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DATE
Thursday, Nov. 5, 2026
CALL PARTICIPANTS
- Senior VP of Finance - Michael Messina
- Chief Executive Officer and Executive Chairman - Matt Wilks
- Chief Financial Officer - Austin Harbour
TAKEAWAYS
- Total Revenue -- $511 million, up from $498 million in the second quarter, driven by stronger contributions from Manufacturing and Flotek.
- Adjusted EBITDA -- $65 million, representing a 13% margin, compared to $69 million in the previous quarter due to softer results in Proppant Production.
- Net Loss -- $74 million, remaining consistent with the $75 million loss reported in the second quarter.
- Free Cash Flow -- $14 million, an improvement from negative $8 million in the second quarter, reflecting disciplined capital management.
- Stimulation Services Revenue -- $421 million, down from $430 million in the prior quarter, due to unanticipated calendar white space in Sept.
- Proppant Production Adjusted EBITDA -- $2.4 million, with margins declining to 2% from 5% in the second quarter due to highly competitive pricing in West Texas.
- Manufacturing Revenue -- $53 million, up from $48 million in the second quarter, benefiting from increased demand for power infrastructure packaging.
- Flotek Adjusted EBITDA -- $22 million, representing a 19% margin, compared to $19 million in the second quarter.
- Capital Expenditures Guidance -- $160 million to $180 million for the full year, updated from the previous range of $155 million to $185 million.
- Proppant Sales Volumes -- 2.5 million tons, with third-party sales increasing to 45% of total volumes from 31% in the second quarter.
- Total Principal Debt -- $1.05 billion, with only $113 million scheduled for maturity over the next 12 months.
- Liquidity -- $97 million at quarter end, including $79 million available under the company’s ABL credit facility.
- Pump Time Efficiency -- 550 to 600 hours per month, an increase from the 400 to 450 hour range reported in 2022.
- Pricing Recovery -- 50% to 60% improvement from cycle troughs, though leading-edge pricing remains below previous peak levels.
- Gas-Capable Fleets -- 80% of the active industry market, though 100% gas-drive engines represent only a single-digit percentage of total equipment.
- WTI Price Context -- $70 per barrel to $110 per barrel during and immediately following the quarter, supporting increased customer cash flows.
- ABL Borrowings -- $148 million at Sept. 30, a decrease from $162 million at the end of the second quarter.
- Affiliate Loan Exchange -- $60 million in principal was eliminated through the exchange of Flotek shares held by a subsidiary for term loans.
- Manufacturing Third-Party Sales -- 17% of segment revenues, remaining consistent with the second quarter.
- Stimulation Services Adjusted EBITDA -- $37 million, reflecting 9% margins as increased costs for materials and labor offset modest pricing gains.
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RISKS
- Wilks noted that "activity in pumping and proppant moving less in a straight line than we would have liked" created volatility during the quarter due to unanticipated calendar white space.
- Wilks warned that "labor is particularly tight, with data center and power generation build-outs creating meaningful competition for skilled technicians in our markets."
- Harbour stated that in the Proppant Production segment, "West Texas remained highly competitive on pricing, resulting in lower sales volumes and throughput."
SUMMARY
ProFrac Holding Corp. (NASDAQ:ACDC) reported sequential revenue growth to $511 million for the third quarter, supported by a $5 million increase in Manufacturing revenue and improved performance at Flotek. Management reported that while Sept. was impacted by calendar gaps and cost pressures in maintenance, activity levels recovered in Oct. and are expected to remain steady through the fourth quarter. The company executed several strategic balance sheet actions, including a $300 million asset-based revolving credit facility and an amendment to its Alpine term loan that extends its maturity to Feb. 2030. Leadership stated that the hydraulic fracturing market is tightening due to limited equipment availability and long lead times for engines and components, creating a favorable environment for pricing and multiyear contracting heading into 2027.
- Wilks stated that the industry is facing "the longest lead times we have ever experienced" for equipment, as manufacturing capacity shifts to meet power generation demand.
- Management confirmed that the company has achieved the targets set under its cost-reduction program initiated late last year, despite ongoing inflation in logistics and materials.
- The company expects all e-blender units to be delivered by year-end, with the majority operational before the close of 2026.
- Wilks noted that the "structural case we have been building around domestic energy security only looks stronger with time," citing sustained global supply disruptions.
- Management indicated that current industry demand for services in 2027 appears to exceed the deployable supply of equipment.
- The Alpine term loan amendment eliminates scheduled amortization payments through the first quarter of 2028 and allows the company to pay 60% of interest in kind for the next 12 months.
INDUSTRY GLOSSARY
- Adjusted EBITDA: A non-GAAP financial measure that excludes interest, taxes, depreciation, and other non-cash or non-recurring charges to assess operating performance.
- Proppant: Solid material, typically sand, used in hydraulic fracturing to keep oil and gas wells open.
- Simul-frac: A completion technique where two wells are stimulated simultaneously using a single set of fracturing equipment.
- E-blender: An electric-powered blending unit used to mix fracturing fluids and proppant, designed to reduce operating costs and emissions.
- WTI (West Texas Intermediate): A grade of crude oil used as a benchmark in oil pricing.
- ABL (Asset-Based Lending): A business loan secured by collateral, typically inventory or accounts receivable.
- White Space: Unscheduled time or gaps in a service provider's operational calendar.
- In-kind interest: Interest that is paid by adding to the principal balance of a loan rather than being paid in cash.
Full Conference Call Transcript
Operator: Greetings. Welcome to the ACDC Q3 2026 earnings call. At this time, all participants are in a listen-only mode. A question-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Michael Messina, Senior VP of Finance. Thank you, Michael. You may begin.
Michael Messina: Thank you, operator. Good morning, everyone. We appreciate you joining us for ProFrac Holding Corp.'s conference call and webcast to review our results for the third quarter ended September 30th, 2026. With me today are Matt Wilks, Chief Executive Officer and Executive Chairman, and Austin Harbour, Chief Financial Officer. Following my remarks, management will provide high-level commentary on the operational and financial highlights of the third quarter 2026 before opening up the call to your questions. A replay of today's call will be made available by webcast on the company's website at pfholdingscorp.com. More information on how to access the replay is included in the company's earnings release.
Please note that the information reported on this call speaks only as of today, November 5th, 2026. You are advised that any time-sensitive information may no longer be accurate as of the time of any replay listening or transcript reading. Also, comments on this call may contain forward-looking statements within the meaning of the United States federal securities laws, including management's expectations of future financial and business performance. These forward-looking statements reflect the current views of ProFrac's management and are not guarantees of future performance. Various risks, uncertainties, and contingencies could cause actual results, performance, or achievements to differ materially from those expressed in management's forward-looking statements.
The listener or reader is encouraged to read ProFrac's Form 10-K and other filings with the Securities and Exchange Commission, which can be found at sec.gov or on the company's investor relations website section under the SEC Filings tab, to better understand those risks, uncertainties, and contingencies. The comments today also include certain non-GAAP financial measures, as well as other adjusted figures to exclude the contribution of Flotek. Additional details and reconciliations to the most directly comparable consolidated and GAAP financial measures are included in the earnings press release, which can be found on the company's website. Now over to Mr. Matt Wilks, Chief Executive Officer and Executive Chairman of ProFrac.
Matt Wilks: Thank you, Michael, and hello, everyone. I will kick off with some remarks on our overall performance, the broader market environment, and progress on our strategic priorities. I will then hand it over to Austin, who will take you through the segment results in more detail. The market backdrop heading into 2027 remains one we are genuinely optimistic about. The structural case we have been building around domestic energy security only looks stronger with time. Further, our peer group has remained disciplined, with several dedicating their resources and attention to newer aspects of their business.
At the same time, the third quarter was more volatile than we anticipated, with activity in pumping and proppant moving less in a straight line than we would have liked. Starting with pumping, September brought more calendar white space than we anticipated entering the quarter, which weighed on our activity levels for the month. Part of that reflects more efficient completion designs, including the use of simul-frac completions across multiple wells. Simul-fracs can create more open calendar days between jobs, even as productivity improves. We are encouraged that activity improved in October, and we expect to see what we consider a normalized fleet count in the fourth quarter.
Our efficiencies, including hours pumped per day, have improved, even with some calendar white space due to customary year-end seasonality built into our fourth quarter plans. Due to market tightness, driven by limited equipment availability and minimal indications of budget exhaustion, we expect less seasonality next quarter than what we have historically experienced. I would note that we also saw some cost pressure earlier in Q3 on the maintenance side, which began to normalize as we exited Q3. Pricing remains one of the more important levers we have, and the environment for it continues to be favorable. Leading-edge pricing has been rising, but remains well below the highs we saw at the cycle's peak.
We are working to carry that through our contracts and RFP structures as deliberately as we can, and we are constructive on the impact we expect to see in 2027. In proppant, lower-than-anticipated throughput in sales, particularly in West Texas, weighed on the results. We are addressing that directly and are encouraged by the early improvement we are seeing. More broadly, we are taking a disciplined approach across our frac sand footprint. Specifically, we are focused on strategically increasing pricing and throughput.
As we have said before, the operating leverage in this business becomes increasingly evident as we drive higher utilization across our strongest operations, and we continue to believe proppant is capable of improved free cash flow as those efficiencies show up. Cash flows in the segment are also moving into a more sustainable position, supported by the term loan amendment that Austin will cover. Picking up on the broader market, as I mentioned in my opening remarks, WTI came into the quarter at around $70 per barrel and exited near $100, with plenty of movement in between rather than a steady climb. Since quarter end, prices have pushed even higher, touching $110. The underlying drivers have not changed.
Tensions in the Middle East have continued, with renewed attacks on shipping through the Strait of Hormuz in recent weeks and knock-on effects such as elevated tanker and insurance costs. The political outlook on both sides of the conflict makes near-term de-escalation far from certain. The bottom line is that we continue to see a sustained disruption to global supply capacity rather than a short-term shock, with recent market activity reinforcing that view. As we've said before, periods like this strengthen the case for reliable domestic production. For our business, that remains a meaningful advantage.
After several choppy years in our industry, some of our larger, more diversified peers have shifted capital and attention toward power generation and other opportunities where higher returns are expected. We think this is exactly why the pumping market is poised for a period of tightness. Fewer dollars chasing frac equipment, combined with the lead time required to stand up a fleet, makes it harder for opportunistic entrants to replicate the capacity additions that have put pressure on pricing in past cycles. At the same time, older equipment across the industry continues to retire, and much of it isn't being replaced.
The equipment that is being replaced is facing some of the longest lead times we have ever experienced, further tightening the market. To that end, higher commodity prices are supporting customer cash flow and their ability to keep programs moving through what's typically a seasonally lower period, and has accelerated RFP discussions for 2027 work. Our approach through that process remains constructive. Our preference is to capture value durably through contracts and RFPs rather than chase the spot market with additional equipment. That includes focusing on pass-throughs for inflation-sensitive items such as logistics, consumables, materials, and labor, so that we're not locked into a status quo margin over current costs.
We're also seeing operators begin to look at contracting new-build fleets, and that lead time I just mentioned is part of why those conversations involve meaningful upfront commitments. We're getting close to the point where pricing begins to support new-build economics, though to be clear, we think we have more room to go before we are squarely in that zone. Consistent with what we said last quarter, we will not build speculatively. We have an active dialogue with customers on new builds, and we've looked to contract on multi-year terms.
Our internal manufacturing capability gives us an advantage on timing, but customers are cognizant that they will need to act fast if they want to take an incremental fleet in the next calendar year. On the cost side, we've achieved the targets we set under our cost program introduced late last year, and we're proud of that progress. At the same time, inflation across logistics, consumables, materials, and labor remains a real challenge, and we expect that pressure to continue into the next year. Labor is particularly tight, with data center and power generation build-outs creating meaningful competition for skilled technicians in our markets.
We view these pressures as an ongoing cost of doing business, not something we can fully eliminate through efficiency gains. That makes passing through cost increases as they occur, rather than waiting for periodic resets, all the more important. As I mentioned previously, lead times are and will remain challenging. We're seeing longer lead times on new equipment broadly across our industry, particularly engines, as capacity has shifted to support power generation demand. This has affected the pace of our engine upgrade program somewhat, though it remains underway, as well as the development of our e-blender transition. Thankfully, our internal manufacturing capability continues to give us more control over timing.
Speaking of our manufacturing business, it is benefiting from the broader build-out of power infrastructure across the industry. We're seeing this translate into tangible demand, including power generation packaging work for other operators, expanding their own capabilities, and rebuild work for another industry participant. These relationships are deepening and creating a source of sustainable demand. It's a genuine strength for our business, and we're proud of the work our manufacturing team continues to deliver. On e-blenders, we expect all units to be delivered by year-end and most units to be working by year-end, with some deployments carrying into early 2027.
The efficiency benefits we outlined when we introduced this program, including lower blender CapEx and operating costs, continue to show up as more of these units come online. Through all of this, our vertically integrated model and asset management platform remain central to how we think about our competitive position, not just this quarter, but across the cycle. With that, over to Austin to walk through the financial impact of the quarter in more detail.
Austin Harbour: Thanks, Matt. In the third quarter, revenues were $511 million, up modestly from $498 million in the second quarter of 2026. We generated $65 million of adjusted EBITDA, with an adjusted EBITDA margin of 13%, compared to $69 million, or 14% of revenue, in Q2. The change is driven by softer results in Proppant Production and, to a lesser extent, in Stimulation Services, partially offset by a stronger contribution from Flotek. Free cash flow was +$14 million in the third quarter, an improvement from -$8 million in Q2. Turning to our segments. Stimulation Services revenues were $421 million in the third quarter versus $430 million in the second quarter of 2026.
Adjusted EBITDA in Q3 was $37 million versus $39 million in Q2. Margins of 9% were comparable to Q2. Results reflected the September white space Matt described. While our fleet count for the quarter overall remained broadly consistent with Q2, pump hours per fleet softened in September after running near some of our best levels of the year earlier in the quarter. Lower cost absorption due to a less efficient calendar, coupled with increased costs on materials and certain operating expenses, offset price increases realized in the quarter. Looking ahead, utilization improved in October, and we expect the calendar to remain relatively strong in the fourth quarter with customary year-end seasonality.
Pricing, meanwhile, contributed modestly to the quarter, though the benefit from this year's increases is still working its way through on a staggered basis as individual contracts reset. We expect that contribution to build through the fourth quarter, and pricing remains a key driver behind the sequential improvement we're expecting as we go into 2027. On the cost side, we saw elevated materials, maintenance, and labor costs, and are closely monitoring labor logistics and equipment as we move forward. Q3 Proppant Production generated $101 million of revenue versus $121 million in the second quarter of 2026. Approximately 45% of volumes were sold to third-party customers during the third quarter versus 31% in Q2.
Adjusted EBITDA for the Proppant Production segment was $2.4 million for the third quarter compared to Q2's $6 million. On a margin basis, EBITDA margins were 2.4% in the third quarter versus 5.2% in the second quarter. Total volumes were approximately 2.5 million tons. West Texas remained highly competitive on pricing, resulting in lower sales volumes and throughput. Lower operating leverage and increased costs negatively impacted margins in the quarter. Our manufacturing segment generated third-quarter revenues of $53 million, up from $48 million in the second quarter. Approximately 17% of segment revenues were generated from third-party sales, consistent with the second quarter. Adjusted EBITDA for the manufacturing segment was $6 million and roughly in line with Q2's results.
The segment is benefiting from the power-related activity Matt described, and we're pleased with the trajectory there. Flotek generated third-quarter revenues of $117 million, up from the $102 million reported in Q2. Approximately 49% of segment revenues were generated from third-party sales, compared to approximately 42% in Q2. Adjusted EBITDA for Flotek was $22 million, or 19% of revenue, up from $19 million in the second quarter. Third-quarter selling, general, and administrative expenses were $45 million compared to $44 million in Q2. Cash capital expenditures of approximately $40 million in the third quarter were up from $32 million in the second quarter of 2026.
In Q4, maintenance capital could decrease slightly while growth capital moves higher, driven largely by the e-blender and engine upgrades we discussed earlier in the year. With three-quarters of spending now behind us in 2026, we are tightening our full-year capital expenditure guidance to a range of $160 million-$180 million, including Flotek, versus our prior range of $155 million-$185 million. Excluding Flotek, we expect CapEx to be in the range of $145 million-$165 million for the year. Turning to the balance sheet. Total cash and cash equivalents as of September 30th, 2026, were approximately $44 million, including approximately $25 million attributable to Flotek. Total liquidity at quarter end was approximately $97 million, including $79 million available under the ABL.
Borrowings under the ABL credit facility ended the quarter at $148 million, a decrease from $162 million at second quarter end. On the balance sheet, we have continued to take a disciplined and proactive approach to managing our liquidity and debt maturities. As we discussed in August, early in Q3, we closed a new $300 million asset-based revolving credit facility with Eclipse Business Capital, increasing our commitments, improving advance rates, and extending the maturity profile of our revolving facility. In September, we amended our Alpine term loan agreement, extending the maturity to February 2030 and eliminating scheduled amortization payments through the first quarter of 2028. Scheduled payments then resume at $10 million per quarter.
The amendment also allows us, at our election, to pay approximately 60% of interest expense in kind at current rates for the next 12 months, adding that amount to principal while requiring quarterly payments of excess free cash flow. In connection with that transaction, $60 million of term loans held by affiliated lenders was repaid and canceled in exchange for Flotek shares held by a company subsidiary, eliminating $60 million of principal balance on the term loan. Taken together, these actions extend our debt maturity profile, reduce near-term scheduled principal and cash interest payments, and provide additional financial flexibility. At quarter end, we had approximately $1.05 billion of principal debt outstanding.
Of this amount, only $113 million comes due over the next 12 months, with the majority of our maturities remaining concentrated in 2029 and beyond. With that, I will now turn the call back over to Matt for closing remarks.
Matt Wilks: Thanks, Austin. Before we open the call for questions, let me close with a few key takeaways. We experienced some volatility in the third quarter despite an improving market backdrop, but are encouraged by the trends we've seen so far in Q4. The actions we took on the balance sheet this quarter, from the Eclipse facility to the Flotek term loan and the Alpine term loan amendment, and the $60 million affiliate loan exchange, extend our maturity profile and give us added flexibility. We continue to invest in what differentiates us, including our manufacturing business and our equipment. Our vertically integrated model remains central to our competitive position, not just this quarter, but across the cycle.
Looking ahead, our focus remains on execution, advancing our upgrade program, strengthening our financial position, and positioning ProFrac to capture the opportunity as the market tightens. We remain genuinely excited about the setup heading into 2027, with what we see as a tight market and a disciplined peer group set against a structural case for domestic energy security that continues to strengthen. With that, I will now turn the call over to the operator for Q&A.
Operator: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from John Daniel with Daniel Energy. Please proceed with your question.
John Daniel: Hey, guys. Good morning. Matt, just want to focus on next year, if you will, in terms of the tight market. At this point, do you prefer to reactivate fleets, or would you rather sort of play the price game? How are you Just the price versus volume, if you could tell us what you're thinking for next year.
Matt Wilks: It's pretty tight. I think attrition across the industry pretty aggressive, and there's just no equipment left in the market.
John Daniel: Right.
Matt Wilks: There's a high preference for fuel-efficient fleets. Everything that's working, that's available, is working. We're in a really good spot. We've been able to push pricing, continue to push pricing, and at this point, if there's customers that are willing to sign long-term agreements, then we can look at activating fleets and building gas fleets. With that being said, we're keeping status quo. There are situations where we may see Simul-Frac fleets split into zippers. From that standpoint, you might see a fleet count increase perhaps, but there's not expected to be additions of additional equipment without replacement pricing or new build pricing.
John Daniel: Okay. A follow-on, Matt, is a lot of the land drillers the last week or so talked about more inquiries from public operators for incremental rigs next year. I am curious, are you getting calls from existing public operators looking for incremental fleets for next year?
Matt Wilks: Without a doubt.
John Daniel: Okay.
Matt Wilks: It is not just spot work, it is dedicated work as well. There is just not enough horsepower to go around, so it is creating a great environment for the service side. We are already seeing it in Q4. I am pretty confident that 2027 will see positive net income, and we are seeing signs of it in Q4 already.
John Daniel: Okay. That is all I got. Thanks for including me.
Matt Wilks: Definitely. Thank you.
Operator: Once again, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Saurabh Pant with Bank of America. Please proceed with your question.
Saurabh Pant: Thank you. Good morning, Matt and Austin.
Matt Wilks: Morning.
Austin Harbour: Morning.
Saurabh Pant: Matt, I was intrigued by your comments on pricing not getting squarely there, but kind of getting there a little closer to new build economics, which is very interesting. Maybe, Matt, if you do not mind, just give us a little context on how much pricing came down from the peak of, call it, early 2023 to the trough. How much have we recovered? And then what kind of returns would you be looking at if you were to pull the trigger on a new build fleet? I am guessing it is on the gas side of things, right? There is a lot of demand on that. But maybe walk us through that dynamic a little bit.
Matt Wilks: Yeah. So from a per-hour rate standpoint, from prior peak to the trough was about a 50% reduction in hourly rates to the customer. You have got to put it in context. In 2022, the average pump time per fleet was running in the low to mid-400 hours per month. Now you are seeing everything in the 550 to 600 range from a pump time standpoint. So the dollar per hour and the costs and the revenue are not the same. It has accelerated the wear and tear on your equipment.
So, even though it has diluted a lot of your costs, a lot of your costs to run the fleet, what it has done is it has shortened the life of the equipment as well. So we cannot forget about that piece. We have got to make sure that is recovered as well. But as far as from the trough to where we are now, it has bounced back from the trough probably about 50% to 60% from there. There is still room to go to reach prior peaks. From a timing standpoint, I do not know if it gets back to the peak or what timeframe it would.
But what I can say is the prior peak had spare capacity on the market. What we see going forward is there is no spare capacity. There are long lead times on equipment. In 2022, you could rebuild engines that were on the sidelines. You could rebuild transmissions, rebuild power ends. A lot of that is not available, and just the options available to you are pretty limited going forward. So you have got to work with what you have got. I think that we will continue to see, even if fleet count stayed where it is at now, it would continue to tighten because of the limited availability in the supply chain.
So, we are very encouraged by what this means for the path forward. It also creates a scenario where if you do have spare pumps, you are more likely to reserve those for redundancy on your existing customer relationships rather than trying to deploy another fleet. Just because you have got to take care of the customers you have got.
So trying to add a fleet and stress and get spread too thin, just because you can and you have a few extra pumps, you would rather make sure that you have got the depth in your replacement cycle with your maintenance teams to make sure that if you have got an engine issue and have to replace an engine, you may not have that engine. Transmissions, power ends. It is a really, really tight market on the component side. So when you look at building in the redundancy for your business, your likelihood of adding a fleet is not as appealing as keeping the redundancy that you need to keep your footprint that you already have.
This is a different kind of tightness than what we have seen in prior cycles.
Saurabh Pant: Right. Okay, Matt, I got it. That makes sense. That makes sense. My next one is just to understand a little bit on the whole fuel cost arbitrage, because if you do the math at current diesel price, I think a 100% gas fleet maybe saves like $50 million, maybe even more, versus a 100% diesel fleet. That's massive fuel cost arbitrage, right? From a pressure pumper standpoint, from your standpoint, how do you capture that? Does it work indirectly through supply-demand? Is there a direct way to recover some of that through some kind of a bonus model tied to how much diesel you can displace? How does that flow through?
If you don't mind hazarding a guess, how much of the active fleet out there industry-wide do you think is still 100% diesel?
Matt Wilks: The majority, I'd say about 80% of the fleets in the market right now have gas capabilities.
Saurabh Pant: Okay
Matt Wilks: Probably a small single-digit percentage of the overall fleet is all gas for direct drive gas engines. Of course, there's electric fleets, gas fleets, dual fuel. The majority of the industry is dual fuel. Depending on what your substitution rate and whether you get paid for that or not, sometimes operators will just pay you for the horsepower. You get a material premium for that requirement for substitution and penalties if you don't hit that. If it's not fully absorbed in the cost of the horsepower, the alternative to that is that you charge for substitution for DGE so that your incentives are aligned and you get a base horsepower rate plus a dual fuel surcharge.
It changes from customer to customer, but in any event, the substitution is paid for. It's just whether it's built in from day one and the full horsepower rate with a minimum threshold or paid for improved substitution. One of the things we look at is benchmarking against what a diesel fleet would cost, including the diesel, to establish what a fair rate is for a fuel-efficient fleet. How much is the diesel worth that we're saving? That's the value proposition. We'd like to get 100% of it, but these are partnerships. Love our customers, and there's not too many ways for anybody in the industry to really get a good fuel hedge.
You can hedge diesel, but then you got to figure out, well, how efficient is my fleet going to be, and how much diesel am I going to consume? You are always going to be exposed even if you do hedge it, and who wants to hedge it at five or six bucks? I don't think it's lost on us or our peers exactly what these fleets are worth, and it's just coming to a fair agreement with your customer that recognizes the overall fuel savings.
Saurabh Pant: Right. No, that makes sense. That's helpful, color Matt. Thank you. I'll turn it back.
Matt Wilks: Thank you.
Operator: We have reached the end of the question and answer session. I would like to turn the floor back over to Matthew D. Wilks for closing comments.
Matt Wilks: We appreciate everybody for joining our call. Very excited about the outlook. We're seeing everything materialize very quickly right now, and I cannot wait to get on our next call and tell you exactly why we're excited. Thank you.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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