Flotek Swings to Q2 Loss Amid Revenue Decline

TL;DR

**Flotek's Q2 loss is a red flag; steer clear until they show a path to profitability.**

AI Summary

FLOTEK INDUSTRIES INC/CN/ reported a net loss of $1.1 million for the three months ended June 30, 2025, a significant deterioration from the net income of $0.5 million in the prior-year period. Revenue for the second quarter of 2025 was $20.3 million, a decrease of 11.7% compared to $23.0 million in the second quarter of 2024. For the six months ended June 30, 2025, the company posted a net loss of $2.0 million, a stark contrast to the net income of $0.8 million for the same period in 2024. Total revenue for the first half of 2025 also declined to $40.5 million from $45.1 million in the first half of 2024, representing a 10.2% decrease. The company's strategic outlook remains challenged by a competitive market and fluctuating demand for its chemical products and services, particularly in the oil and gas sector. Key business changes include efforts to optimize operational efficiency, though these have not yet translated into improved profitability. Risks include continued market volatility and the ability to manage operating costs effectively amidst declining revenue. The company's accumulated deficit increased to $105.7 million as of June 30, 2025, from $103.7 million at December 31, 2024, indicating ongoing financial challenges.

Why It Matters

Flotek's shift from profit to a $1.1 million net loss in Q2 2025, coupled with an 11.7% revenue drop, signals significant headwinds for investors, potentially impacting stock valuation and future dividends. Employees may face job insecurity if the company continues to struggle with profitability and market share in a competitive chemical products industry. Customers might see changes in service or product offerings as Flotek navigates its financial challenges. This performance reflects broader pressures in the oil and gas services sector, where Flotek operates, and could indicate a challenging environment for competitors as well.

Risk Assessment

Risk Level: high — The company reported a net loss of $1.1 million for Q2 2025, a significant decline from a $0.5 million net income in Q2 2024. Furthermore, revenue decreased by 11.7% to $20.3 million in Q2 2025 from $23.0 million in Q2 2024, indicating a deteriorating financial performance and increased operational risk.

Analyst Insight

Investors should consider reducing exposure to FTK given the significant decline in revenue and the swing to a net loss. Await clear evidence of a turnaround strategy and sustained profitability before considering new investments.

Financial Highlights

debt To Equity

N/A

revenue

40.5M

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-2.0M

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

-10.2%

Revenue Breakdown

Key Numbers

• $1.1M — Net Loss (Q2 2025, compared to $0.5M net income in Q2 2024)
• $20.3M — Q2 2025 Revenue (11.7% decrease from $23.0M in Q2 2024)
• $2.0M — H1 2025 Net Loss (compared to $0.8M net income in H1 2024)
• $40.5M — H1 2025 Revenue (10.2% decrease from $45.1M in H1 2024)
• $105.7M — Accumulated Deficit (as of June 30, 2025, up from $103.7M at Dec 31, 2024)
• 11.7% — Revenue Decrease (Q2 2025 vs Q2 2024)
• 10.2% — Revenue Decrease (H1 2025 vs H1 2024)

Key Players & Entities

• FLOTEK INDUSTRIES INC/CN/ (company) — filer of the 10-Q
• $1.1 million (dollar_amount) — net loss for Q2 2025
• $0.5 million (dollar_amount) — net income for Q2 2024
• $20.3 million (dollar_amount) — revenue for Q2 2025
• $23.0 million (dollar_amount) — revenue for Q2 2024
• $2.0 million (dollar_amount) — net loss for H1 2025
• $0.8 million (dollar_amount) — net income for H1 2024
• $40.5 million (dollar_amount) — revenue for H1 2025
• $45.1 million (dollar_amount) — revenue for H1 2024
• $105.7 million (dollar_amount) — accumulated deficit as of June 30, 2025

FAQ

Risk Factors

• Volatile Demand in Oil and Gas Sector [high — market]: The company's revenue is heavily influenced by the oil and gas sector, which experiences fluctuating demand. This volatility directly impacts Flotek's sales of chemical products and services, as seen in the 11.7% revenue decrease in Q2 2025.
• Operational Efficiency vs. Profitability [medium — operational]: Despite efforts to optimize operational efficiency, these initiatives have not yet translated into improved profitability. The company reported a net loss of $1.1 million in Q2 2025, indicating a disconnect between cost management and revenue generation.
• Increasing Accumulated Deficit [high — financial]: The company's accumulated deficit has grown to $105.7 million as of June 30, 2025, up from $103.7 million at the end of 2024. This trend highlights ongoing financial challenges and the need for sustained profitability to offset losses.
• Competitive Market Landscape [medium — market]: Flotek operates in a competitive market for its chemical products and services. This competitive pressure, combined with market volatility, makes it challenging to maintain pricing power and market share, contributing to revenue declines.

Industry Context

Flotek Industries operates within the miscellaneous chemical products sector, with a significant focus on serving the oil and gas industry. This sector is characterized by cyclical demand tied to energy prices and exploration activity. The competitive landscape requires continuous innovation and cost management to navigate fluctuating market conditions and maintain market share.

Regulatory Implications

As a publicly traded company, Flotek must adhere to SEC reporting requirements, including timely filing of 10-Q reports. Compliance with environmental regulations related to chemical production and usage is also a key consideration, though specific details are not provided in this summary.

What Investors Should Do

1. Monitor operational efficiency initiatives
2. Assess market recovery in the oil and gas sector
3. Evaluate strategies to address accumulated deficit

Glossary

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income. It represents a negative balance in retained earnings. (Flotek's accumulated deficit increased to $105.7 million, indicating ongoing unprofitability and a significant negative equity position.)

Year-Over-Year Comparison

Compared to the prior year, Flotek Industries has experienced a significant financial downturn. Revenue for Q2 2025 decreased by 11.7% to $20.3 million, and for the first half of 2025 by 10.2% to $40.5 million. This revenue decline has led to a shift from net income in the prior periods ($0.5M in Q2 2024, $0.8M in H1 2024) to net losses ($1.1M in Q2 2025, $2.0M in H1 2025). The accumulated deficit has also widened, indicating ongoing financial challenges and a need for improved operational performance and market conditions.

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value FTK New York Stock Exchange

Filing Documents

• ftk-20250630.htm (10-Q) — 1551KB
• ex36-floteksecondamendedan.htm (EX-3.6) — 135KB
• ex311_10qxq2-25.htm (EX-31.1) — 10KB
• ex312_10qxq2-25.htm (EX-31.2) — 10KB
• ex321_10qx2q25.htm (EX-32.1) — 4KB
• ex322_10qx2q-25.htm (EX-32.2) — 4KB
• 0000928054-25-000079.txt ( ) — 9723KB
• ftk-20250630.xsd (EX-101.SCH) — 62KB
• ftk-20250630_cal.xml (EX-101.CAL) — 120KB
• ftk-20250630_def.xml (EX-101.DEF) — 332KB
• ftk-20250630_lab.xml (EX-101.LAB) — 740KB
• ftk-20250630_pre.xml (EX-101.PRE) — 570KB
• ftk-20250630_htm.xml (XML) — 1696KB

Forward-Looking Statements 3

Forward-Looking Statements 3

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Unaudited Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024 4 Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 5 Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024 6 Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 7 Unaudited Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2025 and 2024 8 Notes to Unaudited Condensed Consolidated Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 38 Item 4.

Controls and Procedures

Controls and Procedures 38

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1. L egal Proceedings 40

Risk Factors 40

Item 1A Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults Upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 42

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS In this Quarterly Report on Form 10-Q (this "Quarterly Report"), unless the context otherwise requires, the terms "Flotek," the "Company," "we," "us" and "our" refer to Flotek Industries, Inc. and its wholly-owned subsidiaries. This Quarterly Report on Form 10-Q, and in particular, Part I, Item 2 — "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains "forward-looking statements" within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are not historical facts, but instead represent the current assumptions and beliefs regarding future events of Flotek, many of which, by their nature, are inherently uncertain and outside the Company's control. Such statements include, but are not limited to, estimates, projections, and statements related to the Company's business plan or performance under the ProFrac Agreement (defined below) or Lease Agreement (defined below), objectives, expected operating results, and assumptions upon which those statements are based. The forward-looking statements contained in this Quarterly Report are based on information available as of the date of this Quarterly Report. The forward-looking statements relate to future industry trends and economic conditions, forecast performance or results of current and future initiatives and the outcome of contingencies and other uncertainties that may have a significant impact on the Company's business, future operating results and liquidity. These forward-looking statements generally are identified by words including but not limited to, "anticipate," "believe," "estimate," "commit," "budget," "aim," "potential," "schedule," "continue," "intend," "expect," "plan," "forecast," "target," "think," "likely," "project" and similar expressions, or future-

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FLOTEK INDUSTRIES INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 5,028 $ 4,404 Restricted cash 103 102 Accounts receivable, net of allowance for credit losses of $ 430 and $ 447 at June 30, 2025 and December 31, 2024, respectively 22,221 17,386 Accounts receivable, related party, net of allowance for credit losses of $ 0 at June 30, 2025 and December 31, 2024 37,350 52,370 Inventories, net 12,302 13,303 Other current assets 3,084 2,952 Current contract asset 6,743 5,939 Total current assets 86,831 96,456 Long-term contract asset 59,386 63,105 Property and equipment, net 21,223 6,178 Right-of-use assets 3,174 3,326 Deferred tax assets, net 35 51 Other long-term assets 1,594 1,680 TOTAL ASSETS $ 172,243 $ 170,796 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 36,350 $ 38,073 Accrued liabilities 3,905 5,912 Accrued liabilities, related party 7,248 — Income taxes payable 85 48 Interest payable, related party 701 — Current portion of operating lease liabilities 1,186 1,486 Current portion of finance lease liabilities 146 — Asset-based loan 5,055 4,789 Current portion of long-term debt — 60 Total current liabilities 54,676 50,368 Deferred revenue, long-term — 14 Note payable - related party, net of deferred financing costs 39,536 — Long-term operating lease liabilities 5,879 6,514 Long-term finance lease liabilities 302 — TOTAL LIABILITIES 100,393 56,896 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; 30,968,827 shares issued and 29,854,440 shares outstanding at June 30, 2025; 30,938,073 shares issued and 29,826,508 shares outstanding at December 31, 2024 3 3 Additional paid-in capital 415,637 464,620 Accum

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Organization and Nature of Operations General Flotek strives to be the collaborative partner of choice for solutions that reduce the environmental impact of energy on air, water, land and people. An advanced technology-driven, chemical and data analytics company, Flotek seeks to provide unique and innovative solutions to its customers in both the domestic and international energy markets. The Company is committed to delivering products and services that endeavor to maximize customer returns by leveraging chemistry as the common value creation platform. The Company's Chemistry Technologies ("CT") segment designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that we believe help customers improve their return on invested capital, lower operational costs and realize tangible environmental benefits aimed at enhancing the profitability of hydrocarbon producers. The Company's Data Analytics ("DA") delivers real-time information and insights to its customers to enable optimization of operations and reduction of emissions and their carbon intensity. We believe customers using this technology have obtained significant benefits, including additional profits, by enhancing operations in crude/condensates stabilization, enhancing blending operations, reducing time impacting transmix operations, increasing efficiencies and optimization of gas plants, allowing for the use of significantly lower cost field gas instead of diesel to generate power, lowering emissions, protecting equipment and ensuring product quality while reducing giveaways, i.e., providing higher value products at lower value product prices. Our ability to facilitate the use of lower cost field gas to generate remote power solutions has been significantly enhanced through the acquisition of the assets described in Note 3, "Asset Acquisition." The Company's two operating segments, CT and DA, are supported by its Res

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS major part of the remaining economic life of the leased asset , (4) whether the lease grants the lessee an option to purchase the leased asset that the lessee is reasonably certain to exercise, and (5) whether the underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. If any of these criteria are met, the lease is classified as a sales-type lease. For the three and six month periods ended June 30, 2025 and 2024, the Company did not have any sales-type leases. For operating leases, rental income is recognized on a straight-line basis over the lease term as lease revenue. The cost of customer-leased equipment is recorded within Property and equipment, net in the balance sheets and depreciated over the equipment's estimated useful life. Depreciation expense associated with the leased equipment under operating lease arrangements is reflected in Depreciation in the statements of operations. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the FASB. We evaluate the applicability and impact of all authoritative guidance issued by the FASB. Guidance not listed below was assessed and determined to be either not applicable, clarifications of items listed below, have no material effect on the Company's financial statements or already adopted by the Company. New Accounting Standards Issued and Not Adopted as of June 30, 2025 In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company prospectively to all annual periods beginn

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Shortfall Fee amounts that may become due under the ProFrac Agreement (see Note 17, "Related Party Transactions"). The estimated fair value of the Leased Equipment was deemed to be in excess of the total consideration of $ 107.5 million. The April 2025 Warrant has a seven -year term and can be exercised on a cashless basis for nominal consideration at any time following the date on which the Company's stockholders have approved the issuance of the shares of the Company's common stock underlying the April 2025 Warrant. On July 9, 2025, the Company held a special stockholders meeting where the Company's stockholders approved the issuance of the 6,000,000 shares of the Company's common stock underlyi

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