Good morning, ladies and gentlemen, and welcome to the Flotek Industries, Inc. first quarter 2026 earnings conference call. At this time, all lines are in listen-only mode. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Wednesday, May 6, 2026. I would now like to turn the conference over to Mike Critelli. Please go ahead.

Thank you, and good morning. We are thrilled to have you with us for Flotek Industries, Inc.’s first quarter 2026 earnings conference call. Today, I am joined by Ryan Ezell, chief executive officer, and Bond Clement, chief financial officer. We will begin with prepared remarks on our operations and financial performance followed by Q&A. Yesterday, we released our first quarter 2026 results, full-year 2026 guidance, and an updated investor presentation, all available on our investor relations website. This call is being webcast with a replay available shortly afterward. Please note that today’s comments may include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from our projections. For a full discussion of risk factors, please review our earnings release and most recent SEC filings. Please also refer to the reconciliations in our earnings release and investor presentation for non-GAAP measures. With that, I will turn the call over to our CEO, Ryan Ezell.

Thank you, Mike, and good morning to everyone. We appreciate your interest in Flotek Industries, Inc. and your participation today as we review our first quarter 2026 operational and financial results. In 2026, Flotek further positioned its industrialized pivot and transformational growth storyline through the continued execution of its corporate strategy. Driven by the power convergence of innovative real-time data and chemistry solutions, as shown on slide 3, Flotek has laid the foundation for a data-driven growth trajectory built on diverse recurring revenue, high-margin services, and proprietary technologies that create value for our customers and improve returns for our shareholders. The strategic transition of the company into a data-as-a-service business model continues to gain momentum while expanding the total addressable market for the company. As a result, Flotek’s data analytics segment grew exponentially while our differentiated chemistry segment outpaced the market in a challenging environment through an unwavering commitment to safety, service quality, innovation, and total value creation. Now, before I discuss the company’s vantage point on the evolving geopolitical and macroeconomic dynamics within the sector, I would like to touch on some key highlights for the first quarter referenced on slide 4 that Bond will discuss later in the call. Company total revenue grew 27% compared to 2025, highlighted by 295% growth in data analytics, which was the highest quarterly revenue for data analytics in the company’s history. Industry technologies revenue increased 13% despite three-year lows in completions activity in North America, which was also the highest quarterly revenue in over seven years. Company gross profit climbed 25% versus 2025. It is impactful to note that data analytics accounted for 50% of the company’s gross profit versus 8% in the prior-year quarter, marking a major milestone in Flotek’s transformation. Total company adjusted EBITDA grew 44% year over year. Flotek’s XSpec Analyzer was named Product of the Year at the 2026 Analyzer Technology Conference. Finally, 2026 guidance builds upon a multiyear trend of revenue and profitability growth as the company executes on its strategic initiatives to provide long-term resiliency and profitability as shown on slide 5. Most importantly, these results were achieved with zero lost-time incidents in the field operations. I want 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, we share the viewpoint that the ongoing situation in Iran will have impactful and potentially long-term implications on global supply and energy security that will demand action. The structural disruption in the Middle East has catalyzed a fundamental shift in supply-side dynamics, establishing a higher baseline for energy security and recalibrating the risk profile for regional supply. As cumulative production deficits and reductions in strategic reserves are trending towards 1 billion barrels, we expect increased investment in localized oil and gas developments, while geographies that do not possess resources look to rapidly diversify energy security exposure. All of these factors point towards a fundamentally tighter energy market than what existed just 60 days ago and support a stronger commodity pricing environment for increased upstream activities. Layering in the expanding power demand driven by AI, data centers, and industrial reshoring, combined with the reliability issues of an aging transmission infrastructure, the expectations for tailwinds within the energy sector further strengthen. North America is already showing early indicators of recovery. Completions activity white space has all but disappeared for 2026, with spot work interest increasing throughout the remainder of the year. Our legacy pressure pumping customers continue to capitalize on the portfolio diversification opportunity provided by the demand for remote power generation. Flotek is poised to support emerging customers with products and services that help protect their assets while optimizing their operational performance and fuel efficiency. With multiyear waiting lists 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. Transitioning from the macro view, let us dive into the details starting with slide 9. I want to spotlight the remarkable progress in our data analytics segment. We saw service revenues increase 785% in 2026 versus the first quarter of 2025, driving gross profit margin to 75% versus 38% in the prior-year period. This strong growth is powered by our flagship upstream applications Power Services and Digital Valuation, both of which are generating significant contracted wins and a robust recurring revenue backlog shown on slide 10. Highlighting these wins are: first, 21 Power Services measurement units added since closing our original PowerTech deal. These are in addition to the primary long-term PowerTech contract assets. There is a 27-unit order from a large OFS customer with an expanding distributed power fleet to monitor field gas for power generation and digital evaluation of fuel quality and consumption. A 15-unit order from a major midstream customer for real-time crude and condensate quality measurement. And also a deployment of a smart skid rental to a major IOC to optimize gas quality with real-time blending of field gas and CNG, which is one of the first applications of its kind. We also deployed rental assets to support our large utility recovery power contract in Montana. This momentum has accelerated with these new contracts, expanding our expected backlog for the remainder of 2026 to $34.1 million and our three-year expected backlog to more than $90 million. Power Services led this growth, further reinforcing our shift towards high-margin recurring revenue streams. Flotek’s Power Services has evolved from a novel analytical approach into a transformative platform for the energy infrastructure sector that we call PowerTech. What began as advanced analytics has grown into a comprehensive end-to-end fuel management platform, redefining performance standards and operations within the sector as shown on slide 11. Our expanding portfolio of patents and field-proven use cases position Flotek as a leader across the natural gas value chain. When considering the velocity of our measurement, we deliver unmatched real-time fuel monitoring, conditioning, blending, and engine control to optimize performance and safety for behind-the-meter distributed power operations. The success of Flotek’s Power Services applications is expanding rapidly as we expect to have proprietary real-time analyzers on more than 50% of the currently active North American e-frac and natural gas-powered fleets by year-end. Additionally, on March 3, 2026, Flotek announced its first contract within the utilities infrastructure sector, seen on slide 12. Leveraging our patented PowerTech platform, Flotek will partner with leading distributed power providers to coordinate installation of up to 50 megawatts of state-of-the-art power generation equipment, including advanced gas distribution and smart conditioning systems, to support critical federal disaster recovery initiatives. We are pleased to announce that we have initiated phase one of the project, which includes the mobilization of 12 megawatts of distributed power combined with our proprietary gas conditioning and distribution skids to the in-field staging area while the site prep work is completed. First power is expected in 2026. Now let us transition to slide 13 and 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 process. In 2025, Flotek reported a historic milestone in natural gas measurement. The XSpec 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, also known as API 14.5. We believe the XSpec’s 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 its manufacture and field deployment. In March 2026, the XSpec Analyzer was named Product of the Year at the 2026 Analyzer Technology Conference, further exemplifying its differentiated capabilities. Since completing our digital valuation pilot program in 2025, we exited the year at 25 active units deployed. Furthermore, 2026 is off to a great start with that number more than doubling to 57 units currently deployed or contracted for delivery. It is clear that execution of our transformational strategy to grow the data analytics segment with upstream applications is gaining traction. What is most important is what it means for our stakeholders and investors. First, our DAS-driven strategy ensures predictable, recurring revenue and cash flow, delivering stability and long-term value. Secondly, our proprietary data technologies and superior measurement accuracy enable velocity and decision control that establish a high barrier to entry, secure client loyalty, and support our value-based service model. Finally, long-term, high-margin subscriptions position Flotek for sustained growth and margin expansion, driving significant shareholder value over time. Lastly, let us move to our chemistry technology segment, which continues to deliver robust performance driven by the differentiation of our Prescriptive Chemistry Management services and our expanding international presence. Slide 15 highlights the resilient performance of our 13% increase in total revenue for 2026 compared to 2025 despite a 21% decline in the average North American frac fleet count over the same period according to Primary Vision data. As mentioned earlier, we believe we have reached the trough of the cycle and see encouraging indicators for cautious optimism in the second quarter of 2026 and beyond. We continue to closely monitor operational and supply chain risks to our international operations amid the ongoing conflicts in the Eastern Hemisphere. It is evident that our chemistry team has executed our strategy flawlessly. As we move into the second quarter of 2026 and beyond, the opportunities leveraging the convergence of Prescriptive Chemistry Management and data services move to the forefront through high-margin services that improve operator ROI. These advanced services include smart chem-add units, real-time flowback monitoring, and implementation of prescriptive geological targeting. Looking ahead, I am more confident than ever in Flotek’s momentum and our ability to drive sustained, profitable growth as we execute our transformative corporate strategy. We are firmly positioning Flotek as a high-growth technology leader in the energy and infrastructure sectors, accelerating innovation through the powerful integration of real-time data analytics and advanced chemistry solutions that are tailored to precisely meet our customers’ evolving needs. Now I will turn the call over to Bond to provide key financial highlights. Thanks, everyone, and good morning.

Our first quarter results build upon a record-setting 2025. We issued our initial guidance for 2026 that points toward continued strong growth in revenue and adjusted EBITDA. Quarterly highlights included achieving our highest quarter of total revenue since 2017, driven by the largest quarterly contribution from ProFrac in the more than four-year history of our supply agreement, and the second consecutive quarter in which our data analytics segment surpassed $10 million in revenue. Total revenues for the quarter increased 27% year over year and 4% sequentially, driven by continued strength in related-party revenue, which increased $21 million, or approximately 70%, compared to the year-ago quarter. Of that increase, roughly $14 million was related to chemistry revenue, while approximately $97 million was attributable to the PowerTech lease agreement. External customer chemistry revenue declined 33% year over year but was flat on a sequential basis, which we view as an encouraging sign. As Ryan touched upon earlier, we expect external chemistry revenue to increase in the second quarter amid improving customer engagement, reinforcing our belief that completion activity levels are stabilizing and may be in the early stages of recovery as we move through the year. Data analytics delivered another strong quarter with service revenue increasing significantly compared to the prior-year period. As highlighted on slide 9, service revenue accounted for 82% of data analytics revenue this quarter, up sharply from the year-ago quarter, helping to drive first-quarter data analytics gross profit margin to 75%, a 200 basis point improvement sequentially. Data analytics segment revenue represented 15% of total company revenue in the first quarter, significantly up from 5% in the year-ago quarter. As highlighted in the earnings release, we began mobilizing equipment related to our disaster recovery Power Services contract. As a result of this incremental revenue, we are forecasting sequential growth in data analytics during the second quarter. As noted on slide 12, we currently expect 2026 revenues from this contract to total approximately $12 million before consideration of the contract extension. Gross profit increased 25% as compared to the year-ago quarter. First-quarter gross profit as a percentage of revenue totaled 22%, which equated with the year-ago quarter despite the nearly $5 million reduction in the order shortfall penalty as compared to the first quarter of last year. SG&A expenses increased 10% year over year, primarily driven by higher non-cash stock-based compensation related to the timing of our long-term incentive grants. For context, our 2026 grants were issued in the first quarter, whereas the 2025 grants were made in the fourth quarter. On a sequential basis, SG&A declined 9%, reflecting lower legal and professional fees. As revenue continued to scale this quarter, we saw meaningful leverage in our G&A expenses. Excluding stock compensation, G&A declined to 8.7% of revenue, down from 10.5% in the year-ago quarter. That nearly 200 basis point improvement below the gross profit line reflects the efficiency of our cost structure and was a key driver in the year-over-year expansion in adjusted EBITDA margin in the first quarter of this year. Net income for the quarter was $4.7 million, or $0.12 per share, compared to $5.4 million, or $0.17 per share, in the prior-year quarter. The year-over-year decline was primarily driven by higher depreciation and interest expense related to the PowerTech acquisition that closed during 2025, as well as a higher effective tax rate. For the first quarter, our effective tax rate was approximately 26% compared to only 1% in the year-ago period, reflecting adjustments that we previously discussed related to our valuation allowance on deferred tax assets. As an update to our prior expectations, we now anticipate our effective tax rate to be in the range of 23% to 26% going forward, the vast majority of which will be non-cash, and that incorporates estimated state taxes on top of the 21% federal rate. Per-share metrics for 2026 as compared to the year-ago quarter also included a higher share count as a result of the 6 million shares issued in conjunction with the PowerTech acquisition in the second quarter of last year. The earnings release yesterday included our guidance for 2026. As shown on slide 4, we are estimating total revenue in a range of $270 million to $290 million and adjusted EBITDA in a range of $36 million to $41 million. The midpoints of these metrics imply growth of 18% and 17%, respectively, as compared to 2025. As a reminder, our adjusted EBITDA numbers presented in the release and the presentation, including our guidance, do not add back non-cash amortization of contract assets, which totaled $2.2 million in the first quarter and are expected to total $6.2 million for the remainder of 2026. On the balance sheet, you may note a new line item called “equipment credit—related party.” As part of the settlement of the 2025 order shortfall penalty, we agreed to receive a $12.5 million allowance from which we can place orders for construction of Power Services equipment. We have already placed POs for approximately $10 million of additional distribution and conditioning assets that we expect to have in service throughout 2026. We expect to fully utilize the equipment credit in 2026, which will represent the bulk of our estimated capital expenditures budget. We believe 2026 is shaping up to be a significant year for Flotek. Importantly, we have been able to deliver consistent growth metrics while maintaining a disciplined balance sheet and low leverage. As shown on slide 16, using the midpoint of our 2026 adjusted EBITDA guidance, our leverage ratio is approximately 1.0x based on net debt outstanding as of March 31. When you factor in the estimated $8.4 million in 2026 non-cash amortization of contract assets, we are less than 1.0x levered. We believe that this ultimately positions us to continue investing in growth while maintaining financial flexibility. With that, I will turn it back to Ryan for closing prepared remarks.

Thanks, Bond. Our first quarter 2026 results extend our multiyear track record of consistent improvement as we continue transforming Flotek Industries, Inc. into a data-driven technology leader. The data analytics segment delivered strong growth, highlighted by triple-digit increases in service revenue, expanding recurring revenue streams, and a robust multiyear backlog. Together with our resilient Prescriptive Chemistry Management services, Flotek is well positioned to gain additional market share and drive further top- and bottom-line improvement with substantial upside opportunities in our data-driven services. We remain committed to shaping the industry’s digital and sustainable future by leveraging chemistry as our common value creation platform. With our proven execution, expanding high-margin capabilities, and clear pathway to scaled growth, Flotek is poised for the next phase of value creation for our investors. We will now open the call for questions.

Thank you. Ladies and gentlemen, to ask a question, please press star then 1. One moment, please. We will begin the Q&A. Our first question comes from Jeffrey Scott Grampp. Your line is open.

Hey, good morning, guys. Wanted to start first, Ryan. The data point to get to 50% of your units on e-frac is impressive. As I recall, that was how things initially started with the ProFrac relationship and the value you brought there and then obviously scaling that to a much larger deployment with them. Is that kind of the goal or outcome on some of these deployments, or where are we in terms of traction or state of conversations to potentially expand the market opportunity with some of these customers?

Yeah, Jeff, that is a great question. I will try to give you some tangible color on our approach. In our Power Services business, we have taken a very methodical approach. Our background in monitoring hydrocarbon flow through our data analytics group has over 15 years of experience. We evaluated all the different basins, hydrocarbon and gas quality, and geography to look at where frac fleets are going to be, where potential data center locations will be, and other power generation sites, and we built our equipment and measurement techniques for those specific locations. We executed a pursuit plan of proving out our measurement, then moving into control, and then finally the distribution piece. What you are seeing now is we targeted our primary experienced customer base around e-frac and natural gas power. Most of these customers are now aggressively moving to other behind-the-meter distributed power platforms. Looking at our original work that started back in 2022 with ProFrac and the continued growth of North America’s e-frac and natural gas fleets, the team has done a great job working with a multitude of clients to get our Varex or XSpec units on location to start measuring gas quality, whether for evaluation and volume or for potential conditioning. That is always the first step in our sales process. We are proud to announce that between currently awarded work and recent POs we have received, by the end of the year we will have an analyzer on location for over 50% of these higher-tech fleets, which is a phenomenal step. We hope that evolves into our ability to further advance their conditioning and optimization, whether reciprocating engines, turbines, or even their natural gas pumping fleets. That is part of our execution of the sales process.

Got it. Thanks for those details. My follow-up on the utility infrastructure side, appreciate you putting some data on the impact in 2026. Where do you think it potentially builds beyond this phase one and the 12 megawatts you put out? Are there additional phases under consideration, or is that your best guess for steady-state work on that contract?

Right now, after our initial assessment, there are two primary sites, which are phase one and phase two. Phase one is moving forward. We have mobilized the first 12 megawatts to location with our proprietary conditioning and distribution equipment and plan to have that site active in the back half of the year. We believe with the success of that project we will initiate phase two, which will probably be an additional 15 to 20 megawatts. The timing on that at best would be the very end of the year, probably more into the 2027 timeframe, given site prep requirements. We do expect this work to continue past just our six-month measurement part of the contract, but we will be conservative until we officially lock that down. We expect this project in the end to be between 25 to 30 megawatts with all of our gas distribution equipment on location. Another point to note, while our primary goals are growing Power Services in oilfield power, we are now seeing our tentacles stretch into other areas around data center growth and other behind-the-meter power generation opportunities. We are seeing line of sight into 200-plus megawatts of power generation and conditioning opportunities coming into the pipeline that we are actively pursuing through the back half of the year and into 2027. The pipeline is continuing to grow. We also have Varex units on two different large turbine gas-fired power plants where we are monitoring fuel quality, ethane percentage in natural gas, and optimizing fuel. A lot of exciting things are happening in Power Services for Flotek, which offer potential upside to our numbers in the back half of the year, particularly rolling into 2027.

Thank you. Our next question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Good morning. Congratulations on all the progress. Following up on the 200 megawatt pipeline you discussed, how does the cadence of quotes in that market work, and how does revenue flow through for you as those come into the mix?

Our primary goal is around gas conditioning and fuel optimization services. They come in different ways. Traditionally, we are the primary gas conditioning equipment for emergency power startups or peak power support because they are using very raw field gas that could be wet or otherwise out of spec. Often there are power shortages, so we can leverage relationships with current customers to help pass through or greenlight some of those power generation assets. Moving into data centers, those are longer-term plays where we improve fuel efficiency and, depending on geographical location and gas or pipeline quality, we come in heavily. Those tend to be on the longer end of our sales pursuit cycle due to engineering, proving out, gas testing, and sampling. Given we are already into May, those are more likely 2027 revenue-generating opportunities. However, there are opportunities to pull some forward, particularly where power assets are already on location and having gas quality issues. We are being pulled in to fix those problems.

Great. On the 57 units you have deployed or on order, how is the order book pipeline looking for that product? How do you see that building?

When we talked a few weeks ago, those numbers have more than doubled on issued POs, contracted deliveries, and field installations. It is not linear. We are seeing double-digit orders of units, we get them installed, and then amplified opportunities follow. We are having a lot of conversations with midstream providers, our main target audience. Once we get solid acceptance, we have two major midstream customers right now who, on any scale purchases, could triple the current active number with a couple of POs. We expect growth in a nonlinear fashion. Our target is roughly 150 units by year-end, which is within striking distance for custody transfer, with potential upside.

Thank you. The next question comes from Gerard J. Sweeney with ROTH Capital. Please go ahead.

Thanks for taking my call. On digital analytics, lots of opportunities are starting to emerge. As you look at the playing field, what do you need to solidify some of these orders and get the product out there further? Any choke points? Do you need more investment in sales, or is it more time-oriented and more testing?

Breaking down Power Services into phases—measurement, conditioning, then control and distribution—we are making great headway. The majority of measurement POs are already received, and we are manufacturing and deploying analyzers. The next revenue growth step is conditioning. We mentioned our first modified smart blending skid that monitors volumes of CNG to field gas for a flat BTU quality every five seconds—the first of its kind. Once analyzers are on location, adding equipment like that is the next step. As Bond mentioned, we have already issued POs to build out $10 million dedicated to the next generation of conditioning and distribution assets. We expect a big majority online by midyear, then you will see impact and uptake. We are investing at least $12 million into capital assets for conditioning, with potential for more as business cases arise. We have amplified our sales force and have open positions to put more salespeople on the ground. We picked up a couple of large-scale engineering firms involved in data center design-builds that are getting comfortable with our equipment. Lastly, we are in in-depth conversations with OEM engine providers—most are sold out for the next three years and are doubling or tripling capacity. We are far along on the ability to control engines by methane number and Wobbe index. Look for exciting things on that front, which could provide additional upside depending on distribution schedules in the back part of the year.

Are those conditioning skids that you are building and expect to be available at midyear all factored into your guidance, or are they layered in as you go through the year into next year?

They are layered in conservatively. As they come online, we have objective utilization rates, with room for higher utilization and earlier in-service dates. This is a new frontier for us, and we are getting a better understanding. We lean conservative with opportunities to push asset utilization and returns. We have a positive outlook for the back part of the year.

Thank you. Our next question comes from Donald Crist. Please go ahead.

Hope you all are doing well. Ryan, I wanted to ask about your comment on the U.S. pressure pumping business, either on the third-party side or with ProFrac. What are you seeing out there? We are hearing that a lot more pressure pumping is going to work. Thoughts around that and chemical sales, domestically or through ProFrac?

We break the year into first half and second half. A lot of potential items in the first half have now solidified. The majority of the spot-call white space is gone, particularly with our target customers using Tier 4 dual-fuel, direct-drive natural gas, or e-fleets. We are starting to see an uptick. Our expectation is external chemistry customers will continue to strengthen from Q2 onward. Visibility is improving for the back half, with spot work increasing. Availability of upper-tier equipment is almost gone now, which is good for the market. In chemistry, you have seen that play out with our related-party revenues with ProFrac. These fleets have moved into a lot of gas basins where they have strong positioning, and we picked up a lot of chemistry. We expect that to translate to other customers. Our external business was slightly impacted by weather in early Q1 and some normal repair and maintenance cycles, and now businesses are picking up. Importantly, there is a lot of optimism for our frac business in the Middle East. We got through trial stages and expect large deployments of our chemistry to hit the ground this quarter. We are now on two operating fleets and looking to pick up one to two more by the end of the year. You will see a lot of stage work coming from the Middle East, which will bolster our external chemistry revenue mix.

Don, to give you some numbers, when you look at first-quarter external chemistry revenue in 2025 of $22 million, we are obviously down this quarter. We believe by the end of the year we could see those kinds of numbers again on a quarterly basis—getting back to where we were last year—which would be a big growth driver from here.

That was my next question—whether the Middle East impacted the $14 million you generated this year or not. Any comments around that and getting chemicals into the Middle East, including logistics?

International business was extremely light in Q1 due to logistics delays. I have been very pleased with our team’s logistics plan. In Q2, we are seeing chemicals get on the ground a few weeks earlier than expected. Our biggest customer there is pleased, and we are seeing a pickup in total stages. Domestically, our chemistry team has done a phenomenal job finding opportunities and growing the business. We are seeing the convergence of our data and chemistry businesses play out, with opportunities to utilize our XSpec units and dual-channel Varex units for flowback control, crude, and gas quality, as well as our advanced real-time chem-add units that use micro-dosing on concentrates. These drive differentiation and significant growth opportunities for chemistry and high-margin data services.

Thank you. Our next question comes from Gaushi Sriharan with Singular Research. Please go ahead.

Good morning, and thank you for taking my call. On gross margins coming in at about 22%, with data analytics already at 50% of gross profit, as the shortfall penalty mechanism resets through 2026 and data analytics share continues to grow, how should we think about the pace of gross margin expansion? Is a 25% to 27% range realistic by 2026, or are there other offsets we should model?

We have continued to see overall gross margin improvement even with reductions in the order shortfall penalty, which is now minimal. The factor that will play the biggest role is how much distributed power revenue runs through the P&L. When we pass through distributed power with one of our big customers, we typically have a minimal markup, which can dilute profitability, for example on our Montana contract. By contrast, our conditioning skids alone can come in at roughly 80% gross margin. Depending on how many additional megawatts move into the back half, it could dilute the consolidated margin.

In the back half, we expect margin expansion, but it is hard to forecast precisely because we also expect a sizable increase in external chemistry revenue, which carries lower margins, while data analytics grows at higher margins. We think 25% by the end of the year is possible, and we are forecasting gross margins to continue to move up.

Thanks. One more. On the Q1 deck, you flagged EPA flare monitoring enforcement being rolled back. Given that Veracal was generating around $2 million to $2.5 million at around 60% gross margin in 2025, how much of that demand has deteriorated versus what you originally expected? Is that business pivoting toward voluntary or international regulatory frameworks to offset that headwind?

There has been some softness domestically. We still have a fleet staying relatively busy, but as a rapid growth mechanism in the U.S., it has slowed. International deployments are picking up. In the U.S., New Mexico and Colorado are advancing utilization even as Texas softens. We are seeing customers move from mobile 14-day test pad use to ongoing operational efficiency and real-time tuning of flares to achieve lower emitter status and operational efficiency targets. That trend is occurring domestically and internationally.

There are no further questions at this time. I will now turn the call back over to Mike Critelli for closing remarks.

Thank you. Join us at our upcoming investor events. In May, you can catch us at the Louisiana Energy Conference for meetings and an investor presentation. In June, we will be at the Planet MicroCap 2026 conference at the Bellagio in Las Vegas. In August, we will be at EnerCom Denver at the Westin, featuring an investor presentation and one-on-one meetings. For all other events and the latest information, please see the events section of our website.

Thanks, everyone, for your time today and your questions. We will speak to you soon.

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