All right, guys. We'll go ahead and get started with our next presentation. It's my privilege to be able to introduce Ryan Ezell with Flotek Industries. Flotek has a growing chemicals and data analytics business with an emerging behind-the-meter technology. With that, I'll go ahead and turn it over to Ryan. Thanks, Ryan.
All right. Make sure that microphone was clear. A little feedback. Good morning. As mentioned earlier, I'm Ryan Ezell, the CEO here at Flotek. I'm super excited to be here this morning as we've made now 10 EnerCom for four years straight. Every time this year, we have an opportunity to update everyone on the performance of Flotek and how we've been executing on our strategy. For those of you who aren't aware of Flotek, we're a publicly traded company. Been publicly traded for over two decades. Most of you know us in the energy space as a chemistry company, and that's where it existed for multiple years. Since the current team has come on board, including myself, we created essentially a turnaround strategy for the organization focused on the convergence of real-time data analytics and innovative chemistry technologies.
We put the strategy in place at the mid-year of 2021, and we're very happy at what we've seen growing in terms of as we've transitioned the business to a real-time data analytics business delivered around Data as a Service component qualities. When you look at how the business is set up today, we have two distinct segments. One around chemistry technologies, which is built around our core platform of Prescriptive Chemistry Management services. The other one is our emerging data analytics division, which is built around a unique near-infrared technology that allows us to monitor chemistry and take measurements as fast as every five seconds and drive logic and advanced decision-making on a ton of operations.
Not only what we do in the upstream component of oil and gas, but now we're transitioning that business into behind-the-meter power generation, production chemistry, water management, infrastructure, all the way down to refineries and refined fuels, et cetera. It's also opened a significant amount of pathways for us to transition the business into other industrial platforms with the goal being is we're not seen as a pigeonholed oil and gas specialty chemistry company, but more of an industrialized platform around recurring revenue contracts, better profitability, and overall shareholder value. When you look quickly at the growth we've seen from the second quarter of 2025 to the second quarter of 2026, it's been dramatic as the company's gross profit basically just almost doubled.
Now you start to see the real-time data analytics is driving more than 51% of the gross profit for the organization driven by recurring revenue and backlog contracts. We talk about Flotek's expanding addressable market. When we took over coming in the early part of 2021, we only had about a $2 billion addressable market, and that complete market was exposed to transactional in nature and very much exposed to commodity pricing. The shift that we've seen in bringing our real-time data analytics has now opened up a series of pathways, a lot of other industrial processes like behind-the-meter power generation, water chemistry, advanced water monitoring, and the production chemistry side. We've seen our addressable market now expand to almost $20 billion, with $18 billion of that addressable market not necessarily tied to commodity pricing in oil and gas.
More importantly, we've seen the ability to now get long-term recurring revenue contracts at significantly improved margins backed by our real-time monitoring service and our Data as a Service contracts. Currently to date, Flotek has grown from having zero recurring revenue backlog in 2021 to over $500 million in recurring revenue backlog for growth of the organization. As you start to see this transformative approach take hold between our real-time data analytics and our advanced chemistry technologies. Looking at our second quarter performance, it's been a dramatic change in the business. We had the strongest revenue quarter in over a decade. We approached $100 million in revenue. When you look year-on-year, that's a 70% improvement. Gross profit was up 65%, and all the way down the board from EPS and all adjusted EBITDA, significant improvements year-over-year.
What's really exciting is that we talked about our emerging data analytics division, which is driving our recurring revenue backlog contracts, that we had a record quarter in the second quarter of 2026, which is up 85% on the first quarter, which was our prior record quarter, again, showing this business starting to gain momentum. The exciting part about our data analytics division is that the majority of these upstream technologies that's driving this growth only became commercial in the back half of 2025. So I would say that we're in the first inning of a nine-inning baseball game with this growth in terms of what we're seeing from data analytics. When you look at adjusted EBITDA and net income growth, we are 463% up on net income and 109% up on adjusted EBITDA year-on-year on the same quarter.
Now, how this has really impacted when you look at from a long-term look at Flotek, our transformational growth storyline continues. For almost five years, we've continued to show not only gross profit improvement but also revenue growth. We updated our guidance here at the end of the second quarter, and you can now see that the midpoint of our current guidance on both adjusted EBITDA and revenue represent 45% and 49% improvements on 2025 actuals. This doesn't include any of our recent power board contracts that we announced here prior to earnings in the second quarter.
So again, the transformation of the organization from where we were on a really small addressable market in 2021, this larger market and rapid growth is now showing the scalability, diversity, and size of Flotek that not only leads to improved shareholder returns but also overall stability for the organization in the long term. Diving into the segments a little bit more, our chemistry business continues to outperform the market. Since 2023, you've seen a decline in overall average frac fleet counts. Year on year, you see a drop from Q2 of 2025 to Q2 of 2026, but you see the significant growth where our domestic revenue was up 43% year on year.
More importantly, we had record highs in our international growth, driven by what we're doing in the Middle East with the Jafurah field with Saudi Aramco, our growth in Argentina, and also the growth that we're having in Abu Dhabi. So significant pickups there of almost 172%, not only driving more stable revenue. For long-term, most of this revenue that we have there is good for contracts up to five years. More importantly, we're seeing improved margins on full delivery systems. What's unique is that we are now coupling our chemistry technologies to our real-time data analytics to where you can make decisions stage by stage on water quality, production quality, different components of chemistry that's required for optimum output on hydraulic fracturing, and completion operations.
When you look at this back half of the year, we expect the international chemistry business to continue to grow as we now represent 100% of the hydraulic fracturing fluids in Saudi Aramco's largest field, the Jafurah field, and we expect those frac crews to grow by 50% by December. So again, strong revenue looking in the back half of the year. It talks to the strength of the strategy that we have around the convergence of real-time data analytics and our advanced chemistry technologies. We kind of dove into international growth here. This was a long-term component that we put into the business back in 2021, where we got not only our unconventional fluids approved by Saudi Aramco, which took a multi-year process, but speaks to our service delivery components as we've now achieved 100% of that market share.
What's unique about this, even with the disruptions that you've seen in some of the Middle East conflicts that's been going on, this field is very stable. It represents Saudi's largest investment in unconventional energy production that'll drive their internal economy. So we've seen that continue to grow, albeit we've had some supply chain difficulties where traditionally we would've come into Dammam. We've had to transfer operations and come into Jeddah. We've moved with that very smoothly, and that's allowed us to pick up additional work. We do feel like this field is going to continue to grow. What's exciting about it is subsequent with our chemistry technologies that have been applied there, we've also had our real-time data monitoring systems applied there for not only transmix, gas monitoring for behind-the-meter power generation, and other adopted activities for Saudi Aramco.
We're transitioning this type of approach to other geographical footprints that we have in Argentina and what we have in Abu Dhabi and some of what we're doing in Qatar as we expect those environments to continue to expand over the year. Traditionally, what we see is when domestic energy may slow down, our international growth provides a lot of stability on that aspect. When you look at a lot of these economies over there are definitely hungry for advanced monitoring technologies to improve efficiency and operation. Our real-time data analytics drive this type of visibility and transparency on why you choose the chemistry that you do, how does it improve performance, and more importantly, how does it lead to overall efficiency output from the operations and better return on the capital invested.
We're really excited around how the chemistry business is continuing to gain momentum as we tie it to our real-time data analytics. Now, spending a lot more time here, and what most everyone is interested in is our advanced technologies around how we monitor not only hydrocarbons, but other types of chemistries. Since we acquired the data analytics group in 2020, we've seen rapid growth. You look at here from second quarter of 2025 to second quarter of 2026, significant growth, 223%. You also can see what's unique is this is driven by significant growth in recurring revenue backlog contracts. As I mentioned earlier, we have over $500 million of that continuing to expand.
When you look at traditional gross profit profiles, our chemistry business typically runs in the mid to upper 20%s, whereas a lot of our gross profit from our data analytics division is over 75%. It drives much stronger returns to the bottom line. The business is very asset light. Most of the equipment that we have will cost us $150,000, $200,000 to produce payback periods of less than three months. We have some larger conditioning equipment that's a little bit higher in monitoring devices, but significant return on investments that allow us to maintain a capital-light approach. We also mentioned that this has allowed us to transition into behind-the-meter power generation. Where we take a place there is that we actually monitor gas quality in real time.
One of the bigger components has been for a lot of these different operators' setup is they don't fully know or understand the BTU quality, the net heating value, the Wobbe index of various fuel types that come to the engines, which puts them at risk in terms of either derate, liner damage, inefficiency, multiple things. Also they can have catastrophic engine failure, which can damage millions of dollars of assets. Our equipment sits in front of this. We take a measurement every eighth of a second, give an output to the engine every three to five seconds that we can either stop, treat, divert the gas. We can blend up to a flat BTU value by using compressed natural gas. We can knock out liquids, solids. We have a significant amount of intellectual property around this, which puts what we can do unique to the marketplace.
Since we got into the behind-the-meter power space, we've seen that business expand from us monitoring about 40 MW of power to 5 GW of power in the last year. We're continuing to expand that business. We're extremely excited about it. Most of that falls under our line of technologies that we call PwrTek, quite a unique set of tools. We focus that business traditionally in the kind of growing where we know in the oilfield services part about providing monitoring conditioning for frac fleets as they use raw field gas. We condition and treat that to optimize performance there. On our first location, we were at a very problematic spot for utilization of field gas, and they were only getting about 25% substitution rate on their Tier 4 dual fuel.
Once we put our monitoring conditioning service in places, we were able to push that substitution rate to greater than 80%. We're now seeing those up into the upper 90% substitution rate in protection. We are currently either monitoring and/or conditioning fuel on over 60% of the current nat gas fleets in North America in some way, shape, or form. We expect that business to continue to grow. What's unique about this is the majority of those players are now transitioning to other power services, whether it's for a data center, island grid support for utilities, et cetera. For us, we don't own any power generation assets ourself. We want to work with these other behind-the-meter power generation companies to protect their assets, improve fuel efficiency, and give them levels of uptime and security from that aspect, no matter what type of operation they're doing.
That's the unique value proposition that the velocity of our real-time data analytics brings to the business and how we differentiate ourself in the marketplace. Traditionally, most of these measures would've been tried to be made with gas chromatography, which is lucky to make a measurement every 15-20 minutes. They usually would get an output once an hour, and yet we can give it every five seconds, should they require it. This slide just shows some of the unique technology here.
This is backed up by our Verax or XSPCT unit, which is the actual control device that does the real-time measurement, feeding to our advanced filtration units, what we call smart conditioning skids, which can actually control, knock out liquids, do the blend out with CNG, and then advanced distribution units that has measurement devices on all the reels, pressure control, H2S sensors, CO2 sensors, everything to where you have the type of transparency on full-time behind the meter power operations as never seen before. We often have a lot of questions around, "Well, what if you're using pipeline gas? Do you really need this level of monitoring?" What we say is we've actually been monitoring pipeline gas going to power generation assets since 2018. Most just didn't realize we did that. We look at operations in the Northeast. We look at ethane takeaway capacity problems. Do they cryo-knockout liquids?
What is the potential impact of derating on the engines? All these different turbines. These are things that we do to just provide overall operational efficiency to various infrastructure components. We talk about the impact this potentially has being able to real time blend. When you look at operations in West Texas or South Texas, where you could actually access raw field gas. In this case, one of our current operators, they had a turbine set up out there that was shutting down multiple times a week due to variations in field gas quality. We came out on location, put a monitoring device at the front end of the field line, and put our smart conditioning skids right before the turbine set. We were able to actually, in real time, monitor the quality of the gas and adjust the methane number to where we optimized the engine.
We were on location for seven weeks. The engine didn't shut down one single time. You look at the annual impact evaluation creation around fuel efficiency, cycle maintenance, overall power efficiency, and the reduction in emissions. Just for that small setup, you could pick up anywhere from $3 million - $5 million in customer cost savings. When you look at that compared to what it costs for us to do that type of operation, significant return on investment for being on there, not only for an overall operational efficiency, but also protecting those assets for the long time. As most of you are aware, the power generation piece is extremely asset heavy and asset intensive. Not only that, it's long lead times to get this equipment.
Putting a small 15-foot skid on location that can protect this battery of assets would seem like a no-brainer, and this is why we're seeing significant and rapid adoption of our ability to not only treat but monitor behind the meter power generation. Secondly, we talk around the ability to look at data and chemistry in action. Whenever we acquired our data business, we actually built some algorithmic models that drives our choice of chemistry called Prescriptive Chemistry Management. We go into a project, we actually look at multiple physicochemical properties of the target reservoir, and from those, we put them into our AI-driven system, backed by our JP3 hydrocarbon measurement database, and it gives us an output of what we consider the most technical application for fluid choice, the most cost-effective, and then probably the one that sits here in the middle.
We then move into microfluidic environments, test, do the different components there to see which one minimizes the amount of formation damage, which gives the best flow back. At that point in time, we move into the field where we monitor water quality in real time. We look at by-stage treatment adjustments of the chemistry based on our advanced algorithmic properties that we see that we've transitioned from the lab. Then we target specific improvements from geology. When we first put this in place, we were looking at just additional uplift out of the wells. Now we're actually going back, and we are looking to see, because we leave our XSPCT unit at the wellhead, we can see what chemistry flows back in real time. We also can actually not only see the average BTU value, et cetera, from gas or hydrocarbon makeup.
We look at the full composition, and we target the additional higher-end hydrocarbons to not only improve the output of the well but actually the quality of the output. We call this reservoir fingerprinting, where we are actually giving transparent looks at how our chemistry targets reservoir improvement. Do you get a volume improvement? More importantly, do you release the hydrocarbons that we are targeting specifically? We give these data back. We are seeing significant success in not only improving potential valuation of these acreages, but overall performance. This leads to a multitude of aspects in terms of we move all the way down to custody transfer, et cetera. Our XSPCT units are the only optical instrument in the world that has passed the GPA 2172 to do custody transfer measurements outside of gas chromatography.
So you look at a complete revolution around how this whole infrastructure, how gas flows, how liquid hydrocarbons flows, its valuation, and how it moves into the pipeline environment. We are truly excited about this step and what we have been doing. This has kind of been our holy grail of actually not only being able to say that the chemistry works, but prove the chemistry works through transparency and real-time optimization. Here you start to see, you just kind of break out of our real-time data in terms of how this impacts crude resolutions from API gravity, Reid vapor. We are targeting C1 through C6+. We have had multiple tests of this run in the field. We are going to continue to write some white papers and case studies on this improvement.
What you look at is when you combine our PCM service, we are not only releasing a higher level of hydrocarbons in the first 24 months, we can actually identify the advanced quality of what that is. We are running these in test cells where we look at, we put XSPCT units on wells that has not had a PCM service flow back versus what we are doing on the advanced chemistry to show the return on investment on doing this. These ROIs that the operators we are working with are doing is phenomenal. They are seeing significant improvement there, and this is the scale and scope that we were hoping to see out of our digital valuation services. This is something that we only brought to the market in Q4 of last year.
We targeted this year, we wanted to push out 150 of these by the end of 2026. We are at about 120 already where we sit today. So we think we have an opportunity to exceed the 150, maybe push to 200, as we are getting what I call enterprise level adoption in not only some of the things we are doing in the midstream, but also what we are doing in upstream applications for digital valuation. Extremely exciting part around how Flotek is bringing differentiated technologies that will revolutionize how we look at energy and infrastructure. The final thing we talk about is just another scope around digital valuation, where we just look at most of the overall quality, and particularly if you look at natural gas. Most of the time when they are doing custody transfer type measurements, they are taking one sample a year. They are running on gas chromatography.
Gas chromatography can't see any NGLs, any condensates. They're usually taking that at a certain time of the day where they know they're going to get that lowest BTU value. What we offer is a unit that sits out there and monitors this thing in real time. You can see a measurement as fast as every three seconds, take it every two minutes, but it gives you a true profile 24 hours a day, 7 days a week, 365 days a year, what the well is actually producing. We typically see on average, on the majority of these, we're seeing basically an undervaluation of anywhere from 2%-5%, which is a significant return improvement when you look at the improved valuation of the well. As I mentioned earlier, we're starting to see rapid adoption. There's no doubt about this.
This is extremely disruptive technologies that traditionally it kind of overtakes what gas chromatography has done. We're seeing solid adoption in what I would consider to be new wells. Legacy wells are a little more complicated. It opens up a lot of trap doors in their application, but the growth in terms of new markets and infrastructure development has been phenomenal as we've seen uptake there. To wrap it up to a close, when you look at Flotek, we continue to execute our corporate strategies around creating an industrialized pivot of a company that had a really small addressable market that was really volatile to one that has grown 10x. Not only that, 80% of that new market is now tied to higher margin recurring revenue, long-term contracts, based on Data as a Service component, which drives a high valuation of our business and improved share price.
You see this, we've seen a 620% improvement in share price since 2023 to the, say, 1st of August of this year. We're continuing to push into areas where we've got cycle-resistant revenue, not only for our chemistry technology, but driven by our behind-the-meter growth and our digital valuation services. We continue to bring state-of-the-art technologies. Our XSPCT Analyzer won Analyzer of the Year at the recent technology conferences. Our PwrTek business continues to drive value on behind-the-meter growth we haven't seen to date in terms of our ability to monitor measurements, including feeding measurement of methane numbers directly to reciprocating engines to adjust fuel timing and firing and overall efficiency. We're excited about the business, and look forward to answering any questions, and we appreciate your time today. I think we're in Lawrence, I believe eight, for any questions. Thank you.