Liberty Energy Inc. Q4 FY2024 earnings call

• Liberty delivered strong leadership in technological innovation and executional excellence in 2024, achieving solid financial results despite industry softening. • Executed on fleet transition initiatives, cost optimization using AI - enhanced digital systems, and expanded natural gas fueling and delivery capacity. • 2025 strategic priorities: continued technology innovation and leadership in completion services, and significant expansion of power generation services business. • Announced the latest iteration of the digiPrime platform with a natural gas variable speed, large displacement engine, and built an integrated ecosystem of software. • A Liberty fleet set a single crew company record of 7,143 hours pumped in 2024. • Distributed energy business was put into motion in 2024, with plans to deploy 400 megawatts of power generation by the end of 2026, and 130 megawatts deployed already.

Liberty Energy had a strong financial performance in the fourth quarter and full year 2024. For the full year, revenue was $4.3 billion, net income was $316 million, and adjusted EBITDA was $922 million. Full year return of capital employed was 17% and cash return on capital invested was 21%. In the fourth quarter, revenue was $944 million, net income was $52 million, and adjusted net income was $70 million. The completion services business and power generation services business are key segments. The completion services segment's financials are part of the overall performance, and the power generation segment is emerging as a significant growth area.

• Anticipate a modest sequential increase in revenue and adjusted EBITDA in the first quarter. • For the full year, adjusted EBITDA is expected to be in the $700 million to $750 million range, offset by headwinds from late 2024 service pricing but with potential for price improvement as frac activity improves. • Completions capital expenditures in 2025 are moderated to approximately $450 million, including $175 million in maintenance capital expenditures. • Power business expects to take delivery of approximately 150 megawatts of power generation by the end of 2025 and another 250 megawatts by the end of 2026, with 2025 power generation and related ancillary equipment capital expenditures expected to be approximately $200 million. Total capital expenditures in 2025 are expected to be approximately $650 million.

• Global oil markets face uncertainties from geopolitics, Chinese economic growth, OPEC+ production plans, and domestic political climate, which impact E&P activity plans. • Frac markets saw a trough at the end of 2024 with near - term price pressure at the start of 2025, especially impacting conventional fleets. • Fleet idling, attrition, and cannibalization of aging equipment likely accelerate as a large swath of Tier 2 equipment reaches end of life.

Q: On the merchant power opportunity, is it a situation where equipment is dedicated to capture elevated spark spread or dedicated to merchant power on a go - forward basis?

A: There is a great long - term opportunity. It can be for areas with significant transmission issues and load. Assets can be used for bridge power to back up and wheel power onto the grid to improve returns, and the return profile of assets can morph over their life for different uses.

Q: When it comes to the 400 megawatts of power generation, how much is under binding commitment with customers?

A: 400 megawatts is all in the supply chain, with two - thirds in negotiation for binding commitments and the last part in the midpoint of the pipeline. We will give more color in quarters but don't discuss customers in detail as we focus on building the business.

Q: On the useful life of power gen units and maintenance costs, what are the expectations?

A: Gas engines have a time between major overhaul of 80,000 hours, which is a long time. Maintenance costs are lower compared to diesel engines, and the lifespan is measured in decades. The power gen business has less labor intensity than the frac business, and we can attract people due to our strong name in the industry.

Q: How is Liberty positioned for the LPI supply chain related to power gen assets?

A: We have strong partnerships with suppliers like Cummins, Caterpillar, etc. We are well - positioned to take delivery of assets for the 400 megawatts and can expand with support from the supply chain. We will leverage vertical integration capabilities in packaging, engineering, and controls for power gen assets.

Q: How does the labor intensity differ between the services side and the power gen side, and recruitment considerations?

A: The power gen business is significantly less labor intensive than the services side. We have a strong ability to attract people due to our good name in the industry, and we are starting to build expertise in power gen recruitment as we expand into the space.

Q: On the incremental 400 megawatts of power gen equipment, how does it differ from existing equipment, and CapEx for power business?

A: Power gen equipment for the power business is less mobile, larger in scale in some cases, and balance of plant is included. CapEx per megawatt varies due to factors like balance of plant and application. Orders for assets are placed, and lead times are shorter than traditional, with all 400 megawatts orders underway in the supply chain.

Q: How does the power business unfold over the next five years, and fleet size change in the frac business?

A: We are bullish on the power business and see potential to grow it to a large scale. In the frac business, fleet sizes have increased due to more simul - frac work, with increases ranging from 30% to 100% depending on customer thoughts on simul - frac or trimul - frac.