Liberty Energy Q3 Net Income Plunges 41% Amid Revenue Decline

TL;DR

**LBRT's Q3 numbers are a red flag; revenue and net income are down significantly, so stay cautious despite investment gains.**

AI Summary

Liberty Energy Inc. reported a significant decline in net income for the three months ended September 30, 2025, falling to $43.055 million from $73.804 million in the prior year, a 41.66% decrease. Total revenue also decreased by 16.8% to $947.397 million from $1,138.578 million in the same period. For the nine months ended September 30, 2025, net income was $134.182 million, down 49.19% from $264.117 million in 2024, with total revenue decreasing to $2,967.379 million from $3,371.587 million. A key business change was the acquisition of IMG Energy Solutions on March 3, 2025, for approximately $19.6 million, enhancing its distributed power systems capabilities. The company also saw a substantial gain on investments, net, of $155.883 million for the nine months ended September 30, 2025, compared to a loss of $4.474 million in the prior year, primarily driven by its investment in Oklo Inc., which increased from $51.611 million to $115.651 million. Risks include the impact of sustained lower commodity prices, which could adversely affect financial condition, results of operations, and cash flows. The strategic outlook involves leveraging acquisitions like IMG Energy Solutions to expand its energy services and technology offerings, particularly in lower emission completions.

Why It Matters

This filing reveals a challenging quarter for Liberty Energy, with significant drops in both revenue and net income, signaling potential headwinds in the energy services sector. For investors, the substantial decline in profitability and revenue, despite a notable gain on investments, suggests a need for caution regarding operational performance. Employees might face uncertainty if these trends continue, potentially impacting job security or growth opportunities. Customers could see shifts in service offerings or pricing as Liberty Energy adapts to market conditions and integrates new acquisitions like IMG Energy Solutions. The broader market, particularly the oil and natural gas exploration and production sector, will watch Liberty Energy's performance as a bellwether for industry health, especially given the competitive landscape and ongoing energy transition pressures.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant decline in net income by 41.66% for the three months ended September 30, 2025, and a 49.19% drop for the nine months, coupled with a 16.8% decrease in total revenue for the quarter. The filing explicitly states that 'sustained lower commodity prices, could have a significant adverse impact to the Company's financial condition, results of operations, and cash flows,' indicating a clear external market risk.

Analyst Insight

Investors should closely monitor LBRT's upcoming earnings calls for management's commentary on revenue stabilization and cost control initiatives. While the investment gains are positive, the core business's declining profitability warrants a cautious approach; consider holding or reducing exposure until operational improvements are evident.

Financial Highlights

debt To Equity

0.69

revenue

$947,397,000

total Assets

$3,503,385,000

total Debt

$253,000,000

net Income

$43,055,000

eps

$0.27

cash Position

$13,454,000

revenue Growth

-16.8%

Revenue Breakdown

Key Numbers

• $947.397M — Total Revenue (Q3 2025) (Decreased by 16.8% from $1,138.578 million in Q3 2024)
• $43.055M — Net Income (Q3 2025) (Decreased by 41.66% from $73.804 million in Q3 2024)
• $134.182M — Net Income (9M 2025) (Decreased by 49.19% from $264.117 million in 9M 2024)
• $155.883M — Gain on Investments, net (9M 2025) (Significant increase from a loss of $4.474 million in 9M 2024)
• $19.6M — IMG Acquisition Cash Consideration (Amount paid for IMG Energy Solutions on March 3, 2025)
• $115.651M — Investment in Oklo Inc. (Sept 30, 2025) (Increased from $51.611 million at December 31, 2024)
• $0.27 — Basic Net Income Per Share (Q3 2025) (Decreased from $0.45 in Q3 2024)
• $0.83 — Basic Net Income Per Share (9M 2025) (Decreased from $1.59 in 9M 2024)
• $13,454 — Cash and Cash Equivalents (Sept 30, 2025) (Decreased from $19,984 at December 31, 2024)
• $3,503,385 — Total Assets (Sept 30, 2025) (Increased from $3,296,394 at December 31, 2024)

Key Players & Entities

• Liberty Energy Inc. (company) — Registrant and leading integrated energy services and technology company
• IMG Energy Solutions (company) — Acquired company, developer of distributed power systems
• Oklo Inc. (company) — Company in which Liberty Energy Inc. holds an investment
• Nomad Proppant Services LLC (company) — Company in which Liberty Energy Inc. holds an investment
• Tamboran Resources Corporation (company) — Company in which Liberty Energy Inc. holds an investment
• New York Stock Exchange (regulator) — Exchange where Class A Common Stock is traded
• SEC (regulator) — U.S. Securities Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• Chief Executive Officer (person) — Chief operating decision maker (CODM) for Liberty Energy Inc.
• Bloomberg (company) — Financial news and data provider

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: Sustained lower commodity prices, particularly for oil and natural gas, could adversely affect Liberty Energy's financial condition, results of operations, and cash flows. This is a primary risk given the industry's sensitivity to energy market fluctuations.
• Integration of Acquisitions [medium — operational]: The successful integration of acquired businesses, such as IMG Energy Solutions, is critical. Failure to effectively integrate could disrupt operations, impact profitability, and prevent the realization of expected synergies.
• Debt and Lease Obligations [medium — financial]: Total liabilities increased to $1,433,720,000 from $1,317,525,000, with long-term debt rising to $253,000,000 from $190,500,000. Managing these obligations, alongside significant finance and operating lease liabilities, poses a financial risk.
• Competition in Oilfield Services [medium — market]: The oilfield services industry is highly competitive. Liberty Energy faces competition from numerous companies, which can pressure pricing and market share, impacting revenue and margins.
• Environmental Regulations [medium — regulatory]: Increasingly stringent environmental regulations related to oil and gas operations could lead to higher compliance costs, operational restrictions, and potential liabilities, impacting financial performance.

Industry Context

Liberty Energy operates in the highly competitive oilfield services sector, which is intrinsically linked to commodity price cycles and exploration & production (E&P) spending. The industry is characterized by a need for technological innovation, operational efficiency, and strategic consolidation to navigate market volatility and meet evolving environmental standards.

Regulatory Implications

The company faces regulatory scrutiny related to environmental standards in oil and gas operations. Compliance with evolving regulations, particularly concerning emissions and operational safety, is crucial and can impact operating costs and the company's social license to operate.

What Investors Should Do

1. Monitor commodity price trends and their impact on E&P spending.
2. Assess the integration success and performance of IMG Energy Solutions.
3. Evaluate the sustainability of investment gains.
4. Analyze the company's debt and liquidity position.

Key Dates

• 2025-03-03: Acquisition of IMG Energy Solutions — Acquired for approximately $19.6 million, this strategic move aims to enhance the company's distributed power systems capabilities and expand its energy services and technology offerings.
• 2025-09-30: End of Q3 2025 — Reported a 41.66% decrease in net income and a 16.8% decrease in total revenue compared to Q3 2024, reflecting challenging market conditions.
• 2025-09-30: Investment in Oklo Inc. valuation — The investment in Oklo Inc. increased significantly to $115.651 million, contributing substantially to a large net gain on investments for the nine-month period.

Glossary

Right-of-use assets

Assets representing the right to use an underlying asset for a specified period, typically arising from lease agreements (finance or operating). (Significant amounts are reported for both finance ($328,179,000) and operating ($70,179,000) leases as of September 30, 2025, indicating substantial lease commitments.)

Tax receivable agreements

Agreements that typically obligate a company to make payments to its equity holders (or their transferees) in exchange for certain tax benefits that the company may realize. (The company has current ($7,725,000) and noncurrent ($67,180,000) payables related to these agreements, impacting its liquidity and financial obligations.)

Accumulated other comprehensive loss

A component of equity that includes unrealized gains and losses on certain investments, foreign currency translations, and pension adjustments that have not yet been realized in net income. (Reported as a loss of $16,046,000 as of September 30, 2025, reflecting unrealized losses that impact total equity.)

Gain on investments, net

The profit realized from the sale or increase in fair value of investments. This can include gains from equity investments, debt securities, or other financial instruments. (A substantial gain of $155,883,000 for the nine months ended September 30, 2025, primarily from the investment in Oklo Inc., significantly boosted net income for the period.)

Year-Over-Year Comparison

Compared to the prior year, Liberty Energy Inc. experienced a notable downturn in financial performance. Total revenue for the third quarter decreased by 16.8% to $947.397 million, and net income plummeted by 41.66% to $43.055 million. For the nine-month period, net income saw a steeper decline of 49.19%. While total assets grew, cash and cash equivalents decreased, and total liabilities and long-term debt increased, indicating a tightening liquidity and increased leverage. A significant positive development was the substantial gain on investments, primarily from Oklo Inc., which offset some of the operational weakness.

Key Financial Figures

• $0.01 — tered Class A Common Stock, par value $0.01 LBRT New York Stock Exchange Indicate

Filing Documents

• lbrt-20250930.htm (10-Q) — 1087KB
• a311certq325.htm (EX-31.1) — 7KB
• a312certq325.htm (EX-31.2) — 7KB
• a321certq325.htm (EX-32.1) — 4KB
• a322certq325.htm (EX-32.2) — 4KB
• ex95miningdisclosures93025.htm (EX-95) — 19KB
• 0001694028-25-000115.txt ( ) — 7192KB
• lbrt-20250930.xsd (EX-101.SCH) — 49KB
• lbrt-20250930_cal.xml (EX-101.CAL) — 83KB
• lbrt-20250930_def.xml (EX-101.DEF) — 253KB
• lbrt-20250930_lab.xml (EX-101.LAB) — 645KB
• lbrt-20250930_pre.xml (EX-101.PRE) — 459KB
• lbrt-20250930_htm.xml (XML) — 1075KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of O perations 2 Condensed Consolidated Statements of Comprehensive Income 3 Condensed Consolidated Statements of Changes in Equity 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 7 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 23 Item 3. Quantitative and Qualitative Disclosure about Market Risk 32 Item 4.

Controls and Procedures

Controls and Procedures 32 PART II OTHER INFORMATION 33 Item 1.

Legal Proceedings

Legal Proceedings 33 Item 1A.

Risk Factors

Risk Factors 33 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 33 Item 3. Defaults Upon Senior Securities 33 Item 4. Mine Safety Disclosures 33 Item 5. Other Information 33 Item 6. Exhibits 34

SIGNATURES

SIGNATURES 35 i Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q ("Quarterly Report") and certain other communications made by us contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange of 1934, as amended (the "Exchange Act"), including, among others, expected performance, future operating results, oil and natural gas demand and prices and the outlook for the oil and gas industry, outlook for the power industry, future global economic conditions, the impact of worldwide political, military and armed conflict, the impact of announcements and changes in oil production quotas by oil exporting countries, improvements in operating procedures and technology, our business strategy and the business strategies of our customers, the impact of policy, legislative, and regulatory changes, in addition to other estimates, and beliefs. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We may use the words "estimate," "outlook," "project," "forecast," "position," "potential," "likely," "believe," "anticipate," "assume," "plan," "expect," "intend," "achievable," "may," "will," "continue," "should," "could" and similar expressions to help identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. We cannot assure you that our assumptions and expectations will prove to be correct. Important factors, many of which are beyond our control, could cause our actual results to differ materially from those indicated or implied by forward-looking statements, including but not limited to the risks and uncertainties described in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2024, (the "Annual Report"), this Quarterly Report, and

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) LIBERTY ENERGY INC. Condensed Consolidated Balance Sheets (Dollars in thousands, except share data) (Unaudited) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 13,454 $ 19,984 Accounts receivable—trade, net of allowances for credit losses of $ 994 and $ 848 , respectively 386,176 350,412 Accounts receivable—related party — 4,234 Unbilled revenue 187,625 185,210 Inventories 184,420 203,469 Prepaid and other current assets 122,733 85,214 Total current assets 894,408 848,523 Property and equipment, net 1,925,871 1,890,998 Finance lease right-of-use assets 328,179 283,113 Operating lease right-of-use assets 70,179 73,322 Other assets 135,928 119,402 Investment in Nomad Proppant Services LLC 8,710 10,674 Investment in Oklo Inc. 115,651 51,611 Investment in Tamboran Resources Corporation 24,459 18,751 Total assets $ 3,503,385 $ 3,296,394 Liabilities and Equity Current liabilities: Accounts payable (including amounts due to related parties of $ 248 and $ 582 , respectively) $ 350,102 $ 314,123 Accrued liabilities 201,846 206,713 Income taxes payable — 9,693 Current portion of payable pursuant to tax receivable agreements 7,725 40,776 Current portion of finance lease liabilities 91,366 66,648 Current portion of operating lease liabilities 26,164 28,570 Total current liabilities 677,203 666,523 Long-term debt 253,000 190,500 Deferred tax liability 180,883 137,728 Payable pursuant to tax receivable agreements 67,180 74,886 Noncurrent portion of finance lease liabilities 211,975 203,511 Noncurrent portion of operating lease liabilities 43,479 44,377 Total liabilities 1,433,720 1,317,525 Commitments & contingencies (Note 14) Stockholders' equity: Preferred Stock, $ 0.01 par value, 10,000 shares authorized and none issued and outstanding — — Common Stock: Class A, $ 0.01 par value, 400,000,000 shares authorized and 161,966,952 issued and outstanding

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View this 10-Q filing on SEC EDGAR