Flotek Industries (NYSE:FTK) used its fourth-quarter earnings call to highlight what management described as continued progress in its shift toward a data-as-a-service business model, while also pointing to resilience in its chemistry business despite a weaker North American completions market. Executives said the company delivered its highest quarterly and annual revenue since 2017 in 2025 and posted its third consecutive year of “significant” gross profit and adjusted EBITDA improvement.
Management highlights: revenue growth and a changing profit mix
CEO Ryan Ezell said North American operators maintained a cautious posture that began in the second quarter, citing the return of OPEC+ spare capacity and global trade volatility. Even with that backdrop, Ezell said Flotek gained market share in both of its complementary segments and is laying the groundwork for a “data-driven growth trajectory” built on recurring revenue and proprietary technologies.
- Fourth-quarter and full-year 2025 represented the company’s highest quarterly and annual revenues since 2017, according to management.
- The data analytics segment posted its highest quarterly and annual revenue in company history.
- Gross profit increased 24% versus the fourth quarter of 2024 and 52% versus full-year 2024, the company said.
- Data analytics gross profit represented 48% of total company gross profit in Q4 2025, up from 8% in the year-ago quarter.
- Ezell said adjusted EBITDA grew more than 123% year-over-year and 2025 net income improved 191%.
- Flotek reported 0 lost time incidents in field operations, and Ezell said the prescriptive chemistry management and Raceland NTI team surpassed 10 years without a lost time incident.
Data analytics: PowerTech, digital valuation, and flare monitoring
Ezell described “remarkable progress” in the data analytics segment, saying service revenue increased 381% in Q4 2025 versus Q4 2024 and gross profit margin in the segment rose to 73% from 39% a year earlier. He attributed the growth to three upstream applications: power services (PowerTech), digital valuation, and flare monitoring, which he said are building recurring revenue backlog.
On PowerTech, Ezell said Flotek’s Varex Analyzer provides custody-transfer grade measurements, including BTU, methane number, and volume reporting for royalties, invoicing, and performance guarantees. He also said the company’s conditioning and distribution trailers remove liquids and contaminants to meet turbine or engine specifications. Ezell emphasized that the platform’s cloud portal enables live monitoring, alerts, and automated controls that can isolate off-spec hydrocarbon feeds and protect turbines or engines, and said measurement velocity allows direct communication to OEM engines for real-time performance adjustments.
Ezell also pointed to Flotek’s “35+ data analytics patents” as a differentiator across the natural gas value chain.
During the call, management discussed a March 3, 2026 announcement of what Ezell described as Flotek’s first contract in the utilities infrastructure sector. Under the contract, the company expects to support installation of up to 50 MW of power generation equipment for federal disaster recovery initiatives. Ezell said Flotek will supply and mobilize smart conditioning skids and advanced gas distribution equipment alongside natural gas-powered generator sets, and that the company had personnel on the ground evaluating site selection and working on design, demand, and deployment scheduling.
Flotek’s second application, digital valuation, centers on real-time monitoring of hydrocarbon quality and composition and “digital twinning” of custody transfer. Ezell highlighted an October 29, 2025 milestone: Flotek’s X-SPEC spectrometer became, in his words, the first optical instrument to meet GPA 2172 reproducibility and repeatability requirements for custody transfer. He said the technology is designed to improve volume and compositional accuracy versus traditional methods and that the company exited 2025 with more than $120,000 per month in recurring high-margin revenue following completion of an X-SPEC pilot in the third quarter. Ezell added that early 2026 included multiple opportunities that “could more than double” deployed active X-SPEC units.
For flare monitoring, Ezell said full-year flare monitoring revenue exceeded $2 million in 2025. He said Flotek is working with operators and flare technology developers as the regulatory landscape evolves, including EPA flare monitoring and methane emission standards, with a focus on compliance and operational efficiencies.
Overall, Ezell said upstream revenue increased from $2.1 million in 2024 to more than $21 million in 2025, while gross profit expanded from $1.2 million to $18.4 million over the same period.
Chemistry business: growth despite lower frac activity
Ezell said Flotek’s chemistry technology segment delivered a 25% year-over-year revenue increase in 2025 versus 2024 (excluding an OSP payment), despite a 24% decline in average North American frac count from 201 at year-end 2024 to 154 at year-end 2025, citing Primary Vision data. He said the company continues to monitor near-term commodity price volatility and expects “cautious optimism” in the back half of 2026 and beyond.
He also addressed supply chain considerations for international operations given conflicts in the Eastern Hemisphere, saying the company was monitoring risks closely. In response to a question about the Middle East, Ezell said operations in Saudi Arabia were “business as usual” at the time of the call, though he noted supply routes had become strained due to pressure around the Strait of Hormuz. He said Flotek was using alternative delivery pathways that could increase costs due to additional handling, but that the company aimed to maintain reliability for customers.
Financial details: ProFrac contribution, earnings, and 2026 PowerTech expectations
CFO Vaughn Clement said the fourth quarter capped an “exceptional year,” and noted that the quarter included the largest quarterly contribution from ProFrac in more than four years of the supply agreement. He also said it was the first quarter in which the data analytics segment surpassed $10 million in revenue.
Clement said total company revenue in the quarter rose 33% year-over-year, helped by a $22 million (about 80%) increase in related-party revenue. He attributed about $15 million of the increase to chemistry and $6.7 million to the PowerTech lease agreement. He added that external customer chemistry revenue fell 30% in the quarter due largely to slowing activity in November and December, though external chemistry revenue was still up 26% for the full year versus 2024.
PowerTech revenue totaled $15.8 million in 2025, and Clement said the acquired assets were a “clear catalyst” for margin and profitability expansion. He said that based on lease terms, PowerTech revenue in 2026 is expected to be north of $27 million, which he characterized as about a 70% increase from 2025.
Gross profit margin in the fourth quarter was 22.5%, and Clement said the quarter was impacted by product mix and an approximate $5 million sequential reduction tied to a shortfall penalty related to the strong ProFrac quarter. SG&A increased year-over-year, reflecting higher personnel costs (including stock compensation) and elevated professional fees tied in part to the company’s first-time integrated audit requirement. Still, Clement said G&A improved to 11% of revenue from 13% a year earlier.
Net income for the quarter was $3.0 million, or $0.08 per diluted share, compared with $4.4 million, or $0.14 per diluted share, in the prior-year quarter. Clement attributed the year-over-year decline in part to higher depreciation and interest expense related to the PowerTech acquisition and a higher effective tax rate driven by non-cash valuation allowance adjustments on deferred tax assets. He said the fourth-quarter effective tax rate was approximately 35%, versus 7% in the prior-year period, and that the company expects the effective tax rate to normalize closer to 21% going forward, with no expectation of paying cash taxes for the next few years aside from minor state income taxes.
Clement also noted that Flotek changed its adjusted EBITDA calculation at year-end 2025 to align with SEC guidance by no longer adding back non-cash amortization of contract assets. Using the revised calculation, he said adjusted EBITDA increased 40% versus the year-ago quarter and grew 123% for the full year. He added that under the prior methodology, fourth-quarter adjusted EBITDA would have been approximately $10.1 million.
On liquidity, Clement said Flotek ended 2025 with $5.7 million in cash and $3.3 million drawn on its ABL. He said total assets increased to just over $220 million at year-end, primarily due to release of the valuation allowance allowing deferred tax assets to be reflected on the balance sheet.
Outlook themes: fleet expansion, OEM projects, and higher CapEx
In Q&A, Ezell said PowerTech business development has progressed from measurement validation to control/integration and then to full distribution/conditioning. He said Flotek added seven new measurement customers with executed purchase orders and field trials, and that the company had about six ongoing field operations. He also said the company remained on track to double the size of its PowerTech fleet by year-end.
Regarding the utilities infrastructure contract, Ezell said he viewed the model as “100% repeatable,” and said the company is pursuing additional opportunities, including potential work linked to data centers and AI-related infrastructure. He said revenue from the new utilities contract would likely begin in the early-to-middle part of Q2 through initial mobilization and setup and would build through the year, adding that he expects the project could extend beyond an initial six-month term due to the time required for rebuilding efforts.
In discussing engine and turbine OEM integration, Ezell said Flotek is working with four OEMs at various stages, including an 18-month effort that has progressed into advanced field trials. He said the company’s measurement data can be fed to engines every five seconds to help optimize operating parameters and improve fuel efficiency, emissions, and maintenance outcomes, and suggested monetization could begin by mid-year or in the back half of the year.
On capital spending, Clement said 2026 is expected to be Flotek’s largest CapEx year in a long time. He estimated 2025 CapEx at around $2 million and projected 2026 CapEx of roughly $10 million to $15 million, with funding supported by the OSP and evaluation of equipment financing options. He said the net OSP at year-end was around $20 million after a $7 million offset tied to the PowerTech transaction.
Flotek also said it will participate in investor events, including the Roth Conference on March 23-24 and the Louisiana Energy Conference on May 26-28.
About Flotek Industries (NYSE:FTK)
Flotek Industries, Inc (NYSE: FTK) is a Houston-based oilfield services provider specializing in innovative chemical technologies for the upstream energy sector. The company develops, manufactures and markets specialty drilling fluids, completion fluids and production chemicals that enhance drilling efficiency, optimize well performance and mitigate operational risks. Flotek’s solutions are designed to improve drilling rates of penetration, reduce nonproductive time and address challenging downhole environments, including high-pressure/high-temperature wells and sour service conditions.
Flotek’s operations are organized into three core business segments: Drilling & Completion Fluids, Production Chemicals & Process Management, and Water Solutions.
