Stock-Based Compensation

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Stock Options

There were no new stock option grants during the three months ended March 31, 2025. As of March 31, 2025, there was no aggregate intrinsic value for our outstanding or exercisable stock options because the closing stock price as of March 31, 2025 was below the cost to exercise these options. No stock options were exercised during the three months ended March 31, 2025. The weighted average remaining contractual term for the outstanding and exercisable stock options as of March 31, 2025 was approximately 2.0 years.

A summary of the stock option activity for the three months ended March 31, 2025 is presented below (in thousands, except for weighted average price):


	Number of Shares	Weighted Average Exercise Price
Outstanding at January 1, 2025	179	$	14.00
Granted	—	$	—
Exercised	—	$	—
Forfeited	—	$	—
Expired	(12)	$	14.00
Outstanding at March 31, 2025	167	$	14.00
Exercisable at March 31, 2025	167	$	14.00

Restricted Stock Units

On May 11, 2023, the Company's stockholders approved the Amended and Restated ProPetro Holding Corp. 2020 Long Term Incentive Plan (the "A&R 2020 Incentive Plan"), which had been previously approved by the Board and replaced the ProPetro Holding Corp. 2020 Long Term Incentive Plan.

During the three months ended March 31, 2025, we granted 1,314,846 RSUs to employees, officers and directors pursuant to the A&R 2020 Incentive Plan, which generally vest ratably over a three-year vesting period in the case of awards to employees and officers, and generally vest in full after one year, in the case of awards to directors. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Each RSU represents the right to receive one share of common stock. The grant date fair value of the RSUs is based on the closing share price of our common stock on the date of grant. As of March 31, 2025, the total unrecognized compensation expense for all RSUs was approximately $21.7 million, and is expected to be recognized over a weighted average period of approximately 1.9 years.

The following table summarizes RSUs activity during the three months ended March 31, 2025 (in thousands, except for fair value):


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2025	3,001	$	8.54
Granted	1,315	$	7.52
Vested	(888)	$	8.76
Forfeited	(113)	$	7.91
Canceled	—	$	—
Outstanding at March 31, 2025	3,315	$	8.10

Performance Share Units

During the three months ended March 31, 2025, we granted 536,774 PSUs to certain key employees and officers as new awards under the A&R 2020 Incentive Plan. Each PSU earned represents the right to receive either one share of common stock or, as determined by the A&R 2020 Incentive Plan administrator in its sole discretion, a cash amount equal to fair market value of one share of common stock or amount of cash on the day immediately preceding the settlement date. The actual number of shares of common stock that may be issued under the PSUs ranges from 0% up to a maximum of 200% of the target number of PSUs granted to the participant, based on our total shareholder return ("TSR") relative to a designated peer group, generally at the end of a three year period. In addition to the TSR conditions, vesting of the PSUs is generally subject to the recipient’s continued employment through the end of the applicable performance period. Compensation expense is recorded ratably over the corresponding requisite service period. The grant date fair value of PSUs is determined using a Monte Carlo simulation. Grant recipients do not have any shareholder rights until performance relative to the peer group has been determined following the completion of the performance period and shares have been issued.

The following table summarizes information about PSUs activity during the three months ended March 31, 2025 (in thousands, except for weighted average fair value):


Period Granted	Target Shares Outstanding at January 1, 2025		Target Shares Granted		Target Shares Vested		Target Shares Forfeited		Target Shares Outstanding at March 31, 2025
2022	301		—		(220)		(81)		—
2023	431		—		—		(61)		370
2024	633		—		—		(101)		532
2025	—		537		—		—		537
Total	1,365		537		(220)		(243)		1,439
Weighted Average Fair Value Per Share	$	12.77	$	9.87	$	19.99	$	13.71	$	10.42

The total stock-based compensation expense for the three months ended March 31, 2025 and 2024 for all stock awards was $3.3 million and $3.7 million, respectively, and the associated tax benefit related thereto was $0.7 million and $0.8 million, respectively. The total unrecognized stock-based compensation expense as of March 31, 2025 was approximately $30.9 million, and is expected to be recognized over a weighted average period of approximately 1.9 years.