Good morning, ladies and gentlemen, and welcome to the Flotek Industries Third Quarter 2025 Earnings Conference Call. This call is being recorded on Wednesday, November 5, 2025. I would now like to turn the conference over to Delbert Rose. Please go ahead.

Thank you, and good morning. We're thrilled to have you with us for Flotek's Third Quarter 2025 Earnings Conference Call. Today, I'm joined by Ryan Ezell, Chief Executive Officer; and Bond Clement, Chief Financial Officer. We will start with prepared remarks covering our business operations and financial performance. Following that, we will open the floor for questions. Yesterday, we announced our third quarter 2025 results and an updated earnings presentation, both of which are available on the Investor Relations section of our website. This call is being webcast with a replay available on our website shortly after its conclusion. Please note that the comments made on today's call may include forward-looking statements, which include our projections or expectations for future events. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from those projected in forward-looking statements. We advise listeners to review our earnings release and most recent 10-K and 10-Q filings for a more complete description of risk factors that could cause actual results to materially differ from those projected in forward-looking statements. Please refer to the reconciliations provided in the earnings press release and investor presentation as management will be discussing non-GAAP metrics on this call. With that, I will turn the call over to our CEO, Ryan Ezell.

Thank you, Delbert, and good morning. We appreciate everyone's interest in Flotek and for joining us today as we discuss our third quarter of 2025 operational and financial results. In the third quarter, we saw North American operators maintain the cautious posture initiated in the second quarter as they continue to navigate the return of OPEC+ spare capacity and persistent global trade uncertainty. Despite the dynamic geopolitical and macroeconomic challenges that have injected uncertainty within the market, the Flotek team remains steadfast at the execution of our corporate strategy, driving transformation and delivering our 12th consecutive quarter of adjusted EBITDA improvement. As referenced on Slide 4, Flotek extended its track record of transforming the company into a Data-as-a-Service business model as our industrial pivot continues to gain momentum while expanding the total addressable market for future growth of the company. Furthermore, we increased market share in both of our complementary business segments with an unwavering commitment to service quality and value creation for our customers and shareholders through the convergence of innovative data and chemistry solutions. With that, I'd like to touch on some key highlights for the quarter referenced on Slide 7 that Bond will discuss later in the call. Total revenue during the quarter rose 13% versus third quarter 2024, highlighted by a 232% increase in data analytics revenue, which is our strongest quarter ever and a 43% increase in external chemistry revenue. Gross profit climbed 95% versus third quarter 2024, with third quarter 2025 gross profit margin rising to 32%. Net income totaled $20.4 million, while adjusted EBITDA was up 142% versus third quarter 2024 and up more than 20% sequentially. On October 29, 2025, Flotek announced that the XSPCT analyzer was the first optical spectrometer to comply with oil and gas custody transfer standards known as GPA 2172, further empowering our ability to build high-margin revenue backlog in the Data Analytics segment. Finally, we increased our 2025 total revenue and adjusted EBITDA guidance ranges by 6% and 3%, respectively. Above all, these milestones were achieved with 0 lost time incidents in the field of operations. I also want to spotlight our differentiated prescriptive chemistry management service team, which has remarkably maintained over 3,500 days with no OSHA recordables or lost time occurrences. You combine that with the recent achievements at MTI in the third quarter of 2025 saw Flotek achieve its lowest EMR score in company history. I'd like to thank all of our employees for their hard work and commitment to safety and service quality in achieving these outstanding results. Now turning to the larger picture for the energy and infrastructure sector shown on Slide 9. We share the vantage point that the fundamentals for hydrocarbon demand will continue to grow over the long term. Substantial investment will be required to maintain current production levels, much less to increase production sustainably to meet expanding requirements of power demand driven by AI, data centers and industrial reshoring, combined with the reliability issues of an aging transmission infrastructure. As our legacy pressure pumping customers diversify into the power generation business to capitalize on this demand opportunity, Flotek is poised to support them and emerging customers with products and services that help protect their investment in power generation equipment. With a multi-year waiting list for turbines and reciprocating engines, protecting these capital-intensive investments is critical, along with enabling reliability standards that exceed the greater than 99% uptime requirements. With this outlook in mind and referencing Slide 10, I've never been more invigorated about Flotek's future as we strengthen our position as a technology leader, spearheading innovation and delivering tailored data and chemistry solutions that meet our customers' specific needs. We are committed to shaping the industry's digitalized future by leveraging chemistry as the common value creation platform. Now let's dive into the details, referencing Slide 11 of the earnings investor deck. Today, I want to spotlight the remarkable progress in our Data Analytics segment, which saw service revenues increase 625% in Q3 2025 versus Q3 2024, elevating gross profit to 71% in Q3 2025 versus 44% in the same quarter a year ago. This transformational growth in data-driven service revenue is empowered by 3 upstream technology applications: power services, digital valuation and flare monitoring, all of which are fueling significant advancements for our organization while generating recurring revenue backlog. The first is our transformative power services, which has evolved from a novel analytical approach into a transformative solution for the energy infrastructure sector that we call PWRtek. What began as advanced analytics has grown into a comprehensive end-to-end fuel management platform, redefining performance standards and operations within the sector. Looking at Slide 12. At the heart of PWRtek is our Verax analyzer, which goes beyond data collection to deliver custody transfer grade measurements. It provides precise BTU methane number and volume reporting for royalties, invoicing and performance guarantees. Complementing this is our patented ESD trailers that actively remove liquids and contaminants, conditioning high BTU hydrocarbon feeds to meet exact turbine or engine performance specifications. Because every site and grid condition are unique, we have integrated Coriolis metering, automated CNG blending and seamless backup connections, allowing operators to switch fuels or go off grid with a single button, resolving major constraints to the development of data center and grid power infrastructure. But Biotech is more than just technology. It's about control. Operators interact effortlessly through an on-trailer HMI or a unified web portal that is accessible on desktop, tablet or smartphone. Our cloud-based portal enables the monitoring of live BTU trends, H2S alerts, Coriolis flow meter readings and automated CNG blend controls, combined with custom alarm thresholds to automatically isolate all-spec hydrocarbon feeds and protect high-value turbines or engines from catastrophic damage, thus minimizing downtime and operational risk while enhancing safety. All data flows securely through our patented edge-to-cloud pipeline, ensuring zero manual intervention, end-to-end encryption, full audit trails and compliant custody transfer recordkeeping. Finally, our over 35 data analytics patents position Flotek as a leader across the natural gas value chain. When considering our capabilities for advanced fuel blending, zero emissions analytics, custody transfer grade flow cell measurements, wireless ESD actuation and secure edge-to-cloud data transmission, we deliver unmatched monitoring, control and safety for field gas operations. In April of 2025, we acquired 30 patented real-time gas monitoring and dual fuel optimization assets. We are proud to report that the integration of these assets has gone seamlessly and all units are in service as of today, which is ahead of our original schedule. Now let's transition to Slide 13, where we'll dive into our second upstream application, digital valuation. This groundbreaking use case sets a new standard in the oil and gas industry, delivering unprecedented transparency and minimizing enterprise risk for producing wells like never before through real-time digital twinning of the custody transfer processes. By monitoring hydrocarbon quality and composition in real time, we have unlocked a new market for the industry and for Flotek. On October 29, 2025, Flotek reported a historic milestone in natural gas measurement. The XSPCT spectrometer became the first optical instrument to achieve the stringent reproducibility and repeatability requirements of the oil and gas industry standard for custody transfer, GPA 2172 and API 14.5. The XSPCT measurement unit is designed to enable more accurate volume and composition of data, thereby delivering greater transparency for royalty owners, operators and midstream companies than traditional methods. We believe the XSPCT speed, accuracy, durability and qualification under the rigorous measurement standards outlined in GPA 2172 will provide a significant advantage in discussions with prospective customers as we aggressively expand this manufacture and field deployment. Let's move to our third upstream application, the VeraCal flare monitoring solution. We continue to see operational demand in the third quarter of 2025 as we navigate the rapidly changing regulatory landscape by partnering with operators and flare developers to deliver value that goes beyond just compliance and unlocks new efficiencies and environmental benefits to our clients. It's clear that our transformational strategy to grow the data analytics segment through upstream applications is gaining traction. But what is most important is what it means for our stakeholders and investors. Our Data-as-a-Service driven strategy ensures predictable recurring revenue and cash flow, delivering stability and long-term value. Our proprietary data technology is a superior measurement accuracy that enables velocity and decision control that establishes a high barrier to entry, secures client loyalty and supports our value-based service model. In long-term, high-margin subscriptions position Flotek for sustained growth and margin expansion, driving significant shareholder value over time. And lastly, our Chemistry Technologies segment continues to deliver robust performance, driven by the differentiation of our prescriptive chemistry management services and our expanding international presence. Slide 17 underscores the resilient performance of our Chemistry segment with a 54% growth in external chemistry revenues and a 21% increase in total chemistry revenues for 3 months ended in 2025 versus the 3 quarters or 9 months ended 2024, despite a 24% decline in active frac fleets during the same period. While we anticipate potential commodity price volatility through the remainder of 2025, we do see indicators for cautious optimism in 2026. This presents a strategic opportunity to expand our market share by accelerating the adoption of our prescriptive chemistry management solutions and enhancing asset value for our customers. It's evident that our chemistry team has executed our strategy flawlessly despite the near- to medium-term headwinds. While uncertainties around near-term activity levels persist due to macro factors that could affect the completion chemistry market, we remain focused on defining these challenges, delivering differentiated chemistry and data services to provide our customers with industry-leading returns on their investment. We're confident that our expanding suite of services positions us to deliver superior solutions to a variety of our industry's most challenging problems while maximizing our customers' value chain. Now I'll turn the call over to Bond to provide key financial highlights.

Thank you, Ryan. Good morning, everyone. I'm excited to discuss our third quarter numbers released yesterday afternoon. Our results were positively impacted by the first full quarter of cash flow contribution from our PWRtek assets. The $6.1 million in PWRtek revenues during the quarter drove a 50% sequential increase in data analytics revenue. Data analytics gross profit margin totaled 71% during the quarter. That was up 800 bps sequentially as gross margins relative to the PWRtek assets specifically came in at 89%. The increased data analytics contribution, along with an increase in the chemistry shortfall penalty, combined to raise total company gross profit margin to 32% for the quarter. As noted in the release, all of the PWRtek assets are now in service, so we expect fourth quarter revenues to increase further to approximately $6.8 million. As shown on Slide 11 in yesterday's deck, since closing the acquisition in April, our PWRtek assets are a clear catalyst for margin and profitability expansion, driving improvements not only within the Data Analytics segment, but also at the corporate level. Emphasizing PWRtek's impact and as shown on Slide 6, during the third quarter of last year, the Data Analytics segment contributed just 13% of total company gross profit versus 35% during the third quarter of this year. As a reminder, based on the contractual terms in the lease agreement, PWRtek revenues in 2026 are expected to be north of $27 million or an approximate 70% increase from 2025. So we fully expect these assets to be a significant part of our 2026 results. Looking at the quarter, revenue during the quarter was up 13% from the year ago, and as Ryan said, was driven by the Data Analytics segment. As compared to the year-ago quarter, we saw a massive increase in service revenues driven by PWRtek. Data Analytics segment revenue represented 16% of total company revenue in the third quarter, which is up from 5% in the year-ago quarter. In addition, third quarter revenues from the Data Analytics segment equaled the entire segment revenue for all of 2024. During the quarter, total chemistry revenues were flat versus the '24 quarter, but on a year-to-date basis, as shown on Slide 17, total chemistry sales are up 17% from last year. More importantly, we have made substantial progress in diversifying our chemistry sales. Excluding the chemistry order shortfall penalty, 53% of third quarter 2025 chemistry sales were to external customers, and that's up from 35% in the year-ago quarter. As it relates to international sales, they totaled $10 million through the first 9 months of 2025, which is up about 122% from the year-ago period. SG&A costs during the quarter were up versus the third quarter of last year due to higher personnel costs, including stock comp as well as increased professional fees, some of which are related to the company's first-time requirement for an integrated audit. On a percentage of revenue basis, G&A was 13% this quarter versus 11% in the year-ago quarter. We do expect G&A to trend down in the fourth quarter as compared to the third quarter. Net income for the quarter totaled $20.4 million or $0.53 per diluted share as compared to $2.5 million or $0.08 per share in the year-ago quarter. Current quarter net income did include a $12.6 million tax benefit, primarily associated with the partial release of the company's valuation allowance on its deferred tax assets. While the tax benefit is noncash, it is a positive development that illustrates the company's expectation of future profitability along with its outlook on utilizing deferred tax assets. As shown on Slide 8, during the third quarter, we continued our streak with respect to growing adjusted EBITDA. Our third quarter 2025 adjusted EBITDA was 24% higher sequentially. And through the first 9 months, adjusted EBITDA is running more than 110% higher than the 9-month 2024 period. Similar to the gains we saw in gross profit margin, our third quarter adjusted EBITDA margin increased by 500 bps sequentially, primarily as a result of the increased contribution from our mobile power support assets, PWRtek. In yesterday's release, we increased our 2025 guidance ranges on both total revenue and adjusted EBITDA, which we've summarized on Slide 8. The midpoint of our revised guidance implies 2025 revenue growth of 19% and adjusted EBITDA growth of 85% as compared to last year. Again, using the midpoint of both metrics, it implies a 17% adjusted EBITDA margin for 2025 as compared to 11% in 2024, further underscoring the positive margin impact attributable to the PWRtek assets. Wrapping up my comments on the financials, the third quarter built upon a very strong second quarter, highlighted by continued growth in margins and profitability. We remain focused on continuing to rebalance our profitability mix, transitioning from chemistry technologies as the primary contributor today to data analytics as the leading driver in the near future. With that, I'll turn the call back to Ryan for closing remarks.

Thanks, Bond. The third quarter 2025 results build upon our now multi-year track record of consistently posting improved financials as we successfully transformed the organization to enter a new data-driven frontier. Our 2025 guidance points to the execution of our corporate strategy, leveraging chemistry as the common value creation platform. Looking at Slide 18, I remain convinced we are still in the early innings of Flotek's transformation as we continue to grow and maximize returns for our customers and shareholders across the entire value chain of the energy landscape. Our transformative and strategic entry into the energy infrastructure sector is expected to provide a significant increase in high-margin data analytics revenue and cash flow for years to come. Through the growth of our upstream applications, we anticipate the Data Analytics segment will contribute to over half of the company's profitability in 2026. We continue to secure long-term contracts for both our Chemistry Technologies and Data Analytics segments, bolstering confidence in Flotek's ability to deliver stable revenue and profitability while effectively shielding our business from the impacts of commodity price fluctuations. Finishing with Slide 19, we believe no other company in our industry is better positioned to deliver the cutting-edge technologies needed to tackle the unique challenges of our energy and infrastructure sectors. I'm incredibly proud of our progress and confident in our team's ability to execute moving forward. Given the growth potential for our Chemistry Technologies and Data Analytics segments, we see Flotek as a compelling investment opportunity. Thank you for your continued support, and we're eager to share our vision for Flotek's future and look forward to updating you on our progress in the quarters ahead. Operator, we're ready to open the floor for questions.

Your first question comes from Jeff Grampp with Northland.

I wanted to start with digital valuation. I noticed in the slide deck that there is a goal to reach between 25 and 35 units by year-end, and there are over 200 installations in the pipeline with those customers. What do you believe is the primary factor impacting the pace of that ramp from around 30 to potentially over 200? I'm looking for a bit more detail on those data points.

So Jeff, this is Ryan. We see there are two to three steps that need to happen regarding our digital valuation. Earlier this year, we discussed some successful pilot programs we had running in multiple basins in North America. Those pilots have now transitioned to the commercial phase, which is one of the key factors driving our multiple unit deployments that will begin in the latter part of Q4 and will extend into the over 200 sites we anticipate by 2026. We are also considering the specific locations for these deployments, as different operators have varying strengths. A significant value creation opportunity arises when we introduce the production wedge component at a gathering site, which tends to attract the most initial interest. Following that, we'll implement the pure 2172 addressing method related to custody transfer. The pilot phases are complete, and we are now seeing full commercialization. Our manufacturing levels have increased, and we do not foresee any issues meeting our totals. We have pre-purchased all necessary materials and are currently in the building phase. At this point, we are finalizing terms and conditions for customer rollouts. We expect a steady output by the end of this year, continuing into '26, with a quarterly increase in total numbers, which should provide you with some clearer insight.

Yes, that's perfect, Ryan. Just to clarify one of your comments, it seems the focus is more on customer decisions regarding where to deploy these rather than the decision of whether to deploy them. Is that accurate?

Yes, that's correct. You can see a progression when they bring new wells into production, as we observe every minor change in production quality. Initially, we focus on monitoring the well over time. Each customer operator or midstream client aims to achieve the maximum return on investment from their initial deployments, which then influences subsequent stages. Essentially, we onboard a customer, and it typically takes a few weeks to complete the technical installation and evaluate the system's performance. The initial focus is often on production wedges before we transition into daily monitoring. This process effectively creates a digital twin of the manual custody transfer sampling, which is faster, more accurate, and more sustainable long-term while also being cost-effective over time.

Got it. Those are great details. I appreciate that. My follow-up is on the power gen side with PWRtek. Can you update us on kind of customer conversations for third-party power services and any kind of outlook on when you can get some deployments there?

Yes. Excluding the PWRtek deal with our initial contract, we've generated an additional $2.1 million in revenue year-to-date after only having the equipment for one quarter. On Slide 12, we provide a schematic of our sales process. The first step involves proving measurement, and that $2.1 million relates to using Verax or XSPCT to monitor gas quality for customers operating turbines or reciprocating engines. We can demonstrate the gas quality going in and out of manual treatments they are currently using. This approach has been successful, as we’ve gained six new customers in Q3 outside of our ProFrac deal, with multiple units testing for each of them. The next phase involves control, where we assess their needs for a smart filtration skid or an ESD monitoring unit, including requirements for H2S, CO2, and other components, depending on their level of conditioning needs. Finally, we move to distribution and full control, working effectively with reciprocating engines and adjusting temperature and gas quality for turbines. In my opinion, we're making excellent progress. Additionally, it's worth noting that sales cycles vary by power generation verticals, with somewhat slower turnover compared to our typical frac monitoring and chemical sales, which often have quicker cycles. You'll find that other power service providers may comment on this difference as well. Referring back to Slide 12, we’ve outlined a clear sales pathway, and we are transitioning successfully into control with our diverse client base, which includes legacy pressure pumping customers, data center developers, and biogas generation clients, reflecting varied installation times and equipment needs.

Our next question comes from Gerry Sweeney, ROTH Capital Partners.

I apologize. I was jumping back between a couple of calls here, so I may have missed some stuff. But Bond, I think you said how much did you say PWRtek is projected to do next year? Was it $26 million or $27 million?

Yes, it's $27.4 million next year and for each of the next 5 years or so. And then in the sixth year of the lease agreement, it reverts to whatever the prevailing market rates are. But for the first 5 years, it's fixed rates and the math is $27.4 million a year of revenue.

So that was just for the acquired assets with your partner. That obviously doesn't apply any growth for the power side.

That's correct. So that excludes the $2 million that Ryan just mentioned on the previous question relative to non-PWRtek power services that are not included in that number. That's just the 30 trailers.

Got it. I still refer to it as custody control, although I know you’ve renamed it. I believe that’s a key focus. How do you begin to expand into the power sector? Do you have sufficient skids, monitors, and manufacturing capacity for sales? Can you explain how you plan to drive additional growth in that area?

Yes. I'll reference Slide 12 again. Our first step is to demonstrate the core capabilities of PWRtek and Power Generation services, which involves real-time gas measurement. The type of equipment used, whether a reciprocating engine or a turbine, dictates the specific measurements, including BTU number, methane number, Wobbe index, and various heating values. Our equipment covers all these aspects and showcases the functionality of PWRtek as our initial phase. In Q3 alone, we acquired five new customers for this purpose and are testing multiple Verax and expat units on site to enhance that area. Once we establish a clear measure of gas quality, we advance to controlling equipment, including ESD trailers, smart filtration skids, or H2S monitoring, all designed to optimize gas output for turbines and reciprocating engines. Additionally, we can now see BTU or methane numbers in real time, enabling us to automatically tune a reciprocating engine, a first in the industry, which we actively pursued in Q3. This also sets the stage for our next sales opportunities. Finally, our cutting-edge distribution trailers are part of our systematic approach. We made significant strides in what I term Phase 1 during Q3 and expect further development in control and distribution throughout Q4 and into 2026. Regarding capital needs, we have ample measurement devices prepared, including XSPCT Verax units. We've built an initial four ESD trailers, with plans to order additional distribution trailers in Q4. We have the most ambitious capital delivery plan at Flotek in the last decade as we approach 2026, aimed at meeting the demands of our expanding customer base, including both legacy pressure pumping customers and emerging clients focused on mobile power generation, as well as fixed installations and biogas treatment facilities.

Our next question comes from Don Crist, Johnson Rice.

Most of my questions on the power side or the data analytics side have been answered. But I did want to ask about on the chemical side, particularly international chemicals. Your customer got a big contract with Saudi the other day and didn't know how that would kind of play into your future relationship with them. It seems like they're going to be growing rapidly. And I don't know if you all are going to participate in any meaningful way there?

Yes, that's a great insight and a great question. Our team is currently at ADIPEC and will be in Saudi next week to discuss the impacts of our business expansion with what I believe is our largest customer in the Middle East. As we mentioned, our international revenue year-to-date is up 122%. The initial work we prepared for contributed to those revenue increases. We experienced a slowdown after the mega tender for Aramco was completed, but since our customer is taking on the majority of that hydraulic fracturing scope, we expect business to pick up significantly in the latter half of Q4 and especially in 2026. This aligns with our positioning of Flotek for growth in the Middle East. While we haven't provided specific guidance on expectations, we anticipate a very positive outcome from this.

Your next question comes from Josh Jayne at Daniel Energy Partners.

First question is just on XSPCT. I think in the press release there was a discussion about October. Could you elaborate a bit more on the cost and efficiency gains for the analysis so that the real-time analysis happens every 15 seconds? How does that alter decision-making for the customer?

I'll discuss a few points. First, let's focus on efficiency. Now that we've moved past GPA 2172, we can provide a custody transfer grade measurement to resource owners, operators, or midstream buyers almost every five seconds, compared to the three to six months it previously took. This frequent and high-resolution measurement helps eliminate a lot of potential manual sampling biases in production, adding clarity to the actual production levels and quality from each target location. We typically observe a bias range of 3% to 5%. Additionally, measuring directly from the flow line eliminates manual sampling, leading to cost savings. Manual sampling often varies by lab, resulting in discrepancies due to differences like pressure drops or temperature issues. By removing these factors, we see substantial improvements in measurement quality, accuracy, resolution, and reduced variability. In terms of costs, we anticipate nearly a 50% reduction in overall expenses, including capital expenditures and maintenance. This represents a significant advancement in developing a real-time digital twin of the custody transfer process, offering considerable efficiency, accuracy, and cost benefits for our customers.

That's very helpful. I wanted to discuss the chemistry business. Continuous fracturing has been mentioned in some recent E&P calls. Could you share what you're observing in terms of remaining efficiency gains on the pumping side? You noted the revenue growth despite a declining frac count in the chemistry business. Could you also provide your outlook for U.S. land in 2026, particularly regarding the potential for chemistry revenue growth even if there is little to no change in fleet size? Additionally, are you seeing more customers utilizing chemistry in the current environment as they seek to maximize output from less acreage?

That's a lot to cover, so I'll summarize in a few key points. First, our focus on stabilizing revenue both domestically and internationally will create a strong foundation for growth. We believe the potential expansion of our Middle East business will significantly contribute to our growth in 2026, along with opportunities in Latin America and Asia Pacific, although these may not be as substantial as those in the Middle East. Second, domestically, the operations of oil and gas companies are critical to Flotek's strength. They are seeking efficiency and maximum returns on their investments, which aligns with our offerings. We are improving efficiency through our PCM services and advanced chemical technologies, moving towards complete automation with real-time water quality monitoring and adjustable chemical pumping. This allows us to optimize operations, bridging the gap between Tier 1 and Tier 2 acreage. While we have seen a steady use of water despite increased pumping hours, we anticipate positive movement in 2026. However, we must continue to deliver innovative technologies to capture competitive market share. Despite our efficiency gains and disciplined investment, there remains underinvestment in the industry. Currently, 90% of spending is focused on maintaining production, which has been declining since late 2021. A significant shift in investment is necessary, and I believe Flotek's capabilities in data-driven monitoring and chemistry solutions will position us well to address this challenge. We have room to grow, and our advancements will enhance efficiency and return on investment for our operators. Additionally, future demand shifts, driven by electrification and infrastructure development, will require more than just maintaining production.

Your next question comes from Joichi Sakai, Singular Research.

Can you hear me?

Yes, we got you.

Yes. Just on the data analytics, can you give us a sense of where that analytics gross margin would normalize as the installed base kind of matures or the recurring revenues outweigh one-time setup and integration costs?

You're asking about our expectations going forward. This year, we anticipate generating approximately $16 million under the PWRtek agreement, which has margins of 89% to 90%. Next year, we expect that number to increase by 70%. Clearly, additional revenue from this high-margin business should continue to enhance our margins. It's challenging to predict other factors contributing to next year's revenue because we don't have a significant long-term contract driving margin growth this year. However, if the PWRtek business represents a substantial part of next year's revenue, it should push the weighted average gross margins above 70%, potentially nearing 80%.

Got you. Regarding the post-sale customer support for this product installation, do you anticipate any resource constraints or additional costs that would impact future renewal rates?

Not at this time. We've started investing in inventory for actual measurement devices, including the Verax and XSPCT units. We have begun building out multiple ESD and smart filtration skids from the PWRtek aspect, and we will continue to expand our distribution skids while maintaining a balanced risk assessment of our pipeline versus pre-built inventory versus contract deliveries. Fortunately, even if we receive a significant tender or award that exceeds our capacity, most of this equipment can be produced in five weeks or less, and we can typically deliver expected Verax units within a few days from the time we receive an order. Currently, we should be able to keep pace. We are examining our capital outlay and manufacturing production over a 36 to 60-month horizon, focusing on potential bottlenecks related to our facility capacity rather than personnel or equipment availability. Expansions of our facilities are among the options being considered in the coming months.

Got you. And on the external chemistry side, as your mix kind of shifts, how are the payment delays from your non-anchor clients compared to your legacy business?

All things considered, our North America land customers generally pay quite well, and our days sales outstanding are relatively low compared to the industry. However, as expected, our international customers, especially in the Middle East, tend to pay more slowly. This is often due to extended payment terms with service companies because of arrangements with ADNOC, Aramco, and others, which adds an average of 20 to 25 days to the typical DSO. Currently, our cash flow has been stable. If we see significant growth in our Middle East business, it may require some additional working capital to stabilize. We anticipate this cash flow will increase in the first half of 2026 and hope to reach stability by mid-Q2. We are closely monitoring this situation in case the business ramps up faster, given the longer payment terms. Therefore, the primary concern on our radar is the working capital needed to support this ramp-up.

Got you. And just my last question on that working capital. If these order volumes kind of spike, would you need any alternative backup for working capital facilities? Or do you have headroom in the lending capacity?

Yes, I believe we are in a strong position concerning our capital. In the first quarter, we will receive a cash payment related to the OSP, which I can't predict precisely, but after considering the $7 million offset, it could provide a cash infusion of around $20 million to $25 million. We also have about $15 million of availability under our existing ABL. Currently, our leverage is quite low, so if necessary, we could consider raising capital in the debt markets. Additionally, our stock performance has been strong, giving us options in terms of equity as well. Overall, we have considerable flexibility regarding liquidity, and we anticipate that the OSP cash payment in Q1 will adequately support our working capital needs for our expanded international business.

There are no further questions at this time. I will now turn the call over to Delbert Rose. Please continue.

Yes. Thank you. Join us at some of our upcoming events. The Permian Basin Barbeque Cook-Off from November 11 to 12 in Midland, Texas. The Invest: Houston Second Edition event on November 20 at the JW Marriott in Houston, Texas; Daniel Energy Partners Executive Series, December 3 in New York City, New York; the 14th Annual ROTH Deer Valley event December 10 through 13 in Park City, Utah, and we will participate in Northland's Virtual Growth Conference on December 16.

So thanks, everyone, for joining us today, and we look forward to keeping you abreast of the growth and execution of our digitalization strategy.

All right. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.