Liberty Energy Q2 Earnings Call Highlights

Key Points

• Liberty Energy posted a stronger second quarter, with revenue of $1.2 billion and adjusted EBITDA of $151 million. Results improved sequentially as utilization hit record levels, pricing in the frac market firmed modestly, and net income rose to $43 million.
• The company is expanding beyond oilfield services into power generation, especially for data centers and other large-load customers. Liberty highlighted its new joint venture with PowerBridge and said it is targeting a 3-gigawatt power plan with long-term returns of 17% to 18%.
• Capital spending is rising to support that power strategy, with 2026 capex now expected to reach about $1.5 billion. Management said the higher spending is mainly for long-lead power generation equipment, though it expects project financing to be largely non-recourse to the parent company.

Liberty Energy NYSE: LBRT reported stronger second-quarter 2026 results as utilization improved from early-year lows, while management outlined expanding ambitions in power generation for data centers and other large-load customers.

Chief Executive Officer Ron Gusek said the quarter reflected “strong operational execution” amid commodity price volatility and geopolitical uncertainty. The company reported revenue of $1.2 billion and adjusted EBITDA of $151 million, with Gusek pointing to strategic investments and AI-driven technology advancements as the industry “modestly strengthened” from cyclical lows earlier in the year.

Chief Financial Officer Michael Stock said second-quarter revenue increased 16% sequentially from $1 billion in the first quarter, driven by record utilization, modest pricing improvement and higher product sales. Net income rose to $43 million from $23 million in the prior quarter. Adjusted net income was $14 million, compared with $10 million in the first quarter, excluding $29 million of tax-affected gains on investments, partially offset by transaction and other costs.

Fully diluted net income per share was $0.26, up from $0.14 in the prior quarter. Adjusted net income per diluted share was $0.09, compared with $0.06 in the first quarter.

Operational Performance Improves as Frac Market Tightens

Stock said Liberty’s teams achieved record operational performance during the quarter, including new highs for pump hours, horsepower hours and pumping activity. He said customers increasingly relied on Liberty’s ability to source, move and deliver products at scale.

Gusek said North American frac markets improved modestly as producer activity gradually increased, providing more transparency into available frac fleet capacity after years of attrition and equipment cannibalization. He said improved conditions are supporting a modest recovery in service prices from lows earlier in the year.

However, management remained cautious about the second half of 2026. Gusek said large U.S. and Canadian producers remain careful about raising activity levels because of continued price volatility and broader macroeconomic uncertainty. In response to analyst questions, he said third-quarter utilization appeared strong, with “very modest white space” in the calendar, but he declined to be too firm about pricing or fourth-quarter activity given uncertainty in oil prices.

Gusek said pricing conversations are moving in a positive direction, especially for next-generation equipment, but product-side margins remain challenged. He noted that sand and chemical markets have not meaningfully recovered, even as Liberty moves higher volumes through simulfrac operations.

Technology Investments Expand in U.S. and Canada

Liberty said its digiPrime platform reached a milestone with an upcoming fleet deployment in Canada for a cross-border customer. Gusek said the Canadian deployment reflects the company’s ability to scale technology across North America and reinforces the value of innovation in customer relationships.

During the question-and-answer session, Gusek said the Canadian digiPrime fleet will be new capacity being built for delivery in the second half of the year, but it will replace older Tier 2 equipment rather than add net capacity in Canada. He said the Western Canadian Sedimentary Basin outlook has improved following recent industry developments, including pipeline-related announcements and investment activity.

The company also began commercial operations for Slurry, its proprietary last-mile sand system. Gusek said the system replaces large numbers of truck trips by transporting slurried sand through pipe. At a current Rockies basin deployment, Liberty said nearly eight miles of Slurry pipe are replacing up to 200 truckloads of sand per day over 24 miles of county and lease roads. The project is expected to transport about 1.5 billion pounds of slurried sand while eliminating nearly 30,000 truck trips over seven months.

Gusek also highlighted AI and digital tools, including Forge, a distributed agentic system for fuel optimization. He said the system is identifying additional opportunities to improve fleet design, asset utilization and operating performance beyond its original fuel-consumption objectives.

Power Strategy Becomes Larger Part of Growth Plan

A major portion of the call focused on Liberty’s power platform, including its recently announced joint venture with PowerBridge, a Five Point Infrastructure portfolio company. Gusek said the venture combines PowerBridge’s powered campus development platform with Liberty Power Innovations’ generation, energy management and operating capabilities.

The joint venture’s current scope is focused on PowerBridge’s Alpha Digital Campus, a planned 2-gigawatt powered campus in West Texas. The initial phase is expected to include more than 300 megawatts of generation capacity, with first power anticipated in the fourth quarter of 2027 and development continuing through the first half of 2028. Gusek said discussions with prospective data center tenants on future power offtake opportunities are underway.

Stock said Liberty expects the initial generation to begin behind the meter and that many campuses will eventually integrate with the grid. He said the company sees increasing project scale and complexity, with more campuses targeting gigawatt-plus ultimate build-outs in staged phases.

Management also discussed Liberty’s strategic alliance with SLB. Gusek said the alliance brings together Liberty’s integrated power solutions with SLB’s modular infrastructure capabilities and global market presence, offering customers a more unified interface for power and electrical infrastructure inside and outside data centers.

Capital Spending Outlook Raised

Liberty ended the quarter with $559 million in cash, net debt of $736 million and total liquidity of about $1 billion, including credit facility availability. Net debt increased by $157 million from the prior quarter.

Second-quarter net capital expenditures and long-term deposits totaled $221 million, including $71 million in power generation deposits. Stock said Liberty now expects approximately $1.5 billion in capital expenditures in 2026, primarily reflecting higher deposit payments to secure long-lead-time power generation equipment.

Stock said the company has secured, or expects to secure in the near term, enough power generation capacity to support its 3-gigawatt plan through the end of 2029, with some deliveries extending into late 2029 and early 2030. He estimated that building 3 gigawatts would require roughly $5 billion to $6 billion in capital expenditures, including inflation assumptions and related components such as battery energy storage systems.

Gusek said Liberty continues to target a five- to six-year cash-on-cash payback and a 17% to 18% unlevered rate of return for power investments. Stock said project financing is expected to be done through special purpose vehicles that are non-recourse to the corporate balance sheet, with cash recycled back to fund additional deposits.

Management Sees Long-Term Energy Demand Support

Gusek said geopolitical disruptions in the Middle East have renewed focus on energy security and supply diversification, reinforcing the importance of North American oil and natural gas. He said international buyers are pursuing longer-term agreements for U.S. petroleum products and LNG, while planned storage expansions in Southeast Asia and Australia could support incremental demand over time.

On natural gas, Gusek said activity in gas basins remains strong and customers appear to be taking a long-term view despite near-term price volatility. He cited expected growth in power generation demand in North America and global LNG demand as supportive factors.

Gusek closed the call by marking Liberty’s 15th anniversary, noting the company’s growth from one fleet operating out of a tent in Williston, North Dakota, to operations across 10 basins, including Canada and Australia.

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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