Flotek Reports 95% Gross Profit Growth in Third Quarter

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

% Change

2025

2024

% Change

Total Revenues

$      56,031

$      49,742

13 %

$    169,743

$    136,267

25 %

Gross Profit

$      17,783

$         9,119

95 %

$      44,639

$      27,108

65 %

Net Income

$      20,355

$         2,532

704 %

$      27,503

$         6,068

353 %

Diluted Income Per Share

$           0.53

$           0.08

563 %

$           0.78

$           0.20

290 %

Adjusted EBITDA ⁽¹⁾

$      11,721

$         4,840

142 %

$      28,953

$      13,303

118 %

Previous Guidance

Revised Guidance

Total Revenues

$200-$220

$220-$225

Adjusted EBITDA ⁽²⁾

$34-$39

$35-$40

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

% Change

2025

2024

% Change

Chemistry Technologies:

External Revenues

$             20,221

$             14,097

43 %

$ 64,773

$      42,143

54 %

Related Party Revenues

26,956

32,977

(18) %

87,562

87,732

— %

Total

$             47,177

$             47,074

— %

$  152,335

$    129,875

17 %

Data Analytics:

Product Revenues

$               1,694

$               1,681

1 %

$    5,176

$         3,920

32 %

Service Revenues ⁽³⁾

7,160

987

625 %

12,232

2,472

395 %

Total

$               8,854

$               2,668

232 %

$ 17,408

$         6,392

172 %

(1)

Represents a non-GAAP measure, see the "Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings" table in this release for more information about this measure, including reconciliations to the most comparable GAAP measures.

(2)

A non-GAAP financial measure. See the "Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings" table  in this release for more information about this measure. We are unable to reconcile this forward-looking non-GAAP financial measure to the most directly comparable GAAP financial measure without unreasonable efforts, as we are unable to predict with a reasonable degree of certainty the impact of certain items that would be expected to impact the GAAP financial measure, including, among other items, certain stock-based compensation costs, interest costs related to fluctuations in borrowings outstanding under the Company's asset based loan and the impact of the revaluation of certain liabilities, which is based upon our future stock price. These items do not impact the non-GAAP financial measure.

(3)

Service revenues during the three- and nine-month 2025 periods include $6.1 million and $9.3 million respectively, related to PWRtek rental revenues.

(4)

Comparison according to Primary Vision Active U.S. Fracturing Operation Fleet Counts on 9/26/2025 of 179 compared to 9/28/2024 of 238

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

September 30, 2025

December 31, 2024

ASSETS

Current assets:

Cash and cash equivalents

$                          4,603

$                          4,404

Restricted cash

103

102

Accounts receivable, net of allowance for credit losses of $716 and $447 at

September 30, 2025 and December 31, 2024, respectively

26,767

17,386

Accounts receivable, related party, net of allowance for credit losses of $0 at

each of September 30, 2025 and December 31, 2024, respectively

44,831

52,370

Inventories, net

13,232

13,303

Other current assets

2,305

2,952

Current contract asset

8,179

5,939

Total current assets

100,020

96,456

Long-term contract asset

56,655

63,105

Property and equipment, net

20,822

6,178

Right-of-use assets

3,266

3,326

Deferred tax assets, net

30,351

51

Other long-term assets

1,573

1,680

TOTAL ASSETS

$                      212,687

$                      170,796

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                        35,073

$                        38,073

Accrued liabilities

4,925

5,912

Accrued liabilities, related party

7,248

—

Income taxes payable

197

48

Interest payable, related party

1,008

—

Current portion of operating lease liabilities

1,216

1,486

Current portion of finance lease liabilities

149

—

Asset-based loan

6,662

4,789

Current portion of long-term debt

—

60

Total current liabilities

56,478

50,368

Deferred revenue, long-term

—

14

Note payable - related party

39,560

—

Long-term operating lease liabilities

5,887

6,514

Long-term finance lease liabilities

264

—

TOTAL LIABILITIES

102,189

56,896

Commitments and contingencies

Stockholders' equity:

Preferred stock, $0.0001 par value, 100,000 shares authorized; no shares

      issued and outstanding

—

—

Common stock, $0.0001 par value, 240,000,000 shares authorized;

31,102,241 shares issued and 29,989,657 shares outstanding at September

30, 2025; 30,938,073 shares issued and 29,826,508 shares outstanding at

December 31, 2024

3

3

Additional paid-in capital

433,939

464,620

Accumulated other comprehensive income

109

251

Accumulated deficit

(288,805)

(316,308)

Treasury stock, at cost; 1,112,584 and 1,111,565 shares at September 30,

2025 and December 31, 2024, respectively

(34,748)

(34,666)

Total stockholders' equity

110,498

113,900

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$                      212,687

$                      170,796

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Revenue:

Revenue from external customers

$    22,941

$    16,565

$    72,546

$    47,935

Revenue from related party

33,090

33,177

97,197

88,332

Total revenues

56,031

49,742

169,743

136,267

Cost of goods sold

38,248

40,623

125,104

109,159

Gross profit

17,783

9,119

44,639

27,108

Operating costs and expenses:

Selling, general, and administrative

7,384

5,714

20,462

18,079

Asset acquisition expenses

167

—

4,362

—

Depreciation

581

220

1,207

662

Research and development

549

462

1,359

1,349

Gain on sale of property and equipment

—

—

(7)

(34)

Total operating costs and expenses

8,681

6,396

27,383

20,056

Income from operations

9,102

2,723

17,256

7,052

Other income (expense):

Interest expense

(1,351)

(256)

(2,563)

(842)

Other income (expense), net

(8)

102

279

151

Total other expense

(1,359)

(154)

(2,284)

(691)

Income before income taxes

7,743

2,569

14,972

6,361

Income tax benefit (expense)

12,612

(37)

12,531

(293)

Net income

$    20,355

$       2,532

$    27,503

$       6,068

Income per common share:

Basic

$         0.57

$         0.09

$         0.83

$         0.21

Diluted

$         0.53

$         0.08

$         0.78

$         0.20

Weighted average common shares:

Weighted average common shares used in

 computing basic income per common share

35,868

29,613

33,189

29,498

Weighted average common shares used in

 computing diluted income per common share

38,137

30,897

35,420

30,655

FLOTEK INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended September 30,

2025

2024

Cash flows from operating activities:

Net income

$               27,503

$                 6,068

Adjustments to reconcile net income to net cash provided by operating activities:

Change in fair value of contingent consideration

(127)

(46)

Amortization of contract assets

4,210

4,341

Depreciation

1,207

662

Amortization of deferred financing costs

252

243

Provision for credit losses, net of recoveries

555

121

Provision for excess and obsolete inventory

307

626

Gain on sale of property and equipment

(7)

(34)

Non-cash lease expense

840

1,661

Stock compensation expense

1,706

915

Deferred income tax (benefit) expense

(12,773)

233

Changes in current assets and liabilities:

Accounts receivable

(9,936)

1,346

Accounts receivable, related party

(10,013)

(12,495)

Inventories

462

(532)

Income tax receivable

(32)

—

Other assets

724

849

Accounts payable

(3,000)

5,690

Accrued liabilities

(874)

(1,730)

Operating lease liabilities

(1,204)

(2,002)

Income taxes payable

149

9

Interest payable, related party

1,008

—

Net cash provided by operating activities

957

5,925

Cash flows from investing activities:

Capital expenditures

(1,697)

(491)

Proceeds from sale of assets

7

34

Net cash used in investing activities

(1,690)

(457)

Cash flows from financing activities:

Payments on long term debt

(60)

(135)

Proceeds from asset-based loan

147,000

122,600

Payments on asset-based loan

(145,127)

(128,666)

Payment of asset-based loan origination costs

(150)

(164)

Payment of note payable issuance costs

(480)

—

Payment of issuance costs of stock warrants

(653)

—

Payments to tax authorities for shares withheld from employees

(82)

(30)

Proceeds from issuance of stock under Employee Stock Purchase Plan

113

88

Proceeds from issuance of stock from stock option exercises

574

—

Payments for finance leases

(60)

(22)

Net cash provided by (used in) financing activities

1,075

(6,329)

Effect of changes in exchange rates on cash and cash equivalents

(142)

6

Net change in cash and cash equivalents and restricted cash

200

(855)

Cash and cash equivalents at the beginning of period

4,404

5,851

Restricted cash at the beginning of period

102

102

Cash and cash equivalents and restricted cash at beginning of period

4,506

5,953

Cash and cash equivalents at end of period

4,603

4,997

Restricted cash at the end of period

103

101

Cash and cash equivalents and restricted cash at end of period

$                 4,706

$                 5,098

FLOTEK INDUSTRIES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ITEMS AND NON-CASH ITEMS IMPACTING EARNINGS

(in thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Twelve

Months Ended

December 31,

2025

2024

2025

2024

2024

Net income

$        20,355

$          2,532

$    27,503

$      6,068

$             10,498

Interest expense

1,351

256

2,563

842

1,095

Income tax (benefit) expense

(12,612)

37

(12,531)

293

649

Depreciation and amortization

581

220

1,207

662

891

EBITDA (Non-GAAP) ⁽¹⁾

$          9,675

$          3,045

$    18,742

$      7,865

$             13,133

Stock compensation expense

569

272

1,706

915

1,366

Severance and retirement

16

—

67

32

39

Contingent liability revaluation

—

(19)

(127)

(46)

71

Gain on disposal of asset

—

—

(7)

(34)

(124)

Amortization of contract asset ⁽²⁾

1,294

1,592

4,210

4,341

5,612

Non-Recurring professional fees ⁽³⁾

167

(50)

4,362

230

230

Adjusted EBITDA (Non-GAAP) ⁽¹⁾

$        11,721

$          4,840

$    28,953

$    13,303

$             20,327

(1)

Management believes that EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024, and for the twelve months ended December 31, 2024 are useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods.  Management views the adjustments made to net income for certain non-cash or non-recurring items noted above to be outside of the Company's normal operating results.  Management analyzes operating results without the impact of the above items as an indicator of performance, to identify underlying trends in the business and cash flow from continuing operations, and to establish financial, compensation and operational objectives. In addition, the Company believes that Adjusted EBITDA provides investors, creditors and analysts with a clearer view of the Company's leverage profile and debt service capacity, enhancing comparability and augmenting the ability of investors, creditors and analysts to make investment decisions based upon liquidity.

(2)

The Company's contract assets arose from fixed, non-refundable consideration in the form of convertible notes issued by the Company to ProFrac in connection with the entry into the ProFrac Agreement and are amortized as a reduction of revenue over the contract term. While the GAAP presentation reduces revenue, these amounts economically represent the cost of acquiring the ProFrac Agreement, similar to commissions, marketing spend or other customer acquisition expenses. Accordingly, the Company's management treats the amortization of contract assets similar to a non-cash expense added-back to arrive at Adjusted EBITDA to more accurately reflect the recurring cash impact of the transaction and to maintain comparability with the treatment of other amortization costs and comparability of the Company's results with competitors that may not report amortization of contract assets. The Company believes that it is important for investors to understand that under GAAP, the amortization of contract assets is not an expense and instead reduces revenue.

(3)

Includes $0.2 million and $4.4 million of expenses related to Asset Acquisition for the three and nine months ended September 30, 2025, respectively.