Calfrac Reports Strong Second Quarter 2025 Results

Executive Summary

• Calfrac Well Services Ltd. reported financial and operating results for the three and six months ended June 30, 2025, highlighting a significant increase in Adjusted EBITDA driven by strong performance in Argentina, despite lower revenue and margins in North America.
• The Company amended its revolving credit facility to include a new $120.0 million delay draw term facility and updated covenant definitions, providing flexibility to manage debt ahead of the 2026 maturity of its Second Lien Notes.
• North American operations reduced their operating footprint to 10 fleets to align with anticipated softening activity, while Argentina operations achieved record financial performance with the deployment of a second unconventional fracturing fleet.

Key Details

• Q2 2025 Financial Highlights (Three Months Ended June 30, 2025):
  • Revenue: $402.3 million (down 6% from Q2 2024).
  • Adjusted EBITDA: $77.0 million (up 18% from Q2 2024).
  • Net Income: $15.3 million ($0.18 per share diluted), down from $24.5 million ($0.29 per share diluted) in Q2 2024.
  • Cash Flow from Operating Activities: $73.5 million (up from $9.0 million in Q2 2024).
  • Capital Expenditures: $40.8 million (down 39% from Q2 2024).
• H1 2025 Financial Highlights (Six Months Ended June 30, 2025):
  • Revenue: $772.3 million (up 2% from H1 2024).
  • Adjusted EBITDA: $132.3 million (up 45% from H1 2024).
  • Net Income: $23.1 million ($0.27 per share diluted), up from $21.6 million ($0.25 per share diluted) in H1 2024.
• Segment Performance:
  • North America: Revenue decreased 22% in Q2 to $260.0 million due to lower activity, pricing, and fleet count (11 fleets vs. 13 in Q2 2024). Adjusted EBITDA fell to $31.9 million (12.3% margin) from $54.4 million (16.3% margin). The Company reduced its operating footprint to 10 fleets for Q3 2025.
  • Argentina: Revenue surged 54% in Q2 to $142.3 million, driven by the second unconventional fracturing fleet. Adjusted EBITDA jumped 231% to $48.6 million (34.1% margin). H1 Adjusted EBITDA reached $101.8 million (35.8% margin).
• Financing and Debt:
  • Amended revolving credit facility on June 27, 2025, to change Bank EBITDA definition (includes NA EBITDA plus repatriated Argentina cash flow) and reduced minimum net tangible assets in North America to $700.0 million.
  • Subsequent to quarter-end, amended and restated facility to include a $120.0 million Term Loan, expanding the lending syndicate to five Canadian financial institutions.
  • Term Loan terms: Available for single drawdown until Jan 15, 2026; repayable in quarterly principal payments starting Q3 after drawdown; interest rates 3.75%–4.25% above CORRA; 0.75% standby fee.
  • Maturity of facilities amended to the earlier of Jan 15, 2026 (two months prior to Second Lien Notes maturity) or July 1, 2028.
  • Long-term debt at period-end: $352.7 million; Net debt: $321.3 million.
• Operational Updates:
  • Completed Tier IV fleet modernization program in North America; now operating five Tier IV Dynamic Gas Blending (DGB) fleets.
  • Incurred $5.4 million in restructuring costs related to district and SG&A personnel in North America.
  • Repatriated approximately US$24.0 million from Argentina in July to reduce revolving credit facility draws.
  • 2025 Capital Budget: Approved at ~$135.0 million plus $30.0 million in delayed 2024 commitments. Expected total capex reduced to $145.0 million due to lower maintenance requirements.
  • Argentina 2025 capital program will add in-house wireline capabilities.

Notable Quotes

• Mike Olinek, CFO: “I am very pleased with the strong financial performance demonstrated by Calfrac’s teams in both North America and Argentina during the second quarter despite the current macroeconomic challenges affecting the global economy. The Company’s second unconventional fracturing fleet in Argentina continues to gain further traction and we are excited about our ability to capture future growth opportunities in that market.”
• Mike Olinek, CFO: “Calfrac has recently taken steps to reduce its operating footprint in North America to ten fleets as customer activity is expected to soften in the second half of the year, but I am confident that the demand for our next-generation Dynamic Gas Blending fleets will continue to remain strong. The completion of the Company’s North American fleet modernization program during the second quarter combined with normal seasonality is expected to result in robust cash flow throughout the remainder of the year which will be used to reduce long-term debt.”