Q3 2025 Atlas Energy Solutions Inc Earnings Call

The conference. Please press star zero on your telephone keypad.

Please note this conference is being recorded.

I'll now turn the conference over to your host Kyle Turlington. Please go ahead.

Hello, and welcome to the Atmos Energy Solutions conference call and webcast for the third quarter of 2025 with US today are John Turner, President and CEO.

Mccarthy Executive Vice President and CFO and Bud Brigham Executive Chair.

We will be sharing their comments on the company's operational and financial performance for the third quarter of 2025, after which we will open the call for Q&A.

Before we begin our prepared remarks, I would like to remind everyone that this call will include forward looking statements as defined under the U S security laws such statements are based on current information and management's management's expectations as of this statement and are not guarantees of future performance.

Forward looking statements involve certain risks uncertainties and assumptions that are difficult to predict as such our actual outcomes and results could differ materially.

Can learn more about these risks in the annual report on Form 10-K, we filed with the SEC on February 25, 2025, our quarterly reports on Form 10-Q for the first quarter in second quarter.

Speaker #1: Greetings, and welcome to the Atlas Energy Solutions third quarter 2025 financial and operational results conference participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Our other quarterly reports on Form 10-Q, and current reports on form 8-K, and our other SEC filings.

You should not place undue reliance on forward looking statements and we undertake no obligation to update. These forward looking statements. We will also make reference to certain non-GAAP financial measures such as adjusted EBITDA adjusted free cash flow and other operating metrics and statistics, you will find the GAAP reconciliation comments and calculate.

Speaker #1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Kyle Turlington.

Speaker #1: Please go ahead.

In Yesterdays press release with that said I will turn the call over to John Turner.

Speaker #2: Hello, and welcome to

Thank you Kyle.

Speaker #2: and Webcast for the third quarter of 2025. With us today are John call.

We begin our prepared remarks, I'd like to extend our deepest condolences to David Smith family and our friends at Pickering Energy partners.

Speaker #2: Turner, President and At this time, all CEO; Blake McCarthy, Executive Vice President and CFO; and Bud Brigham, Executive Chair. We will be sharing their comments on the company's operational and financial performance for the third quarter of 2025, after which we will open the call for Q&A.

Dave was more than a respected analyst he was a true friend his kindness camera and generosity touched everyone fortunate enough to know him for.

We are deeply saddened by his loss.

Godspeed David.

Speaker #2: Before we begin our prepared remarks, I would like to remind everyone that this call will include forward-looking statements as defined under the U.S. Security Laws.

For the quarter Atlas generated $42 million of adjusted EBITDA of $260 million of revenue delivered a 15% adjusted EBITDA margins.

Speaker #2: Such statements are based on the current information and management's expectations as of this statement and are not guaranteed for future performance. Forward-looking statements involve certain risks and uncertainties and assumptions that are difficult to predict.

Despite an exceptionally weak west, Texas completions market, we generated meaningful adjusted free cash flow a clear statement to the strength of our competitive mode.

Speaker #2: As such, our actual outcomes and results could differ materially. You can learn more about these risks in the annual report on Form 10-K we filed with the SEC on February 25, 2025.

With our cost advantaged mines and integrated logistics network.

Our third quarter volumes came in at 525 million tons, a slight sequential decline to the second quarter, but a significant deviation from our expectations, which were based on completion schedule as communicated to us by our customers.

Speaker #2: Our quarterly reports on Form 10-Q for the first quarter and second quarter, our other quarterly reports on Form 10-Q, and current reports on Form A-K and our other SEC filings.

As more of our customers shift to 6% as contracts were increasingly dependent on.

Speaker #2: You should not place undue reliance on forward-looking statements, and we undertake no obligation to update these forward-looking statements. We will also make reference to certain non-GAAP financial measures, such as adjusted EBITDA, adjusted free cash flow, and other operating metrics and statistics.

Tight alignment and transparency with our plans during.

During the quarter several key customers made the tough, but prudent call to slow or pause completion activity into 2026 to preserve 2025 capital budgets.

We expect fourth quarter volumes to step down again sequentially due to typical seasonality and a continuation of customer intention to slow capital spend on completions, that's pushing that as expected volumes into 2026.

Speaker #2: You will find the GAAP reconciliation comments and calculations in yesterday's press release. With that said, I will turn the call over to John Turner.

Speaker #3: Thank you, Kyle. Before we begin our prepared remarks, I'd like to extend our deepest condolences to David Smith's family, and our friends at Pickering Energy Partners.

However, encouragingly, we are seeing some customers that pause all completions activity earlier in the year resume operations in October.

Speaker #3: Dave was more than a respected analyst. He was a true friend. His kindness, humor, and generosity touched everyone fortunate enough to know him. We are deeply saddened by his loss.

Our current estimate for fourth quarter sand volumes is approximately $4 8 million tons, which we forecast to be our low point during the cycle.

Speaker #3: Godspeed, David. For the quarter, Atlas generated 40.2 million dollars of adjusted EBITDA on 260 million dollars of revenue, delivering a 15 percent adjusted EBITDA margin.

Customers have already begun communicating their early 2026 plans, which apply improving volumes early in the calendar.

Opex per ton, including royalties rose to $13 52 sets.

Speaker #3: Despite an exceptionally weak West Texas completions market, we generated meaningful adjusted free cash flow, a clear statement to the strength of our competitive moat, with our cost advantage minds and integrated logistics network.

Given primarily by challenges with the dredge fee and what shadow carbon.

These issues trigger elevated third party service costs and downtime that inflated kermit's operating costs, particularly in September.

While we continue to deal with these issues in October the plan is returning to a more normal state of operations and we expect these cost pressures to ease as the quarter progresses.

Speaker #3: Our third quarter volumes came in at 5.25 million tons, a slight sequential decline to the second quarter, but a significant deviation from our expectations, which were based on completion schedules communicated to us by our customers.

Importantly, we remain on track to take delivery and commissioned two new dredges early in the second quarter of 2026, which we expect to unlock significant cost capacity and cost efficiencies.

Speaker #3: As more of our customers shift to fixed percentage contracts, we're increasingly dependent on tight alignment and transparency with their plans. During the quarter, several key customers made the tough but prudent call to slow or pause completion activity into 2026 to preserve 2025 capital budgets.

Our logistics business delivered five 3 million tons, a modest decline from the second quarter.

The well documented slowdown in Permian completions activity has driven trucking rates are below even cover their levels.

Speaker #3: fourth quarter volumes to step down against sequentially due to typical seasonality and a continuation of customer intentions to slow capital spend on completions thus pushing those expected volumes into 2026.

We're actively optimizing costs and efficiencies, but we're also intentionally carrying some extra capacity into the fourth quarter, Karen sure that were ready to meet anticipated 2026 demand.

The Permian Frac crew, count, which average more than 90 in 2024 and peaked at approximately 95 in March of this year dropped to around 80 crews and are in the third quarter.

It is likely declined further in the fourth quarter.

With W. T I prices trading around $60 and little incentive for operators to ramp activity, we remain cautious about our broad recovery in early 2026.

But we are increasingly optimistic about our progress getting market share through this downturn.

That's why only the lowest cost to produce sand reserves pairing them with an extensive logistics network and.

And amplifying it with the gene Express was central to the strategy.

Downturns are where you grind out the hard yards up cycles or were you reap the rewards.

The oil and gas business and specifically oilfield services for you.

So we're focused on what we can control.

We have launched a companywide initiative to maximize efficiencies with an initial target of $20 million in annual cost savings.

Using our scale and cost advantage, we're attacking the market while competitors pull back.

While we will have a more concrete grafts of total lives in the coming weeks, we are well positioned for our core plants to be highly utilized in 2026.

And we are growing more confident by the day that they didn't express will exceed 10 million tonnes next year, a major rent for 2025.

Atlas has now achieved scale in the sand and logistics business for additional investments currently yield more risk due to the inherent cyclicality of the oil and gas industry.

It has been a tough oil and gas market in the Permian and incremental growth investments in sand and logistics are not currently justified by the returns available in this pricing environment.

Nine months ago, we entered the power business on the thesis that the tail wins were broad deep and durable.

Today that thesis has proven true well beyond our original expectations.

The world turns to the oil and gas industry to solve complex energy problems in times of turmoil.

Now is turning at two firms with oilfield DNA to close the massive gas and power generation.

Electrification the resurgence of domestic manufacturing and now the explosive power demands of AI in computing have turned a capacity constrained grid into a crisis.

Four years power wasn't a line item often an afterthought today, it's the most critical assumption and any growth model.

Relying on the grid now carries unacceptable risk of delays cost escalation or outright failure.

For large capital projects dedicated behind the meter power is quickly becoming a must have.

When we entered the power space, we saw this trend coming our legacy business generated strong through cycle cash flows, but it is volatile.

Power offered decades, plus contracts uncorrelated to oilfield swings delivering a level of stability and sustainability.

and we are growing more confident by the day that the Dune Express will exceed 10 million tons, next year, a major rent for 2025,

It fundamentally changes atlas's cash flows.

The Mojo acquisition wasn't about additional EBITDA.

Atlas has now achieved scale in the standard Logistics business for additional Investments. Currently yield more risk, due to the inherent, clytie of the oil and gas industry.

It was about the addition of a base platform on which to build and grow this business.

It has been a tough oil and gas market in the Permian and incremental growth investments in sand and Logistics are not currently justified by the returns available in this pricing environment.

We've since added significant industry talent and expertise from outside oil and gas and it's paying off fast.

Our opportunity pipeline is now approaching two gigawatts and potential projects.

9 months ago, we entered the power business on the thesis that the Tailwind were very broad deep and durable,

And we're in active commercial dialogue for large load long term power solutions.

Today, that thesis has proven true. Well beyond our original expectations.

These are customers looking for fully integrated permanent power solutions to power their own significant investments, which are otherwise at risk due to the lack of access to reliable grid power.

The world turns to the oil and gas industry to solve complex energy problems in times of turmoil.

Now it's turning into firms with oil, filled DNA to close the massive Gap in power generation.

Atlas is ready to be their solution.

We are targeting having more than 400 megawatts deployed across our power business by early 2027 with the majority of under long term contracts.

Electrification, the resurgence of domestic manufacturing, and now the explosive power demands of AI and computing have turned our capacity-constrained grid into a crisis.

In order to achieve this target.

And indicative of our growing confidence in the pace of negotiations we have placed an order for more than 240 megawatts of new more power dish generation assets with a blue chip equipment provider.

For years power was a line item often an afterthought today is the most critical assumption in any growth model.

Relying on the grid. Now carries unacceptable risk of delays cost escalation or outright failure.

Meanwhile, our legacy measure fleet, while not high density excels at delivering flexible near term bridge power.

For large capital projects, dedicated behind the meter power as quickly becoming a must-have.

At a market starving for generation assets. This capability opens doors. It lets us solve immediate pain points builds trust and pivot to conversations to permanent contracted power exactly what the market demands and what we're built to deliver.

when we entered the power space, we saw this trend coming our Legacy business, generates strong through cycle, cash flows, but it's volatile

We have been relatively quiet about the evolution of our power platform for the past several quarters.

Power offers decades plus contracts, uncorrelated to oil field. Swings delivering a level of stability and sustainability that fundamentally changes. This Atlas is cash flow profile.

But the combination of the merger platform. The talent, we have brought into the organization the strong macro tailwind and our opportunity set becoming more concrete has made it apparent. This transformation is changing the complexion of Atlas at a pace that is gaining speed faster than we imagined.

the mojer acquisition wasn't about additional ibid, do

it was about the addition of a base platform on which to build and grow this business.

We've since added significant industry talent and expertise from outside oil and gas and it's paying off fast.

This brings me to the subject of the dividend.

Our opportunity pipeline is now approaching 2 gigawatts in potential projects.

As announced last night, we have.

And we're in active commercial dialogue for large, load long-term Power Solutions.

But necessary decision to temporarily suspend the dividend.

Returning capital to shareholders has always been a core part of Atlas's DNA.

Management is fully aligned with investors.

These are customers looking for fully integrated permanent, Power Solutions, to power their own significant Investments, which are, otherwise at risk, due to the lack of access to Reliable grid power.

But our mandate is to maximize long term value creation for atmos shareholders that means protecting our balance sheet and optimizing growth above all else.

Atlas is ready to be their solution.

Atlas is base business continues to generate cash and what we believe is our cyclical low for our sand and logistics business. Our current level of profitability does not cover the entirety of the dividend.

We are targeting having more than 400 megawatts deployed across our power business by early 2027, with the majority of under long-term contracts.

in order to achieve this target,

Additionally, and importantly, the opportunities being presented in the power market or potentially game changing for Atlas, but they do require capital.

And indicative of our growing confidence. In the pace of negotiations, we have placed an order for more than 240. Megawatts of new more power dense generation assets with a blue chip, equipment provider,

Size of the dividend represent a potential roadblock to our ability to pursue these opportunities and secure optimal financing.

The project should bring stable financeable cash flows and high quality counterparties enhancing our ability to resume and sustained shareholder returns.

And maximizing long term value creation for our shareholders as management's core mission importantly, we chose the word suspension deliberately.

In a market starting for Generation assets. This capability opens doors, it lets us solve immediate pain points. Builds trust and pivot to conversations to permanent contracted power exactly what the market demands and what we're built to deliver.

We expect this pause in return of capital to be temporary.

Steps, we're taking today are making out with stronger.

We have been relatively quiet about the evolution of our Power Platform for the past, several quarters.

Not just to survive through the cycles, but the power through them I'll turn the call over to our CFO Blake Mccarthy.

Thanks, John.

In Q3, 2025 Atlas generated revenues of $259 6 million and adjust EBITDA of $40 2, million% to 15% margin.

But the combination of the moure platform, the talent we have brought into the organization, the strong macro Tailwinds, and our opportunity set becoming more concrete has made it apparent. This transformation is changing the complexion of Atlas at a pace that is gaining speed faster than we imagined.

EBITDA fell more than forecast due to the affirmation fall customer demand elevated operating expenses at our current facility and margin pressure in our logistics business.

This brings me to the subject of the dividend.

As announced last night, we have made the difficult but necessary decision to temporarily suspend the dividend.

Opex per ton, including royalties was $13.52 higher than anticipated.

Returning. Capital of the shareholders has always been a core part of atlases DNA.

Management is fully aligned with investors.

Cash SG&A was elevated during the quarter due to litigation expenses, excluding litigation expense cash SG&A was in line.

We expect fourth quarter volumes to decline sequentially to approximately $4 8 million tonnes.

But our mandate is to maximize long-term value creation for at the shareholders that means protecting our balance sheet and optimizing growth Above All Else.

Well, we do expect some degree of seasonality during the quarter, but will be partially offset by new customer additions and a resumption of completion activity from current customers.

While Atlas is based business continues to generate cash and what we believe is our cyclical low for our sand and Logistics business. Our current level of profitability does not cover the entirety of the dividend.

Our average proppant sales price is expected to be slightly under $20 per ton for the fourth quarter.

Opex per ton is expected to be up slightly from third quarter levels due to lower sequential volumes would be elevated expenses related to resolving the website issues the kermit.

Additionally and importantly the opportunities being presented in the power Market are potentially game-changing for Atlas, but they do require capital.

Opex per ton is expected to normalize in the first quarter of 2026 due to an increase in scheduled customer volumes and a return to more normal operations at Permian with further improvement expected in the second quarter with the commissioning of the new directions.

The size of the dividend represent a potential, roadblock to our ability to pursue these opportunities and secure optimal financing.

The project should bring stable financeable cash flows and high-quality counterparties. Enhancing our ability to resume and sustain shareholder returns.

Logistics and margins are expected to decline sequentially with seasonality and planned customer groupings.

And maximizing long-term value creation for our. Our shareholders is the Management's core. Mission importantly, we chose the word suspension deliberately

We expect our power business to be up slightly driven by increased unit deployments.

We expect this pause in Return of capital to be temporary.

Breaking down revenue for the third quarter proppant sales totaled $106 8 million logistics contributed $135 7 million and power Reynolds at $17 1 million.

Steps. We are taking today are making Atlas stronger.

Not just to survive through the cycles, but to power through them, I'll turn the call over to our CFO Blake McCarthy.

Thanks John.

Proppant volumes were $5, two 5 million tonnes slightly slightly lower than the second quarter.

Average revenue per ton was $20.34.

Did not record any shortfall revenue this quarter.

In Q3 2025 Atlas generated revenues of 259.6 million and adjust. You the dub 40.2 million, a 15% margin,

Total cost of sales, excluding DD&A was $195 2 million comprised of $66 3 million in plant operating costs $117 8 million of service costs, $6 4 million in rental costs and $4 7 million in royalties.

Ibid do fell, more than 4, due to the affirmation fall, customer demand elevated. Operating expenses that are current facility and margin pressure in our Logistics biscuits.

Top expert tan including royalties was $13.52 and higher than anticipated.

Cash SG&A for the quarter was $25 5 million.

Cash SG&A was elevated during the quarter due to litigation expenses.

Which included cash transaction expenses and other nonrecurring items of $1 3 million.

Excluding litigation expense cash sgna was in line.

SG&A is expected to remain around third quarter levels due to the aforementioned litigation expenses.

We expect fourth quarter volumes to decline, sequentially to approximately 4.8 million times.

DD&A was $40 6 million net loss was $23 7 million and net loss per share was <unk> 19.

Well, we do expect some degree of seasonality during the quarter. It will be partially offset by new customer additions and a resumption of completion activity from current customers.

Adjusted free cash flow defined as adjusted EBITDA less maintenance Capex was $20 million to $22 million.

Our average profit sales price is expected to be slightly under $20 per ton for the fourth quarter.

For 8% of revenue.

Accrued capex during the third quarter was $30 5 million consisting of $12 3 million in growth Capex and 18.2 in maintenance Capex, bringing total accrued capex for the first nine months to approximately $100 1 million.

Top expert on is expected to be up slightly from third quarter levels, due to lower, sequential volumes the elevated expenses related to resolving the wet shed issues that current

We continue to budget of $115 million of total Capex for 2025.

Comp experts on is expected to normalize on the first quarter of 2026, due to an increase in scheduled customer volumes, and a return to more normal operations at Kermit with further Improvement. Expected in the second quarter.

With the commissioning of the new directions.

Fourth quarter adjusted EBITDA is expected to be down sequentially, driven primarily by lower sales volumes and logistics margins related to it'll be your seasonality.

Logistics and margins are expected to decline, sequentially with seasonality and Plan. Customer care brings

We expect our power business to be up slightly driven by increased unit deployments.

Before I hand, the call over to Budd I'd like to give a little detail on our efficiency initiative and the goals, we have set internally and expect to hold ourselves to for investors.

Breaking down revenue for the third quarter profit sales totaled, 106.8 million Logistics, contributed 135.7 million and power rentals, added 17.1 million.

As John mentioned Atlas's core strategy is based around being the most efficient supplier of Santa logistics in the Permian basin and having our overall cost structure optimized is key to the execution of that strategy.

Profit volumes were 5.25 million tons, slightly lower than the second quarter.

Average revenue per ton was $20.34.

Thus, we have set a near term cost savings target of $20 million annualized for the organization.

We did not record any shortfall revenue this quarter.

These savings are expected to be realized through right sizing of our corporate G&A, but fixed cost structure of our operations and a heightened focus on procurement savings.

We expect to begin realizing some of these savings as early as this quarter with the full impact flowing through our financials by mid 2026.

Total cost of sales excluding ddna with 195.2 million comprised of 66.3 million in plant. Operating costs 117.8 million in service costs 6.4 million in rental costs and 4.7 million in royalties.

Cash sgna for the quarter was 25.5 million.

This is simply good corporate hygiene and necessary falling three successful acquisitions since the beginning of 2024.

This is designed to generate cash through cycle, an extra exercises like this ensure that we will maximize cash flow generation through cycle.

Sgna is expected to remain around third quarter levels, due to the aforementioned litigation expenses.

I'll now turn the call over to our executive chairman, but Bruce for some closing remarks. Thank you Blake.

Ddna was 40.6 Million. Net loss was 23.7 million and net loss per. Share was 19 cents.

All of our operations logistically located in the to our corporate headquarters right here in Austin, Texas home to circuit of Americans with a U S Formula One Grand Prix debuted in 2012.

Adjusted free cash flow defined in his adjusted Eva list. Maintenance capex, was 22. 22 million.

For 8% of Revenue.

Just over a decade ago in 2014 F. One went hybrid.

18.2, and maintenance capex, bringing total acute capex for the first 9 months to approximately 100.1 million.

Introducing a revolutionary dual power architecture that pair the traditional engine with advanced energy recovery systems.

We continue to budget $115 million of total capex for 2025.

The impact was profound lepton fell about three to five seconds.

Monumental game in the sport.

Fourth quarter. Adjusted evida is expected to be down, sequentially driven primarily by lower sales, volumes and Logistics. Margins related to end of year seasonality.

Aided by a 10th of a second.

Yeah.

With dual polymer sources effluent became faster more efficient and more sustainable than ever.

Before I hand the call over to Bud, I'd like to give a little detail on our efficiency initiative and the goals we have set internally and expect to hold ourselves to or best investors.

We only record profitability global viewership and enduring moments.

That's the perfect metaphor for Atlas today, we've gone it's hybrid.

As John mentioned, Atlases, our core strategy is based around being the most efficient supplier of Saint and Logistics on a permanent basis. Having our overall cost structure optimized is key to the execution of best results.

With the acquisition of most of our energy systems, we've layered on stable hydro power generation platform.

Thus, we have set a near-term cost savings Target of 20 million annualized for the organization.

Our industry, leading oilfield foundation.

This isn't mere diversification.

These savings are expected to be realized through a Rite sizing of our corporate GNA. The fixed cost structure of our operations and a heightened focused on procurement savings.

Strategic synergy.

Engineered to one smooth volatility in oil and gas cycles.

We expect to begin realizing some of these savings as early as this quarter, with the pool impact flowing through our financials by mid 2026.

To accelerate growth in high demand high margin power markets and three deliver.

This is simply good, corporate hygiene and necessary, following 3 successful Acquisitions since the beginning of 2024.

<unk> resilient cash flows for shareholders.

The tailwind we are unlike anything I've seen in my career.

Atlas is designed to generate cash to recycle and exercises like this ensure that we will maximize cash flow generation through recycle

We now see that the convergence of explosive growth in infrastructure and advanced manufacturing grid reliability and next generation energy systems.

I'll now turn the call over to our Executive Chairman, Bud Brigham, for some closing remarks. Thank you, Blake.

Markets were distributed efficient always on power is mission critical.

Regarding our core proppant and logistics business.

Well, our operations are logistically located in the field. Our corporate headquarters are right here in Austin Texas, home to Circuit of Americas where the US Formula, 1 grand prix debuted in 2012.

We estimate our Permian market share has grown during this down cycle to about 35%.

Just over a decade ago, in 2004 F1 went hybrid.

And early or a P. CS and signals suggest it will grow further next year.

Introducing a revolutionary dual power architecture that paired the traditional Engine with Advanced Energy recovery systems.

That's a direct result of our unmatched advantages and performance.

As Blake and John noted a key driver will be meaningful ramp and do an express utilization beginning in 2026.

The impact was profound. Lap times fell by 3 to 5 Seconds. A Monumental game in a sport decided by tenths of a second.

Finally on the dividend.

Don't take this decision lightly dividends are a vital signal of value creation and transparency.

With dual power sources F1 became faster, more efficient and more sustainable than ever fueling record. Profitability Global viewership and enduring relevance.

That's the perfect metaphor for Atlas today. We've gone hybrid.

However to optimize capital allocation and maximize long term shareholder value, especially given the transformative opportunities in power.

With the acquisition of Moser Energy Systems. We've layered a stable high growth power generation platform, a top or industry-leading oil field Foundation.

Temporary suspension.

This isn't Meir Dirac.

Right.

And as one of the largest shareholders in your executive Chairman returning capital to owners remains a top priority.

Its strategic synergy.

Engineered to 1 smooth volatility in oil and gas Cycles.

This is a strategic pause not a retreat.

That concludes our prepared remarks for the third quarter I will now turn the call over to the operator for Q&A.

2 accelerate growth in high demand, high margin, power markets, and 3 deliver predictable, resilient cash flows for shareholders.

Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

The Tailwinds are unlike anything I've seen in my career.

We now sit at the convergence of explosive growth in AI infrastructure, Advanced manufacturing grid reliability and Next Generation Energy Systems.

You May press star two if he would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Markets where distributed efficiency is always on. Power is mission-critical.

Regard regarding our core profit and Logistics business.

And our first question will come from Jim Rollyson with Raymond James.

We estimate our prahran market share has grown during this down cycle to about 35%.

Hey, good morning, guys.

I don't know, if John or Bob, but you guys are obviously historically been kind of quiet on the power business and obviously that changed with your release last night and plan to deploy more than 400 megawatts.

And early RFP season signals suggest it will grow further next year.

That's a direct result of our unmatched advantages and performance.

Our new strategic order can you, maybe just kind of back up and spend a minute on kind of how your thought process has changed what's your updated power strategy.

As Blake and John noted, a key driver will be meaningful ramp in Dune Express, utilization beginning in 2026.

Finally, on the dividend.

I don't take this decision lightly.

And how <unk> kind of fits into that given that equipment differences. Please.

Dividends are a vital signal of value, creation and transparency.

Yeah, Hey, Hey, Jim This is John I'll take that question.

We've been intentionally tight lipped until now about our power business because we wanted to share targets that were backed by clear line of sight execution.

However, to optimize Capital, allocation and maximize long-term shareholder value, especially given the transformative opportunities and Power.

A temporary suspension was the right move.

Pat or power strategy really hasn't changed we're simply advanced to the next phase in the next quarter.

And is 1 of the largest shareholders. In your executive, chairman returning, Capital to owners remains a top priority

From the start we knew you know success required an established platform with deep power expertise.

This is a strategic pause. Not a retreat.

Far beyond just ordering generators the acquisition of measure delivered exactly that a season team and engineering.

That concludes our prepared remarks for the third quarter. I'll now turn the call over to the operator for Q&A.

Thank you.

Trolls and manufacturing, we've tests bolstered that with talent experienced it at large scale permitted projects EPC partnerships and negotiating a long term.

We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad,

A confirmation tone. Will indicate your line is in the question queue?

You may press star 2 if you would like to remove your question from the cube.

Power purchase agreements to support our our major investments.

The secular tailwind here explosive comparable to the oil and gas business in the mid two thousands when China became a super consumer.

Our keys.

But with far broader customer that power is now the critical bottleneck across revolutionary.

And our first question will come from Jim balison with Raymond James.

Hey, good morning, guys.

U S growth areas from AI to electrification solving the offers high equity returns.

The ability.

Unlike the whipsaw, the oil and gas business power delivers predictable long term cash flows make it far easier to justify sustained investments.

Typically it's a straightforward position.

Straightforward our position.

Physicians are at positioning ourselves as an integrated power producer behind the meter power provider of choice for building owning and operating.

I don't know if John or bud but you guys have obviously historically been kind of quiet on the power business and and obviously that changed uh with your release last night and planned to deploy more than 400 megawatts and and a new strategic order. Can can you maybe just kind of back up and spend a minute on kind of how your thought process has changed? What what your updated power strategy and and how moure kind of fits into that given the equipment differences, please.

Operating bespoke solutions to scale, we're augmenting our assets with higher density generation as evidenced by our today of our 400 plus megawatt deployment.

Yeah. Hey hey Jen. This is John, I'll take that question.

Um,

By early 2027, and large equipment order, we've actually placed now as far as where you know merger plays into that.

you know, we've been intentionally tight lips until now about our power business because we wanted to share targets that were backed by clear line of sight execution.

Our legacy business is mission critical to our power to our strategy the strategy.

It's Tom.

<unk> current real World data crisis, Rami crisis, right now data centers and industrial projects are being built without assured power.

Our path, our power strategy really has to change. Um, we're simply Advanced to the next phase of the next quarter. Um, from the start, we knew, you know, success required and established platform with deep power expertise.

Counterparties have invested billions in facilities that risk stained dark grid connections delayed three to five years, our existing assets deliver immediate bridge power, we deploy proven emplaced generation of projects operational now.

Far beyond, just ordering generators. The acquisition of of Mojo delivered exactly that a seasoned team and engineering.

These solutions are our space optimal, but theyre vastly better than zero output.

Controls and Manufacturing. You know, we've since bolstered that with Talent, um, experience in in large scale permanent, um, projects EPC Partnerships, and negotiating long-term, um, Power purchase agreements to support our major Investments.

Customers aren't waiting for perfect. They are choosing to stay in business.

This positions.

Power as a strategic enabler and not just a legacy unit it generates stable cash flow derisked.

You know, the secular Tailwinds here, explosive, comparable to the oil and gas business and the mid 2000s when China became a super consumer.

De risked customer commitments and buys time to scale permanent power solutions and short power mode like legacy Moshe business isn't just fitting into the strategy it's unlocking it.

But with far broader customer debt power is now the critical bottleneck across revolutionary, you know, us growth areas from AI to electrification. Solving it offers High Equity returns and, um, and stability.

Appreciate that and as a follow up kind of sticking with that same topic I presume you have contracts or a line of sight to contracts.

You know, unlike the whipsaw, the oil and gas business—power delivers predictable long-term cash flows, making it far easier to justify sustained investments.

Joseph I ordering with 240 megawatts of new capacity in <unk> and if so do you guys plan kind of like some of the others in this business and as those contracts to finance the equipment kind of generally externally other than deposits.

Yeah, right I mean, the answer to that question as far as line of sight to contracts. The answer to that is yes, we wouldn't have ordered the equipment unless we had a line of sight on contracts and doesn't that negotiations are currently ongoing I'll, let Blake talk about the financial piece of it and then with respect to the planned financing just like we're thinking through it through the lens of more like project.

Strategically, it's a straightforward position. Um, you know, straight forward our position. Um, you know, positions are as positions ourselves as an integrated power producer behind the meter power provider of choice for building owning an open and operating bespoke solutions, to scale. Raw meaning our assets with higher density. Generation is evidenced by our today of our 400 plus megawatt deployment. Um, Target by early 2027 and large equipment order. We've actually placed. Now, as far as where, you know, most your plays into that, um, you know, our Legacy business is Mission critical to

Our power to our strategy, the strategy.

Financing ask.

Where this.

As John said. These these are these are permanent power solutions.

You know, it solves the current real-world data crisis. I mean crisis, right now, data centers and industrial projects are being built without assured power.

That's one of the key things about the equipment ordering because they are built.

Go into place would be stationery and operate on a very very long term contracts and.

Counterparties have invested billions in facilities that risk staying dark. And you know grid connections, delayed 3, to 5 years

As such.

That type of cash flows very financeable, and so certainly thinking about it.

Our existing assets deliver immediate Bridge power. We deploy proven in place generation of projects operational. Now

Long term financing there.

These Solutions aren't aren't spaced optimal but they're vastly better than zero output.

The capital providers.

The same market trends.

Customers aren't waiting for perfect. They're choosing to stay in business.

We all see and so it's something that Oh.

It's very accessible right now.

Got it I appreciate that guys or Quebec.

This positions, um, Power as a strategic enabler, not just a legacy unit. It generates stable cash flow.

Thanks, Jim.

And our next question comes from Derrick, Paul Taser with Piper Sandler.

De-risk, commit customer commitments, and buys time to scale permanent power solutions in short power mode or legacy. Moisture business isn't just fitting into the strategy; it's unlocking it.

Hey, good morning, guys, maybe just sticking on the power theme can you help us understand the equipment that you order. The 240 megawatts from a third party. If you can provide a suite of third party was that he said there are four megawatt units are these turbines are these natural gas reciprocating engines, maybe just a little bit more color on the actual equipment would be helpful.

Paul.

Yes, Derek this is Tim Andre and I will take that question.

Appreciate that and and as a follow-up kind of stick to that same topic, I presume you have contracts or or line of sight to contracts to justify ordering the 240 megawatts of of new capacity. And and if so, do you guys plan kind of like some of the others in this business, to use those contracts to finance the equipment, uh, kind of generally externally, other than deposits.

So.

We're not going to disclose the OEM on the equipment.

But these are these are recip units, we like recent units.

A couple of different reasons.

It's kind of come down to the efficiencies and redundancies.

So these are higher density.

There are four megawatt gross output.

And again, we like them because of the responsiveness of the redundancy.

Yes. These are these are like as we mentioned that these are these are designed to be put in place and not look. So these are a trailer mounted or anything like that these are effectively we're creating.

Many power plants are not even many but.

Power plants that they go in place if they stay there.

Our long term contracts.

Gotcha, and then maybe just on the Capex related to the to the the orders maybe on a cost per megawatt basis and does this include balance of plant or any sort of battery that youll need to support some of the high transient load for some of these projects.

Trends that uh you know, we all see and so uh it's it's something that uh is very accessible right now.

Got it. Appreciate that, guys. We'll put it back.

Thanks Jim.

And our next question comes from Derek Pazer with Piper Sandler.

Yeah. So the the order includes our balanced plans.

And.

I think looking at it.

We're in line.

With what others in the market have reported on on a cost per megawatt.

Until we have all of our contracts are negotiated on the EPC side I don't think we're ready to get a.

Hey, good morning guys. Um maybe just sticking on the power theme. Can you help us understand the equipment that you ordered the 240, megawatts, from this, the third party. If you can provide us through the third party was think you said they're 4 megawatt units or these turbines or these natural gas specifications. Maybe just a little bit more color on the actual equipment would be helpful.

Full cost per megawatt on the on the entire package.

Okay got it. Thank you very much I'll turn it back.

Yeah uh Derek this is Tim androck and and I'll take that question. Um, so you know we're not going to disclose the, the OEM on the equipment. Um,

Moving on to Stephen <unk> with Stifel.

Thanks, Good morning, everybody.

Can you.

Talking.

But these are, these are recipient units. We like recent units, um, for a couple of different reasons. Uh, and those kind of come down to to efficiencies and redundancies.

Good morning can you talk about the you mentioned some of the higher operating costs.

So these are a higher density. Um, you know, they're a they're a 4 megawatt, gross output.

Corner can you talk about what caused those costs and how we should think about when they normalized.

Um, and you know, again we like them because of the the responsiveness and the redundancy.

Yes, so the issue at Kermit, if really at Kermit with related to tailings and upon where they are those tailings are capped our tailings are the waste product.

Yeah, these are these are like as we mentioned that these are these are designed to be put in place and not moved. So these aren't trailer mounted or anything like that. These are effectively, we're creating, you know.

That remains after we extract the sand.

We deposit tailings in the ponds, where reserves have already been removed.

Many power plants or not even many but uh power plants that you know, they go in place and they they stay there.

Under the long term contract. Yep.

And so every so often.

Tailings pond builds up and we have to go build a new pond.

This is all done in accordance with our 10 year mining plan.

And so in August.

We noticed that our current pond that we were using was near full we began to build a new pond, but we were not able to build a new pond in time. So we had to put tailings into the pond, where we were mining sand.

Gotcha. And then, um, maybe just on the, the, the capex related to the, to the, uh, the orders. Maybe on a cost per megawatt basis. And does this include balance of plant or any sort of battery that you'll need to support some of the high transient load for some of these projects.

yeah, so the the order includes uh, balance plans uh

The introduction of tailings to that.

To that pond, and two our wet feed lead to inefficiencies in our our wet plant and the canyon process. So we had that we ended up having to rerun all the wet sand that we had washed through the wash process. A second time with significantly increased our cost and also impacted the time it took for the sand to dry and also led to elevated.

And, you know, I think looking at it we're we're in line uh with with what others in the market have reported on on a cost per megawatt. Um you know until we have all of our contracts uh negotiated on the EPC side, I don't think we're ready to give a a full cost per megawatt on uh on the entire package.

Okay, got it. Thank you very much. I'll turn it back.

Cost of the dry process.

You know we have a new tailing, we a new tailings pond has been built.

Moving on to Stephen Gennaro with stifel.

That last day. It was really the last time, we were mining reserve from the current dredges had been moved to their next reserve PON and when the new dredges arrive in 2026, we'll open up another reserve PON.

Uh thanks. Good morning. Everybody can can I talk

So you know we're.

We're also installing equipment to monitor the flow of tailings as a possible better be better informed and can better plan in the future I would suspect that that you know we're going to continue to see some elevated cost here in the third.

Morning can you talk about the you you mentioned some of the higher operating costs that Kermit in the quarter, can you talk about your what caused those costs and how we should think about when they normalize?

In the fourth quarter as we begin the fourth quarter, but those costs are going to kind of decline as we continue and then once we bring those new dredges on next year Youre going to see.

Yeah. So the issue um, at Kermit is really a Kermit with related to tailings and the pond where they're those tailings are kept, our tailings are the waste product um, that remains after we extract the sand,

So youre going to continue to see cost efficiencies and costs go down.

Um, you know, we deposit tailings in the ponds where reserves have already been removed.

Okay, great. Thank you for the details.

And the other the other one I just happens.

As we think about the balance sheet, maybe Blake 26 capital spending, Germany early read and maybe maybe the split between power and the sand business.

And so every so often, um, the tailings pond fills up and we have to go build a new Pond. And this is all done in accordance with our 10 year, mining plan,

and so in August,

Yeah Yeah.

Yes.

Still definitely in the.

we noticed that our current Pond that we were using was near full. We began to build a new Pond, um but we were not able to build the new pond in time. So we had to put tailings into the pond where we were mining sand.

The middle of 'twenty six.

Budgeting process, but I don't think it's.

Yeah, the introduction of tailings to that.

Yes going out on a limb when I say that.

Capex in 'twenty, six that's going down from 25 levels.

And likely very close to the maintenance levels. We have always we've always talked about I'm talking cash capex.

With current conditions in the oil and gas market.

Current price of sand.

Incremental growth investments just aren't justified by the returns you can you can obtain in the market right now.

To that pond and to our wet feet, led to inefficiencies in our our wet plant into Canyon process. So we had to we ended up having to rerun all the wet sand that we had washed through the wash process a second time with significantly increased our cost and also impacted the time it took for the sand to dry and also lead to elevated costs in the drying process.

So we're going to spend it up to keep the plants in good working condition and keep the do in express Aman.

But it's going to be significantly near here.

With respect to the power Capex like I said, we're looking at.

At this large the first large order through the lens of more project financing us capital.

You know we have a new tailing, we a new tailings Pond has to build um that last it was really the last Pond. We were reminding reserves from and the current dredges have been moved to their next Reserve Pond. And when the new dredges arrived in 2026, we'll open up another Reserve pond.

Initial order.

Have a minimal impact on 26 cash capex.

That being said the pace of which these projects are progressing as they're moving at a speed that we need to ensure that we're positioned to act.

At times this may require us to make down payments with cash before financing is fully secured and we need cash on hand to do that so that was currently a key part of the calculus of suspending the dividend.

So that we continue to build cash so that were belongs to take advantage of the opportunities out there.

Okay, great. Thanks, I'll get back in line I appreciate it.

Steven.

Our next question comes from Doug Becker with capital one.

Okay, great, thank you for the details and, and, and the other. The other 1 I just had was was, as we think about the balance sheet, maybe Blake on on 26 Capital, spending driven, early read and and maybe maybe even this the split between power and and the same business.

Thank you.

You're targeting more than 400 glass.

Yeah, yeah. Um

27.

Get a sense of how that reconciles with patent 225.

Passenger in August.

You know, it's, uh, we're still, you know, definitely in the, uh, the, the middle of the 26th, uh, budgeting process. But I, I don't think it's, uh,

Okay.

Increasingly.

And Ken.

By the end of 2026, and just Simplistically thinking about it this would imply more capacity deployed in bid 400 megawatts.

But Doug I know there was a little garbled in the beginning but I think what your question was is that.

you know, going out on a limb when I say that, uh, capex in 26 is going down from 25 levels, um, and likely very close to the maintenance levels. We have always, we've always talked about and I'm talking cash capex, uh, you know, with current conditions and they want the gas market.

The target the 400 plus target how does that fit with the initial targets. We gave when we announced the merger acquisition is that correct.

Exactly okay.

Okay cool.

Okay.

So I'll start and others can and can add you know when we originally announced our merger acquisition and this is really we talked about two numbers, we talked about our total fleet and then we and then we also talked about deployed so let's go look at what our total what nameplate capacity was when we acquired <unk>.

Current price of sand. Here's incremental, growth investments, just aren't justified by the returns. You can, you can obtain in the market right now. Um, so we're going to spend it up to keep the camp, the plants in, good working condition, and keep the Dune Express humming. Uh, but it's going to be a significantly leaner year.

You know with respect to the power capex. Like I said we're looking at the uh at this large, the first large order through the lens of more project financing as capital uh and this initial order will have a minimal impact on 26 cash capex.

It was 212 megawatts as what we have what we had what was in the presentation, what we announced.

By the end of 2026 on the legacy fleet that number's going to grow to $2 60 to 200 by around 260, and then by the end of 2020 states that number's going to be around 280 megawatts.

Um that being said, the pace at which these projects are progressing, is they're moving at a speed that we need to ensure that we're positioned to act uh at times. This may require us to make down payments with cash before financing is fully secured and we need cash on hand to do that. Um so that was currently a key part of the calculus of suspending, the dividend. Um so that we continue to build cache so that we're we're armed to take advantage of the opportunities out there.

You add that so then on top of that so that's total deployed thank you.

Okay, great. Thanks. I'll get back in the line. I appreciate it.

You add but what we're adding to new.

Thanks David.

That's going to be another 240 megawatts. So your total deployable our nameplate capacity of our plans is going to be around 500 plus megawatts.

Question comes from Doug, Becker with capital 1.

Thank you. Got your card have more than 400 my early 27.

Now if we go back when we're talking about 400 megawatts, we're talking about what's the what's deployed that's not our nameplate capacity that's what the that's what deployed so when we bought Moshe.

Outfit our total deployed at that time was 100, there's around 130 megawatts.

That number will be around 160 by the end of 2025 and that number will grow to 180 to 200 by the end of 2026, and we continue to grow the measure fleet.

For how that works with having about 225. I go out to the capacity in August in the old, cargo increasing the 3010, but the clocks by the end of 2026 and just simplistically thinking about it, this would imply more capacity deployed than than 400 megawatts.

But then as you add on top of that you add the new with the new order of 240, you get 400 plus megawatts deployed power so.

Doug. That was a little garbled in the beginning, but I think what your question was is that, you know, with the target the 400 plus Target? How does that fit with the initial targets? We gave when we announced the Moser acquisition, is that correct? Exactly.

Okay, cool.

We continue to grow that legacy business and in this with this with the addition of these new assets that just in addition to that Nothing's really changed I think to distill it down to probably what matters. Most of you guys that you know at the time of the acquisition.

Talked about hey, we're going to grow the fleet to 310 megawatts and that's going to translate to an exit EBITDA run rate at the end of 'twenty six to approximately $8 million.

With this new target.

Since your debt power EBITDA target is revised up and so.

Think about it is yes.

We're allocating incremental capital to be a very high return investment opportunity.

Yes, I think let me just add a little more little more color on the on our fleet. So when we guided.

So, uh, and I'll start and others can can can can, can can add, you know, when we originally announced our mojo acquisition and this is really we, we talked about 2 numbers, we talked about our total Fleet. And then we, and then we also talked about deployed. So let's go look at what our total what name plate capacity was when we acquired moure it was 212. Megawatts, is what we, what, we, what was in the presentation, what we announced, um, you know, by the end of 2026 on the Legacy Fleet that number is going to grow to 262 200 by around 260. And then by the end of 2026, that number is going to be around, 280 megawatts. Um, you add that. So then on top of that so that's total deployed then if you add what, what we're adding to new, um,

To to I think it was 310 megawatts that was based on our production capacity. So we actually have had done some things to increase our production capacity, but we also want to be opportunistic with a portion of our fleet. We've got a portion that's out today working with oil and gas we've got that.

That's going to be another 240 megawatt. So your total Deployable or name plate capacity of of our plans is going to be 500, plus megawatts.

New equipment.

Orders that we expect to be deploy.

Deployed late 2026 early 'twenty seven and then they've got a portion of our fleet that allows us to be opportunistic to provide these bridge power solutions that end up leading to our team and developing a bespoke permanently installed solution.

Now, if we go back, when we're talking about, 400 megawatts, we're talking about. What's the what's deployed? That's not our name plate capacity. That's what the that's what deployed. So when we bought moer in a and announced it, our total deployed at that time was around 130 megawatts.

Um that number will be around 160 by the end of 2025 and that number will grow to 180 to 200 by the end of 2026. So we continue to grow the moure fleet, um,

So that flexibility in manufacturing capacity.

Allows us to do that and we will.

But then if you add on top of that, you add the, the new with the New Order of 240, you get 400, plus megawatts of deployed power. So,

To be opportunistic as we look to look to grow those megawatt number yes, I think that's a really key point Doug.

With respect to the most of our assets.

They provide a vital week for a love for a lot of these permanent power opportunities.

So customers that are coming to us and it's been a bit of a state of panic right, where they're like Hey, we've made.

Hundreds of millions 1 billion dollar investments since facilities.

And now we're being told like Hey, like yes, you can connect to the grid and youre going to get a fraction of what you actually need to run the facility.

<unk>.

And they're like well, hey, like we need to get the phase one immediately we need power now and the thing is is with these assets that actually if you could for the equipment you need for the permanent solutions. They are lead times on ups and so there's a gap there and that that's the most of our assets well not ideal from a footprint standpoint.

uh, you know, this is the thing about it is, uh, you know, we're allocating incremental Capital to a very high return investment opportunity

That's a heck of a lot better than the light is not being and so it pulls forward the revenue opportunity for us, but more importantly, it allow.

Allows them to be operating their facilities.

And it's been a week.

A key advantage in terms of these conversations where hey, like we could we can be the problem solver for you, yes, as we said on the legacy business is a critical part of our business and it's unlocking.

It's a lock in the permanent power business for us.

Okay.

I really appreciate all the detail there.

Maybe just thinking about.

The market for Recip engines, a number of other players have announced.

Yeah, and I think just add a little more, a little more color on the on the fleet. So when we guided uh, to to, I think it was 310 megawatts. That was based on our production capacity. Um, so we actually had have done some things to increase our production capacity, but we also want to be, you know, opportunistic with a portion of our Fleet. We've got a, a portion that's out today, working with, with oil and gas, we've got the new equipment that we've ordered that. We expect to be uh, deployed late 2026, early 27th. And then we've got a portion of our Fleet that allows us to be opportunistic to provide these Bridge Power Solutions that end up leading to our team, you know, developing a, a bespoke permanently installed solution and so that that flexibility and Manufacturing capacity.

Orders without contracts.

Signed I think they probably have good line of sight, but how do you assess.

Just the supply of.

Contracted reset our capacity.

And.

How that plays into contracting for Atlas.

Over the next several.

Months.

Allows us to do that. And we'll continue to be opportunistic as as we look to look to grow those megawatt numbers. Yeah, and I think that's a really key Point. Doug is that, uh, with respect to the Moser assets, they provide like a vital link for a lot for a lot of these permanent power, uh, opportunities. These are customers that are coming to us in a, in a bit of a state of panic, right? Where they're like, hey we've made, you know, hundreds of millions billion dollar investment.

So I think.

The market for any type of natural gas fired generation equipment is incredibly tight right now.

Since facilities. And now we're being told like, hey, like yeah, you can connect to the grid and you're going to get a fraction of what you actually need to run the facility. Uh,

So you know when you when you go back to the press release, we put out on the 240 megawatts of power that we bought.

Yeah, I think it was critical for us to to get a hold of those assets and.

That allows us to to end up deploying them I think when you look at the rest of the market.

and that they're like, well, hey, like we we need to get into phase 1 immediately, we need power now and the thing is is with these assets that actually, you could for the equipment, you need for the permanent Solutions, there are lead times on this and so, um, there's a gap there and that that's the most assets. Well, not ideal from a, a footprint standpoint.

You know theres only so many engine blocks that are manufactured every year.

And so we we will continue to be opportunistic when assets come available if they fit solutions for customers that were talking to.

And.

The comments that John Blake made about.

So moshe platform opening doors for us.

We expect the same thing out of out of these equipment orders that they continue to open doors and while we are in active negotiations for for replacing that 240 megawatts. We expect that that will bring more folks to the table and you know when you go back to two.

That's a heck of a lot better than the lights, not being. And so, it, it pulls for the revenue opportunity for us but more importantly, it it, uh, allows them to, to be operating their facilities, um, and it's been a, uh, we take a, a key advantage in terms of these conversations where, uh, Hey, like we could we can be the problem solver for you. Yeah. As we said earlier, that's the Legacy business is a critical part of our business and it's unlocking this, it sounds it's unlocking, the permanent power of business for us.

I really appreciate all the detail there. Uh,

Maybe just thinking about.

The market for a Reuben engines, a number of other players have announced.

Retaining capital in the business.

Orders without contracts.

We're doing that so we can act on all these opportunities.

Yeah, I think it's a.

It's really hard to understate the rate of growth that we're seeing the opportunity set right.

Uh, signed I think they probably have good line of sight. But how do you assess uh, just the supply of

Uncontracted recept capacity. Uh, and

Just over the last three months, we've talked about that obviously, but tangible opportunity set.

Approaching two gigawatts.

How that plays into Contracting for Atlas, uh, over the next several?

Uh months.

Heck of a lot smaller just three months ago, and it's it's increasing at a pace and in Europe.

We drafted that number two weeks ago and since then.

The number of phone calls we've gotten as big.

We updated that number it's probably it's probably moving up so.

The demand growth I think bud hasn't seen anything like this at his entire career, it's pretty wild and.

Uh, I think, uh, you know, the market for any type of natural, gas fire, generation equipment is is incredibly tight right now. And so, you know, when you, when you go back to the, the press release, we put out on the 240, megawatts of of power that we bought.

I think we're all just.

French sprint to keep up with it.

yeah, I think it was critical for us to to get a hold of those assets and uh,

Definitely sounds encouraging thank you.

Well go next to Keith Mackey with RBC capital markets.

You know, that that allows us to to end up deploying them. I think, when you look at the rest of the market, um, you know, there's only so many engine blocks that are manufactured every year.

Hi, Good morning, maybe just continuing on the power generation opportunity can you just discuss a little bit more about.

What's in that two gigawatt number that you put out therefore, the potential market opportunity.

and so we we will continue to be opportunistic when assets come available, if they fit solutions for customers that we're talking to and you know the the comments that that John and Blake made about you know

What is the what types of opportunities is that comprised of where do you see that growing over time.

The Moto platform opening doors for us.

That type of commentary would be helpful.

Yeah. So I think I think I can give a little bit of color on that so I think when you look it at that.

Two gigawatts.

We expect the same thing out of out of these equipment orders, that they continue to open doors. And while, you know, we're an active negotiations for for placing that 240 megawatts.

Yes, Theres a theres a core of that that will continue to belong to oil and gas and thats in the applications that we're using are they it's in micro grids to to continue to support oil and gas development. So that's gonna be about 10% of R.

We expect that that will bring more folks to the table. And, you know, when you go back to to, you know, retaining capital in the business,

We're doing that. So we can act on all these opportunities.

Yeah, I think it's uh,

Our mix.

And kind of our opportunity set.

I think theres, another 40% that said C&I opportunities, which I would.

It's really hard to understand the rate of growth that we're seeing in the opportunity set, right? Like just over the last 3 months. Yeah, we talked about that opportunity, that tangible opportunity, set, you know, approaching 2 gigawatts.

I would take the universe of our opportunities and I would say everything that is not a data center is a C&I opportunity and that's how we're defining that.

So about half that opportunity set is C&I and oil and gas and the other other 50% is going to be data centers and so we're getting a lot of inbounds.

The number of phone calls we've gotten is I think if we, uh, updated that number, it's probably, it's probably moving up. So,

Some data centers, we're not we're not actively hunting that market, but.

The uh the demand growth I think you know bud said like he hasn't seen anything like this in his entire career. It's pretty wild and um you know I think we're all just uh trying to Sprint to keep up with it.

I think because we have power they are finding us and a lot of them are these smaller bridge opportunities for the conversation immediately goes to.

Definitely sounds encouraging. Thank you.

Next to Keith Mackey with RBC Capital markets.

Can you solve this near term and what solutions do you have for them for the long term and near term could be.

Hi, good morning. Uh, maybe just continuing on the power generation opportunity. Can you just

Yeah, it could be three years maybe longer.

And that's in a lot of that's driven by equipment lead times.

What the proper solution looks like for that customer.

Yeah again I go back to.

A little bit more about um what's in that 2 gigawatt number that you uh put out there for the potential Market opportunity. Uh, what is what types of opportunities is that comprised of? Where do you see that growing over time? Um, that type of commentary would be helpful.

We think we're uniquely positioned to provide the bridge that opens these doors for permanent installs.

There are 10, 15, 20 year powerpoints and when Youre looking at that but when you look at that split 90% of that.

If I can be that well just talk about the C&I spent the C&I space is typically.

We're looking at.

10, plus year contracts on supply in that power.

So these are all very very attractive opportunities from a risk adjusted basis for us to deploy capital.

Yeah, so I think, I think I can give a little bit of color on that. So I think, you know, when you look at at at 2 gigawatts. Yeah, there's a, there's a core of that, that will continue to belong to oil and gas. And that's in, you know, the applications that we're using our units in today. It's in micro grids to, to continue to support oil and gas development. But that's going to be about 10% of of our our mixed uh and kind of our opportunity set.

Got it and then I know Blake touched on the EBITDA or earnings generation and the increased target for.

I think there's another, you know, 40% that said, cni opportunities, which I would

What you can generate with the megawatts you will have in the field.

I would take the universe of our opportunities; I would say everything that's not a data center is a CNI opportunity. That's how we're defining that.

Would you be able to just put some maybe guideposts around how youre thinking about that I know others in the market have kind of said it's somewhere.

Somewhere between a four to six times EBITDA multiple for the Capex for these types of opportunities.

so about half that opportunity set is is cni and oil, and gas, and the other other 50% is going to be data centers, and so we're getting a lot of inbounds

Would you be roughly within that range I know certainly a sensitive time for negotiations, but just any way we can kind of think about the the.

The earnings power of this this new opportunity would be helpful.

Yeah, I'm going to refrain from going into specifics just because we've got ongoing negotiations, but I think that.

Um, from data centers. We're not we're not actively hunting that market, but uh, I think because we have power, they're, they're finding us, and a lot of them are these, you know, smaller Bridge opportunities, where the conversation immediately goes to, you know, can can you solve this near-term and what Solutions do you have for the long term in near time could be

With respect to how you think about it I wouldn't be too far off on the EBITDA per megawatt generation that you've seen from others in the space.

Yeah, it could be 3 years. Yeah, it may be longer.

Got it okay. Thanks, so much.

And that's and a lot of that's driven by you know, equipment lead times and and you know what a what the proper solution looks like for that customer.

Moving onto Sean Mitchell with Daniel Energy partners.

Good morning, guys. Thanks for taking the question just one for me just when you talk to your Oems and I know, you're not providing who's who's building. These for you, but just Oems at large.

And so, you know, again, I go back to we we think we're uniquely positioned to provide a bridge that opens these doors for permanent installs that that are, you know, 10, 15, 20 year, power points. And when you're looking at the, the when you look at that, split 90% of that

Lead times for Gastroparesis inches today, and where is that going over the next kind of two years.

Yeah. So.

It varies but the majority of the Oems were talking to are taking orders for 2028 and beyond delivery.

If I could be that the well, let's talk about the cni space. The cni space is typically, uh, you know, we're looking at, you know, 10 plus year contracts on Supply and that power. So, these are all very, um, very attractive opportunities from a risk adjusted basis for us to deploy capital.

Okay.

It really depends on what Youre looking for I think theres. Some theres. Some large players out there that have recently announced bigger deals and bigger orders.

So that has sucked up.

Some of these some of these blocks into 2030.

And so it seems like I said it varies but typically it's going to be 2028, and maybe there's somebody that is cancelled in order and if we can we can step in and be opportunistic with with picking up those assets we've got.

Got line of sight to a home for them.

Got it and and I know um Blake touched on the the Evita or earnings generation and and the increase to Target for um what you can generate with the uh the mega watch, you'll have in the field. Um, would would you be able to just put some maybe guideposts around? How you're thinking about that? I know others in the market have kind of said, it's a somewhere between a 4 to 6, times. Evita build multiple for the capex for these types of opportunities. Uh, would would you be roughly within that range? I know. Certainly a sensitive time for the negotiations, but just any way we can kind of think about the the the earnings power of this. Uh, this new opportunity would be helpful.

So that's why it's so critical though that we're off to it.

Capital to act fast on it.

These swaps are very valuable.

Ed.

We're not the only ones looking to take advantage of them.

Yeah, I'm going to refrain from going into specifics just because we got ongoing negotiations, but I think that um with respect to how you think about it. I I wouldn't be too far off on the Evita for megawatt Generation that you've seen from others. In this case,

Opportunity arises that aligns with the commercial opportunity.

Got it. Okay. Thanks very much.

The decision to move quickly.

And then maybe Blake or John just as you think about the traditional business and the 10 million tons on the express.

Moving on to Sean Mitchell with Daniel Energy Partners.

At some point what are your customers, what what what commodity price do you I mean, if we're at $65 world.

Next year, our through next year.

Are we going to.

What price do you think these guys are going to get back to work because it feels like everybody has taken a pause right now.

Good morning guys. Um, thanks for taking the question, just 1 for me. Just when you talk to your oems, I mean, I know you're not providing, who's who's building these for you, but just oems at large, what, what are lead times like for gastric sip engines today, and where is that going over the next kind of 2 years?

Yeah. So um

Yes, I think that there is just.

A.

It's kind of continuing at the current pace like I think everybody is just waiting to see which way the wind blows right.

It it buries, but the majority of the oems, we're talking to are taking orders for 2028 and Beyond delivery.

Yes.

Yes, guys like you are part of the problem and Sean.

A kid, but like everybody, we all read the same stuff, where it's like a <unk>.

The price of oil is going to fall off here in the next six weeks and so when crude's hanging in the low sixty's, but everybody like there is a risk that it's going to bolt the low fifty's.

Uh, bigger deals and bigger orders and so that has sucked up, uh, you know, some of these, some of these blocks into 2030.

Nobody's going to put more equipment to work.

On the flip of that is that you're starting to see the production statistics.

To move in the right direction.

But I think it's just kind of a wait and see and then there is no impetus right now at the tail end of the year for people to spend more capex.

So I think that.

Yeah, we will.

We are at the customers are a bit opaque.

In terms of like what their plans are and I think that's because they are working through their own budgeting processes, but.

Uh, and so it's like I said, it varies but, you know, typically it's going to be 2028. Um, and maybe there's somebody that has canceled an order and and we can, we can step in and be opportunistic with, uh, with picking up those assets. If we've got, uh, got line of sight to hold for them. Yeah, that that's why it's so critical though that we're our, it, uh, Capital to act fast on it. Um, these, these slots are very valuable, um, and uh, we're not the only ones looking to take advantage of them. So, oh, and an opportunity arises that aligns with the commercial opportunity. Uh, we have to position to move move quickly.

The signals that we have received and through RFP season, thus far have been very encouraging from our standpoint, and just in terms of being able to.

Gather incremental share.

And so that's what we're focused on right now our expectation is that good.

Right now is that 26 is kind of more of the same that we've seen in 'twenty five.

And so it's like it's up to us to go execute in that type of market.

And then maybe Blake or John just as you think about, um, the traditional business and the 10 million tons on the D Express, uh, at some point. What are your customers? What what what what commodity price do you? I mean, if we're at a 65%, are we going to

We know the playbook and ready to go.

Got it thanks for the color.

What, what price do you think these guys are going to get back to work because it feels like everybody's taking a pause right now.

yeah, I I think that there's uh, just, you know, a

And our next question comes from Eddie Kim with Barclays.

Hi, good morning.

Just on the power business.

Do you currently contemplates the entirety of the 240 megawatts you just ordered to be deployed on a single project or is it going to be split up into multiple different projects and just based on your discussion of the end markets.

You know, it's kind of you know, continuing at the current Pace. Like I think everybody's just waiting to see which way the the wind blows. Right. Uh, you know I think it's uh,

It feels like the the the 240 megawatts is going to be deployed in something other than like a Permian microgrid supporting our artificial lift so.

Other C&I or data centers would that be a fair assessment to make.

So we.

We don't expect that to be deployed in the oil and gas.

We've got multiple opportunities.

The debt 240 megawatts could deploy into.

I would expect that.

It's probably not more than two.

And it potentially could go to one project.

Okay. Okay understood. Thank you for that.

And just my follow up is on base business and I apologize if I. If I missed this I know you haven't provided 2026 guidance yet, but any way you can help us think about your volumes for next year, even just directionally. It feels apparent that the Permian Frac crew count is going to be down next year on a year over year basis. So should we expect.

You know, guys, like you or, you know, part of the problem Sean? Where, uh, you know, we we are a kid but, like, you know, there's everybody. We all read the same stuff where it's like, hey, you know, the price of oil is gonna, you know, fall off here the next 6 weeks. And, um, so when you know, Crews hanging in the low 60s, but everybody, like, there's a risk that it's going to fall to low 50s, you know. Nobody's going to put more more, uh, equipment to work. Uh, you know, on the flip of that is that, you know, you are starting to see, you know, the production statistics, uh, start to move in the right direction. Um, but I think it's just kind of a wait and see. And then there's no impetus right now at the tail end of the year, uh, for people to spend more capex. Um, so I think that, uh, you know, we'll, uh, we are the customers are a bit opaque, um, in terms of like what their plans are. And I think that's because they're working through their own budgeting processes, but, uh, the signals that we have received and through our PCS and thus far have been very encouraging from our standpoint and just in the terms of being

Kind of a similar.

Able to, uh, gather incremental share, uh, and so like that's what we're focused on right now. Um, our expectations that that uh, right now is that 26 is kind of more of the same that we've seen in 25. Um, and so it's like, it's up to us to go execute in that type of Market, um, we know the Playbook and uh, we're ready to go.

Trajectory for for your volumes sold as a base case, and maybe flat year over year in sort of an upside case scenario.

Got it. Thanks for the caller.

Any thoughts there would be helpful.

And our next question comes from Eddie, Kim with Barclays.

Yeah. This is Bob I might start and these guys maybe I'll add to my comments Blake kind of touched on it that none of us know.

Have a real good sense for when all is going to bottom and of course, all drive sand consumption.

Whether thats, the fourth quarter or whether it pushes out through 2026, so it's really hard to say.

But my personal view is that for Atlas in terms of our.

Where we sit in this trough that the fourth quarter is the trough for Atlas in part because our competition is getting weaker.

Hey, good morning. Um, just on the power business. Uh do you currently contemplate the entirety of the 240 megawatts? You just uh ordered to be deployed on a on a single project or is it going to be split up into multiple different projects and just based on your discussion of the end markets? Uh, it's it feels like the the the 240 megawatts is going to be deployed in something other than like a Parian micro grid supporting artificial lift. Uh, so likely in other cni or or data centers, uh, would would that be a fair assessment to make?

Are the lowest cost producer.

Yeah, so um, we don't expect that to to be deployed in the oil and gas. Um,

And we are.

Significant logistical advantages.

And including of course, the due next breath. So so I think our sweet.

Our market share has grown.

We've got multiple opportunities, uh, that that 240 megawatts could deploy into. Um, I would expect that uh, it's probably not more than 2.

Think that'll continue to happen through next year.

Um, and it potentially could go to to 1 Project.

And so our.

That's why I feel like this is likely our trough.

Okay, understood, thank you for that. Um,

so, my follow-up is

From an outlet perspective.

Even if oil prices do stay soft, which is probably likely through 2026, but but we all know that the longer oil prices are down at these level levels are stronger.

The upswing is going to be on the other side and Thats, one Atlas is really going to be poised to.

Business. And and apologies. If I, if I mess this, um, I know you haven't provided 2026 guidance yet. But anyway, you can help us think about, uh, your volumes for next year, even just directionally. I mean, it feels apparent that the perming Frac crew count is going to be down next year on a year-over-year basis. So, should we expect kind of a similar? Uh,

To perform extremely well and we're running through the RFP season right now we feel I've said this in my comments were.

We everything.

Trajectory for, for your volume sold as a base case and and maybe flat year over year in soaking upside case scenario. Um, just any thoughts there would be helpful

Everything is looking looking really good right now I mean were looking like as far as the volumes go I mean, like I said, we're going to gain share.

Yeah, this is bud. I'm I'm at start. And these guys may add to my comments. Um,

It's not good pricing pricing is low, but we're doing what we showed with our low cost advantage I mean, most of that most other folks aren't producing any cash flow and the sand sand logistics business, but we obviously I still have really good margins and generating cash flow. It's not the cash flow, we wanted to generate but it's good cash flow and we're positioning ourselves for the upswing.

So I think the adoption off the date Express is was muted last year with with Liberation day happened and but what we are getting an opportunity to fill out those tons. This year with opportunities that are coming up so.

Gonna have more about that as we move into the fourth quarter and when we report next year.

More to talk but we feel we're optimistic about about the volumes, we're going to see next year.

Great Thanks for that color.

I'll turn it back.

And Lee Cooperman with Omega family Office has our next question.

I'd like to hear a little bit late I apologize. If this question was addressed previously.

Did you buyback program more and number two how much of that can be brought back at what prices you pay what you bought it back.

Wall is going to bottom and of course, all Drive sand conception, um, um, you know, whether that's the fourth quarter or whether it pushes out through 2026, it's really hard to say. Um, but I, my my personal view is that for Atlas in terms of our, um, where we sit in this, trough, that the fourth quarter is the trough for Atlas in part because our competition is getting weaker. You know, we are the lowest cost producer, um, and we have, you know, some significant logistical advantages, um, including, of course, the Dune Express. So, so I think our, as we mentioned, our market share has grown, um, we think that'll continue to happen through next year. Um, you know, um, and so our, our you know, that's why I feel like this is likely, um, our trough and from a, from an atlas perspective even if a oil prices do stay soft, which is probably like

So we still have a.

So, it's a $200 billion share buyback authorization.

In place.

Yes.

Execute at a very small amount of that a quarter ago.

But we did not execute any during the current quarter.

Yeah.

Likely, uh, through the 2026. But, but we all know that the longer oil prices are down at these level levels the, um, the stronger. Um, the upswing is going to be on the other side and that's when Atlas is really going to be poised uh to to, to to, to perform extremely well. Yeah. And we're running through the RFP season right now. We feel. We I said this in my comments were

So that is certainly a.

When there are multiple means of returning capital to shareholders.

We're always looking for the highest return.

Means of increasing shareholder value.

We do think that the power opportunities once in a generation opportunity, we announced the 240 megawatt order yesterday.

Yeah.

This won't be the only one right we were.

We had the confidence to make this order because where we are in negotiations.

But like I said.

That's 240 megawatts compared to a an opportunity set that is rapidly rapidly expanding.

And so we are working to continue to grow that that announcement training.

That being said we will.

Based on our current forecast, we should be building cash over the course of 2026.

You know, we're we, you know, everything's looking looking really good right now. I mean, we're looking like as far as the, you know, volumes Go, I mean, like Bud said, we're going to gain share. Um you know it's it's not good pricing is pricing is low, but we're doing what we should with our low-cost Advantage. I mean, most most other folks aren't producing any cash flow and the sand sand and Logistics business, but you know, we obviously, I still have really good margins and generating cash flow. It's not the cash flow, we want to generate but it's it's, it's good, cash flow and we're positioning ourselves for the upswing. I also think the adoption off to do an Express is is you know, was muted last year with with with Liberation day happened and but I what? We are getting an opportunity to fill out those tons. Um, this year with with opportunities that are coming up. So, you know, we're going to have more about that as we, you know, move into the fourth quarter and and when we report next year, um you know, we're going to have more to talk but you know we feel we know, we're optimistic about about the volumes. We're going to see next year.

And that creates a lot of optionality with respect to how do we deploy that.

Great. Thanks for that caller. I'll turn it back.

Where the stock is currently trading we think management believes that is significantly below the intrinsic value of the stock and that's certainly a very high return way of.

And Lee Cooper man with Omega.

Returning to create value for shareholders.

Thank you.

Stock repurchase.

I told you a little bit later, I apologize if this question was addressed, but if you suspended your buyback program, the more number 2, how much stock have you brought back to? What? Prices? Did you pay? When you bought it back?

Sorry can you repeat that.

Despite the elimination of the dividend.

That rule out stock repurchases or use of capital.

Oh, no sorry, no no by no means.

Good luck.

Thank you.

So, we, we still have a, uh, a 200 million share buyback authorization, uh, in place. Uh, you know, we executed a very small amount of that, um, a quarter ago, uh, but we did not execute any, uh, during the this, this current quarter, uh,

you know, in in, uh,

This now concludes our question and answer session I would like to turn the floor back over to John Turner for closing comments.

I want to thank everyone for participating thank you to our employees for all the hard work to our customers and partners. Thank you for your continued confidence and to our shareholders. Thank you for that.

Your support as we build.

The future together, we look forward to reporting our.

Fourth quarter results and talk more about 2026.

Some of the exciting developments that are happening on the power side at our next call. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

So that, that is certainly a, you know, when there, there are multiple means of returning Capital shareholders. Um, and you know, we're always looking for the highest return, uh, you know, means of increasing shareholder value. Uh, we, we do think that the, the power opportunities that once in a generation opportunity, you know, we, we announced the 240 megawatt order yesterday. Um, you know this, this won't be the only 1, right? Uh, we we were we had the confidence to make this order um, because where we are at in in negotiations, uh, but like I said, like that's 240 megawatts compared to a an opportunity set that is rapidly rapidly expanding. Um and so we are, you know working to continue to to grow that announcement training. Um

That being said, you know, we will uh, you know, based on our, you know, current forecast. We we should be building cash over the course of 2026. Um and that creates a lot of optionality with respect to how we deploy that, you know.

Where the stock is currently trading, we think management believes that it is significantly below the intrinsic value of the stock. And that's certainly a very high return play of creating capital value for shareholders.

Thank you. Elimination is it is. You would not stop your purchase.

Sorry, can you repeat that?

I said despite the elimination of dividend, you would not rule out stock repurchases of use of capital.

No sir, no no by no means.

Thank you.

This. Now, concludes our question and answer session, I would like to turn the floor back over to John Turner for closing comments.

Our customers and partners, thank you for your continued confidence and to our shareholders, thank you for your support, we build. Um the future together we look forward to reporting our

the fourth quarter results and talking more about 2026 and the exciting developments that are happening on the power side. At our next call. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference, you may disconnect your lines and have a wonderful day.