Flotek Industries, Inc. reported a total revenue of $187.0 million for the fiscal year ending December 31, 2024, a slight decrease from $188.1 million in 2023. The company's revenue from external customers increased to $71.3 million, up from $66.5 million in the previous year, while revenue from related parties, primarily ProFrac Services, LLC, decreased to $115.8 million from $121.5 million. The company recorded a net income of $10.5 million, down from $24.7 million in 2023, reflecting a decline in operating income primarily due to a significant gain in fair value of convertible notes in the prior year that did not recur.
Flotek's financial performance was impacted by a decrease in activity under the ProFrac Agreement, which resulted in lower product sales. However, this was partially offset by increased Contract Shortfall Fees, which amounted to $32.4 million in 2024, compared to $20.1 million in 2023. The company also reported a gross profit of $39.4 million, representing a gross profit margin of 21.1%, an improvement from 12.9% in the previous year, attributed to reduced costs of sales driven by lower freight and equipment rental expenses.
Strategically, Flotek has made significant developments, including the extension of its asset-based loan (ABL) agreement, which now has a maturity date extended to August 2026. The company also received approval from the Environmental Protection Agency (EPA) for its near-infrared spectrometer measurement system, which is expected to enhance growth opportunities in its Data Analytics segment. The company continues to focus on innovation and sustainability, with ongoing investments in research and development, which totaled $1.7 million in 2024.
Operationally, Flotek's employee headcount stood at approximately 142 as of December 31, 2024, with no employees covered by collective bargaining agreements. The company has emphasized its commitment to health, safety, and environmental goals, achieving a total recordable incident rate of 0.50, indicating a strong safety performance. The company is also expanding its geographic reach, particularly in international markets, with increased activity anticipated in the Middle East and Argentina.
Looking ahead, Flotek's outlook remains cautious due to the cyclical nature of the oil and gas industry. The company expects steady demand for its chemistry products in 2025, driven by anticipated increases in natural gas demand and ongoing commitments from customers. However, the company acknowledges the potential volatility in commodity prices and the impact of macroeconomic conditions on its operations and financial performance.
About FLOTEK INDUSTRIES INC/CN/
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