Liberty Energy Inc. (LBRT) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial health with a 13% dividend increase, indicating confidence in future performance. Despite some market headwinds, the company is well-positioned for growth, especially in power business expansion and next-gen fleets. The Q&A highlights robust demand and strategic partnerships, though some uncertainty remains around specific financial metrics. Overall, the positive aspects, including dividend hike and strategic growth plans, outweigh concerns, suggesting a likely positive stock price movement.
Key Financial Performance
Revenue $4 billion for the full year 2025, compared to $4.3 billion in 2024, representing a decrease. Reasons for the decline include heightened oil market uncertainty and softer industry completions activity.
Adjusted EBITDA $634 million for the full year 2025, compared to $922 million in 2024, showing a decrease. The decline is attributed to pricing headwinds and a slowdown in activity.
Net Income $148 million for the full year 2025, with adjusted net income of $25 million excluding $123 million of tax-effected gains on investments. This is a decrease from the prior year, driven by lower revenue and adjusted EBITDA.
Fourth Quarter Revenue $1 billion, representing a sequential increase of 10% from the prior quarter. This was driven by activity levels that exceeded industry expectations.
Fourth Quarter Adjusted EBITDA $158 million, increasing from $128 million in the prior quarter. The increase was due to better-than-expected activity levels and operational efficiencies.
Cash Return $77 million returned to shareholders in 2025 through cash dividends and share buybacks. This reflects the company's commitment to returning capital to shareholders while investing for growth.
Maintenance Cost Reduction 14% reduction in total maintenance cost per unit of work, achieved through AI-driven asset optimization software and digiTechnologies.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Atlas and Atlas IQ: Launched as a unified technology platform to transform real-time data into actionable insights, enabling faster decision-making and improved operational efficiency. Atlas is a cloud-based completions data platform, while Atlas IQ is an AI-powered assistant for operational data and technical knowledge.
Expansion into power market: Liberty Energy aggressively expanded into the power market, leveraging its LPI execution platform to address rising U.S. power demand. Agreements with Vantage Data Centers and another data center developer were signed to deliver utility-scale power solutions.
AI-driven asset optimization: Implemented AI-driven software and digiTechnologies to reduce maintenance costs by 14% and improve operational efficiencies.
Simulfrac offering: Expanded simulfrac offering with strategic dedicated customers to enhance operational efficiencies.
Distributed power solutions: Positioned distributed power solutions as a strategic cornerstone for future energy planning, targeting 3 gigawatts of power projects by 2029.
Focus on completions and power growth: Strengthened core oilfield service operations while expanding into the power market to capitalize on dual growth opportunities.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Oil market uncertainty and softer industry completions activity: The company faced heightened oil market uncertainty and softer industry completions activity, which could impact revenue and operational stability.
Pricing pressures on completion services: Recent pricing pressures combined with a slowdown in activity have led to equipment cannibalization and attrition, potentially limiting the company's ability to meet future demand.
Underinvestment in next-generation technology: Limited replacement of lost capacity due to underinvestment in next-generation technology could hinder the company's ability to maintain competitive advantage.
Dependence on distributed power solutions: The company is heavily investing in distributed power solutions, which carry long-duration execution cycles and may face challenges such as grid integration and evolving market dynamics.
Economic uncertainties in power demand growth: While U.S. power demand is rising, underinvestment in grid infrastructure and transmission constraints could pose risks to the company's power projects.
Geopolitical risks and OPEC+ dynamics: Global oil markets are balancing structural oil surplus and elevated geopolitical risks, which could impact oil prices and the company's operations.
Winter weather disruptions: Winter weather disruptions are expected to drive lower sequential revenue and adjusted EBITDA in the first quarter.
High capital expenditure requirements: The company anticipates significant capital expenditures for power generation equipment and project-related expenditures, which could strain financial resources.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Projections: Revenue is expected to remain approximately flat year-over-year in 2029, with higher fleet utilization offset by industry-driven pricing headwinds.
Capital Expenditures: Completions capital expenditure is expected to moderate in 2026 to approximately $250 million, including $175 million in maintenance capital expenditures. Power business capital expenditures are projected to be split between $275 million to $350 million in long lead time deposits and $450 million to $550 million of project-related expenditures in 2026.
Power Projects Deployment: The company plans to deploy approximately 3 gigawatts of power projects by 2029, with 500 megawatts of power generation equipment expected to be delivered in 2026.
Market Trends: U.S. power demand is rising at the fastest pace in decades, driven by AI-driven data center expansion, onshoring of domestic manufacturing, and increasing industrial electrification. Data center demand for power is projected to grow threefold by 2030.
Oil and Gas Market Outlook: Completions demand is projected to hold firm in 2026, with North American producers targeting flat oil production and modest growth in gas-directed activity. Industry fundamentals are expected to improve over time as supply side dynamics gradually rebalance with completions demand.
Technological Advancements: Strong demand is anticipated for the digiTechnologies platform, which offers improved economics and operational efficiency. The company also launched Atlas and Atlas IQ platforms to enhance data visualization and decision-making.
Financial Guidance: Adjusted EBITDA is expected to be lower year-over-year in 2029 due to pricing headwinds and increased development costs for the LPI distributed power solutions business.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Return of Capital: $77 million returned from cash dividends and early year share buybacks in 2025.
Cash Dividends: $53 million in cash dividends distributed in 2025.
Share Buybacks: $24 million in share buybacks conducted in 2025.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you talk about the pipeline of opportunities and what you're seeing in the market commercially right now?
A:The company has seen a continued trend towards co-located behind-the-meter power as the best solution for long-term power provision at data center sites. This approach offers speed to market, grid stability, and long-term power price surety. Recent agreements with Vantage and another data center fabricator highlight the urgency to lock up power supply with reliable partners. The opportunity set has grown significantly.
Q:How do you see your mix evolving into the expansion to 3 gigawatts? Do customers have a preference?
A:The company can achieve 3 gigawatts entirely with gas recips in the current supply chain. Gas recips are preferred due to their efficiency, modularity, and competitive power price. While turbines could be part of the mix for specific projects, the focus remains on gas recips as the technology of choice.
Q:Can you comment on the delivery of equipment and your confidence in meeting timelines for upcoming deals?
A:The company has expanded relationships with supply chain partners, including high-speed and medium-speed engine manufacturers. Delivery schedules are secured through 2029, ensuring the ability to execute long-lead projects efficiently. Initial implementations will focus on expanding existing data centers rather than building greenfield projects.
Q:Will the 3 gigawatts by 2029 involve more deals with multiple customers or add-on capacity with existing deals?
A:It will be a combination of both. The company expects to grow opportunities with current customers and add new customers, with ongoing conversations with various partners.
Q:How will the $1 billion spending for 2026 be funded, and what are your EBITDA expectations for that year?
A:The spending will be split between long-lead deposits and project-specific spending funded by project finance. Deposits will transition to project financing as projects are assigned. The company expects to handle the rest of the spending through free cash flow and debt availability. EBITDA is expected to be down due to pricing and weather impacts, with significant contributions from the power business starting in 2027.
Q:Has there been a greater urgency from partners to secure fuel agreements, and does this make the LPI platform more attractive?
A:Yes, there is greater urgency from partners to secure fuel agreements. The LPI platform is attractive due to its full-service capabilities, including midstream arrangements, grid interaction, packaging, and engineering solutions.
Q:How does the additional 2 gigawatts by 2029 compare in cost to the first gigawatt?
A:There is no meaningful change in economics. Costs remain consistent at approximately $1 million per megawatt for generation and $1.5-$1.6 million all-in with balance of plant, depending on complexity.
Q:Are data center operators still interested in signing 10-15 year agreements?
A:Yes, there is increasing openness to 15-year agreements as distributed, co-located, behind-the-meter power is recognized as the better long-term solution for reliability, economics, and public concerns.
Q:What differentiates Liberty's integrated power services from competitors entering the market?
A:Liberty's integrated platform includes midstream capabilities, packaging, power quality systems, and grid interaction. This comprehensive approach differentiates it from competitors who may only offer generation assets.
Q:What is the expected cadence for deploying the 3 gigawatts by 2029?
A:Deployment will accelerate through 2028, with ongoing shipments and installations. The timeline depends on supply chain speed and project execution.
Q:What are the end markets for power generation equipment, and how has the focus shifted?
A:The focus has shifted primarily to data centers, though commercial and industrial opportunities and oilfield electrification are still being pursued.
Q:What is the expected payback period for long-term opportunities?
A:The expected payback period remains 5-6 years, with unlevered returns in the high teens.
Q:What is the customer interest in different size megawatt units for packaging solutions?
A:Both smaller high-speed engines (2.5-4.3 MW) and larger medium-speed engines (10-12 MW) are critical. Smaller engines offer modularity and responsiveness, while larger engines provide efficiency and stability for large installations.
Q:Review of Unclear Management Responses
A:Management avoided providing specific EBITDA guidance for 2026, citing various factors like pricing, weather impacts, and operational dynamics. They also did not provide detailed financial metrics for the power business or precise timelines for project milestones beyond general expectations.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Chief
ESA
IQ
LPI power
Officer
Power
Tempo power
Vantage Centers
center expansion
client
cloud
completion activity
completion demand
concern
consumer
core solution
cost unit
decision making
demand power
deployment power
digiTechnologies
footprint
gas market
grid integration
industry completion
infrastructure platform
load
offering
payment
power infrastructure
power platform
power project
power quality
power solution
quality system
recovery
reservation
site
success
user agreement
value creation
LBRT Transcript
Liberty Energy Inc. (LBRT) Q4 2025 Earnings Call Transcript
Positive1-29
The earnings call reveals strong financial health with a 13% dividend increase, indicating confidence in future performance. Despite some market headwinds, the company is well-positioned for growth, especially in power business expansion and next-gen fleets. The Q&A highlights robust demand and strategic partnerships, though some uncertainty remains around specific financial metrics. Overall, the positive aspects, including dividend hike and strategic growth plans, outweigh concerns, suggesting a likely positive stock price movement.
Liberty Energy Inc. (LBRT) Q3 2025 Earnings Call Transcript
Unknown10-17
The earnings call summary and Q&A reveal several concerns: a reduction in fleet deployment, softening revenue and EBITDA, and withdrawal of full-year EBITDA guidance. While there are positive developments in technology and strategic alliances, the lack of clear guidance and pricing pressures overshadow these. Additionally, management's unclear responses in the Q&A and high tension in reserving capacity for contracts contribute to negative sentiment. Given the company's market cap, these factors are likely to result in a negative stock price reaction over the next two weeks.
Liberty Energy Inc. (LBRT) Q2 2025 Earnings Call Transcript
Unknown7-25
The earnings call presents a mixed outlook. Basic financial performance and product development are positive, with growth in revenue, EBITDA, and new technology initiatives. However, the Q&A reveals uncertainties about future performance, particularly in Q3 and Q4, and unclear management responses. These concerns, along with potential seasonal declines and lack of specific guidance, balance the positive aspects, leading to a neutral sentiment. The market cap suggests moderate stock price sensitivity, supporting a neutral prediction.
Liberty Energy Inc. (NYSE:LBRT) Q1 2025 Earnings Call Transcript
Unknown4-18
Despite strong adjusted EBITDA growth and a positive outlook for Q2, the earnings call revealed concerns about rising expenses, a decrease in net income, and an increase in net debt. The Q&A section highlighted uncertainties in the power generation business and potential impacts of price declines. The market cap suggests moderate volatility, leading to a neutral stock price prediction over the next two weeks.
LBRT Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
