Unlocking New Markets: Flotek’s Journey into Real-Time Monitoring and AI Infrastructure

Welcome to FinTech TV.

I'm Remy Blaire.

Flotek Industries is transitioning from a traditional chemistry provider into a data tech player focused on power infrastructure.

With over 130 patents and a presence in 59 countries, the company is now targeting the high growth data analytics and also laser markets.

Joining us here at the New York.

Stock exchange to discuss the unit economics of this pivot is Flotek CEO, Ryan Ezell.

Welcome and thank you so much for joining me.

Hey, good morning.

Thank you for having us.

Appreciate it.

Well, first and foremost, tell us about this operational change that has been driving the sustained reversal in performance at your company.

Yeah, you know, we, we really have been focused on making this industrial pivot for the organization and We've always been at the core of an innovation company looking at chemistry technologies, and one of the ways that we saw the future growth and broadening of the rise of our flote would be measuring chemistry in real time.

And in doing so, we've adopted a brand new platform, uh, leveraging a lot of, you know, multidisciplinary approaches to monitoring the chemistry in real time, and it's driven our what's our rapid growth data analytics segment.

And it's really opening up dramatically improved marketing and applications for flow tech for the future, really exciting time for us.

And tell us about this technology pivot, the why behind it, and what your vision is.

Yeah, you know, over the years, Flow tech's always been exposed to the cyclical natures of commodities around oil and gas, and one thing that we've looked at, we wanted to be able to broaden the, the EBIDon multiples of the company and overall evaluation components and real-time data measurement is a great horizon for us to, to move into.

And so we, we built out our division based on near infrared monitoring technologies, ramen, a lot of different advanced spectroscopy techniques which allow us to look at a multitude of industrial applications of chemistry and look at these things taking measurements every 1/8 of a second.

And there's nothing more powerful than understanding transparency around chem chemistry applications and the real-time monitoring and a multitude of industrial platforms.

So now you see an appreciation towards, uh, our innovation, not just in oil and gas, but energy and infrastructure and other chemical applications in, uh, in industrial platforms, which has dramatically improved our adjustable market where we moved from, say, a $3 billion adjustable market in 2021 to exceeding over $20 billion adjustable market.

So it gives us a long runway for growth.

Yeah, and here on Wall Street we pay attention to what's happening in terms of artificial intelligence and the investment plays surrounding that theme.

But when we think about the global AI data center boom, what does it mean in terms of infrastructure demand?

You know, it's, it's a couple of things for us.

So when we look at it in terms of one thing is there's gonna be significant requirements for electrification power, and the main driver around that here in North America and what we're seeing on the international markets as well is the utilization of natural gas to bridge this gap of this power demand.

Uh, you're gonna see, you know, 300 to 400 gigawatts of growth continuously required for all these dramatic swings to provide power for AI computing.

Also just for normal transmission infrastructure that we see here in the US and flow tech technologies, particularly around, gas monitoring, uh, we do on gas treatment is going to help bridge this gap to provide safe, efficient power, for a lot of these generation, uh, for the data, for you're looking at data centers, power infrastructure, peak power demand, different components, and that's what has been a huge growing market for us, from, from the power generation side.

Yeah, and I do want to ask you about your extensive portfolio of patents.

So you have over 100.

So how do you plan to actually monetize the IP?

You know, it's, it, it's crazy because we, we, we've taken two step approaches.

We have some old historical patents that we've also begun, uh, opening up.

The door to licing those out to other companies because when you, the chemistry markets, uh, get commoditized very rapidly.

So us being able to license the chemistry patents and utilize them in a multitude of other avenues outside of oil and gas has been really, uh, uh, great for us in, in monetizing old technologies.

The newer things that we have are more around the uh real-time monitoring devices, um, whether we're looking at, uh, monitoring oil and gas, hydrocarbon spaces, aqueous environments, and so we're not only looking at that in energy and infrastructure, but we're also leveraging those patents through licenses outside of some of the pharmaceutical industry and other industrial platforms and so we, uh, we find that creating that ecosystem of, you know, keeping, uh, core components around our technology to bring innovation to where we play is great, but also having an ecosystem of other partners that.

Utilizes our our technologies and industries that we don't necessarily, uh, pursue right away, uh, it, it's been a big advantage for us to monetize a lot of this technology because, um, you know, we look at our fatten portfolios around there's certain things that we apply and there's certain things that we draw a moat around our technology to protect our applications and so, um, it's an evolving landscape, but we really look at leveraging these in more of an ecosystem approach and, uh, getting growth for the organization with our, our partners so that we all move forward at a much more rapid pace.

Yeah, and finally, before I let you go, you.

Do you have a global footprint?

So tell us about the countries that you're in and what this means when it comes to your business model.

Yeah, we've, uh, we've pretty much focused on areas where we see similar growth patterns here in the US around one, the, the need for a unique, uh, chemistry, but also our ability to monitor the chemistry in real time.

So we're focused in the Middle East and North Africa.

We're also, uh, focused in Latin America, traditionally where there's large power demands coming.

Uh, there's a lot of, uh, I would say unconventional applications for oil and gas, but more.

Importantly, we're looking at water and other types of infrastructure, and, uh, we feel like we're gonna, you know, be the tip of that spear for the convergence of innovative real-time chemistry and data solutions for, uh, a multitude of geographical areas, uh, in the future.

So, uh, we often consider where we are in our business growth, uh, domestic and internationally.

We're in the bottom of the first of a nine inning game and we're excited where we're going.

Well, I like that analogy.

So thank you so much for joining me here at the New York Stock Exchange and thank you so much for sharing the story of Flotek.

Appreciate it.

Thanks.

Thanks.