LBRT - Earnings call transcript Q3 2024

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Operator

Welcome to the Liberty Energy Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Anjali Voria, Director of Investor Relations. Please go ahead.

Anjali Voria

Wyatt. Thanks, welcome Energy and Earnings Quarter the Call. to morning, Third Liberty XXXX Good

the Wright, Officer. are Ron us call Joining on Chris and Stock, Gusek, Michael Chief Chief Financial President; Officer; Executive

would like comments beliefs could detailed statements. These cause involve on actual view risks These risks our include materially about Before we differ prospects, may that begin, reflect subject current to all other based results expenses earnings some company's are from today the our conditions participants reflecting statements that and matters statements revenues, and remind and the forward-looking future uncertainties of that company's profits. I forward-looking filings. uncertainties in to to release public certain that our are or

discussed return are to now capital income Relations non-GAAP turn the reconciliation income to measures, EBITDA, not calculation net over share and These adjusted Chris. net adjusted include will are per income and available capital net of other operational and Our not share companies. of on per adjusted EBITDA, on substitute comments including pretax measures to adjusted our adjusted net adjusted to net as and adjusted for call financial EBITDA employed income of on website. I non-GAAP adjusted may net this income, income diluted employed, be A on measures a and Investor comparable diluted also measures. similar and return the EBITDA, pretax today GAAP call

Christopher Wright

delivered environment. quarter revenue company-wide everyone, of and amidst reached before XXXX and of demand and slowing us discuss $XXX billion new Quarter to We quarter ever Good solid adjusted pumping operational Anjali. hours joining with again morning, Liberty results. than million. our more you, in backdrop thank and efficiencies the $X.X EBITDA a for a you Thank heights of financial Third a

gas, for in hours for team prior of to of set excited culture a operating We performance. The a celebrate generating record improvement of operational fleet at low value company digiPrime our we record the I'm of for company striving and fuel crew emissions any of strong are number pushing in continues financial month beyond highest from find and the pumped history, executing our that low natural progress achievements ourselves Liberty macro by the Liberty proud levels, for the customers. performance regardless and in. environment our cost

to distributed quarterly that return lower XX% the program expand of cycles. cash years. attractive at at third of the share opportunistically enabling In million program. the reinstatement stock $XX XXXX, price we return relative shares of prior $XXX -- We a our quarter, of we a at flow, increased lower July in million a cash million have $XX the through to strong capital retirement capital generated shareholders quarter. free and robust repurchases to Since of outstanding program our we $X.XX the competitive and opportunities week, of in to in and a per technologies increase an to share. our total also is quarterly disciplined dividends. Earlier dividend investment businesses balance buybacks compounding XX% over and this dividends returns announced cash higher shareholder innovative market in The return capital drive effect advantage leading-edge our way our We increase our with coming

high across period two to service by needs. number Number one, technologies, loyalty their grow returns differential driven the financial success two, focused that of a and essential with withstand areas and relationships across strategically able customers want our our largest their of that drivers And specific leading service look industry to our growth a who on with are our during highlight this superior and cycles also at we've demonstrates we delivering has trust performance. and relative also our expanded built dedicated invested softening grown. have When performance and competitive important? is long-term in and leadership Our position. Why This business moat, we've I service. technology consolidation percentage market, prosper customers of importance our in value multiple well-defined the our of capital. work by cycles of grown is this quality, on safety and potential customers

industry. focus technology Our to and benefit Focused on innovation our in allowed experience drives and markets today. have us the operational strategic lead new investment customers differential develop from efficiency investments the

share me a Let examples. few recent

past partnerships Basin rich with entered Beetaloo new year, gas entrepreneurs Liberty to develop Australia. Over the in the

Operations next of country. We have a taken are begin a significant with fleet to arrival Liberty month. the in expected forward step

Advanced assembly and is the its example marks launch in the year. delivered third that just since digiPrime progress This manufacturing Liberty Another quarter. LAET our division Equipment first great Technologies, of last pumps LAET

the we our ends, including technology, power few of have For last and operations and frac the equipment. ancillary design supported years, pump Liberty with manufacturing ends fluid

LAET as new the components accelerates critical success design ability expands systems. The and We PropX. incorporate of innovation design, proprietary LPI the ability are and the of and complete and well manufacturing The comes ownership as to and feedback cycle for Digi now package organization rapidly reduces cost total from new ownership. engineer our designing through field to engineering of technology operations. This technologies

important our reflects we versus remain learnings external needs. strategy balanced leverage with whereby in-house assembly which of outsourced manufacturing scale the key production, innovation through cycle can manufacturing a of and part our an partners the Our selective to approach

years solutions last X delivery acquired mile since leading handling nearly a pounds proppant is division XXX provider and ago sand has of delivered billion of and PropX Our inception.

several frac deployed excited together piles with simplified new system, optimizing recently in value pile on-site improved for damp currently operations. sand through The delivery sand wet advanced has accuracy PropStack, premier its damp the new hopper offer handling customers use locations. crop sand of new the we're As technology provider share our technology, to to innovative metering PropX laser developments. high-throughput additional testing and of

CNG slurry reduce impact minimize provide and system a of cost advanced sustainable the this summer, with We in to real for chain. Earlier mass. expanded in Innovations, CNG strong value frac in first our fuel fleet testing critical last and DJ fueling LPI, a off LPI's gas reductions bring Power operations sales sand commenced could are of to services start, stages delivery delivery pipe are environmental Colorado helping operations also Basin trucking, across Liberty July. mile the in that the compression

the volumes treating We other demand customers. its more Permian for of supporting for we also LPI Haynesville, our more offers delivered runway both gas in with most basins in and in CNG, the much burning third than history are now gas and fleets quarter certain Basin. industrial are and applications power in opportunities Alongside handled and DJ field operating gas commercial to more in CNG LTI. compelling the rising for the expand. Today, Permian

the future much we have power per which advantages. ensuing will creates area expertise and frac leverage as believe are We natural the plants demand excited an oilfield. built we to opportunity meaningfully additional fleet An outside we managing significant have is and that constructing of inside energy-rich gas, opportunities, to be both by the powered

The power news other firm these growing been opportunity in in has long-term supply days. much which is of the nuclear,

partnership reactor been small and exciting. stake modular has ownership company, Oklo, Our with truly

demand economic that this rate year significant across per to the by production X grow barrels growth is year. exceed reflect for approximately million Total global uncertainty and expected oil geopolitical Chinese dynamics. day next markets and plans, will OPEC+ of Middle East Oil economy, oil

strong XXXX, prices surplus and concerns may expected and to are While curtailments North range-bound gas due producer as American generation be global remain in supportive congestion oil prices in recent relatively production demand. in ease domestic weeks oil of to activity. Natural rose storage power

transitory. wells XXXX including be sustained to the and gains U.S. higher the in the gas Frac natural XXXX strong reversal proved gas has of completions producer longer activity uncertainty higher in accelerate commissioning reluctant further half export and acreage, energy high-graded efficiency factors, are However, LNG concentration elevated first of advance in operators of in development year. XXXX programs expected may demand. prices and lateral consolidation, to to markets facilities activity incentivize new markets, is to The in stimulate production therefore, response left E&P's of Canada in operators support navigating and slowing curtailments of the from activity

more double-digit Completions in E&P softening. a flattish to targets. and in now XXXX early production percentage expect support QX bit oil typical the gas increases a low likely We reduction than activity activity QX

if service U.S. late improve faster XXXX, frac levels, year, has completion larger likely will improvement crude to fracs wells activities Industry-wide decline from Since levels completion persist. dynamics XXXX E&Ps with and expect in a brought activity rates. poised oil horsepower. pump we this for global intensity from mix production the its consolidation current to partnership gas. top-tier and highest frac levels due going are efficiencies higher production Higher at Eventually, support likely and today's demand Efficiencies efficiency natural more and growing flat by frac aided Frac were of industry been towards in require to forward. increased oil to with rate benefiting levels. producers would shift relatively part is increase slow but will intensity providers.

prices fleet attrition, wide and soft supply investment is tighter activity near idling headline of the to Softer activity fleets in demand attractive and year-end in counts increasing economics prices has cannibalization that E&P of Together, term are the service levels imply gains across are support these pressuring needs, efficiency is further horsepower leading-edge and catalyst frac frac a enjoying a that the and well-capitalized maintain inconsistent the been for of than complexity demand are market of of technologies, equipment balance oil anticipated fleets. range in with suggest. Large, XXXX. frac E&P supply to levels necessary

investment, technologies fleet that It service in important is sizes. underinvestment equipment next-generation given especially growing industry prices aging and support

quality New service the completion positioned complexion, service complexities of manage technologies. growing next-generation are bands to providers and with

and superior our the We asset We our technologies that for efficiencies deployment seek we drive in disciplined investing for as in deep relationships, Digi remain and long-term offering leading-edge are enable financial our services integrated returns customer customers to with significantly strong advantaged results. shareholders.

Over we deployed the maintained years, last count. flat roughly a have fleet X

deployed customer planning market continuing our long-term reduce to pressures, we mid near-term temporarily a support reductions count activity while However, and to partners. modestly and are in our fleet

we to ahead, healthy in free Looking XXXX. deliver generation flow expect cash

slows Our transition within frac investment following years. cadence last few accelerated technology in push an the

in opportunities services. growing is power our of investment Our expected to shift support for strategic generation

capital outlook. long our to and of over to over creating results priorities are and CFO, positioned our to our that, shareholders, call value Stock, strategic deliver turn to financial the the We well term. With I'd Michael investment discuss to like dual on return of

Michael Stock

Good morning, everyone.

in delivered from have the the and and during conditions demonstrate market levels We've Over of dedication X are also on a our activity advantages. our that Liberty team. returns competitive to industry fleet We've superior softened our used time high past on when building years, next-generation embarked levels. the focus years demand. transition We results hard work to initiative strategically digi peak to those X an technologies

we natural to primarily are We Digi of start pleased share fleets. approximately dual fuel powered the that gas with track to by and fleets, year are XX% with on

We also now critical launched have and power and infrastructure LPI our to fleets. mass reached

through As headwinds. performance drive XXXX, quarter we to look continued differentiation billion positioned cycles. In a billion well was sequential solid are prior the pricing and $X.X representing compared third we quarter, on $X.X in to ahead, the X% revenue decline of

Third tax $XX and income prior million prior was net was compared million quarter in net after $XX tax of income excludes the $XXX mark-to-market million loss for loss unrealized quarter compared million in quarter. adjustments. Adjusted to $X to $XXX pretax million net after a the

prior compared $X.XX was quarter net quarter. diluted diluted was to Fully the share to and $X.XX prior the in adjusted compared per $X.XX share net per $X.XX in income income

quarter, Third totaled net General and with expenses second $XX administrative in in million noncash the the compared largely quarter quarter. million million in $XX $XXX to line prior in million quarter EBITDA adjusted third stock-based and expense was million. Other the included $XXX loss items aforementioned inclusive million relatively the unrealized in $X million line expense $X the million was prior $XX the investments, of million for $X in $X interest of compensation quarter. of with net quarter, totaled on

million, of income. approximately quarter XX% pretax expense Third was tax $XX

the XXXX were tax to rate expense effective expect XXXX approximately cash to XX% income. $XX tax be expect and in of the for taxes taxes We approximately now rate book we quarter XX% XX% million continue the to pretax be in of year. Cash our to

a end the from $XX with million $XX quarter debt net $XXX the by quarter. We of million. Net declined the and balance of debt of million ended second cash

an fuel at under capital capital $XX availability quarter share and quarter, million of uses in included spending had proceeds Total facility In capitalized the asset expenditures, facility of handling liquidity million. Net $XXX buybacks based to cash $X in cash dual Digi dual million included $XXX of on million from fleet technologies, credit and Third fleets, Digi quarter. the technology sand sales expenditures $XX third be quarterly which were other investments in end of million capital fourth in expect upgrades, the in of We the expenditures upgrades, was dividends. the quarter, $XXX completion including million we wet Permian the on fourth equipment. deliveries and timing quarter, -- construction approximately demand maintenance the projects. fuel approximately for LAET expected

flows commitment shares $XX Our capital ability enables of cash repurchased million dividends. our the $XX distributed strong or and outstanding third cycles cash through million in X% shares of generate to returns. In over quarter, to the we

high-return increase long-term continue reinvesting to while We our flow return on opportunities that in of deliver capital generation. program our cash

keep outperformance, E&P now hesitant quarter the new uncertainties with to are seasonality pronounced fourth raise year. of macroeconomic to anticipating ahead activity production Looking year typical more be E&P's emerging ahead, than early as coupled we

soft rig also a deployed backdrop X%. poised these believe is in activity have and in fleets production required are stabilized our demand are fleet in the fleet While counts maintaining pressures as conversations, activity largely X or and temporarily serving pricing unusually a XXXX. to reduce at in we inconsistent are anticipated a years of flat inflect flattish gas XXXX. oil bottoming market. After of levels the below with count, year-end planning levels approximately by stain are industry now activity now to higher Horizontal signal We

a development reactivate disciplined our fleets will needs support those customers' We fashion. to in long-term

transitioning to XXXX. fleet our Digi for in advantage, to next-generation cycle to completion our expect now program As decline competitive we build our the capital we technologies, our spending in early invested services

increase As less such, to defined we as as completions CapEx expect free cash flow year-over-year. EBITDA business for the

to maintain have potential We of free fund flexibility generation continuing new cash return robust capital flow support opportunities adjust while power strong our targets to program. and spending to our significant capital

services towards shift opportunities for to investments growing power our the expect ahead. We years generation in

have We to a long-term deliver leading in the our to reflect XX% also and we confidence increased ability flow cash our by expand and free drive quarterly cash invest dividend our earnings, generation a return We I Chris our combine value for opportunistic to call will of to now turn for share few dividend back capital strategy. repurchases shareholders. generate remarks. the with significant a cash

Christopher Wright

activity is levels Slowing pricing inconsistent demand. Michael. expected Thanks, pressuring with future

try to me put in Let this perspective.

previous of differential equipment seeing capacity cycle market will with frac our frac increasing frac we per smaller above frac profitability without market markedly in a different most fleet frac demand. companies their frac cycles, healthier are quality even fall Available Our the in reflecting This tightening remains is the into providers. insolvency lead and across below levels. of shrinking. far This competitors' high profitabilities investments cyclical frac are is than to Already, wider in XXXX. in frac the attrition perhaps

has in return, the high our cash core we ever trend frac Power in business. its and and diversification to to advantage our competitive a boosting downward year Innovation Our business have sizable free the technology cash bigger is develop flow. it is flow and been. in next than foreseeable business future, Liberty infrastructure CapEx infancy, will the

business will been at more we prospects in the future frac Q&A, of which now call. operator comments to the the the will never it love our excited some back and about competitive position However, for turn have after and I have end closing frac. I

Operator

Instructions]. the open questions. [Operator now for line your I'll up

Gruber The Citigroup. first with from comes Scott question

Scott Gruber

next investment year. around comments your on start to wanted I Yes.

go year. investment So next What with fleet It will could year. how EBITDA less LPI CapEx rise higher next does e-frac could for CapEx for target additions or sounds year? many lower completions completions that mean like you next it

curious that wide early and So together, 'XX we're two a your could know but pieces fine. putting what early, range is be? range those I just CapEx on are thoughts what

Michael Stock

level mean, that bit Scott. kind bring the or Yes, a I there Thanks, market discussing into probably and fleets of Digi has Yes. us CapEx we're about that X replacement. of X XX% just about

with of Digi So frac of next closing between we're fleet to and the goes in end Sarig year others. XX% depending sort configuration XX% XX% fleets in -- on probably how XX% just at or technologies, the on

about think that. on where we I So that's are

in for the the that advanced opportunities of and reasonable And at status kind on That is of interesting far out need discussions a obviously, to got days are freight lot moment. power of there generating that molecule the cash also we're includes LPI where that quite early looking at going fleets CapEx also gas well. base support then but investments, be a natural clear the -- cash those we for -- it would look investors going more includes I like. more that clearer numbers completions business, the be about lot of gave our think the like we'd come as January doing kind what delivering generating and for will by of which expansion probably to year to any our we're -- management, of that call to those number next the say, we're But kind

consider in something generation of completions that about So the eventually outside frac talk of and of that's sort be included any we business January. in will what power side I

Scott Gruber

any but be sidelines down probably appreciate there Got A from some can I on guess, could follow-up assume decline? dynamics of standpoint. headwind. pieces then that two should think then we just teens it. moving two, and XQ would And pricing positive And the I of revenue additional couple revenue how bit. a you're a I in stand in fleets, incremental that seasonal for on those low a terms the trend, laying the thoughts a there offer XQ recovery color. early near-term on you about the one, And decrementals

trying how revenue Liberty EBITDA should XXXX about starts level set we where think standpoint? Just and a to from

Michael Stock

Yes.

one. that take me let Scott, So

pricing be we've of will a last be slow of kind little the quarter, this it the think the higher. of sort compared fourth of versus of decreasing similar of dynamics dynamics the at at end kind of of the That's of year kind decline, I in looked sort at will with revenue sort as the and think last year. year decrementals I to end the

So revenue decrementals if you the revenue there. look of the at --

to into have I standard think we the to say, QX closer of levels. be between early but QX. are -- the from It cetera, at We're recovery and reasonable QX and get I back closer. have would in incrementals, and at QX We'll part there. activity the we'll -- RFP where et be season, a still moment. have It coming QX between will things won't and look we

Operator

Modak from comes Ati Goldman with question Next Sachs.

Ati Modak

you the Do of in think industry that understand about to trying talk go? market? where a or level down? pricing pricing we think in should dynamic Can can there Is pricing pressure level the your is you fleet discipline on profitability breaking return

Michael Stock

gotten may Yes. I a and statement. down of get people next yet, early year-end wouldn't strong going or programs they you to that fleets keep to have to trying this not November pattern fleet see but December down they're fill pad. number in -- late the we down, get discipline too just out. And are I definitely that gap after They working. is do But know breaking running there's down think of a and going people's the

for and unusually very rough pricing pricing, pickup that's particularly rough. Normally, So great even. that's not work, but is extra rough

a at just to pricing not game. going that not play just fleet. we're We're running And that fleet to doesn't justify going that run

and condition try We've decline. and to technology improving were services of peaked slim it. our that to the slow, years And ago, offsetting a sort look, against market tide been used so it's gradual X efficiency we in

do obviously I that. plateaued. has think continue rig But count to we

a feel or we're operators think I near probably bottom. pricing at

don't this this But my and conditions downturn at isn't be we're which some the we're doing profitability keep can't, stay leg going where the capacity. we But is aren't I look, pricing-wise to today. just right the near about great taking guess. first We're now, to our a We're that. and normal yes, idle bottom partners. probably to tight is fine so it's -- And or up would We're drop take going actions to we down. if our

Ati Modak

it. Got efficiency. you very helpful. That's mentioned And then

advantage? some for understand Maybe that those and highest be the would there can You for but you is changes, it's us from room you. that mentioned which also means help changes incremental efficiency competitive take at will higher the levels, even slower what that that

Christopher Wright

huge average stop. now I they industry, something we've to People running all innovators, per Yes. on would and productivity of the running do our on nine, Look, against by degradation are to just that well months, the that's changes are increases but is and to and say going running been swims when better, sized led acreage last -- fleet and portfolio. But going of that frac, right? in the X, are something one operations. rigs together, long-term and in say a X, we on to nine passionate looking of XX Liberty had We're capacity significant really XX happens simul What do combined for XX soft, some would won't X those in years against or companies. productivity Maybe different, feels go they're always pricing That more -- I think there's now. which more people consolidation excess than well then? to were

counted gets as that's fleet so it but really, X.X fleets, X.X one fleet. So

it's in half the have for in with productivity. last the our obviously, of offset This more industry, great whole allowed years same average in and The in frac But the is equipment. in of efficiency especially fleet the getting by roughly is count just So pie. fleet maybe amount in economics on pricing factors We're the size. increases great great X count last couple term, pressure decline the growth done and months, the short of horsepower. for these

are smaller say would the Liberty of struggling. that frac out is even being their better in versus makes that's has don't profitability, marketplace. horsepower marketplace declined know as of are about But count run has much the differential there privates, in truly yes. part declined. by you feel So They the us what not as the I fleet say,

of selling operations, just someone them down. sort companies holding to going or assets and Some drying cards a are their up, of into their shutting bankruptcy else shutting way or down those

in it are fix supply of generation where that that in marketplace. out to the So bit market see That's we shrinkage little takes a a capacity what whack. and demand

an But AI on but if into for truck add that, I'd delivery, increase engine, customers. gas do to as I do life thing. routing we so how greater wants we can don't and of maximize substitution not supply Ron optimizing we going savings probably ourselves lot address fuel efforts technology your much A a the know to of chain our cost bring on. to how technical

I think I'm talking too long one of if you want move we to add anything on. or

Ron Gusek

you think I high Chris. points, hit all the

Operator

comes Stephen Gengaro with next question Stifel. Our from

Stephen Gengaro

Two roll pricing on When at customers, this just for me. talk expect year any for back prices an that, just the time you I'd they you business? do fleets roll deterioration start pricing the as the of that And of question. dedicated these year? part material add-on about throughout in do or to with

Michael Stock

Those are all different.

caps adjustments is some how Some them, quarterly or adjustments based Those year has there's factors. on on or a some twice much for aren't that even of move them big it usually up down. fixed of a year, and can

some So the a be lot but year huge. not everybody rebidding calendar does for going contract a starting is now they're January. there it on due. can on There movements, but in Not new

dialogue now -- that's there is having with and customers. negotiations our we're So and the right

years lower pressure for been that little the and going on Sure. to dialogue They But a Those that relationships that's that appreciate have X are quality going other now. are together. working continue. us efficiency long-term But bids coming of the partners. bit? in We

Stephen Gengaro

hear Great. the you similar where can about other market demand what of I on And be Or Oklo and market about think AI, will then all is of that kind -- of et end Is investment any end centers, is partnership of data the of LPI and one you SMRs be you with about sort know way side? for And we sort sort the sort the there thinking start cetera. about you'd LPI after energy playing? when us LPI the business. in to help

Michael Stock

electricity they would driven has grid. the at electricity what in of of California's with I stability but the all. of prices, more down in up Both demand of their and the years prices. at actually them driven aimed You states of just industry call bet. driven electricity of push up prices that California, That just look and doubled price out bad than at are sort no they've some that High XX-plus you increase the is policy still

to demand XX electricity first we're meaningful see the nationwide, years. Now in growth about in in

So going yes, they're grid, targeted the be but think location. on at But to the could they're going on be and both going that. Oklo, grid, somewhere be behind They're be fixed built they fixed. of to be could to they're

nuclear be power data be a data XX So years that, for generating center a the going that's to or there plant behind XX industrial be to parked huge XX is months is a target wheels. likely not center natural gas until facilities. LPI our it other gets or grid could and supplying connection. on They market months But somewhere forever. for they're assets, they're

where the also there's could they but markets, have same dislocations. be So some flexibility they move those in of to power

and figure What limited is got is, of amount limited a figuring to So The that highest tremendous. of only out them assets to amount got those we only interest capacity. Where is we're use fleets. a the build of out. in we're we've best just going and

overlap very the between there's two. different some there's So capabilities but

the both. I the than overlap probably will. So opportunities will But exception more excited for there be the think about

Stephen Gengaro

Great.

Michael Stock

prospects -- that's pretty electric problem, another to way. business [indiscernible] a same bright market. addressing same maybe Those but and contracts long-term They're that partner that the that different but more would in from in into but has generating next-generation slightly are utilities, is I plugging got Liberty a geothermal. capacity I think

Operator

BOA. with Pant Saurabh from comes question Next

Saurabh Pant

little back with thinking and just next I'm -- pricing we if I there right? maybe Chris, sign supply-demand think XXXX. case, approach the think relative to that's half XXXX? of dig pressure do that's fixed, more I your inconsistent forward that? on of . in thinking want to you then contracts from anticipated the to shorter-term for approach you on strategy said your look is do is the your reopeners right, a So Basically bit the comment pricing, you relatively you the do most word, you in just get contracts with the upside do want with stable again, up contracting view, Or balance year, how How saying, for 'XX. potential

Christopher Wright

question. Great

will guarantees to can and have a It So to have this to bad the certainly will producers that interest deploy price locked if with fleet a move but not that sense us. investment build be going that, that fleet. there's make that for build for makes in degrade now. may going of it that capital lot in up, to structured reopeners a new investment right that's price someone, way a we're But pricing it

new not at pricing zero world. legacy none them, out We fleets, there not some them. assets for some for they're going course, do tough poor is of have Of equipment, of pricing, that But that. like -- going on we're in

would the the slow So company. price it's such adjustments market gradual as for since there, been possible It's we they fleet we move with firms. make dedicated that way would doing partners be we've partnership a and just structured that that started up

on depends depends duration. it asset on yes, depends customer, So on type,

we part but things is on what the and small partnership different Liberty. to we'll it them out a their move just with customers way different going for that's can't, candidly. idle we there That's with, needs comfortable Liberty Different out thing. So range many is works find structure to right that that And from with And have aren't miss. wide away and priorities. find of if them. want of there the capacity, And do we're engage that vanishingly again, a players

Saurabh Pant

In one makes maybe release, free a for healthy you. a for sense, cash press flow Chris. No, XXXX. the you Mike, mentioned Right. And of that lot

can we you a flow to mindful XXXX as build help free cash us the be what pieces through If about perspective, up? as we think should try think that from we of things

Michael Stock

Yes.

business. of at lot X talked investments look So dual the quarter. natural et the a to made managing X A in will the investments and kind our and technologies, handling our mean, business. fuel, about, there. of new cycle, number maybe of to in cetera, of with be some And wet of PropX that going We'll clients Completions of our XX% in support be CapEx in that replacing we other down attrition -- fleets sort digi of we're I completed the as blended maintenance the cycle we've pile capital all to fourth kind

CapEx So we'll decline the that see as obviously comes is of down, which a offsets it in part kind EBITDA. of biggest it

I taxes, raise see in see tax slight what to running a going about our you're cash kind of think XX% rate. is we're of you'll

tax I rate We looks think, things, will relatively remain XXX% year by book of next flat. of our the interest run, about

we'd we're the to that have expect Obviously, I over relatively the largest moment year QX, doing now the easily a working that free we quite the cash be fluctuate flow on forward, and to flat very same Given return to can to next the going fact business. at going the support side expect the capital that would during whole year, that portion of but of working of shareholders strong we're continue. our you're will much going see capital capital year, and

Operator

with Marc from Next question Bianchi Cowen. TD comes

Marc Bianchi

higher follow-up a lower to to on me. just expect wasn't the the be capital It spending Michael, company? for dollars or the total for Maybe year. next CapEx Do you clear

Michael Stock

a But Lower it the opportunity. within I for I'll the clarified I generation large generally, you'll would get power opportunity say, to generation slightly slightly, down business, mean we'll car that made really say probably be about go that's expect thought the and the may, decided be realm, and think in frac up would is to exciting through quarter outside power going upon, until into call. about. completions I it completions business. that unless I that that the will we it's in Obviously, But we still would very lower, generation significantly still see portion good be of I'd the and and be be around the January business. of down talk as announcements

Marc Bianchi

Yes.

question. next my going Okay. be That was to

I was just The one revenue on that had the progression here. other

down is some but revenue digits, digits, sounds weakness. low also activity low double the there's double but So your like is pricing down it

revenue So activity than I thought would have decline decline. is more that the the

component know not up probably in talk said need pricing we quite about into be I you right? that considering So there's levels. XQ progresses could that how But activities XQ maybe to XQ. you but to to, and

Michael Stock

that when of of the the sort at depends revenue happen of sort of going versus look so of There's mix activity on of sort issues it of on business. the you kind Yes. sort decline lot an are mix a things decline, where parts certain of

in pretty happens it be similar So QX. those two that will

sort QX similar higher a be I've drop of than decrementals the last QX see, slightly element with year. it As pricing offsets, because there, will some year as this revenue in you'll said, obviously, was in there's a

that there of So is kind basically incrementals. to read increasing pricing bit -- that's a through you little sort can of of element that those a

season, say, of I QX. see see falls what see And medium We get that I say, modeling we're it some you'll between say to as kind is through that next to future we talks this think come point. year, QX is really amount year right? going look for for in think lateral equal we'll we year, whole kind of that's to at of with about and around industry the of pricing things And right? similar. that how feet at pretty pricing activity be Yes. up demand when And mean of much demand, clarity is where you this the whole get going year But the QX see kind sort at the through we're up pressure I'd this versus kind earnings. total to of I inconsistent as to I'd moment come of kind the whole thing, Chris the this of next going

number the attrition on market. probably of of is we fleets, if sort and go year. reason amount, So think the larger on that supply a a the the limited pricing tightening Hence, got as that through the of slightly see fracs, going frac metrics the increased we improving have -- improving about really you more we complex

naturally I to happen. it's going think

we been. It market is of demand. I increase, one at a the fleets said the with -- here. We And the you you in back go of out we those supply end bringing flavor I think and them you when we've weren't sentiment brought right, talked our out about can I this to period bid the market with were realities look 'XX we X had 'XX, if have weaker a significant of very there's underlying think number out time fleets call, may profitability remembered September short in working. kind of the of And because we was should because of caught think in and than a have it up April, they of came folks

there in we Now be year, next think, to this. of don't it's not but is be a that flavor extreme going going to that

we better be next a thing So the that share dynamic yes, flow the go free as it. than so year. about great it's of we to is that on year little But cash going will through one side a

Marc Bianchi

if Yes. I things. could experience broader in. for Strategy more you the there's is year-end I'm into a makes think wondering If Liberty-specific do squeeze one industry? sense. just How your indicative here And

than as happening the got of in you've that you to some broader the You've there for business, got other about be into those XQ. frac sort wire your are different we industry cause sand think of businesses companies implications might line, parts the things

Christopher Wright

definitely, think other dictated moving to is There's answer the with what think just marketplace, and say. relationships hard reasonably people's pieces. our lot I customers whole businesses. indicative of of a our by the short But It's don't I is we our seeing but know. business is we're

think don't I probably we'll I see the yes, overall macro, far from weeks. guess it's in off but the So coming

Operator

with comes from RBC Keith question Mackey Capital Next Markets.

Keith MacKey

$XXX would a bit CapEx what And portion year at be that what up of frac you for ends it million, the that So CapEx? about maybe be? could just like would looks maintenance around this talk little portion of

Michael Stock

Yes.

this -- obviously, so a year, frac is probably CapEx maintenance think the -- big a CapEx maintenance big of is I CapEx. part maintenance part So

million, $XXX LPI. We've plus or CapEx a is So of the had investment million significant maintenance probably side that minus say below pretty business. $XXX in on

Frac on on that them some the we've upgrades, the of went of upgrades had seen a other Some And side side significant blend world. then handling of this underlying another or amount year. we've and of Digi technology dual-fuel

bulk the of that's So it.

Keith MacKey

Okay. at this you million. your X should then assume And to at thinking total a Got that be to CapEx each fair to next it. And Is had $XXX Digi is maybe that. point? million fleets ends how follow-up. that frac $XX it just to $XXX X and CapEx be we up business your roughly maintenance similar it the frac in year, Would then about

Michael Stock

in sensibility the of yes. You're realm there, general

Keith MacKey

And one Okay. can. I if just more,

for we with some $XXX getting of the the into right looks that higher ballpark similar put numbers Just like should being maybe decline in million also like the commentary It to between revenue $XXX EBITDA. of somewhere the million be and decremental and there, Is QX. year-over-year Michael?

Michael Stock

estimation. Reasonable

Operator

comes question from The TBH. LeBlanc next Jeff with

Jeffrey LeBlanc

if estimate pulling follow call, just increase? XXXX the from was million. I causing QX on of the curious or of comment to what's on year? forward I'm full up just CapEx believe $XXX Because the wanted for prior the on I you're CapEx the $XXX million

Michael Stock

sort of lot some of partners. been I kind on think in debottlenecking a is deliveries there's With a delivery of our of of combination Yes. -- going

lot and -- a assembly think the of some issues early I we there's together. and of they they've part was fall. through the at of fairly significant around back think And so happening had debottlenecking end had kind -- of summer, lines that the end I got that the

those added where order added as things So I going and of go delivery we've the cycle other think extra that to of had QX of sort wet and fall it of have And reasonable. you expectation were is the additions sand of then kind to that some few things. probably sort a things

Operator

Roger from with Our next question comes Wells Read Fargo.

Roger Read

just on December. follow your into and of month of this about issues exhaustion seasonality kind next I CapEx up comments to or wanted it, some call

entire the to is operations. of large private the way off of you jobs, Does in, seeing pretty of call E&Ps. pursue to consistent to exposed area small they operations, of levels take guys maybe are makes hear opening One E&Ps time requires all and kind it kind things and activity this mix? the little that across or gas here? mostly companies to where Is it reflect the smaller productivity from privates? Or E&P a the Is this like this a we more it down meaning the it, efficiency, sense

Christopher Wright

Roger. geez, we're are reasonable on most for a very small sure, operations. summary, smaller. those be efficiency ceasing the But even be too steadfast keeping you've track would The mostly think occasionally, keeping say, players, -- things It I It's could going, I given there'll not in efficient. and public. biggest

it's players. a smaller is a to hard the with months a would last players. evolved brief gas a mostly XX predict XX to say, Definitely, Gas But yes, players. over and thing the been I break. gas there have plans lot So has frac holiday, it's

So was I reasonable. think your summary beginning the at yes,

Roger Read

So to are become you implying to that easier gas after months? it's going forecast XX

Michael Stock

we're Well, at a keeping you've good even now of that's level probably seen, production gas right as But below humor. again, flat. activity

bouncing trend no, not up. trend it down, predict to to more easy of bouncing be might going So it, a of it's but instead a be

Roger Read

to were trying standing feet. make Yes. I two checking just on still I'm here you there. was sure

a a commodity I what in other there? flexibility or your prices, it, move let's to completion were down The move question, we see, up spending call know trend the solid out to we defer pull will as forward is lower. supply spending But look if either you or solid to understand chains likely CapEx at

Michael Stock

-- really we to ability very defer that or a X-month X- has spending got we've as far But of mean bring deliveries of goes. but window said, I very to sort sort forward. have Yes. as strong it

that You can done defer before. deliveries. We've

about pushed people. off partnership to pushed we those X XX closes. You in think and months We deliveries with off our

CapEx you've XX-month to period. going general, window can a there to it's you meaningfully where extreme in got within not in circumstances. So But X- a change But change. X-month

Operator

Capital with Our Waqar comes Syed ATB from Markets. question next

Waqar Syed

that by out? like years revenues could guidance that something be on Chris, material is at just -- would LPI? would have think of on a years when you X that revenue do Any line, could X, a the I be to out? helpful? be on maybe XX% sense LPI looking be to Or X Is wanted get it X impact that

Christopher Wright

or as our not it years. faster Yes. it for always to doing Well, doing certainly than X right -- it But us more than core It's X with it's it's fast. about that. doing business, big frac

probably not X to unreasonable X So is expectation. years

Waqar Syed

production. And Do do then Haynesville do that pick you mostly oil some you And perspective, for and pick up expect see you activity do you're be increases? to when think Permian? Or it's activity think expect activity then pumping next to you maintain Okay. sees you activity to needs Where activity of crude go mentioning up? from year, to perspective Eagle Bakken going also up? Ford activity to kind

Christopher Wright

will the are for those Obviously, sure. winter in it they Waqar. down time. the across all think some But Wow, hard naturally basins be I areas, of slow questions, the northern

but So price But change a move, earlier this. slower oil QX if doesn't and busier. it's the se. QX per Northern I in a dependent. little will on in cycle QX things, certainly weather is it often wildly be little for start Look, margin, a doesn't bit have would it prices does. regions weather, are commodity Permian really

in low advantage So at activity activity And -- is assumption is basis, well. if it much today. competitive we're but as we just seen, up think right it gas the where look, We've there. In where great is of be I where the look, basins reasonable now. general, be now. think look today. now, I oil from we some How basins, will yet are in that's across it in will level general, in up from to gas got from It's probably be the a very QX so average X we months right

market not is not huge, share, is but big. but insignificant, our share activity market like our mean it's I today our gas So

be gas higher predicting So I probably little maybe a that's higher months shouldn't is from meaningfully if guess. That's maybe just X XX I a a from now. much. activity -- that guess. too just months But now, shouldn't that

Waqar Syed

across Or pricing as permitted as X it's well? to Okay. and Tier on entire the now DGB then that And Xs is Tier fuel now fleet? still dual more it well? and maybe the Or you're Tier seeing, pressures e-fleets X that is

Christopher Wright

well. learning softest That's being The yes, newbuild desirous. a market, attrition fleets without is equipment economics. equipment, do got little in being are strongest pressure bit there's But of more as high-end much there We newbuild the It's legacy a gas everywhere, when certainly of great least driven wouldn't a you've fleet. desirable natural retired where a fleet equipment.

But yes, much So change X. so at the not top. not

Operator

next with Research Tom Our Seaport comes from Partners. question Curran

Thomas Patrick Curran

ever you've and comprehensive earlier the the field Chris, a in as Michael, everything execution in both technology gave in in accomplished call. addition to out Chris better via overview

grinding new this levers support and identified your trend opportunities you record pulling been margins? or to to to expect protect which At do also the have point, pricing. realized? You've that internally ongoing in and cost long to out profitability yet initiatives frac this down Have sustain efficiency any missed most be meaningfully provide you different

Christopher Wright

look for always thing our so that and us. can right, it many but have to in you -- going how customers over we an to how buckets. cheaper? the projects our like we there's and That's two do and the own to service And efficiently that's more same can marketplace, long-term out and things. Ron, medium-term to I do and don't effort We he control projects. we you're always we I'm going appreciate incremental drive I'm -- better turn But pointing a improvement. them that, self deliver is

Ron Gusek

building there the both for an longer asset We're of Digi the of is Digi outlook And areas maintenance the that things. side Yes. side that's fleet I things, of frac true lived. pretty Obviously, the mean meaningfully. certainly a of digiPrime us. changes on and focus number there on

side both looks side is there, the of a there different If profile things, very We're and assets. profile building in same you And the very asset an than maintenance side diesel power the different digiPrime on the generation maintenance on electric our things. about world. the the course, think has would historical of true that pump of

lot the on capabilities our to and fleet applying them learning we're how learnings regard. the so certainly is work around those asset And going been respond of that's understand as And to throughout taking machine ability a in field. an in and that advance that we performing our

from the and Automation outcomes. the work ultimately has operation into Lots through of handling been been going big the thing. We've chemistry things focused our fleet, a on way pump things side of automating side of of all changes on our that things. the other side the of sand

And immense of amount an so there. going work

continue there. out we these we that automate improve You can as to operations things, imagine

see number You the board on work dramatically profile across rolling of We've measure. We're in logistics XX% sentinel maintenance huge sand well. to across you A to technology also the see time. about and sand for in that efficiencies out a deliveries but of the things. that pre-sentinel LPI We're and manage the from got amount same as required move of a That side assets. handling from the using changed gas both and trucking efficiency, We're efficiencies that the location at the trucks our running standpoint. sand our there our out deployment. handling down a same improve that division probably to versus in our has

in frac working the over of space simul in fleets have. percentage climbing coming our in that our going customer of You're virtue not base, But year We others the probably, high us as for as percentage the working some as well. climb us of well. to just fleets see -- space that's had coming a as our by year

to of come next hour and going as result we're so benefit feel year that that per head seen of lateral we foot And course, of a the too. on per we've a efficiencies completed as into basis,

Thomas Patrick Curran

have with Got for where in solution. of In expectations support you LTI headed and targets you this or looking guys financial? power in XXXX, again field, technology it. terms out once the NextGen just to And to case, then the a operational to or quantified to be you LPI, is have the stated logistics chew share there. for A lot on puck the any could for need

Michael Stock

this is, said, No. I in in that clarification January discuss over that I bound. QX that's we'll we've come the is the mean mean something call. as

of holistic we'll more So I at view of look will look what And think that of of that. business kind a like. kind

Thomas Patrick Curran

forward more Michael? is can look coming to there, sounds Okay. like that there we But it

Michael Stock

to very winning. the is you where know, to the about we not certainly it. but market, talk There ready excited tort -- may always we're much. not things not always We we're as vapor to up talk be the And But about seem go. We -- there, we're is where first we very things about here. end we we in

Operator

The with comes from next question Barclays. Eddie Kim

Edward Kim

a just keep just just to the XQ in market wanted softened like But Here. softness months. the I'll over the pretty It seeing to one dig past more. it question. into bit you're X substantially has feels

expected So surprised you talk or prices what the initially got Is much kind uncertainty, than mentioned, as reaching the volatility you targets or what's that's earlier back mainly July? could really for in than operators you worse in of production it you causing about oil expected. year their operator

Just any past was color X on for what surprise you months? main over guys negative the the

Christopher Wright

this and well. and they a X of now to worked by and bring miles quickly. little Efficiency of of X early say X now done came Production them and consolidation, Think laterals, I'd got are mostly a you start lot you together drilling you bit on -- year both. strong. mile acreages drilling

the bigger on So it efficiency I gains sweet think productivity positives of from part focusing spot. operators, some is in

of prices. a break, going to we're chunk a like Definitely, in that's think to a On kind or oil going softening take where we maybe the break. margin hang of I here it. good little So little take a

think when shifts. those. big you little of of of a productivity lot gains the gear But the it's bit So onetime that's a of of wells, of both kind

a in an location next say get annual mean continued drilling ground we'll still. maybe oil just continued basis. the basis pumped of sand more to now, see ending. year, from in to the to and is X a That It lower intensity another migration years general, it doesn't be X is. quality of on underground migration from have over this amount out up out means average frac is same going lower revolution it year pounds than or of the to the annual an be on way going shale is that be or In was see of We'll to

But our we little and bit were of have both. we longer-term macro in well the a a So sort bit that's trend victims success, a well, sort increased of productivity term, of modestly pricing positive. the short little as of

Operator

with Daniel Daniel John from Partners. comes question next our And Energy

John Daniel

market a drive to start spot outlook, up now and private presumably and I'm you in as know, views? there management backing curious is should have factored teams your probably equity E&P 'XX. upside just your 'XX would that Chris, number are probably of if into that that

Christopher Wright

now. dialogues we people Yes. powder A right and not amount into certainly looking fair We divestitures of up teams, Definitely views are that there's smaller number assets. driven to capital opportunities a in get dry locks our but know. here of for

as eventually look, any happen, going exciting. that of So absolutely. to lifelong baking some a of in that's not no, entrepreneur happening. yes, yes, that's But John, But

John Daniel

-- market low perhaps I single And on the think the more is happens, least Michael, of assessment? that emerge, that attrition it's as market. story pricing all touched happening, else all Right. me perhaps consolidation and that possibility something the a are next new is spot it recovery the you Is seem not then, fair at equal, real, And spot in but some pricing probably bankruptcies, activity players to improvements would being rise when year? digit, liquidations then in substantial, a

Michael Stock

There's certainly one to way it. look at

you If got of 'XX that. historical kind of we've some -- 'XX, example, look evidence at the yes, historical recent

So yes, will it comes. see it I it we'll think when what is be --

it's see next naturally I the a take may the as think at year. you hold. moment. will And market The think, we animal like we spirits an in I to As said, see, soft improvement

John Daniel

R&M, quality it coupled higher calling the a I flow modeling would not. lower 'XX? which were this lower is I'm material so seem with leading activity, not. through, guess, versus maybe if in this a I a you Okay. probably could 'XX question, and OFS I that rock, But XXXX, eventually LPI And rise given improvement Doesn't apologize, in have

Michael Stock

assumption. be very reasonable certainly would That a

John Daniel

Okay. the last And then one me. for

of people those be was contractual longer hog. support, a that to I to question a see talk term would CapEx, business, seen there normally power in that side likely be in CapEx back earlier question perhaps market. Sorry was fair we than the as generation with what But think the assessment? -- it the frac that that a on you Is

Michael Stock

is assessment. that a Yes, fair

Christopher Wright

everyone. by appreciated much That's field. the in Everyone

Operator

like for our closing turn This question-and-answer the to Chris remarks. session. would concludes Wright I to conference back any over

Christopher Wright

bettering us Since in steps the raised over to Thank from we access meal joining every first human more foundation I global concerted we this lack addition energy over so launching today. lives The wood, major death have security. energy a address bettering lives you. X of Thanks to poverty year, cook combined. problem took far the for annual fixable little our address pollution, as to address people and of reports, human malaria, problem to cooking largest by problem. billion preventable This efforts view X results awareness very charcoal important than this AIDS who it. dung. In deliberate and fixable with clean tuberculosis or fuels million therefore, using the air indoor January

amounts kitchens school into lives get be improved large partner human bettering communities. to to in with burning for Thousands cooking to propane will of cylinder and loans increase propane In copious meals. both made. to clean student both Kenya, has to student entrepreneurial access fuels. Ghana, provided businesses convert our partnerships will active from built of clean-burning our wood cages each propane created has lives In and boarding Ghana partners conversion The exchange foundation countries,

selling cooking would our lower soon barrier cut small partnership cooking large to switch purchase major a an fuels of upfront in innovative is a a families factor reducing the early a clean switching company to dramatically by allowing as the allow XX. nearly consumers of adoption opposed in speeding cylinders, This make to entry supply. the XXXX, month propane to will clean to propane American pay payment who could to with time barrier fuels. Further, entry contained upfront to otherwise This for transformative having or by be each stoves. to in piece-wise they of It the amount will

We lowering are also partnering manufacturer with the stoves facility open to locally, growing stope and same to produce costs Ghana a these in supply. American

out all of this find about betteringhumanlives.org. can more at You

shale global propane waterborne American revolution increased has dramatically The supplies.

to in desperately is of cooking great need join all weekend. were fuels. Have and this existing to partners you endeavor. And in those in if inaugural Human clean Foundation our thank day, supply this Bettering the the of surge supporting bring please this benefits My everyone. run, a aim of life-changing XK you Colorado our us weekend, to Lives for Our future new in heartfelt this

Operator

for The presentation. conference today's Thank attending has now concluded. you

disconnect. now may You

Liberty Energy (LBRT) 17 Oct 242024 Q3 Earnings call transcript