Flotek Industries Q2 Earnings Call Highlights

Key Points

• Record second-quarter performance: Revenue rose 70% year over year to nearly $100 million, while adjusted EBITDA increased 109% to $16.8 million and net income reached $10 million.
• Data analytics and power services accelerated: Data analytics revenue grew 223% and generated 51% of total gross profit. Flotek’s contracted backlog exceeded $500 million, with a pipeline of more than $1 billion and a 10-year Puerto Rico project expected to add approximately $400 million in backlog.
• Guidance was raised: Flotek now expects 2026 revenue of $340 million to $350 million and adjusted EBITDA of $47 million to $51 million, supported by strong international chemistry sales and low leverage below one times adjusted EBITDA.

Flotek Industries NYSE: FTK reported second-quarter results marked by record data analytics revenue, strong international chemistry sales and higher profitability, while outlining a growing pipeline for its power-services technology.

Total revenue approached $100 million in the second quarter, up 70% from the year-earlier period and representing the company’s strongest quarterly performance in a decade, Chief Executive Officer Ryan Ezell said. Gross profit rose 65% year over year, while adjusted EBITDA increased 109% to $16.8 million.

Net income was $10 million, or $0.26 per share, compared with $1.8 million, or $0.05 per share, a year earlier, according to Chief Financial Officer Bond Clement. Revenue increased by $41 million year over year, with chemistry contributing 68% of the increase and data analytics accounting for the remaining 32%.

Data Analytics Becomes Largest Gross-Profit Contributor

Flotek’s data analytics segment posted revenue growth of 223% from the prior-year quarter, with segment revenue representing 19% of company revenue, up from 10% a year earlier. Ezell said data analytics accounted for 51% of total company gross profit, compared with 26% in the prior-year period, making it the company’s largest gross-profit contributor.

The business includes power services and digital valuation applications built around Flotek’s PWRtek platform and XSPCT Analyzer. Clement said 63% of second-quarter data analytics revenue came from external customers, compared with 44% a year earlier. The Montana Power Services contract contributed nearly $6 million in quarterly revenue, while upstream power-services revenue increased by $2.5 million sequentially.

Ezell said Flotek expects to support more than 5 gigawatts of power through measurement or control using its technology by the first quarter of 2027. This figure includes measurement and control services for natural-gas-powered hydraulic fracturing fleets, conventional gas-fired power plants and the company’s recently announced Puerto Rico project.

Flotek also reported that its contracted backlog exceeded $500 million. Ezell said the company’s utility, infrastructure and data-center power-services pipeline was at its highest level to date, with a combined potential value of more than $1 billion across opportunities in various stages of bidding and negotiation.

Puerto Rico Contract Adds Long-Term Opportunity

On Aug. 3, Flotek announced a 10-year agreement related to a 400-megawatt natural-gas-fired grid-enhancement project for the Puerto Rico Electric Power Authority, or PREPA. Under the agreement, Flotek expects approximately $400 million of revenue backlog through 2036 from renting gas-fired generation equipment and deploying its conditioning, analytics and gas-distribution skid systems.

The company is partnering with Power Expectations, which leads the group executing the emergency temporary power-generation project. Flotek expects support-equipment deployment to begin in the fourth quarter of 2026, followed by initial power-generation equipment and conditioning and distribution skids by the end of the first quarter of 2027.

Ezell said the Puerto Rico initiative will use Flotek’s technology to monitor, blend and distribute fuel, including a potential transition from liquefied natural gas to compressed natural gas and possible use of biogas. He also said Puerto Rico is pursuing a broader shift from coal- and diesel-fired generation toward natural gas, which could create additional opportunities beyond the initial 400-megawatt project.

Clement said the Puerto Rico contract was not included in Flotek’s 2026 financial guidance because deployment timing is still being finalized. The company also excluded potential fourth-quarter revenue from a Phase II extension of its Montana Power Services contract, which remains under discussion. Clement said the Montana project generated about $6 million of revenue during the second quarter and could continue at roughly that quarterly run rate if extended.

Chemistry Revenue Accelerates on International Sales

Flotek’s chemistry technologies segment increased revenue 53% from the year-earlier quarter despite a 5% decline in the average North American fracturing fleet count, according to Primary Vision data cited by the company. Ezell said the segment delivered its strongest quarterly sales performance since 2017.

June was particularly strong, with nearly $31 million in chemistry revenue, Clement said. External-customer chemistry revenue totaled $15.2 million in June alone, exceeding the external revenue generated during the entire first quarter. International chemistry revenue reached $10.6 million, up 172% from a year earlier and compared with $1.9 million in the first quarter.

Management attributed part of the strength to work pulled forward in the Middle East. Ezell said Flotek is serving four fracturing fleets in the Jafurah field and sees potential to expand to six fleets by year-end. He said that work has a remaining duration of more than four years, while the company is also pursuing chemistry and data analytics opportunities in Latin America and other international markets.

Clement said the company expects international chemistry revenue to remain strong in the second half, supported by inventory shipments expected to arrive in-country during August and potentially September. However, Flotek expects a more normalized pace for domestic external chemistry revenue after work shifted from July into June.

Guidance Raised as Leverage Remains Low

Flotek updated its full-year outlook, projecting revenue of $340 million to $350 million and adjusted EBITDA of $47 million to $51 million. The midpoints represent increases of 45% and 49%, respectively, from 2025 results, management said.

The company expects both chemistry and data analytics revenue in each of the third and fourth quarters to exceed first-quarter levels. Adjusted EBITDA guidance does not add back non-cash amortization of contract assets, which Flotek expects to total about $9 million in 2026.

General and administrative expense increased 14% year over year, but rose 7% excluding stock-based compensation. G&A declined to less than 8% of revenue from nearly 12% a year earlier, which Clement said was the company’s lowest quarterly G&A rate in at least a decade.

Flotek’s asset-based lending balance had been reduced to zero as of the call after being elevated at June 30 to fund working-capital needs associated with strong June sales. Using the midpoint of adjusted EBITDA guidance and June 30 net debt, Clement said the company’s leverage ratio was below one times.

About Flotek Industries (NYSE:FTK)

Flotek Industries, Inc NYSE: FTK is a Houston-based oilfield services provider specializing in innovative chemical technologies for the upstream energy sector. The company develops, manufactures and markets specialty drilling fluids, completion fluids and production chemicals that enhance drilling efficiency, optimize well performance and mitigate operational risks. Flotek's solutions are designed to improve drilling rates of penetration, reduce nonproductive time and address challenging downhole environments, including high-pressure/high-temperature wells and sour service conditions.

Flotek's operations are organized into three core business segments: Drilling & Completion Fluids, Production Chemicals & Process Management, and Water Solutions.

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