Revenue from Contracts with Customers
Disaggregation of Revenue
The Company differentiates revenue based on whether the source of revenue is attributable to product sales, service revenue or rental income. Product, service and rental revenues include sales to related parties as described in Note 18, “Related Party Transactions.”
Total revenue disaggregated by revenue source is as follows (in thousands):
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| | | | Years ended December 31, |
| | | | | | 2025 | | 2024 |
| Revenue: | | | | | | | |
| Products | | | | | $ | 213,487 | | | $ | 180,470 | |
| Services | | | | | 7,636 | | | 6,555 | |
| Rental | | | | | 16,139 | | | — | |
| | | | | $ | 237,262 | | | $ | 187,025 | |
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Disaggregation of Cost of Sales
The Company differentiates cost of sales based on whether the cost is attributable to tangible goods sold, cost of services sold or other costs that cannot be directly attributed to either tangible goods or services.
Total cost of sales disaggregated is as follows (in thousands):
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| | | | Years ended December 31, |
| | | | | | 2025 | | 2024 |
| Cost of sales: | | | | | | | |
| Tangible goods sold | | | | | $ | 155,966 | | | $ | 128,816 | |
| Services | | | | | 1,115 | | | 547 | |
| Other | | | | | 20,348 | | | 18,276 | |
| | | | | $ | 177,429 | | | $ | 147,639 | |
Other cost of sales represents costs directly associated with the generation of revenue that cannot be attributed directly to tangible goods sold or services. Other cost of sales for the year ended December 31, 2025 includes $1.6 million, related to the Lease Agreement. Examples of other costs of sales are certain personnel costs and equipment rental and insurance costs.
Cost of sales, disaggregated between external customers and related party, is as follows (in thousands):
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| | | | Years ended December 31, |
| | | | | | 2025 | | 2024 |
| Cost of sales: | | | | | | | |
| Cost of sales for external customers | | | | | $ | 75,739 | | | $ | 67,205 | |
| Cost of sales for related party | | | | | 101,690 | | | 80,434 | |
| | | | | $ | 177,429 | | | $ | 147,639 | |
Contract Assets
Contract assets are as follows (in thousands):
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| December 31, 2025 | | December 31, 2024 |
| Contract assets | $ | 83,060 | | | $ | 83,060 | |
| Less accumulated amortization | (20,324) | | | (14,016) | |
| Contract assets, net | 62,736 | | | 69,044 | |
| Less current contract assets | (7,621) | | | (5,939) | |
| Contract assets, long term | $ | 55,115 | | | $ | 63,105 | |
In connection with entering into the Initial ProFrac Agreement (defined below) and First Amendment to the ProFrac Agreement (defined below) on February 2, 2022 and May 17, 2022, respectively, as discussed in Note 18, “Related Party Transactions,” the Company recognized contract assets of $10.0 million and $69.5 million, respectively, and associated fees of $3.6 million. As of December 31, 2025 and 2024, $55.1 million and $63.1 million, respectively, of the contract assets were classified as long term based upon our estimate of the forecasted revenues from the ProFrac Agreement that will not be realized within the next twelve months of the ProFrac Agreement. The Company’s estimate of the timing of the future contract revenues is evaluated on a quarterly basis.
During the years ended December 31, 2025 and 2024, the Company recognized $6.3 million and $5.6 million, respectively, of contract assets amortization that is recorded as a reduction of the transaction price included in related party revenue in the consolidated statement of operations. The table below reflects our estimated amortization per year (in thousands) based on the Company’s forecasted revenues from the ProFrac Agreement as of December 31, 2025.
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| Years ending December 31, | | Amortization | |
| 2026 | | $ | 7,621 | | |
| 2027 | | 9,611 | | |
| 2028 | | 10,711 | | |
| 2029 | | 10,711 | | |
| Thereafter through May 2032 | | 24,082 | | |
| Total contract assets | | $ | 62,736 | | |