Skip to content
    LBRT
    Earnings call· Jun 2026(Q2 FY26)

    Liberty Energy Inc. LBRT

    Jul 23, 2026 Source

    Executive summary

    Liberty Energy Q2 FY26 — Strategic Power Expansion and Operational Excellence

    Liberty Energy reported strong Q2 FY26 results, driven by operational execution in its completions business and strategic advancements in the power generation sector. The company is aggressively expanding its digital infrastructure and power solutions through key partnerships and significant capital commitments, aiming to capitalize on the growing demand from hyperscalers and AI. While navigating commodity price volatility and increased net debt, Liberty remains focused on disciplined capital allocation and long-term value creation.

    Highlights

    5

    • Delivered revenue of $1.2 billion, a 16% sequential increase.

    • Achieved adjusted EBITDA of $151 million.

    • Secured 3 gigawatts of power generation capacity through 2029.

    • Commenced commercial operations of the Slurry last-mile sand system, eliminating approximately 30,000 truck trips over 7 months at one deployment.

    • Announced strategic JV with PowerBridge for a planned 2-gigawatt campus and an alliance with SLB for modular infrastructure solutions.

    Concerns

    5

    • Net debt increased by $157 million from the prior quarter to $736 million.

    • General and administrative expenses increased by $7 million (excluding stock-based compensation) due to higher variable compensation and IT costs.

    • Frac market sand and chemical margins are not recovering meaningfully despite higher volumes.

    • Commodity price volatility and geopolitical uncertainty continue to temper customer activity levels and pricing discussions.

    • Early-year deposits for power generation equipment are higher than initially modeled due to inflation and strong supplier position.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year 2026 Capital Expenditures
    $1.5 billion
    high materiality
    High
    PowerBridge Alpha Digital Campus First Power
    Q4 2027
    medium materiality
    High
    PowerBridge Alpha Digital Campus Development Completion
    H1 2028
    medium materiality
    High
    Power Generation Business Income Statement Impact
    Meaningful impact from 2028 proper
    high materiality
    Medium
    Tax Expense Rate
    Approximately 25% of pretax income
    low materiality
    High
    Cash Taxes
    Not material
    low materiality
    High
    Power Generation Capacity Secured
    3 gigawatts
    high materiality
    High
    DigiPrime build-out
    Almost certainly expect to build some
    medium materiality
    Medium

    Operational metrics

    28
    Revenue
    $1.2 billion16% sequential increase
    Q2 FY26

    Reflected record utilization, modest pricing uplift, and higher product sales.

    Adjusted EBITDA
    $151 million
    Q2 FY26

    Leveraging strategic investments and AI-driven technology advancements.

    Net Income
    $43 millioncompared to $23 million in the prior quarter
    Q2 FY26

    Reported GAAP net income.

    Adjusted Net Income
    $14 millioncompared to $10 million in the prior quarter
    Q2 FY26

    Excludes specific items for adjusted measure.

    Diluted Net Income per Share
    $0.26compared to $0.14 in the prior quarter
    Q2 FY26

    Reported GAAP diluted net income per share.

    Adjusted Net Income per Diluted Share
    $0.09compared to $0.06 in the prior quarter
    Q2 FY26

    Adjusted measure per diluted share.

    General and Administrative Expenses
    $67 millioncompared to $60 million in the prior quarter
    Q2 FY26

    Excluding stock-based compensation, G&A increased $7 million primarily due to higher variable compensation and IT-related costs.

    Other Income Items
    $40 million
    Q2 FY26

    Unrealized gains primarily reflected appreciation of investment in Servo following its IPO.

    Tax Expense
    $9 million
    Q2 FY26

    Q2 tax expense.

    Cash Balance
    $559 million
    End of Q2 FY26

    Cash and equivalents at quarter end.

    Net Debt
    $736 millionincreased by $157 million from the prior quarter
    End of Q2 FY26

    Net debt position at quarter end.

    Total Liquidity
    approximately $1 billion
    End of Q2 FY26

    Includes availability under the credit facility.

    Net Capital Expenditures and Long-Term Deposits
    $221 million
    Q2 FY26

    Includes investments in power generation fleets, capitalized maintenance, and other projects.

    Proceeds from Asset Sales
    approximately $2 million
    Q2 FY26

    Proceeds from asset sales in the quarter.

    Pump Hours
    Record
    Q2 FY26

    Achieved record operational performance.

    Horsepower Hours
    Record
    Q2 FY26

    Achieved record operational performance.

    Proppant Pumps
    Record
    Q2 FY26

    Achieved record operational performance.

    Slurry Pipe Length
    Nearly 8 miles
    Current

    Replaces truckloads of sand.

    Truckloads Replaced by Slurry
    Up to 200 per day
    Daily

    Replaced by Slurry pipe.

    Sand Transported by Slurry
    Approximately 1.5 billion pounds
    7-month period

    Expected volume transported by Slurry system.

    Truck Trips Eliminated by Slurry
    Nearly 30,000
    7-month period

    Eliminated by Slurry system.

    Power Generation Investment Payback
    5- to 6-year
    Long-term

    Target return profile for invested capital in power generation.

    Power Generation Investment Return
    17% to 18%
    Long-term

    Target return profile for invested capital in power generation.

    Frac Market Utilization
    Very strong
    Q3 FY26

    Very modest white space in the calendar.

    Frac Market Pricing
    Positive traction
    Q3 FY26

    Expected to continue through Q3 and potentially Q4, tempered by macro uncertainty.

    Sand Prices
    Not recovering meaningfully
    Current

    Still challenged, impacting margins despite higher volumes.

    Simul-frac Activity
    A lot more
    This year

    Leading to moving a lot more product in a 24-hour window.

    Record Sand Pumping
    24-hour recordagain
    Past quarter

    Achieved with a customer.

    Industry KPIs

    2
    MetricValueDetails
    FCF CAPEX leverage$1.5 billionUSD
    Data center new energy revenue capacity2 gigawatt planned; 300 megawatts initial phaseGW; MW

    Deals & partnerships

    4
    PowerBridgeJV for powered campus development platform

    Combines PowerBridge's campus development platform with Liberty's integrated power generation and energy management expertise. Focused on PowerBridge's Alpha Digital campus, a planned 2-gigawatt powered campus in West Texas. Initial phase includes 300 MW generation capacity, first power anticipated Q4 2027, development through H1 2028.

    SLBStrategic alliance for scalable power and electrical infrastructure solutions

    Brings together Liberty's integrated power solutions with SLB's modular infrastructure capabilities and global market presence. Aims to address the need for scalable power and electrical infrastructure solutions for data centers with a unified customer interface. Collaboration on future technology initiatives including hybrid power systems, digital energy management, advanced power architectures, and waste heat recovery.

    Bergen Engines, Wärtsilä and other global suppliersAgreements to purchase power generation equipment

    Secured multiple agreements to purchase power generation equipment. Technology architecture and proprietary control systems are designed to integrate multiple leading manufacturers for optimization of the generation stack.

    ERCOTFormation of Liberty Wholesale Commodities (LWC) for direct participation in ERCOT power markets

    Extends Liberty's CORIS offering by combining on-site generation, retail electricity supply, and market optimization within a single integrated solution. Dynamically optimizes between grid power and on-site generation to improve project economics and support load balancing. Also integrates with PJM market participation for large load customers.

    Capital programs

    1
    Power Generation Build-outunderway$5 billion to $6 billion
    Period spend: $1.5 billion
    Spent to date: Approximately 1/4 of total
    Funding: Project financing (nonrecourse to corporate balance sheet, cash recycled)

    Benefit: 3 gigawatts

    The $1.5 billion for FY26 is primarily for increased deposit payments to secure long lead time power generation. Total amount includes inflation through 2029 deliveries. Early-year deposits are higher than initially modeled.

    Risks & headwinds

    5
    Geopolitical uncertainty and energy supply disruptionOngoing

    Oil prices to levels not seen since 2022 before moderating; 1 billion-plus barrels of oil taken out of the market.

    Mitigation: Reinforced strategic importance of North American oil and natural gas resources; increased international demand for U.S. petroleum products and LNG; planned storage expansions globally.

    Commodity price volatility and macroeconomic uncertaintyQ2 FY26 and ongoing

    WTI came all the way back down to under $70 post-MOU.

    Mitigation: Producers remain cautious toward increasing activity levels; Liberty is working closely with customers on pricing discussions.

    Challenged frac market margins for sand and chemicalsOngoing

    Sand prices are not recovering meaningfully.

    Mitigation: None explicitly stated, but company is doing more simul-frac and moving record volumes of product.

    Complexity and uncertainty in grid interconnection for power projectsOngoing

    Rapidly changing rules and clarifications around different areas of the grid (PJM, ERCOT), batch zero process.

    Mitigation: Starting power generation behind the meter; working collaboratively with data center builders and communities; projects in batch 0 areas for grid interconnection.

    Inflationary costs and higher early-year deposits for power generation equipmentOngoing through 2029

    Early-year deposits were a little bit higher than initially thought; baked in inflation through 2029 deliveries.

    Mitigation: Able to raise prices commensurately to maintain target unlevered returns of 17-18%.

    What to watch in Q3 FY26

    5

    PowerBridge JV Finalization & Leases

    Near term
    CurrentDiscussions with clients underway, JV finalization in near term, no leases booked yet.
    TargetJV finalized, customer leases signed for Alpha Digital campus.

    Why it matters

    Signals concrete progress on a major strategic power initiative and future revenue streams.

    Yes. So discussions with clients are underway, as we've said in the release. The JV finalization will happen over the next little while, the near term as we walk through that. And we will announce customer leases when they're signed.

    Q&A highlights

    10

    How is the commercial pipeline evolving for power generation, especially with increasing scale and complexity, and how is Liberty positioned for these market dynamics?

    The commercial pipeline is evolving towards fewer, larger gigawatt-plus scale opportunities, often with multiple phases. Liberty is well-positioned due to its ability to offer integrated solutions, and the company's confidence is reflected in continued generation capacity additions. The market is seeing increased complexity around grid integration and community engagement.

    “We're seeing more and more campuses that are at that gigawatt-plus scale and ultimate build-out, that are going to have a number of phases involved in them where they started maybe a few hundred megawatts and grow to several gigawatts in scale over a period of time.”

    asked by Arun Jayaram · answered by Ron Gusek

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Expansion into Power Markets

    Liberty is aggressively expanding its presence in digital infrastructure and large load power markets. This includes a new JV with PowerBridge for the planned 2-gigawatt Alpha Digital campus in West Texas, with initial power anticipated in Q4 2027. A strategic alliance with SLB aims to provide scalable power and electrical infrastructure solutions with a unified customer interface. Additionally, Liberty Wholesale Commodities (LWC) has been formed to participate directly in ERCOT power markets, optimizing on-site generation and grid supply for large load customers.

    02

    Operational Excellence in Completions Business

    The completions business demonstrated strong operational execution, achieving record pump hours, horsepower hours, and proppant pumps in Q2 FY26. Key innovations include the deployment of the DigiPrime platform in Canada for a cross-border customer and the commercial launch of the proprietary Slurry last-mile sand system. The Slurry system at a Rockies Basin deployment is expected to transport 1.5 billion pounds of sand and eliminate 30,000 truck trips over seven months, reducing costs and environmental impact.

    03

    Financial Performance and Capital Allocation

    Liberty reported Q2 FY26 revenue of $1.2 billion and adjusted EBITDA of $151 million. Net income was $43 million, with adjusted net income at $14 million. The company ended the quarter with $559 million in cash and $736 million in net debt, an increase of $157 million QoQ. Full-year 2026 capital expenditures are now anticipated at $1.5 billion, primarily driven by increased deposit payments for long lead time power generation equipment, reflecting conviction in future opportunities.

    04

    Market Dynamics and Outlook

    The company observes a constructive long-term outlook for North American energy due to heightened geopolitical risk and a renewed focus on energy security. While frac markets saw modest improvement and demand for next-generation technologies remains high, commodity price volatility and broader macroeconomic uncertainty🌐 lead producers to remain cautious. Power demand fundamentals are strong, driven by AI data center expansion, with customers prioritizing integrated solutions and long-term operational support.

    05

    Power Generation Investment Strategy

    Liberty maintains a disciplined investment approach for its power generation projects, targeting a 5- to 6-year cash-on-cash payback and a 17-18% unlevered rate of return. The total capital expenditure for the planned 3 gigawatts of power generation capacity is estimated at $5 billion to $6 billion, funded through project financing via Special Purpose Vehicles (SPVs) with cash recycled back to the corporate balance sheet. The company has secured 3 GW of capacity through 2029, with early 2030 deliveries.

    06

    Canadian Market Developments

    Recent positive developments in Canada, including pipeline announcements and M&A activity, have increased optimism for the E&P community. Liberty is deploying a new DigiPrime fleet to Canada, which will serve as a replacement for older Tier 2 diesel equipment, reflecting confidence in the market's long-term outlook and the potential for improved efficiencies and utilization.

    AI-generated summary of the company’s earnings call. Not investment advice.