Liberty Energy raises dividend 13% as data center strategy fuels growth
Q4 EPS $0.08 beats estimates; oilfield services provider targets 3 GW power capacity by 2029
Liberty Energy Inc. shares slipped 1.7% on Wednesday despite the oilfield services provider reporting fourth-quarter results that exceeded analyst expectations and announcing a 13% dividend increase, as investors weighed a challenging market environment against the company's ambitious expansion into data center power infrastructure.
The Denver-based company reported fourth-quarter revenue of $1.0 billion, comfortably ahead of consensus estimates that ranged from $853 million to $872.7 million. Net income for the quarter reached $14 million, or $0.08 per diluted share, compared with analyst projections that ranged from a loss of $0.18 to a profit of $0.10. Adjusted EBITDA for the period totaled $158 million.
For the full year 2025, Liberty Energy generated $4.0 billion in revenue with net income of $148 million, or $0.89 per share. The company achieved adjusted EBITDA of $634 million and delivered a 13% cash return on capital invested, demonstrating operational efficiency despite industry headwinds.
The company's board declared a quarterly dividend of $0.09 per share, payable March 18 to shareholders of record as of March 4. The increase, announced January 20, follows a year in which Liberty returned $77 million to shareholders through dividends and reflects management's confidence in the company's cash generation capabilities.
Beyond traditional oilfield services, Liberty Energy is positioning itself at the intersection of energy and artificial intelligence infrastructure through its Liberty Power Innovations subsidiary. The company secured a strategic partnership with Vantage Data Centers to develop up to one gigawatt of utility-scale power solutions for Vantage's North American data center campuses. The agreement includes a firm reservation contract for 400 megawatts of power generation capacity slated for 2027.
In a separate transaction, Liberty Energy entered a preliminary energy services agreement and secured a 330 MW power reservation with a leading data center developer for a Texas site expansion. The company has accelerated its distributed power project deployment plan, now targeting 3 GW of capacity by 2029 as hyperscale data centers race to secure reliable electricity for AI computing operations.
"We are executing on our strategy to diversify beyond our core fracturing business while maintaining operational discipline," Liberty Energy management stated in the earnings announcement. "Our power infrastructure initiatives represent a significant opportunity to leverage our technical expertise and project execution capabilities in a high-growth market."
The stock's decline on the earnings report follows a remarkable six-month surge of 56.2%, with shares climbing from $18.88 at the beginning of January to current levels around $21.80. The company's 52-week range spans from a low of $9.32 to a high of $22.62, reflecting extreme volatility characteristic of the energy services sector.
Analyst sentiment remains broadly positive despite the recent pullback. JP Morgan upgraded Liberty Energy earlier this month, contributing to a consensus "Buy" rating. The average analyst price target stands at $20.64, according to market data, with 27% of analysts rating the stock a "Strong Buy" and 18% a "Buy," while 55% maintain a "Hold" recommendation.
Liberty Energy's push into data center power addresses a critical bottleneck in the AI infrastructure build-out. As technology companies expand their computing capacity to meet growing demand for artificial intelligence applications, reliable and scalable electricity supply has become a competitive constraint. The company's expertise in large-scale power project management and its existing relationships with energy producers provide it with unique advantages in this emerging market.
However, the company faces significant execution risks as it expands beyond its traditional hydraulic fracturing business. The transition from cyclical oilfield services to infrastructure development requires different capabilities and carries longer project timelines. Investors will be closely monitoring Liberty's ability to convert its data center agreements into revenue-generating projects while maintaining performance in its core operations.
With a market capitalization of $3.6 billion and trading at 19.6 times trailing earnings, Liberty Energy's valuation reflects both its recent operational improvements and expectations for its power infrastructure strategy. The company's relatively low beta of 0.46 suggests lower volatility compared with the broader market, though its industry exposure has historically produced sharp price swings tied to energy commodity cycles.
The coming quarters will be critical for Liberty Energy as it seeks to demonstrate that its data center initiatives can deliver on their promise while navigating a challenging environment for oilfield services. Management has indicated that it will provide additional updates on its power development progress in upcoming investor presentations, giving the market greater visibility into this strategic pivot.