ACDC

ProFrac is a cyclical, capital-intensive North American pressure pumper whose fundamentals are moving the wrong way at every line. FY2025 revenue fell 11.4% to $1.94B (the second straight annual decline from the $2.63B 2023 peak), operating income swung to -$226M (-11.6% margin) and net loss widened to -$369M (-19.0% margin). Return on equity is -51.4%, retained earnings collapsed to -$610M, and shareholders' equity shrank 28.7% to $718M. Crucially, operating cash flow nearly halved to $190M while capex was $170M and D&A was $416M — free cash flow is barely positive and well below maintenance capex implied by depreciation, meaning the asset base is being run down to keep cash from going negative.

The filing language confirms the stress the numbers hint at. Management amended the Alpine 2023 Term Loan twice in 2025 to cut required amortization payments (from $15M to $5M, then $7.5M) and — most tellingly — pushed the start of Total Net Leverage Ratio covenant testing from Q1 2026 all the way out to Q1 2028, a clear signal the 2.00x covenant would have been breached on current EBITDA. The capital structure is being propped up by related-party transactions with the Wilks Parties: a $60M private placement of 2029 Senior Notes to Beal Bank and Wilks Brothers, the sale of a $40M intercompany note to a Wilks-controlled entity, and Wilks participation in the August 2025 equity raise. That equity raise itself is a red flag — 20.6M shares issued at $4.00 (below today's $5.50) diluted the float ~13% (shares up 12.9% YoY) just to pay down ABL borrowings and fund working capital, not growth.