U.S. Well Services, Inc.

Second-quarter total revenue was $68.8 million, up from $41.2 million in Q1, a 67% sequential increase. Cost of sales was $55.2 million, up 36% quarter over quarter, and SG&A was $9.4 million; net of stock-based compensation and other noncash charges, SG&A was $10.4 million versus $6.6 million in Q1. Adjusted EBITDA was $7.5 million versus a $3.5 million loss in Q1, and annualized adjusted EBITDA per fully utilized fleet was $5.4 million. The company ended the quarter with $36 million of total liquidity, including $18 million of cash and restricted cash and $18 million of ABL availability. For capital spending, it reported about $7.3 million of maintenance capex and $36.7 million of growth capex in Q2, and it expects to spend about $65 million to $85 million over the remainder of 2022. Management did not provide full-year revenue or EBITDA guidance, but said it expects to average just over 7 active fleets in Q3.

Kyle O'Neill emphasized that market fundamentals have strengthened rapidly and that demand is strongest for next-generation electric fracturing technology. He framed the ProFrac merger as strategically important because it would combine the companies’ technology, fleets, and workforces, and he said the transaction should close in the fourth quarter. His tone was constructive but balanced: he acknowledged recession risk and weaker macro conditions, while arguing that the structural undersupply of oil and gas and depleted inventories make the downturn manageable for efficient frac providers.

Josh Shapiro focused on the quarter’s operating leverage and cash deployment. He cited 6 active fleets at 92% utilization, 7 active fleets currently, and expected average active fleets just over 7 in Q3. He also detailed cost pressure, noting cost of sales of $55.2 million driven by labor, consumables, and third-party services, SG&A of $9.4 million, and a reversible $3.1 million share-based compensation expense related to forfeited awards. On capital allocation, he said maintenance capex was about $7.3 million, growth capex was about $36.7 million for new-build clean fleets, and the company expects $65 million to $85 million of additional spending this year. Liquidity at quarter-end was $36 million, split evenly between cash/restricted cash and ABL availability.

Analysts pressed on whether the industry could repeat a past boom-and-bust supply response and whether supply chain bottlenecks could delay electric-frac deployments. Management said the market is very tight because of older equipment, higher horsepower requirements, and the need for reliability, and added that the industry appears more disciplined this cycle, making a flood of supply less likely. On e-frac timing, Kyle O'Neill said the first fleet is deployed, the second is coming in the next couple of months, and the third and fourth have key components in place, though transformers and VFDs remain concerns and are why the company bought two additional fleets’ worth of long-lead items. On logistics, he said sand and especially water delays in the Northeast have improved somewhat but remain an issue.