ProPetro Holding Corp. (PUMP) | The Buildout — AI Infrastructure
The Verdict
ProPetro Holding Corp. is a Midland, Texas energy services company whose core Permian Basin business is hydraulic fracturing, wireline, and cementing for horizontal shale completions. Its AI-infrastructure role sits in a newer division, PROPWR, which installs mobile natural-gas-fueled generation equipment at customer sites to provide behind-the-meter prime power to data centers, oil and gas producers, and industrial users.
| Market Cap | — |
| Revenue (TTM) | $1.2B |
| Revenue Growth | −15.1% |
| EBITDA Margin (TTM) | 13.1% |
| Net Debt | $74M |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- The Caterpillar framework gives access to up to approximately 2.1 GW of additional power generation equipment, with total capacity positioned at about 2.6 GW delivered by year-end 2031 and fully deployed in 2032.
- PROPWR crossed into positive EBITDA in each of the final two months of Q2 2026, roughly 18 months after launch, while the 60 MW data center project is live and meeting performance obligations.
- Contracted PROPWR capacity rose from approximately 240 MW to approximately 350 MW in Q2 2026, with management pointing toward roughly 450 MW near term.
- Completions fleet count is rising from 11 to 12, with a 13th fleet slated to contribute toward the end of Q3 2026, and next-generation gas-burning fleets were described as sold out.
- Permian fleet count is estimated in the mid-70s, with management saying hot or warm spare equipment is 'less than one hand's worth.'
What We’re Watching
- Data center contract negotiations are taking longer than originally anticipated; the several-hundred-MW advanced pipeline has not yet converted.
- Customer concentration is high: top four customers were about 62% of FY2025 revenue, and the XTO two-fleet contract expires around late 2026.
- Q3 2026 is expected to carry 13th-fleet stand-up and maintenance costs while revenue contribution is 'very low' by management's own signal.
- FY2026 capex was trimmed to $525–595 million and the second FORCE lease buyout slipped into early 2027.
The thesis is intact but not fully proven: completions shows tighter fundamentals and a 13th fleet, and PROPWR has moved from concept to an operating, EBITDA-positive platform with live data center assets. The case has not strengthened as fast as originally signaled because the largest data center contracts remain in negotiation and the timing has slipped. The open question is whether the several-hundred-megawatt data center pipeline converts into signed contracts before equipment capacity arrives.
Earnings Beat
Q2 FY2026 revenue was $305.8 million, up 13% sequentially. Gross margin was 9.3%. Reported EBITDA was $38.7 million, or 12.7% of revenue; net loss widened to $8.1 million. Management's adjusted EBITDA was $45 million, or 15% of revenue.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $306M | $271M | $326M | −6.3% |
| Gross margin | 9.3% | 6.8% | 9.1% | +20bps |
| EBITDA | $39M | $32M | $40M | −3.5% |
| EPS | $-0.07 | $-0.03 | $-0.07 | −4.7% |
| Contracted power capacity | ~350 MW | ~240 MW | n/a | Up ~46% sequentially |
we still continue to expect the majority of our future power capacity to be deployed within the data center market.— Sam Sledge, Chief Executive Officer, July 29, 2026
Management tone: Management's tone on the Q2 2026 call was confident about execution milestones but more candid about timing; it acknowledged data center discussions are taking longer than originally anticipated, while still describing completions as structurally tight and liquidity as sufficient.
Management Guidance
Management's current-year guidance centered on capex rather than revenue or EBITDA. It revised FY2026 capital expenditures incurred to $525–595 million, with PROPWR held at $400–450 million and completions trimmed to $125–145 million. The first FORCE lease buyout remains planned for late 2026 at $15–20 million, with the second moving to early 2027. Per-megawatt cost guidance of $1.4–1.5 million and a 4–6 year portfolio payback target were held. No formal revenue or EBITDA guidance was issued.
Trajectory
Revenue trajectory was stable, with Q1 FY2026 at $270.7 million and Q2 at $305.8 million. Gross margin expanded from 6.8% to 9.3%, while reported EBITDA margin stayed around 12%. The Q1 trough was weather- and activity-driven, with hydraulic fracturing segment revenue down 33.4% year over year, while Q2 improved as active fleets rose from 11 to 12.
The Model
The model projects FY+1 revenue of $1,250 million and EBITDA of $186 million (14.9%), stepping to $1,495 million and $287 million (19.2%) in FY+2. The near-term projection rests on the tightening completions fleet and early PROPWR contributions; FY+2 assumes power capacity deployments scale into a more meaningful earnings stream.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $1.3B | $1.2B | $1.5B |
| YoY Growth | — | −1.5% | +19.6% |
| EBITDA | $180M | $186M | $287M |
| EBITDA Margin | 14.2% | 14.9% | 19.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 3.7% above analyst consensus.
Management's current-year guidance centered on capex rather than revenue or EBITDA. It revised FY2026 capital expenditures incurred to $525–595 million, with PROPWR held at $400–450 million and completions trimmed to $125–145 million. The first FORCE lease buyout remains planned for late 2026 at $15–20 million, with the second moving to early 2027. Per-megawatt cost guidance of $1.4–1.5 million and a 4–6 year portfolio payback target were held. No formal revenue or EBITDA guidance was issued.
What Could Go Right — and Wrong
- A several-hundred-megawatt data center contract converts from advanced negotiations, shifting contracted power capacity toward the majority-data-center split management expects.
- The 6-to-9-month frac recontracting window produces meaningful pricing improvement on natural-gas-burning fleets.
- PROPWR contracted capacity moves from about 350 MW toward the roughly 450 MW management says it is heading to soon.
- FORCE lease buyouts proceed on schedule: first in late 2026 at $15–20 million, roughly three in 2027, and one in 2028, reducing lease expense.
- The 13th fleet begins contributing toward the end of Q3 2026 and adds a new top-tier E&P customer; management signaled no 14th fleet is imminent and portfolio optimization likely comes first.
- Data center contract negotiations continue to slip, leaving PROPWR with equipment and capex deployed before long-duration contracts are signed.
- The Permian pricing inflection is weaker than the structurally-tight narrative; Q2 results were pressured by out-of-Permian downtime and severe June weather.
- Customer concentration event risk: top four customers are about 62% of FY2025 revenue, and the XTO two-fleet contract expires around late 2026.
- Q3 2026 absorbs 13th-fleet stand-up and maintenance costs with very low revenue contribution, pressuring completions margins.
- Supply chain delays or cost increases hit the $1,106 million minimum Caterpillar purchase obligation and the $1.4–1.5 million per-MW cost anchor.
Looking Ahead
The next 12 months turn on two separate cycles: a frac recontracting window over 6–9 months and the build-out of PROPWR. Completions results will be shaped by the 13th fleet contribution late in Q3 2026 and renewal pricing, while PROPWR heads toward roughly 450 MW contracted and the first FORCE buyout late 2026. The largest swing factor is whether the several-hundred-MW data center advanced negotiations convert.
- Late Q3 202613th fleet begins contributing — Tests whether Q3 stand-up costs outweigh late-quarter revenue.
- 2H 2026PROPWR earnings ramp — Management expects increasingly meaningful earnings into 2027.
- Late 2026First FORCE fleet buyout — $15–20 million purchase; begins reducing electric fleet lease expense.
- Late 2026XTO two-fleet contract expires — Renewal, reprice, or rolloff tests customer concentration exposure.
- Next 6–9 monthsFrac contract renewals — Most contracted horsepower renews; tests pricing on gas-burning fleets.
- Ongoing 2026Data center contract negotiations — Several hundred MW advanced negotiations; timing extended beyond original expectations.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $1.4B | $1.3B | $1.2B | -12.1% |
| Gross Margin | 11.2% | 9.8% | 8.3% | 135bps |
| EBITDA | $48M | $180M | $1.6B | +277.4% |
| EBITDA Margin | 3.3% | 14.2% | 13.1% | +1,088bps |
| Net Income | −$138M | $1M | −$13M | +100.5% |
| Free Cash Flow | $112M | $43M | $20M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)8.3%
- EBITDA Margin (TTM)13.1%
- Net Margin (TTM)-1.2%
- ROIC-1.1%
- FCF Conversion-14.7%
- SBC / Revenue0.8%
The Company
ProPetro Holding Corp. is a Midland, Texas integrated energy service company concentrated in the Permian Basin. It provides hydraulic fracturing, wireline, and cementing services for horizontal shale completions, and added power generation in December 2024 through PROPWR. The power business installs mobile natural-gas-fueled generation equipment at customer sites, supplying behind-the-meter prime power for oil and gas, industrial, and data center users.
The company operates four reported business lines: hydraulic fracturing, wireline, cementing, and power generation. As of March 31, 2026, it had 1,254,500 total available hydraulic horsepower, composed of 447,500 horsepower of Tier IV DGB dual-fuel, 312,000 horsepower of FORCE electric, and 495,000 horsepower of conventional Tier II equipment; it also had 28 wireline units and 29 cementing units. The footprint is Permian-focused, with owned and leased field offices, yards, and storage.
Business Segments
Competitive Landscape
The company describes itself in its 10-K as a leading integrated energy service company. In power, management said the live 60 MW project makes it one of the few behind-the-meter power providers currently operating in the market, providing prime power to a data center at scale. In completions, management's view is that the industry is structurally tighter than many appreciate, with limited spare equipment and labor constraints.
Supply Chain
ProPetro sits between equipment suppliers such as Caterpillar and Permian Basin E&P customers, while PROPWR extends that chain to data center and industrial power buyers. The chain is equipment-heavy and financing-linked.
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