Can Liberty Afford Its Spending Bill?

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Liberty Energy (LBRT) runs a completions business and is now also putting money into power generation for data center campuses. The company spent $1.21 billion on buildings and equipment over the twelve months to September 2026, compared with $598 million in the twelve months to September 2023. Before reading on, take a guess: what share of its sales does that bill now take?

How Big Is Liberty’s Spending Bill?

That bill consumed 27.3% of Liberty’s sales over the last twelve months, up from 12.2% in the twelve months to September 2023. The outlay is now about twice the size it was three years ago and continues to climb. In the quarter to September 2026, Liberty spent 427.5% more than in the same quarter a year earlier.

Can Liberty Pay For It?

The company cannot cover the cost from its own operations. During the quarter to September 2026, Liberty spent about 2.8 times the cash its business brought in, compared with about 2.3 times in the same quarter a year earlier.

The cash left after the spending, or free cash flow, was below zero in each of the last four quarters. The shortfall in the latest quarter was about six times as large as a year earlier. A single quarter can swing on the timing of payments, and management said much of this one’s outlay went into power generation deposits. Management said its base business still had positive free cash flow in the quarter on its own measure. Taken as a whole, however, the business no longer covers the bill.

Liberty ended September with $119 million in cash against $1.6 billion of debt. Management said its net debt is mostly senior convertible notes issued in the first quarter.

What Has The Spending Bought So Far?

The outlay has not bought more sales. Liberty’s sales over the last twelve months were 9.3% lower than in the twelve months to September 2023, while the cash its business brings in fell about 42% over the same three years. The business has added no extra yearly cash to set against what it spent. Spending is not the only factor moving those figures, though: management said its completions business has improved meaningfully from cyclical lows early in 2026.

What Must Go Right For Liberty

Liberty needs its power business to secure paying contracts. Management said on the October 22 call that its power unit had entered into a development agreement with an AI lab for 1.2 gigawatts of power at data center campuses, to be switched on in phases from late 2027 into early 2029. Management targets signing the first energy service agreement for about 500 megawatts by December 2026, and said the development agreement itself includes a significant prepayment of capacity fees.

Management also expects project-level financing to launch in early 2027, and it targets a return in the high teens on the capital it puts in. The figure to watch is the cash left after the spending each quarter. That metric fell deeper below zero in the quarter to September than in any of the previous seven, and Liberty is expected to report the next one in January 2027.

Is Too Much Of Your Wealth Riding On One Stock?

Liberty Energy is spending heavily, and its holders are waiting to see whether it pays off. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.

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