $2.4 million for the third quarter, compared to Q2's $6 million. On a margin basis, EBITDA margins were 2.4% in the third quarter versus 5.2% in the second quarter. Total volumes were approximately 2.5 million tons. West Texas remains highly competitive on pricing, resulting in lower sales volumes and throughput. Operating leverage and increased costs negatively impacted margins in the quarter.

Our Manufacturing segment generated third quarter revenues of $53 million, up from $48 million in the second quarter. Approximately 17% of segment revenues were generated from third-party sales, consistent with the second quarter. Adjusted EBITDA for the Manufacturing segment was $6 million, roughly in line with Q2's results. The segment is benefiting from the power-related activity Matt described, and we're pleased with the trajectory there.

Flotek generated third quarter revenues of $117 million, up from $102 million reported in Q2. Approximately 49% of segment revenues were generated from third-party sales, compared to approximately 42% in Q2. Adjusted EBITDA for Flotek was $22 million, or 19% of revenue, up from $9 million in the second quarter. Third quarter selling, general, and administrative expenses were $45 million compared to $44 million in Q2.

Cash capital expenditures of approximately $40 million in the third quarter were up from $32 million in the second quarter of 2026. In Q4, maintenance capital could decrease slightly while growth capital moves higher, driven largely by the e-blender and engine upgrades we discussed earlier in the year. With three quarters of spending now behind us in 2026, we are tightening our full-year capital expenditure guidance to a range of $160 million to $180 million, including Flotek, versus our prior range of $155 million to $185 million. Excluding Flotek, we expect CapEx to be in the range of $145 million to $165 million for the year.

Turning to the balance sheet, total cash and cash equivalents as of September 30, 2026 were approximately $44 million, including approximately $25 million attributable to Flotek. Total liquidity at quarter end was approximately $97 million, including $79 million available under the ABL. The availability under the ABL credit facility ended the quarter at $148 million, a decrease from $162 million at second quarter end.

On the balance sheet, we have continued to take a disciplined and proactive approach to managing our liquidity and debt maturities. As we discussed in August, early in Q3, we closed a new $300 million asset-based revolving credit facility with Eclipse Business Capital, increasing our commitments, improving advance rates, and extending the maturity profile of our revolving facility. In September, we amended our Alpine Term Loan Credit Agreement, extending the maturity to February 2030 and eliminating scheduled amortization payments through the first quarter of 2028. Scheduled payments then resume at $10 million per quarter. The amendment also allows us at our election to pay approximately 675 basis points of interest expense in kind at current rates for the next 12 months, adding that amount to principal while requiring quarterly payments of excess free cash flow.

In connection with that transaction, $60 million of term loans held by affiliated lenders was repaid and canceled in exchange for Flotek shares held by a company subsidiary, eliminating $60 million of principal balance on the term loan. Taken together, these actions extend our debt maturity profile, reduce near-term scheduled principal and cash interest payments, and provide additional financial flexibility. At quarter end, we had approximately $1.05 billion of principal debt outstanding. Of this amount, only $113 million comes due over the next 12 months, with the majority of our maturities remaining concentrated in 2029 and beyond. With that, I will now turn the call back over to Matt for closing remarks.

Matthew Wilks

Thanks, Austin. Before we open the call for questions, let me close with a few key takeaways. We experienced some volatility in the third quarter despite an improving market backdrop, but are encouraged by the trends we've seen so far in Q4. The actions we took on the balance sheet this quarter from the Eclipse facility to the Flotek term loan and the Alpine term loan amendment and the $60 million affiliate loan exchange extend our maturity profile and give us added flexibility. We continue to invest in what differentiates us, including our manufacturing business and our equipment. Our vertically integrated model remains central to our competitive position, not just this quarter, but across the cycle. Looking ahead, our focus remains on execution, advancing our upgrade program, strengthening our financial position, and positioning ProFrac to capture the opportunity as the market tightens.

We remain genuinely excited about the setup heading into 2027 with what we see as a tight market and a disciplined peer group set against a structural case for domestic energy security that continues to strengthen. With that, I will now turn the call over to the operator for Q&A.

Operator

[Operator Instructions] Our first question is from John Daniel with Daniel Energy. Please proceed with your question.

Phần hỏi đáp

John Daniel

Matt, just want to focus on next year, if you will, in terms of the tight market. At this point, do you prefer to reactivate fleets or would you rather sort of play the price game? And man, how are you, just the price versus volume, if you could tell us what you're thinking for next year.

Matthew Wilks

It's pretty tight. I think attrition across the industry is pretty aggressive. There's just no equipment left in the market. And then there's a high preference for fuel-efficient fleets. And so everything that's working, that's available is working, but and so we're in a really good spot. We've been able to push pricing, continue to push pricing. And at this point, if there's customers that are willing to sign long-term agreements, then we can look at activating fleets and building gas fleets. With that being said, we're, you know, keeping status quo. You know, there are situations where we may see simul-frac fleets split into zippers.

And so from that standpoint, you might see a fleet count increase per minute, but there's not expected to be additions of additional equipment without replacement pricing or new build pricing.

John Daniel

Okay. And a follow-on, Matt, is a lot of the land drillers the last week or so talked about more inquiries from public operators for incremental rigs next year. I'm curious, are you getting calls from existing public operators looking for incremental fleets for next year?

Matthew Wilks

Without a doubt. And it's not just spot work, it's dedicated work as well. There's just not enough horsepower to go around, and so it's creating a great environment for the service side. And we're already seeing it in Q4, I'm pretty confident that 2027 we'll see positive net income, and we're seeing signs of it in Q4 already.

John Daniel

Okay. That's all I got. Thanks for including me.

Matthew Wilks

Definitely. Thank you.

Operator

[Operator Instructions] Our next question is from Saurabh Pant with Bank of America. Please proceed with your question.

Saurabh Pant

Matt, I was intrigued by your comments on pricing, not getting squarely there, but kind of getting there a little closer to new build economics, which is very interesting. Maybe Matt, if you don't mind, just give us a little context on how much pricing came down from the peak of call it early 2023 to the trough, have we recovered? And then what kind of returns would you be looking at if you were to pull the trigger on a new build fleet? I'm guessing it's on the gas side of things, right? There's a lot of demand on that, but maybe walk us through that dynamic a little bit.

Matthew Wilks

Yes, so from a per hour rate standpoint, you know, from prior peak to the trough was about a 50% reduction in hourly rates to the customer. But you've got to put it in context. In 2022, the average pump time per fleet was running in the low to mid 400 hours per month. Now you're seeing everything in the 550 to 600 range from a pump time standpoint. So the dollar per hour and the costs and the revenue aren't the same. It's accelerated the wear and tear on your equipment. And so, you know, even though it's diluted a lot of your costs to run the fleet, what it's done is it's shortened the life of the equipment as well.

So we can't forget about that piece. We gotta make sure that that's recovered as well. But as far as from the trough to where we are now, it's bounced back from the trough probably about 50 to 60% from there. There's still room to go to reach prior peaks. And, you know, from a timing standpoint, I don't know if it gets back to the peak or what timeframe it would. But what I can say is the prior peak had spare capacity on the market. And what we see going forward is there's no doubt there's no spare capacity.

There's long lead times on equipment. In '22, you could rebuild engines that were on the sidelines. You could rebuild transmissions, rebuild power ends. None of that is available and just the options available to you are pretty limited going forward. So you've got to work with what you've got. And I think that we'll continue to see, even if fleet count stayed where it's at now, it would continue to tighten because of the limited availability in the supply chain. And so we're very encouraged by what this means for the path forward. It also creates a scenario where if you do have spare pumps, you're more likely to reserve those for redundancy on your existing customer relationships rather than trying to deploy another fleet.

And just because you gotta take care of the customers you've got. And so trying to add a fleet and stress and get spread too thin, just because you can and you have a few extra pumps, you would rather make sure that you've got the depth in your replacement cycle with your maintenance teams to make sure that if you've got an engine issue and have to replace an engine, you may not have that engine. Transmissions, power ends, it's a really, really tight market on the component side. So when you look at building into redundancy for your business, your likelihood of adding a fleet isn't as appealing as keeping the redundancy that you need to keep your footprint that you already have. This is a different kind of tightness than what we've seen in prior cycles.

Saurabh Pant

Right, okay, Matt, I got it. That makes sense, that makes sense. And then my next one is just to understand a little bit on the whole fuel cost arbitrage, because if you do the math at current diesel price, I think 100% gas fleet maybe save like $50 million, maybe even more versus 100% diesel fleet. That's massive fuel cost arbitrage, right? But from a pressure pumper's, from your standpoint, how do you capture that? Does it work indirectly through supply demand? Is there a direct way to recover some of that through some kind of a bonus model tied to how much diesel you can displace? How does that flow through? And if you don't mind hazarding a guess, how much of the active fleet out there in the fleet why do you think it's still 100% diesel?

Matthew Wilks

So the majority, I'd say about 80% of the fleets in the market right now have gas capabilities and probably a small single digit percentage of the overall fleet is all gas for direct drive gas engines. Of course, there's electric fleets, gas fleets, dual fuel. The majority of the industry is dual fuel. And then depending on what your substitution rate and whether you get paid for that or not, sometimes operators will just pay you for the horsepower. And so you get a material premium for that type of equipment. If you have a, typically if they just pay you all at once and say, hey, here's your horsepower rate, there will be a minimum requirement for substitution and penalties if you don't hit that. But if it's not fully absorbed in the cost of the horsepower, the alternative to that is that you charge for substitution, for DGEs, so that your incentives are aligned and you get a base horsepower rate plus a dual fuel surcharge.

It changes from customer to customer. But in any event, the substitution is paid for. It's just whether it's built in from day one in the full horsepower rate with a minimum threshold or paid for improved substitution. But one of the things we look at is benchmarking against what a diesel fleet would cost, including the diesel, to establish what a fair rate is for a fuel-efficient fleet. How much is the diesel worth that we're saving? And that's the value proposition. You know, we'd like to get 100% of it, but these are partnerships, love our customers, and there's not too many ways for anybody in the industry to really get a good fuel hedge. You can hedge diesel, but then you've got to figure out, well, how efficient is my fleet going to be? How much diesel am I going to consume? And so you're always going to be exposed even if you do hedge it.

And who wants to hedge it at $5 or $6? Right. And so I don't think it's lost on us or our peers exactly what these fleets are worth. And it's just coming to a fair agreement with your customer that recognizes the overall fuel savings.

Saurabh Pant

Right. No, that makes sense. That's helpful. Thank you. I'll turn it back.

Matthew Wilks

Thank you.

Operator

We have reached the end of the question and answer session. I would like to turn the floor back over to Matthew D. Wilks for closing comments.

Matthew Wilks

We appreciate everybody for joining our call. Very excited about the outlook. We're seeing everything materialize very quickly right now. I cannot wait to get on our next call and tell you exactly why we're excited. So thank you.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

This live transcript is auto-generated without human intervention or review.