Liberty Energy Q1 Earnings Call Highlights

Key Points

• Liberty reported Q1 revenue of $1.0 billion, net income of $23 million (adjusted EBITDA $126 million), with cash of $699 million and net debt of $579 million (up roughly $360 million from convertible issuances).
• Management said completions demand and fleet utilization tightened, driving an accelerating shift toward pricing recovery and expecting pricing benefits to show up meaningfully in Q3.
• Liberty’s Power unit (LPI) is building a hyperscaler-focused pipeline targeting 3 gigawatts by 2029 with most capacity ordered or in negotiation, funded in part by roughly $1.3 billion of convertible debt and capped calls to support long‑lead investments.

Liberty Energy NYSE: LBRT reported first-quarter 2026 results that executives said reflected strong demand for its completion services, record pumping efficiencies and high fleet utilization, while absorbing pricing headwinds and winter weather disruption.

On the company’s earnings call, Chief Executive Officer Ron Gusek said the quarter was driven by “outsized demand for Liberty’s premium completion service offering, outstanding operational execution, and technology-driven efficiency gains.” He added that the company is seeing an “accelerating shift in momentum” in North American oil and gas, and reiterated confidence that the industry has established a “cyclical floor.”

First-quarter financial results and balance sheet

Chief Financial Officer Michael Stock reported first-quarter revenue of $1.0 billion, which he said was “slightly below the prior quarter, but modestly higher than the year ago period.” Net income was $23 million, up from $14 million in the prior quarter. Adjusted net income was $10 million, compared to $8 million in the prior quarter, excluding $12 million of tax-affected gains on investments.

Fully diluted net income per share was $0.14 versus $0.08 in the prior quarter, while adjusted net income per diluted share was $0.06 versus $0.05. Adjusted EBITDA was $126 million.

Stock said general and administrative expenses totaled $60 million, down from $65 million in the prior quarter, and included about $6 million of non-cash stock-based compensation. Excluding stock-based compensation, G&A was $54 million, which Stock attributed primarily to higher variable compensation costs recognized in the fourth quarter.

• Other income: $10 million, including a $17 million gain on investments offset by about $8 million of interest expense
• Tax expense: $9 million, about 29% of pre-tax income; the company expects about 25% for the remainder of 2026 and does not expect to pay “material cash taxes” in the year
• Cash balance: $699 million at quarter end
• Net debt: $579 million, up $360 million primarily due to convertible debt issuances
• Total liquidity: $1.2 billion including credit facility availability

First-quarter uses of cash included capital expenditures and $15 million in cash dividends. Net capital expenditures and long-term deposits were $133 million, including investments in DigiFleets, capitalized maintenance, power generation and other projects. The company also had about $24 million of proceeds from asset sales.

Completions market: tightening utilization and a path to pricing recovery

Management described a tighter frac market than it expected entering 2026. Gusek told Citigroup’s Scott Gruber that Liberty and peers “right-sized fleets” heading into the year, which left capacity relatively well utilized “prior to any uptick in activity.” As customers seek to accelerate activity—particularly drawing down drilled but uncompleted wells (DUCs)—Gusek said remaining “white space” on the calendar is being absorbed and that the discussion begins to shift toward pricing.

Gusek said Liberty has no additional pumps sidelined, and that bringing back sidelined industry capacity would require “meaningful capital investment.” He added that Liberty’s sales team has been asking for price increases as customer economics improve, saying the company has had “great success in those conversations” and expects to recognize some benefit beginning in the second quarter, with a more meaningful impact later.

Pressed by Stifel’s Stephen Gengaro on timing, Gusek said pricing should show up “meaningfully in Q3,” with only “very modest” effects in Q2 as discussions progress and work cycles roll through. Gusek also emphasized strong demand for dual-fuel and natural-gas-capable fleets amid higher diesel prices, citing fuel savings for customers and noting Liberty’s focus on maximizing natural gas substitution on location.

On second-quarter expectations, management pointed to sequential improvement driven largely by activity and utilization. In response to Bank of America’s Saurabh Pant, Gusek suggested revenue could be up “high single digits” sequentially, “but mostly activity like pull-throughs.” Stock later told Morgan Stanley’s Daniel Kutz to expect “normal incrementals” from activity through to EBITDA.

Regarding equipment plans, Gusek said the 2026 digiPrime builds were expected to be replacement equipment as Liberty transitions away from the remaining diesel portion of its fleet (which he said is now “sub 10%” in the field). He added the company has optionality to make equipment incremental if the “right combination of price, margin, and really duration” supported adding a new fleet.

Power business: pipeline growth, hyperscaler engagement, and testing infrastructure

Beyond completions, Liberty executives spent significant time describing demand for distributed, behind-the-meter generation through Liberty Power Innovations (LPI). Gusek said distributed power demand is being driven by grid interconnection bottlenecks and system constraints, pushing hyperscalers toward on-site power. He also said Liberty is collaborating more directly with hyperscalers as requirements become more complex, expanding beyond the developer ecosystem.

In response to JPMorgan’s Arun Jayaram, Gusek said direct hyperscaler engagement allows LPI to help evaluate sites against a long checklist that includes gas access and community engagement, and to “high grade” opportunities. Stock likened Liberty’s role to “Intel inside,” saying the company aims to be the key power element alongside land developers, vertical developers and hyperscalers.

While data centers represent the largest share of the pipeline, Gusek said the company’s marketing efforts remain broad-based and include other commercial and industrial uses. Stock added that with generation limited, LPI’s focus is on longer-term “build-own-operate” contracts lasting “10-20 years,” rather than short-term deals.

Executives also highlighted investments in validation and testing. Gusek described the company’s LAET advanced testing facility and a microgrid testing facility in El Reno designed to validate multi-source systems within the Forte offering using the Tempo proprietary control system, moving from software modeling to hardware-in-the-loop to integrated system validation.

Financing, capital spending, and contract structure

Gusek said Liberty executed $1.3 billion in convertible debt offerings during the quarter and entered capped call transactions “at a 150% premium to the reference share price,” intended to reduce potential dilution and “preserve substantial upside for shareholders.” He said the financing supports long lead-time investments to reach Liberty’s 2029 goal of deploying 3 gigawatts of power.

Asked by Morgan Stanley about the two offerings and their timing, Gusek said the transactions were “opportunistic,” describing the first as “incredibly successful” and the second as aimed at ensuring capital availability amid heightened geopolitical and financial market uncertainty. He characterized the financing as a “cost-effective way of raising money” to fund forward payments on generation that later flip into project finance, with proceeds expected to recycle to the corporate balance sheet.

On capital spending, Stock told TD Cowen’s Marc Bianchi that the company’s CapEx outlook “hasn’t changed at the moment,” with a potential revisit in July as power plans develop. He said about $250 million of the guidance relates to completions, and that upside could come if a digiTechnologies fleet were made incremental rather than replacement.

Stock also said Liberty has planned contract milestone payments of approximately $300 million in the second quarter or early part of the third quarter to secure generation capacity supporting the company’s 3 GW plan, noting that power opportunities carry longer time horizons and multi-year execution cycles.

On ordering progress for the 3 GW target, Stock told Barclays’ Sungeun Kim that the “vast majority” is “either ordered or in contractual negotiations,” and that it is expected to be “in flight this year.”

Updates on specific power agreements and delivery timing

In response to Stifel, Stock provided additional details on the company’s arrangement with Vantage, describing a commitment of 400 megawatts beginning in early 2027 that can be deployed across projects. He said that while an energy services agreement (ESA) would ultimately be signed with the hyperscaler, the current structure provides Vantage surety for development and includes a payment stream that “mirrors the equivalent of an ESA over a five-year period” for the portion of capital expenditures related to generation.

UBS’s Josh Silverstein asked about deployment milestones and timing. Gusek said Liberty is already taking delivery of power generation equipment—arriving since late 2025 and through 2026—and is working on packaging. He added that deployments tend to occur in large blocks, requiring a backlog of assets before deployment. Gusek said equipment arriving now is allocated to other opportunities, while assets designated for Vantage arrive in 2027.

Piper Sandler’s Derek Podhaizer asked about a previously highlighted canceled 330-megawatt data center expansion. Stock said the hyperscaler decided to delay the campus expansion during negotiations. He said the reservation agreement included “quickly ratcheting cancellation fees,” and the developer paid a “$multi-million cancellation fee.” Stock added that the 330 MW has since been associated with a different opportunity expected to execute in the same timeframe.

RBC’s Keith MacKey asked about the pipeline and momentum. Gusek said the pipeline is “certainly accelerating,” with increasing urgency. He said Liberty has recently added campuses with “gigawatt scale or larger” potential, and that the sales pipeline remains “many fold larger” than what the company will be able to deploy, reflecting the fact that not all sites reach completion.

In closing remarks, Gusek framed recent geopolitical events as underscoring the importance of energy security and the role of North American oil and gas supply. He argued that energy disruptions have broad economic impacts beyond fuel prices and said he hopes current events mark “a defining moment for the course of energy policy going forward.”

About Liberty Energy NYSE: LBRT

Liberty Energy Inc provides hydraulic services and related technologies to onshore oil and natural gas exploration, and production companies in North America. The company offers hydraulic fracturing services, including complementary services, such as wireline services, proppant delivery solutions, field gas processing and treating, compressed natural gas (CNG) delivery, data analytics, related goods comprising sand mine operations, and technologies; and well site fueling and logistics. As of as of December 31, 2023, the company owned and operated a fleet of approximately 40 active hydraulic fracturing; and two sand mines in the Permian Basin.

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