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Celina Davila

Thanks, Sam, and good morning, everyone. I am pleased to be here. As you have just heard, we continue to advance our strategy in the first quarter of 2025 and in doing so, generated substantial free cash flow.
In terms of results, financial performance for the quarter was strong and supported by our differentiated service offering, our loyal customer base, our Permian focus, and our operational excellence. ProPetro generated total revenue of $359 million, an increase of 12% as compared to the prior quarter.
Net income totaled $10 million or $0.09 per diluted share compared to a net loss of $17 million or $0.17 per diluted share for the fourth quarter of 2024. Net income for the first quarter was 2025, included a net loss on disposal of assets of $10 million, primarily related to the sale of certain Tier II hydraulic fracturing equipment.
Adjusted EBITDA totaled $73 million, which was 20% of revenue and an increase of 38% as compared to the prior quarter. Additionally, we incurred a lease expense related to our electric fleets of $15 million for the quarter. Net cash provided by operating activities and free cash flow were $55 million and $22 million respectively.
Capital expenditures incurred for the first quarter were $39 million, most of which related to maintenance and our initial ProPWR orders. Net cash used in investing activities as shown on the statement of cash flows was $33 million for this quarter.
We have demonstrated in the last few quarters that our lower CapEx is a strong tailwind for free cash flow generation. That rings true today and is a testament to our fleet transition and the industrialization of our business segments. As you are aware, we have already made significant investments in our assets and capabilities, and those investments are bearing fruit.
In terms of CapEx guidance, we will continue to evaluate the market and scale CapEx with activity realizations. But as we sit here today, we anticipate our full-year 2025 CapEx to be between $295 million and $345 million down from the $300 million to $400 million of CapEx we discussed last quarter. This represents a 9% reduction at the midpoint from our prior guidance. Of this, the completions business is expected to account for $125 million to $175 million, a reduction from the original guidance thanks to additional successful cost optimization efforts.
Additionally, the company plans to allocate $170 million in 2025 and $60 million in 2026 to support current ProPWR equipment orders that Sam mentioned. As a reminder, $104 million of the ProPWR CapEx is financed.
Importantly, cash and liquidity remain strong, which is very important in today's uncertain market. As of March 30, 2025, total cash was $63 million and our borrowings under the ABL credit facility were $45 million. Total liquidity at the end of the first quarter of 2025 was $197 million including the cash and $134 million of available capacity under the ABL credit facility.
As for our share repurchase program, we have retired approximately 13 million shares, representing approximately 11% of our outstanding common stock since the inception of the program in May of 2023. We view share repurchases as an important part of our strategy, showing our conviction in the future of the company while creating value for shareholders, and it is a key pillar of our value proposition for investors. As such, we intend to extend the program for another year, subject to approval by the Board of Directors to enable us to continue to be opportunistic and deploying excess cash flow to share repurchases.
Finally, as we have underscored several times already, ProPetro's capital allocation strategy is balanced and key to maintaining flexibility and navigating uncertain conditions. Looking forward, we will remain focused on balancing investments between share repurchases, FORCE electric feet conversion, disciplined M&A, and ProPWR investments while maintaining a strong balance sheet and liquidity profile. We are fortunate to have a strong financial profile and free cash flow to pursue all these value-enhancing opportunities simultaneously.
With that, Sam, back over to you.

Samuel Sledge

Thanks, Celina. In closing, we believe ProPetro is a resilient company that is built to withstand market volatility and thrive over the long term. We're prepared for the uncertain market that lies ahead and are confident in our ability to execute because we have built a business that has proven profitable through various market cycles.
Our investments in discipline M&A, the FORCE electric fleet conversion, and our ProPWR offering position our company for sustainable growth and success. And our low debt, blue chip customers, contracted assets, and Permian Basin focus will all help us to keep moving forward even in the face of significant market volatility.
I'm very proud of the work our team did to generate the strong performance in the first quarter. We have significant momentum that I am confident we will continue to build on. None of this would be possible without our ProPetro teammates, whose efforts and dedication to operating safely, efficiently, and responsibly give me and our management team that much more confidence in our ability to lead the company through this dynamic environment. Thank you for everything you do.
With that, operator, we'd now like to open the call to questions.

Question and Answer Session

Operator

Yes. Thank you. We will now begin the question-and-answer session. (Operator Instructions)
John Daniel, Daniel Energy Partners.

John Daniel

Hey, guys. Thank you for including me. Sam, I've got two questions this morning. One is on power and one is on the traditional frac business.
I'll start with power. The opportunities that you're seeing with ProPWR -- I mean, you all are a Permian Basin company. Are you limiting -- or not the right way to say -- are you focused entirely on the Permian for the power side as well, or are you guys looking at opportunities outside the basin and just could you distinguish the opportunities that's both inside the basin and outside the basin?

Samuel Sledge

Yeah, John, good morning. Great question. I think, originally, when we set out to design the strategy for our ProPWR business, it was going to be very focused just on Permian oil and gas operations. It still very much is. So with these first two deals that we are very close to having contracts on; it's going to be just that. Those are deals to support production operations.
That said, the longer we're in the market, the more we see across different geographies and different industries. Part of our thesis was to get in the supply chain and to acquire power generators -- to acquire power capacity that we know is going to be needed just in this increasing demand environment that we see ourselves in.
So, I think our strategy and thesis is playing out that we're going to build a really strong foundation on Permian oil and gas, something we know very well, customers we know very well. But this is very soon going to create a platform that's going to be able to service potentially other areas and other industries. So, yes, we've sought some of those opportunities out ourselves.
Some of those have come in the door unsolicitedly, and we'll continue to hold an open ear to opportunities that are outside of oil and gas. All the meanwhile, we've got a very distinct focus plan to attack the Permian oil and gas operations.
Pretty exciting, but we know that to get this business off the ground and for it to hold true to what we're known for from operational excellence standpoint, these first couple of steps we need to stick to what we know.

John Daniel

Okay. Well, thank you for that. The second one is just on the traditional frac business. And recognizing a lot is in flux right now and there's no shortage of uncertainty, but when you look at you going from the 14 to 15 fleets down to say 13 to 14, is that a function of a customer reducing activity, or you choosing to walk away from lower prices or just the consequence of continued efficiency gains? Just a little bit of color around the change would be appreciated.

Samuel Sledge

Yeah. The simple answer is it's a little bit of both, John. As you and I both know, we all know that when oil price takes an aggressive dip like it did after the OPEC and tariff announcements, the customers maybe that have the most flexibility or the most hindered economics are some of the first ones you hear from. And it's really, thankfully, been a very small part of our customer portfolio that we've had those inbound calls from the almost half of our frac capacity as we state in the press release and in the scripted remarks is under what we call long-term, contracts more than a year.
So you call it the traditional frac business, and it is, but 75% of our capacities burning natural gas is what we call next-generation equipment. And almost all of that equipment is garnering long-term contracts, and we think those are going to be very valuable and useful in any market volatility or downside fluctuations. And that's proving out as we sit here today.

Operator

[Alex Shegelhofer, Stifel].

Alex Shegelhofer

Hi. Good morning, everyone, and thanks for taking my question. So just to kick us off, kind of following up on that last question there, I just want to maybe put a finer point on what you're seeing in terms of pricing for pressure pumping equipment in the market. I think you said about 50% of your active horsepower is contracted. Just curious for you to provide some context on like what spot versus contract is doing. And exiting '24 and exiting the first quarter and naturally I assume that there's some benefits from your higher-quality assets or newer assets, so just any color that would be appreciated.

Samuel Sledge

Yeah. I'd say that the benefits from the newer and high-quality assets, namely, I'll point out our FORCE electric offering. Efficiencies and economics on those fleets continue to be very attractive and valuable for us.
And as it pertains to pricing in the contracted market, I'd say it's very steady. When you're having those contracted fleet discussions, it's with a certain type of E&P: one that has a very long view of the future that's trying to create a lot of consistency, continuity, both operationally, and financially in kind of their approach to executing on their acreage. So we still feel very confident about our thesis to continue to evolve into more electric, more dual-fuel fleet over time as a portion of our portfolio because that market seems very sturdy from a pricing standpoint.
It's also very sturdy from an activity standpoint. I mean these are customers where the plan is the plan, and a $5 dip or a $10 dip in oil prices out of nowhere like we've seen here just recently doesn't really make them blink. They just kind of continue on with their plan.
On the other side of the market, call it diesel or spot, those aren't the same thing, but those markets overlap quite a bit. There's just a lot of -- it's very fluid right now. I'd say you're seeing a lot of price discipline, but you're seeing some very small areas where there are some people willing to price enough under us where we would be willing to turn the work away.
So we're seeing that happen on the fringes and I -- for a company like us that has the balance sheet that we do and the scale and density that we do, when that happens, we're happy to allow that to happen many times because pricing that's significantly below where we are, say, in the diesel or the spot market is extremely unsustainable.
It's not uncommon to see competitors pricing at negative free cash flow. So from a consolidation standpoint, we're happy for that to be consolidation via attrition when that -- when those parts of the market are willing to go that low -- really, as we sit here today, I think it's very important for anybody, especially if you're new to the space, listening to this call or maybe you're coming back from a hiatus, that part of the market, which is diesel and spot, is a very small part of the market as compared to prior cycles. You might only -- in the Permian Basin, you might only be talking about 20%-ish of the market that is playing in that game.
So it's changed quite a bit from both an equipment makeup and kind of a contracted dedicated situation. That's why we're making it clear, calling out that 75% of our fleet is burning natural gas and 50% of our fleet is contracted, almost 100% of our fleet is on dedicated agreements that's not contracted.
So yes, I can give you some fringe commentary. We're talking about a very small part of the market here today.

Alex Shegelhofer

Got it. Appreciate it. That's excellent color there. And then, kind of shifting gears a little bit here. I know you touched on this during the prepared remarks, but just some maybe added color on your capital allocation framework when you're thinking about funding the power business versus buybacks and any opportunities to maybe finance some of the spending like on the initial 110 megawatts with the incremental 80 or how you're thinking about that.

Samuel Sledge

Sure. Yeah. We're -- I think we're really proud of what we've been able to do. From a capital allocation standpoint, in the last couple of years, you've quite literally seen us do all the above without ever putting our balance sheet in question.
At the top of the stack today -- and hopefully, this comes through clear in our communications -- is our power business and our FORCE electric offering. Probably, the main reason why those go to the top of the stack today is because of how known the returns are with those things in large part due to the contracts that we're able to obtain and the take or pay nature of those contracts, where when you're making -- when you're investing a dollar into one of those types of equipment or opportunities, you're all but guaranteed -- at least in an oil field services sense, you're all but guaranteed a specific return that is very attractive and frankly, transformational for a business like ours.
And then maybe go one layer deeper on the -- what we're seeing here recently on the power side and the and the contracts that we're obtaining, there's one of these contracts that's as long as 10 years. I could almost call them data center-like. So we're not just flippantly saying, these contracts are good; like I said, they're transformational if we can continue to execute on that model in a large way, and we think we can.
The other capital allocation opportunities, look, you've seen us do M&A, three bolt-on deals in the last couple years. You've seen us buy back more than 10% of our market cap, over the last 18 months or so. We've also kind of in the background continued to allocate capital to our smaller business lines like wireline and cementing that are two very well-positioned competitive businesses that have high free cash flow conversion.
So that's quite literally five different categories that I just mentioned to you from a capital allocation standpoint. Power, e-fleets, M&A, wireline, cement, and buybacks and shareholder returns. And we will keep our optionality open to do all of those things moving forward.
We have a framework that we move opportunities through that help us make that decision. But as we sit here today, the forces that exist in the market, we really like the power and the e-fleet opportunities. All the meanwhile, we're going to allocate capital in a manner that also protects our balance sheet.

Alex Shegelhofer

Got it. Appreciate the color there, and I'll turn it back. Congrats on the quarter.

Operator

(Operator Instructions)
Waqar Syed, ATB Capital Markets.

Waqar Syed

Thank you for taking my question. Good morning. Sam, given where commodity prices are today, how many crews do you do you expect to be working in by, let's say, June in the Permian versus where they are maybe today or where they were a month ago?

Samuel Sledge

Yeah. I think June, Waqar, will probably -- for the Permian. Is that your question? The Permian in general?

Waqar Syed

Right, yeah.

Samuel Sledge

I think you'll see a downtick in June. I don't think you've seen much come off in total yet here since the tariff and the OPEC announcements, but I think you might see a little bit come off in June. Part of our fleet guidance being down kind of one whole fleet at the midpoint is us looking at June saying, Matt, there could be a little bit of activity come out of the system for us in June. You might, this summer, be headed into a setup where the Permian's run 75 to 85 fleets, something like that. So, yeah.

Waqar Syed

So 75, 85 just -- is it versus 100 today?

Samuel Sledge

You're probably not running 100 today. You might be closer to 85 to 90 today.

Waqar Syed

Yeah. So about 10 feet or so come out. Now just to be clear, so today you're still worth running around 14 crews or so?

Samuel Sledge

Correct. Yeah. Of which I think -- I think another thing interesting to note from an activity standpoint, Waqar, is that headed into May, we'll be running four simul-frac fleets as well. So that's -- I know we've traditionally given fleet guidance and things like that, but in the background, some of these fleets are twice the size of a -- say, a normal traditional fleet.
I know that kind of might create a lot of noise when you're trying to fine tune a model, but these fleets on average continue to grow in size. I think that's not only true for us, I think that's true for the entire industry.

Waqar Syed

Okay. So your guidance regarding a crew that just - being down is just an expectation that come June, you don't have any requests from a customer to release the rig or -- ?

Samuel Sledge

Yeah. There's just some one or two very small spots where we're getting some pricing pressure that we're probably not going to be willing to meet on the low side. So we're right now expecting to pull at least one fleet out of the mix in June, if kind of the broader circumstances don't change from a macro standpoint.

Waqar Syed

Yeah. Secondly, on your CapEx cuts on the pumping side, is that mostly related to one fleet lower or -- you mentioned optimization and is that optimization benefits mostly on the e-fleet side, or are you seeing across your entire fleet, including your Tier IV DGBs and others?

Samuel Sledge

It's almost all optimization, Waqar. I mean if you go back and look at our last several call scripts, and what my team and I have been communicating about, the continued wins on the optimization front, i.e., extending the life of equipment and the large components on that equipment has just been phenomenal. Adam and his team and the work that they've been doing every quarter just seems to continue to surprise to the upside in different ways.
So we've continued to issue the challenge to our operations and maintenance teams, and they've continued to raise the bar, and knock it out of the park. So there's probably a very small bit of activity in that CapEx guide lower, but I'd say almost all of it is optimization. Matt, do you want to add to that?

Matt Augustine

Waqar, this is Matt. I think the point on the activity is really indicative in the range we're providing on the completion side, the $125 million to $175 million. And that wider range is more an indication of our flexible CapEx program, depending on how activity flushes out through the rest of the year.

Waqar Syed

Okay. Great. And then in terms of your mobile power, you mentioned there's a mix between turbines and reciprocating engines. Why are you deciding between one versus the other? Or is it all the recent orders have been all reciprocating engines, and these turbines are mostly some of the legacy equipment that you have?

Samuel Sledge

No, these are all new. We have a team in our ProPWR leadership team that has vast experience in both. Our initial approach has also been one of flexibility and modularity. We want to be able to open ourselves to many different types of opportunities. These first couple of deals that we announced and communicated today are going to go to oil and gas production operations. But those assets will be usable across more than just that midstream frac industrial applications. That's a big part of our strategy.
And another part is just availability, right? This is a crowded supply chain that we're continuing to compete in, and try and carve out our spot. And so, a very small part of this is what you can get your hands on. But what we've been able to get our hands on thus far has been very well fit to our strategy, to be able to do many different things.
So and we will continue to evolve this portfolio over time. We're simply just getting started. And we expect this power business to be a very meaningful part of the overall business moving forward. So we'll look to grow from here.

Operator

Arun Jayaram, JPMorgan.

Arun Jayaram

Hey, Sam. Wanted to see if you could kind of elaborate on your longer-term ambitions on the FORCE new builds as we think about capital allocation over the balance of the year and into 2026?

Samuel Sledge

I think you've always heard us say that we think electric frac is the future. If you just look long, long term, 10-, 20-plus years, we fully expect North America shale to continue to industrialize, and we think a huge part of that is electrification. So that's been the thesis for years frankly.
That said, you have to be able to carve out the right opportunities in the market. And we did that pretty aggressively with our first four fleets, because the e-fleet market was frankly just growing very quickly at that time, and opportunities were vast. I'd say we're kind of starting to trend from growth to maturation in the e-fleet market.
The first wave of e-fleets that were built even before ours are coming off of their initial contracts, and many of the largest E&P operators have gotten most of what they need. That doesn't mean that it's still growing. I think it's just growing at a slower rate. That's why I say it's kind of trending on maturation.
So I think you should look for us to continue to transition into more e-fleets, maybe at a rate of one to two a year in perpetuity, because we think those opportunities are going to be there. We think it's the right thing to do for our financial returns and the consistency in those returns. And we'll be very tactical and picky about how we choose to do that and who we choose to do that with. So as we said in our remarks earlier, we've got a fifth coming this year.
Another thing that I think is interesting to note, we have four running today, one of which is a 200 barrel a minute simul-frac. So that's basically two regular fleets. So however you want to slice and dice it, you could say we have technically a five worth of horsepower working today, going on six, but that's five. Four real profit centers as it pertains to crude fleets and customers going on five today. But we're going to stay in the market there.
And look, I think we should expect the existing e-fleets we have, many of them to look to transition to simul in the future too. These e-fleets are really built for that type of work, and I think our customers that are running zipper e-fleets are starting to understand that. I think there's an interest to convert many existing e-fleets to simul as well.
So, sorry. That was a long-winded answer. Hopefully, I answered your question.

Arun Jayaram

No, that was super helpful. You mentioned a couple of LOIs for 75 megawatts of power generation. Can you help us think about what type of returns you're seeing on these type of opportunities versus maybe some opportunities you have of reinvesting in the frac side of the business? How are the returns looking?

Samuel Sledge

Yeah. I'd say we're executing on exactly what we've said previously that you're looking for four-year paybacks, if not a little bit better on those assets, cash-on-cash paybacks, which in turn ends up generating in the ballpark of $300,000 of EBITDA per megawatt per year. That will equate to that four-year payback pretty closely. So those -- that still holds true.
We'll keep it pretty tight. We'll hold our cards pretty tight in terms of other parts of those contracts, because we think we're doing kind of unique things in the market commercially. But we're super excited about this and the willingness and the openness of the E&Ps to contract with us is definitely there. This is not kind of a new thing that we have to be worried about them taking us up on.
This is - we're doing things that are frankly right now on the production operations side in E&P space that are just ensuring their operation in general, while at the same time we're helping them lower their OpEx significantly and lower their emissions significantly. So it's pretty exciting stuff. It's a real win-win opportunity.

Operator

Thank you. And this does conclude the question-and-answer session. I would like to turn the conference back to Sam Sledge for any closing comments.

Samuel Sledge

Thanks, everybody, for tuning in today. Thanks for your interest in the company. We look forward to talking to you again soon. Have a great day.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.