Michael: to the power teams that were being built inside the big six. Now there is a lot of familiarity about the efficiency of the M plus equation and the inherent benefits of the execution and the ability of putting those to work. And I think that is a key factor. If you think about the fact that we will use a third less fuel than a simple cycle turbine, just when we think about the emissions profile, It is significant. So therefore, we believe that we are having the right technical solution for our clients. Very like when we started building and electrifying our digital assets. Digifrac assets. We looked at all of the technologies. We are a technology agnostic company, and we have a team that is based around excellent engineering leadership that focuses on what is the right solution, not the easy button.
Stephen: Great. Thank you both for all the detail. Thank you.
Operator: Thanks, Stephen. The next question comes from Keith McKay with RBC Capital Markets. Please go ahead.
Keith McKay: Hi, good morning, and thanks for taking my questions. Just wondering if you can comment on the delivery of equipment, where you are in the process there with respect to delivery, packaging, and ultimately what underpins your confidence in being able to meet the timelines for the upcoming deals that you've got to commit to.
Michael: Yeah, Keith, I'll take a lot of that. In reality, we've spent a lot of the last six months developing, expanding our deep relationships with our supply chain. And when you think about it, we've always had very, very strong relationships in the high-speed arena with Yenbacher and Caterpillar, and we've expanded those relationships to all of the large, medium-speed engine manufacturers. And we have spent some time in Europe, spent a lot of time on their factories, their factory floors, with their production planning, and have shored up the delivery schedules out as far as through the end of 29, in some cases, for the ability to execute on these long lead projects for our customers. When you think about it, these projects are going to start with initial implementations and it is much more capital efficient, cost efficient, and better to expand a data center in an existing current data center than it is to build Greenfield. So as we build these initial campuses, those campuses will continue to expand right through the 2030s to hit the compute levels that are being demanded by our ultimate end users.
Keith McKay: Okay, thanks for that color. And just one more question if I could. So three gigawatts by 2029. Can you just comment on, you know, will that likely be more deals with multiple customers or do you think the existing deals you've announced will likely have some potential add-on capacity through time?
Ron: It'll be a combination of both of those, Keith. We certainly expect that with our current customers, those will be growing opportunities together as we continue to expand those, not only starting initial facilities, but additional facilities beyond that. And certainly we expect to add additional customers in that mix as well. We've got ongoing conversations with a number of different partners in that space. So expect to... to have a number of legs on that stool ultimately down the road.
Keith McKay: Okay, I appreciate the comments. Thanks so much.
Operator: And the next question comes from Mark Bianchi with TD Cowan. Please go ahead.
Mark Bianchi: Hey, thanks so much. I guess maybe, Michael, this is probably one for you. So if I heard you right, it sounded like you talked about about a billion dollars worth of spending on for 2026, and maybe half of that is covered by project finance. Do you anticipate the other half to be funded through free cash flow? And maybe you could talk a little bit more precisely about how you're thinking about EBITDA for 2026.
Michael: So, Mark, while I split the spending into long lead time deposits and specific project spending that we funded by project finance, those long lead time deposits are really for long lead time generation that as soon as that generation is assigned to a project, that will then move into the project financing realm. That is all being sourced, packaged, manufactured, engineered through our Liberty Advanced Equipment Technologies project. Group, which is a registered manufacturer and purchasing company, that will eventually be sold to the project companies, and then there will be project financing, construction financing at the project level that will support that spend. So I would expect to see those deposits that I've talked about for the year of 26 actually move into project financing runs within the majority of that within that year. So there will be a movement between those two categories. But I wanted to give you kind of a split on that. So there will be more project finance capability than is given by those numbers. The rest of the spending, we believe that we will easily handle with our very, very fortress-like balance sheet that we have now and our ability to fund that through free cash flow and debt availability.
Mark Bianchi: Okay. And how – How should we think about the level of EBITDA? I mean, I think if I sort of read back what I heard, revenue is flat in 26, higher utilization, offset by pricing, EBITDA down, but just any steer on sort of the magnitude there, things were quite strong in 4Q, so you're starting from a nice level.
Michael: Right. Yeah, I think 4Q was an anomaly. We had almost the opposite effect of the seasonal swing. We had, I think, what was some people finishing up programs that they had maybe delayed from the beginning part of the year due to economic uncertainty or geopolitical worries. So I think I would look at somewhat of that bounce up in Q4 as a bit of an anomaly. And so yes, EBITDA will be down, which is, as you would imagine, but virtually all driven by the completions business as EBITDA will start to kick in for the power business in a significant way in 27.
Ron: Mark, I would say just to add a little more color to that and maybe a few things to keep in your mind about this year, I would say we've probably got pricing off low to mid-single digits as a rough order of magnitude to give you some sense of how that will impact us on the EBITDA line. And then I would also keep in mind the weather. We've also had a pretty meaningful weather event already this year. We, over the course of this past weekend, prioritized safety for our crews and the subcontractors that work with us out in the field. Obviously, road conditions, very, very challenging in Texas and Louisiana. And as a result, through close communication with our customers, made appropriate decisions around activity levels out in the field. That probably impacted close to two-thirds of our capacity, the majority of the equipment operating in Texas and Louisiana, over a period of maybe as long as five days. Probably a bit early to tell exactly what the true impact of that's going to be, but it was a meaningful event for sure.
Mark Bianchi: Got it. Okay, thanks for that, Ron. I'll turn it back.
Operator: And the next question comes from Jeff LeBlanc with TPH. Please go ahead.
Jeff LeBlanc: Good morning, Ron and team. Thank you for taking my question. I believe in the past you've mentioned that LPI intends to help their hyperscaler partners secure the fuel source. A, I want to make sure this is still the case, and if so, has there been a greater urgency from your partners on securing these agreements as demand continues to increase? and does it make the LPI platform more attractive to your customers? Thank you.
Ron: Jeff, I think you described it perfectly. Certainly, just like in our completions business, we've aimed to build an LPI, a business that really is a full-service business, power as a service from beginning to end. And so that includes, of course, the midstream side of things. We've got a very capable team under Richard Bradsby that is absolutely capable of going out and making arrangements for interconnects, pipeline, We can interact on behalf of the customer with respect to natural gas and the supply of that. We're not going to take on any risk in that regard, but we absolutely have the capability and expertise to play a significant role in that. And I would say it's one of the things that makes us a very, very valuable partner in this space is not only that midstream capability, but all of the other pieces of the puzzle we bring to the table. I think you've heard from us that we've been very thoughtful around the construction of that business and the capabilities that we have built within it beyond the midstream side of things, the commercial interaction with the grid, the packaging capabilities, the engineering solutions around power quality services. All of these things are assets that we think differentiate us from somebody who might be able to bring generation to the table.
Jeff LeBlanc: Yeah, thanks for the call. I'll hand the call back to the operator. Thank you.
Operator: Thanks, Jeff. And the next question comes from Josh Silverstein with UBS. Please go ahead.
Josh Silverstein: Thanks. Good morning, guys. So you mentioned that you have confidence in getting the three gigawatts deployed in 2029. Can you just talk about how this works? additional two gigawatts may change from a cost relative to the first gigawatt, or is there additional cost because of the tightness in the market, or similar economics to what you were paying before?
Ron: No, I would say you shouldn't expect meaningful change in economics at all. One of the great things about having strong partners on the supply chain side, a strong relationship with those counterparties that we're doing business with, is that those relationships don't change, and we are not we're not finding ourselves in a position where the whims of the market are impacting our ability to procure the equipment we need at costs in line with our expectations. And so, you know, we've suggested in the past about a million dollars a megawatt for the generation as a nice round number. And then maybe 1.5, 1.6 million, depending on complexity of the load case for all in with balance of plant. And at this point in time, I would tell you that our expectations around those costs have not changed.
Josh Silverstein: Got it. And then when you're having discussions with data centers or other operators, are they still interested in signing these 10-, 15-year agreements, or is there some sort of out that they're trying to get in maybe 5- to 10-year window, assuming that there's going to be an improvement in grid connectivity then?
Ron: No, definitely not. I would say, if anything, the pendulum's swinging the other way with more openness to the idea of distributed, co-located, behind-the-meter power is the right long-term answer. I think we've been able to demonstrate and the market has recognized over the last 12 months that this solution is the better long-term solution for a whole host of reasons. Reliability, economics, the commercial optionality that the grid brings, addressing public concerns around cost of energy, and the list goes on. So I would say that the willingness to enter into a 15-year ESA with a distributed power generation company like Liberty is absolutely getting greater and greater and greater. My guess is that you're going to see how we think about power systems evolve over the coming years with the recognition that distributed power is going to play a much, much bigger role in our world. That we're going to build these data centers, as Michael alluded to, they will continue to expand. But that in the event the grid arrives, we are not going to be there as backup. but actually is the primary supply for the data center and then additional resilience for the grid. I think we can bring a story to the community that says we are a benefit to that community and their cost of power over the long term, not a detriment as a presence there.
Michael: And maybe give us just a little bit of color to Ron's comments there as well. I think you have to remember the underlying economics that drive everything in the industry. We are bringing a solution to bear that provides power at grid parity now. That grid parity has a much lower – our power has a much lower inflationary component because the vast majority of the variable cost is related to natural gas, and the estimation of the inflation rate of gas over the next 15 years compared to the estimation of grid power prices over the next 15 years are very, very different. Gas prices will remain relatively range-bound. Grid power prices, everybody expects to increase significantly because we are rebuilding a 50-year-old transmission system, and that is going to be passed along either directly to the large loads or as part of a general upgrade to the system. So we are grid parity now, and 5, 10, 15 years from now, we're going to be significantly lower than the grid prices. Now, we can, with our core system and the team that we're building there, that we have built there, provide you integration with that grid if there are other attributes that you wish to take advantage of, or the ability to actually bring your peak power price down by taking you where there is oscillations, where there is cheap power available. We're providing you a machine heat rate guarantee, and we will never go above this power price. If the power price in certain parts of the day or certain seasons where it's very sunny and the wind's blowing all the time and therefore there's a little bit of excess, you know, kind of of that renewable power, we can buy that power when we're grid integrated and bring down your cost significantly below the grid on average pricing. So we have a solution that works economically for the next 15 years and that is what's driving our customers. They are incredibly excited incredibly financially focused business people. And we bring them an economically winning solution.
Josh Silverstein: That's very helpful. Thank you.
Operator: And the next question comes from Derek Podhazer with Piper Sandler. Please go ahead.
Derek Podhazer: Hey, good morning, everyone. Just wanted to get your take on the supply side for power generation assets. Obviously, it feels like every day we're hearing a number of OEMs entering this Recip and turbine space talk about converting and repurposing older jet engines to power data centers. So obviously this creates a bit of an oversupply concern that's emerging in the market, but it really sounds like you're creating this integrated power services infrastructure solution to defend this mode. Just could you help us understand a bit more about you know, we hear about all the supply potentially coming into the market, but, but what makes it different for you guys and building that mode and why you really should, we shouldn't have any concerns as far as this excess or flood of supply or the perception of that supply coming into the market.
Ron: Thanks for the question, Derek. Of course, it's not as straightforward as just bringing supply to the table. If you think about the complexity of the load and the other components that have to be brought to bear to be successful in the power generation space, particularly for a data center, it's a lot more than showing up with a used turbine repurposed to run generation. I think we have talked about all the components that we have built into the lpi platform and and i think a real testament to the success we've had there and the belief that people have in that solution are these recent uh deals that we have announced vantage has vetted the lpi platform the capabilities we bring to the table that range from the midstream capabilities the packaging and supply chain capabilities our power quality systems and the technology that we will deploy there and And with respect to that technology, the specificity of that with regards to the type of load that we are going to be addressing, the grid interaction capabilities that Michael just spent some time talking about and our commercial optionality there. As you think about that entire portfolio of services, really our LPI, Power as a Service platform, That stands far apart from somebody who could bring a gray market turbine to the table and some generation attached to that. As a result, I think we remain extremely confident in our space in the market and our ability to continue to grow this business despite the fact that you're going to see abundant supply there. I'd argue that's beneficial maybe from a timeline standpoint. That will potentially enable us to get these projects across the finish line quicker rather than worrying about a stretched out supply chain. That maybe adds a little bit of flexibility there. But in terms of displacing LPI and our place in that market, absolutely not.
Michael: Yeah, I think the only thing that it'll do, when you think by the time you take a gray market turbine and refurbish it to zero hours, you're really not talking much difference in total cost from the brand new version of it. And then, obviously, all it does is actually speed up the supply timeline from the delays of expanding the turbine factories themselves. So that really just changes that. And the only thing that that will do with our partners and our ability to put multiple sources of generation into our power solutions group will just enable us to speed our growth rather than slow it down
Derek Podhazer: Right now that makes sense. It's a very helpful color. And I mean, clearly recreating the integrated solutions that you've done in frac in the power side, um, and, and in the position that you've been able to build in frac. So it's exciting to see, um, I guess on the followup side, sticking with the power three, maybe just talk about M and a not necessarily from buying, you know, power generation assets, but as far as supporting, you know, Forte tempo chorus, this is, these are the clear pillars to your integration strategy. What could we potentially see from Liberty? whether it's bolt-on, tuck-in, to support the build-out of this integrated solution.
Michael: But very much along as we've built the Frag business, look to us to add technology or things over time that make sense, that really increase our vertical stack and increase our technological heft. So as we add things like that, those are the key things. They'll be small additions where they bring and they expand and they fit nicely within the puzzle that we have built.
Ron: We've always been thoughtful about making sure we understand the things that are have significant implications in terms of our ability to execute. So if you think about on the oil field services side, we recognize that in the transition to natural gas, we had to control the CNG supply. That when we transitioned to an electric fleet, we wanted to control power generation. that we've recognized we had to have some manufacturing capability in-house, that it made sense to have some sand production capabilities to support our business. We find those things that are key inputs critical to our success, and those are the things you should expect us to focus on to the extent those show themselves on the power generation side.
Michael: Key long lead items that you can make sure that you have access that allows you to de-risk execution are also valuable.
Derek Podhazer: Right. That all makes a lot of sense. Appreciate the call. I'll turn it back.
Operator: Thanks, Derek. And the next question comes from Dan Coutts with Morgan Stanley. Please go ahead.
Dan Coutts: Hey, thanks. Good morning. Good morning. Good morning. Yeah, Ron, I just wanted to put a finer point on the pricing comment that you shared earlier. I think you said that Strack was down – maybe in the low single-digit, mid-single-digit range. And I was just wondering if you could share what the time frame was for that comment, whether it was kind of like a year-over-year or expected in one queue or kind of cumulative in four queue through one queue, just so we can think about, you know, how much of those kind of pricing decrementals we should flow through our estimates for 2026. Thanks.
Ron: Dan, I think you want to think about that as really relative to the second half of 25. The pricing that we're going to see in 26 is really a reflection of RFP season. That's taking place against a second half 25 backdrop as we're going through that. In some cases, in Q3, some of that stretching out into Q4. But that's really the timeframe against which you want to measure that going forward.
Dan Coutts: Right. Understood. And then... Go ahead.
Ron: No, sorry. Go ahead.
Dan Coutts: And then maybe just on the improved utilization comment in 2026, I guess just ballpark, should we think about normal incrementals on the higher utilization? And maybe if you could kind of unpack some of the drivers in a little bit more detail, whether it's just fleet demand resilience versus further increases in horsepower per fleet from more simul-frac and continuous frac, or if a big factor is the kind of flight to quality that you flagged and the associated liberty market share gains. Thank you.
Ron: Yeah, that's a very good question. And to your point, there are a lot of pieces of the puzzle there that are moving, in some cases, counter to one another, in some cases, supportive of one another. I would say that in terms of utilization, it's probably fair to think about that from a normal incremental standpoint. But there are some puts and takes to that. We continue to be asked for that drive towards continuous pumping. And so that remains a very specific goal for some of our customers and we are working hard alongside of them to plot a path to accomplishing that outcome. As you noted, intensity continues to climb and fleets continue to get larger. as you think about an environment i i'll call one out the western haynesville as an example that will be the deepest highest pressure work we do i think anywhere in north america and will require the largest amount of horsepower on any given location uh that we would have any place so as we continue to see people operators trend into those sorts of environments, our fleets are going to continue to get bigger. The amount of intensity on the well site going to continue to climb. Alongside of that, we'll continue to push for that 24-hour-a-day, seven-day-a-week pumping environment. That'll be offset to the extent we can manage it by efficiencies that we gain in our operations through the use of AI. We've alluded to of our software platform, what that's meant from a maintenance standpoint, and in parallel with that, the deployment of the Digi technologies and the positive impact that they have had from an operations standpoint. So there's a lot of things moving there, and as a result, probably makes it a little difficult to get to exactly the puts and takes, but you're thinking about all of the right variables in the math.
Dan Coutts: Great. Super helpful. Thanks a lot. I'll turn it back.
Operator: Thanks, Dan. And the next question comes from Eddie Kim with Barclays. Please go ahead.
Eddie Kim: Hi, good morning. I just wanted to ask about the end markets for your power generation equipment. In the past, you've talked about commercial and industrial and potentially even deploying equipment for Permian microgrids. But at this point in time, is it fair to say the The vast majority of the two gigawatts, incremental two gigawatts you plan to deploy by 2029 are likely all, most if not all, going to be deployed for data center operators? Or just curious on your thoughts on the end markets for your PowerGen equipment.
Ron: I would certainly say, Eddie, that relative to my comments on this call last year where I said I thought we'd probably be primarily CNI opportunities, maybe some oil fields, electrification as the largest slice of the pie ultimately growing into data centers, the reverse is true today. Certainly the large percentage of the assets that we will deploy, projects that we will take on, will be in the data center space, but we are absolutely still pursuing a number of CNI opportunities There still continues to be this desire to electrify operations in the oil field, and we are at the table for a number of those conversations as well. So, I don't want to suggest that those have gone away by any stretch of the imagination, but to your point, they will represent the smaller piece of the pie relative to the data center opportunities in front of us.
Eddie Kim: Understood. That makes sense. And then shifting over to pricing, in the past you've talked about for some of the longer-term opportunities, like say 10 or 15 years, maybe a five- to six-year payback on the upfront cost of the equipment was appropriate. Is that still your expectation, or have your thoughts on pricing and payback changed at all?
Ron: No, no changes there at all. I think we still believe that a five- to six-year payback is very, very reasonable, that we should expect unlevered returns in the high teens. So no changes from what we've got it to in the past.
Eddie Kim: Got it. Great. Thank you. I'll turn it back.
Operator: And the next question comes from Caitlin Donahue with Goldman Sachs. Please go ahead.
Caitlin Donahue: Good morning, and thank you for taking my questions. Can you provide some color in the market in terms of different sized megawatt units as a packaging solution for your customers? I know we've been seeing some of these units come in at 2.5 and 5.5 megawatt units, but there's the possibility of 10 megawatt units coming into the market over time. What is the customer interest in this, and how do you see Liberty potentially offering this over the longer term?
Ron: You're going to see a mix of both of those technologies in our world for sure. We absolutely have a good amount of the smaller high-speed gas engines, the 2.5 and 4.3 megawatt assets that will be a part of our world. The wonderful advantage to those assets is that as a high-speed asset, they're very, very responsive to load dynamics, and so they can play a very, very important role in a complex load use situation. They also remove a lot of the EPC risk on location in that we prepackage those assets. So they come into the Liberty Advanced Equipment Technologies group, we're packaging those up, and that results in relatively minimal construction required on location. They show up in a container. We do a little bit of interconnection work with a central control facility, some plumbing and wiring and whatnot, and you have a power plant ready to go. you transition to that larger medium speed asset in the 10 to 12 megawatt range, you get some inherent advantages there in that you have a large stable platform, a lot of rotating inertia there, and incredible efficiencies. You're talking about an asset with a heat rate that's probably sub 7,000. Not exactly in line with modern combined cycle, but very, very close to modern combined cycle for a fraction of the cost. And so, to the point Michael was making earlier around the economics of our power generation, effectively the efficiency of the conversion from natural gas into electricity and the reduced emissions footprint that comes with that efficient conversion. These large assets play an important role in that. You can expect to see on these larger installations you know, think the gigawatt-type scale campuses, power halls, 200-megawatt blocks of these large medium-speed engines that are going to be a key piece of that, depending on the end-use case potentially paired with some amount of smaller high-speed engines, and then, of course, our power quality system to go along with that to deliver that load. But both of those technologies critical to the path forward, and you're going to see both of them play a very very important role in Liberty's supply chain and execution going forward.
Caitlin Donahue: Thank you. That makes sense. And then just one last quick one. In terms of that three gigawatt number deployment by 2029, is there a cadence that we should be looking for in terms of that deployment over the next few years, or can we expect it to be a little bit more lumpy as contracts are signed over time?
Michael: Yeah, as contracts are signed over time, but it will accelerate from now on. through to the end of 28 when that's in service. That's the way you should think about it. You'll hear the contract announcements when the contract announcements are made, but really that'll be defined by the accelerating speed of our supply chain and then our ability to install those in the field. Obviously, when we talk about that three gigawatts by 2029, given the timeframe of our shipments arriving, you take ownership in Europe. You've got to ship them to the U.S. You've got to move them to site. We will have – it's not like we are stopping in 2029. So, 2029 will continue to accelerate beyond here. We've just had our 29 announcement.
Caitlin Donahue: Makes sense. Thank you. I'll turn it back.
Operator: David, thank you very much. I will now turn it back to Ron for closing remarks.
Ron: I received an unexpected letter this past Friday. It was from a woman named Nancy, and it came to me through a bit of mistaken identity. As it turns out, the local utility provider where Nancy lives in Massachusetts is also called Liberty, and she was writing to the CEO of Liberty to express her concerns with the cost of heating their home. We've since sent the letter off to the correct Liberty with the hope that they will address her concerns, but in her letter, she raises an important issue that I want to close with today. Nancy wrote that she and her husband are in their 70s and living on Social Security. She went on to say that last month their gas bill was $226, of which $68 was the gas and $158 was the delivery charge. This month's bill was $319, of which $102 was the gas and $217 was the delivery charge. She pointed out that the delivery charge is more than 2x the cost of the gas and wanted to know why. One in three American households today experiences energy poverty or the inability to access sufficient amounts of electricity and other energy sources due to financial constraints. And yet, states like Massachusetts continue to saddle their residents with additional financial burden in the pursuit of net zero targets and other similar energy initiatives, a program called MassSave in this case, which is an integral part of the state's plan to become carbon neutral by 2050. The cost of this program is carried by the rate payers, people like Nancy and her husband, through a fee added on to their cost of delivery for natural gas. People in Massachusetts have seen their gas bills climb by as much as 20%, or about $60 this month in Nancy's case, directly because of this program. Net zero policies raise energy costs for American families and businesses, threaten the reliability of our energy system, and undermine energy and national security. They have also achieved precious little in reducing global greenhouse gas emissions. The fact is that energy matters. It's what keeps people alive on weekends like this past one. Putting families in a position where they are forced to choose between a comfortable or even safe indoor temperature and putting food on the table is simply unacceptable. And state mandates like MassSave are only amplifying this issue. Liberty turns 15 this year. I am incredibly proud of the Liberty team for the significant contributions we've made over those years to enable and advance the shale revolution, a step change in U.S. energy supply that ensures abundant, affordable, reliable energy for families like Nancy and her husband. I am equally energized by the opportunities ahead to carry on this important work. continuing to grow our core oilfield services business while also expanding our new and growing LPI business to provide the necessary power for growing data center demand, helping ensure American families also have abundant, affordable, and reliable electricity to meet their daily needs without hardship. Thank you, everyone, for joining us today.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
