Q3 2025 Mammoth Energy Services Inc Earnings Call

Mohammad Tobewalla: These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectation expressed year-end. Please refer to our latest Securities and Exchange Commission filings for risk factors and cautions regarding forward-looking statements. Our comments today also include non-GAAP financial measures. The underlying details and a reconciliation of GAAP to non-GAAP financial measures are included in our third quarter earnings press release, which can be found on our website. As a reminder, today's call is being webcast, and a recorded version will be available on the Investor Relations section of Mammoth's website following the conclusion of this call. With that, I'll turn the call over to Mark. Thank you, Mohammad, and good morning, everyone. Mammoth delivered another quarter of steady execution as we advance our transformation plan, simplifying the company and realigning the portfolio toward higher return businesses.

Our call today also includes non-GAAP financial measures. The underlying details and a reconciliation of GAAP to non-GAAP financial measures were included in our third quarter earnings press release, which can be found on our website. As a reminder, today’s call is being webcast, and a recorded version will be available in the investor relations section of the Mammoth website following the conclusion of this call.

With that, I'll turn the call over to mark.

Thank you, Muhammad and good morning, everyone.

Mohammad Tobewalla: Our drilling segment was a standout this quarter, with revenue more than tripling sequentially and gross margin reaching the highest level in the segment's history. Activity was driven by increased horizontal drilling in the Permian Basin, which continues to demonstrate the value of concentrating capital in our strongest markets. This performance underscores the early benefits of our strategic realignment and highlights the opportunity for further growth as market conditions stabilize. For the third quarter, revenue was $14.8 million, down from the $16.4 million in the second quarter and $17.1 million a year ago, largely reflecting the divestiture of the Piranha assets and continued underperformance in the sand segment. Net loss from continuing operations was $12.1 million, or $0.25 per diluted share.

Mammoth delivered another quarter of steady execution. As we advance, our transformation plan simplifying, the company and realigning, the portfolio toward higher return businesses.

Our drilling segment was a standout this quarter with Revenue more than tripling, sequentially and gross margin reaching the highest level in the segment's history.

Activity was driven by increased horizontal drilling in the Permian Basin which continues to demonstrate the value of concentrating capital in our strongest markets.

this performance, underscores the

The early benefits of our strategic realignment and highlights the opportunity for further growth as market conditions stabilize.

For the third quarter Revenue was 14.8 million down from the 16.4 million in the second quarter and 17.1 million a year ago.

Largely reflecting the domestic of the pyranha assets and continued underperformance in the sand segment.

Net loss from continuing operations was $12.1 million, or 25 cents per diluted share.

Mohammad Tobewalla: While these results are not where we want them to be, they reinforce why we're taking decisive actions to fix structural issues, strengthen the portfolio, and build a healthier business. Importantly, the quarter also marked a step forward in cash generation. We delivered positive free cash flow from operations, which is inclusive of both continued and discontinued operations, supported by the monetization of underutilized assets. These results highlight the growing financial resilience of our reshaped portfolio and our focus on self-funding the transformation. We remain committed to optimizing the portfolio, reducing structural drag, and redeploying capital toward businesses capable of generating consistent, high-return performance through cycles. We continued repositioning the company this quarter with the sale of our Piranha assets in the sand segment, a transaction that pruned the portfolio by removing an underperforming business.

While these results are not where we want them to be, they reinforce why we're taking decisive actions to fix structural issues, strengthen the portfolio, and build a healthier business.

Importantly, the quarter also marked a step forward in cash generation.

We delivered positive free cash flow from operations, which is inclusive of both continued and discontinued operations.

Supported by the monetization of underutilized assets.

These results highlight the growing Financial resilience of our reshaped portfolio and our focus on self-funding the transformation.

We remain committed to optimizing the portfolio. Reducing structural drag and redeploying capital toward businesses capable of generating consistent, High return performance through Cycles.

We continued repositioning the company this quarter with the sale of our Pyranha assets in the sand segment.

Mohammad Tobewalla: At the same time, we invested selectively in new aviation assets within rentals, where we continue to see compelling returns. Together, these actions reflect our broader effort to shift capital toward businesses that generate consistent cash flow and lower cyclicality. Taking a step back, over the past several quarters, we have executed a series of transactions that collectively unlock value and reposition Mammoth Energy Services for the next phase of growth. We monetized our mature infrastructure business at an attractive valuation, divested our hydraulic fracturing assets, redeployed capital into our aviation platform, and streamlined corporate overhead. Historically, Mammoth Energy Services has been acquisitive, and while we continue to evaluate M&A opportunities, our approach is very selective, with a sharp focus on entry economics, return on capital, and strategic fit.

A transaction that pruned the portfolio by removing an underperforming business.

At the same time, we invested selectively in new aviation assets within Reynolds, where we continue to see compelling returns.

Together these actions, reflect our broader effort, to shift Capital toward businesses, that generate consistent cash flow.

And lower cyclicality.

Taking a step back over the past several quarters, we have executed a series of transactions that collectively unlock value and reposition the Mammoth for the next phase of growth.

We monetize our mature infrastructure business at an attractive valuation.

The bested, our hydraulic fracturing assets redeployed Capital into our Aviation platform and streamlined corporate overhead.

Evaluate m&a opportunities.

Our approach is very selective.

Mohammad Tobewalla: Every decision is guided by our goal of building a company centered on sustainable returns rather than scale for its own sake. Capital deployment during the quarter reflected that same discipline. We continue to invest prudently in our aviation fleet, building on the platform we established earlier this year. During the quarter, we purchased one additional aircraft engine and one auxiliary power unit, or APU, expanding our aviation asset base and reinforcing our commitment to this high-return segment. In total, three engines and one APU are currently staged for deployment as we finalize the right long-term contracts, ones that support better margins and strong conversion to free cash flow. Additionally, two of our eight aircraft are currently off-lease and undergoing minor upgrades. We expect both to be redeployed next quarter at higher lease rates, reflecting favorable market conditions and disciplined asset management.

with a sharp focus on Entry, economics return on Capital and strategic fit

Every decision is guided by our goal of building a company centered on sustainable returns rather than scale for its own sake.

Capital deployment during the quarter reflected. That same discipline.

We continue to invest prudently in our aviation fleet, building on the platform we established earlier this year.

During the quarter, we purchased one additional aircraft engine and one auxiliary power unit, or APU.

Expanding our aviation asset base and reinforcing our commitment to this high-return segment.

In total 3 engines and 1 Apu are currently staged for deployment as we finalize the right long-term contracts.

once the support better margins and strong conversion to free cash flow,

Additionally, 2 of our 8 aircraft are currently off lease and undergoing minor upgrades.

We expect both to be redeployed next quarter at higher lease rates, reflecting favorable market conditions and disciplined Asset Management.

Mohammad Tobewalla: Market fundamentals across our end markets remain mixed but constructive. In energy services, activity levels are steady and pricing is held firm in most basins. Infrastructure demand continues to benefit from grid hardening, broadband expansion, and data center investment, while our aviation platform is positioned to capture sustained leasing demand in the regional passenger market. Together, these trends, combined with our leaner portfolio, provide a solid backdrop for improvement in 2026. Our approach remains deliberate. Every investment decision is return-based, and every asset must earn its place in the portfolio. We will continue to deploy capital prudently, guided by where we see the highest risk-adjusted returns, while maintaining the flexibility to capitalize on new opportunities as they arise. In total, we have now deployed approximately $40 million year-to-date to grow and diversify our aviation portfolio.

Market fundamentals across our end markets remain mixed, the constructive.

In Energy Services, activity levels are steady, and pricing is held firm in most spaces.

Infrastructure, demand continues to benefit from grid hardening Broadband expansion and data center investment. While our Aviation platform is positioned to capture sustained. Leasing demand in the regional passenger Market.

Together, these Trends combined with our leaner portfolio, provide a solid backdrop for improvement in 2026.

Our reproach remains a deliberate. Every investment decision is returned based.

And every asset must earn its place in the portfolio.

We will continue to deploy Capital, prudently Guided by where we see the highest risk. Adjusted returns. While maintaining the flexibility to capitalize on new opportunities as they arise.

Mohammad Tobewalla: These investments have added meaningful scale, strengthened the recurring earnings profile of our rentals segment, and are generating positive EBITDA from day one. Aviation continues to compete effectively for capital within our portfolio and remains a core growth platform as we execute on our broader transformation. Overall, we're making steady progress as we reposition Mammoth Energy Services for sustainable returns. It won't be an overnight process, but the actions we're taking today, from asset sales and disciplined reinvestment to portfolio optimization and improved cash generation, are essential to building a stronger, more resilient Mammoth Energy Services that can deliver sustainable value creation over the long term. Before I hand it over, I want to thank our teams for their continued execution during a period of significant change. Their discipline, adaptability, and commitment are what enabled this transformation to take hold. With that, I'll turn the call over to Vernon Lancaster.

In total, we have now deployed, approximately 40 million year to date to grow and diversify our Aviation portfolio.

These investments have added meaningful scale, strengthened the recurring earnings profile of our rental segment, and we're generating positive EBITDA from day one.

Aviation continues to compete effectively for Capital within our portfolio.

And remains at core growth platform as we execute on our broader transformation.

Overall.

We're making steady progress as we, reposition Mammoth for sustainable returns.

It won't be an overnight process, but the actions we're taking today.

From asset sales and disciplined reinvestment to portfolio, optimization and improved cash generation.

Our essential to building a stronger more resilient mammoth

That can deliver sustainable value creation over the long term.

Before I hand it over, I want to thank our teams for their continued execution, during a period of significant change.

Their discipline, adaptability, and commitment are what enable this transformation to take hold.

Mohammad Tobewalla: Thanks, Mark. Operationally, our teams executed well across our businesses in what was a challenging quarter. While we were disappointed with the results in the sand and infrastructure segments, we have already taken actions to address structural inefficiencies and improve execution. Let me take a moment to review our operating performance by segment and highlight where we're seeing momentum build. In rentals, aviation delivered a full quarter of operations with strong customer demand and improving fleet availability as we continue to tighten operating efficiency to offset startup issues. We're prioritizing long-term contracts and profitable deployment over volume for volume's sake. Non-aviation rentals remained somewhat steady with good equipment returns and minimal downtime. In infrastructure, our teams managed through scheduled shifts and customer delays that impacted margin, but we executed safely and continue to work to secure several new engineering and fiber projects.

With that, I'll turn the call over to Bernie Lancaster.

Thanks Mark.

Operationally our teams executed well across our businesses in what was a challenging quarter.

While we were disappointed with the results in the sand and infrastructure segments, we have already taken actions to address structural inefficiencies and improve execution.

Let me take a moment to review our operating performance by segments and highlight where we're seeing momentum build.

In Reynolds Aviation, we delivered a full quarter of operations with strong customer demand and improving fleet availability, as we continue to tighten operational efficiency.

Offset startup issues.

We're prioritizing long-term contracts and profitable deployment over volume for volume sake.

Non-aviation rentals remain somewhat steady, with good equipment, returns, and minimal downtime.

Mohammad Tobewalla: This business remains a strategic part of Mammoth Energy Services given its alignment with long-term grid, AI data center, and broadband investment themes. Our sand operations faced another difficult quarter driven by the divestiture of Piranha assets, non-recurring costs associated with railcar returns, and continued weather-related headwinds in Canada. The environment remains challenging, but we believe our remaining assets are in a more advantageous position to return capital over the medium to long term. We believe that focusing on internal cost efficiency, maintenance reliability, and disciplined contract management will restore margins over time. Our accommodation segment had a very good quarter. Higher occupancy and improved cost efficiency led to margin expansion and solid EBITDA growth. Customer feedback remained strong, and our team continues to deliver excellent service and safety performance. Finally, drilling was the standout performance this quarter.

Part of Mammoth given its alignment with long-term grid, AI Data Center and Broadband investment themes.

Our sand operations, faced another difficult quarter driven by the divestiture of pyranha assets. Non-recurring costs, associated associated with rail car returns and continued weather related, headwinds in Canada.

The environment remains challenging but we believe our remaining assets are in a more advantageous position to return Capital over the medium to long term.

We believe that focusing on internal cost efficiency. Maintenance, reliability, and discipline, contract management will restore margins over time.

Our accommodation segment had a very good quarter higher occupancy and improved cost. Efficiency led to margin expansion and solid Evo growth,

Customer feedback from Maine has been strong, and our team continues to deliver excellent service and safety performance.

Mohammad Tobewalla: Our decision to focus on the Permian Basin and horizontal drilling activity is paying off. The team delivered record gross margins and continued to gain share in our target markets. We expect to build on this momentum in Q4 and into 2026 as activity and customer engagement remain strong in the areas where we operate. Taken together, these results demonstrate the resilience of our diversified portfolio, with strength in drilling and accommodations helping offset weakness in sand and infrastructure during the third quarter. Across the company, I want to thank our employees for their commitment and execution. We are steadily building a more efficient and resilient organization. With that, I'll hand it back to Mark for closing remarks. Thanks, Vernon. While Q3 results highlight areas where we must improve, they also demonstrate the progress we're making to rebuild Mammoth Energy Services on a stronger foundation.

Finally drilling was the standout performer of this quarter. Our decision to focus on the puran, Basin and horizontal drilling activity is paying off.

The team delivered record gross margins and continued to gain share in our target markets.

We expect to build on this momentum in Q4 and into 2026 as activity and customer engagement remain strong in the areas where we operate.

Taken together these results, demonstrate the resilience of our Diversified portfolio with strength and Drilling and accommodations helping offset weakness and sand and infrastructure during the third quarter.

Across the company. I want to thank our employees for their commitment and execution. We are steadily building a more efficient and resilient organization with that. I'll hand it back to mark for closing remarks.

Thanks Bernie.

Mohammad Tobewalla: Our drilling and accommodation segments show what disciplined execution can deliver even in a challenging market, and we're applying those lessons across the organization. These segment results reflect both the progress we've made and the work still ahead. Our continued discipline around the cost and capital remains central to restoring profitability. Now, turning to our financial performance by segment, I'll walk through key highlights for the quarter, beginning with rentals. Segment revenue was $2.8 million, down 11% sequentially but up 24% year-over-year. Aviation performed well with a full quarter of revenue and solid customer demand. On average, during the third quarter of 2025, we had approximately 286 pieces of equipment rented out to customers compared to 296 pieces in the second quarter. The sequential decline primarily reflected timing of project completions in the Northeast.

While Q3 results highlight areas where we must improve, they also demonstrate the progress, we're making to rebuild Mammoth on a stronger Foundation.

Our Drilling and accommodation segments, show that what discipline execution can deliver even in a challenging market, and we're applying those lessons across the organization.

These segment results reflect both the progress we've made and the work still ahead.

Our continued discipline around cost and capital remains central to restoring profitability.

Now turning to our financial performance by segment, I'll walk through key highlights for the quarter beginning with rentals.

Segment revenue was $2.8 million, down 11% sequentially, but up 24% year-over-year.

And performed well, with a full quarter of revenue and solid customer demand.

on average during the third quarter of 2025, we had approximately 286 pieces of equipment, rented, out to customers

compared to 296 pieces in the second quarter.

Mohammad Tobewalla: We continue to be encouraged by the potential in this segment, as more than 80% of our current rental activity is tied to gas-weighted basins. These markets stand to benefit from secular demand growth and natural gas-fired power generation, particularly as the AI-driven expansion of data center capacity increases electricity requirements across the grid. Utilization levels remain healthy, and we're focused on operational levers and pricing to further enhance margins. In addition, seasonal weather trends could provide a tailwind for heating-related rental assets as we move through the winter months. The quarter also represented the first full quarter of revenue contribution from our aviation assets, which continued to perform well and generate stable returns. Overall, we remain excited about the opportunity set within our rentals business as we enter 2026.

the sequential decline primarily reflected timing of project completions in the Northeast,

We continue to be encouraged by the potential in this segment, as more than 80% of our current rental activity is tied to gas-weighted basins.

These markets stand to benefit from secular demand growth and natural gas-fired power generation, particularly as the AI-driven expansion of data center capacity increases electricity requirements on the grid.

Utilization levels remain healthy and we're focused on operational levers and pricing to further enhance margins.

In addition.

Seasonal weather trends could provide a Tailwind for heating related rental assets as we move through the winter months.

the quarter also represented, the First full quarter of Revenue contribution from our Aviation assets,

Which continue to perform well.

And generate stable returns.

Mohammad Tobewalla: Infrastructure segment revenue of $4.8 million declined 13% sequentially, primarily reflecting operational execution challenges on a few fiber projects that impacted both timing and margins. We've already taken corrective action, including management changes and tighter project oversight to ensure greater accountability and consistency going forward. While the quarter was softer than we would have liked, we remain encouraged by the long-term opportunity in this business. The segment is well-positioned to benefit from secular investment in grid modernization, broadband expansion, and the build-out of AI data centers, all of which are driving sustained demand for electrical and fiber infrastructure capabilities. With changes to our structure and leadership, we're confident this segment will return to a stronger performance trajectory in 2026. Our sand segment revenue of $2.7 million was down 49% from Q2 and 44% year-over-year, reflecting the Piranha divestiture and weather-related disruptions in Canada.

Overall, we remain excited about the opportunities that within our Reynolds business as we enter 2026.

Infrastructure. Segment revenue of 4.8 million declined, 13% sequentially.

Primarily reflecting operational execution challenges on a few fiber projects that impacted both timing and margins.

We've already taken corrective action.

Including management changes and tighter project oversight to ensure greater accountability and consistency going forward.

We remain encouraged by the long-term opportunity in this business.

The segment is well positioned to benefit from secular investment in Grid modernization Broadband expansion and the buildout of AI related data centers,

all of which are driving sustained demand for electrical and fiber infrastructure capabilities.

With changes to our structure and Leadership. We're confident this segment will return to a stronger performance trajectory in 2026

Our sand segment, revenue of 2.7 million was down 49% from Q2 in 44% year-over-year.

Mohammad Tobewalla: In addition, we incurred approximately $0.6 million in expenses during the quarter related to the return of railcars. We view Q3 as a reset point. With Piranha sold and improvements underway at Taylor Frack, we expect sand to return to positive gross margin in 2026. Accommodations revenue was $2.3 million and up 29% sequentially, while down 20% year-over-year. EBITDA rose to $0.5 million from $0.2 million in Q2, as strong operational execution and cost discipline are driving better performance from this segment. Drilling revenue of $2.3 million represented a 207% sequential increase and a 47% increase year-over-year, driven by improved utilization and higher activity. Gross margin rose to 19%, the highest in this segment's history, and EBITDA improved to $0.2 million from a loss in Q2.

And weather-related disruptions in Canada.

In addition we incurred approximately 0.6 million in expenses during the quarter related to The Return of rail cars.

We view Q3 as a reset point.

With pyranha sold and improvements underway at Taylor. Frac, we expect sand to return to positive, gross margin in 2026.

Accommodations Revenue.

Was 2.3 million and up 29% sequentially.

While down 20% year-over-year.

To 0.5 million from 0.2 million in Q2, a strong operational execution and cost discipline are driving better performance from this segment.

Drilling revenue of 2.3 million.

Represented a 207% sequential increase into 47% increase year-over-year.

By improved utilization and higher activity.

Gross margin grew to 19%, the highest in this segment's history, and EBITDA improved to $0.2 million.

Mohammad Tobewalla: Importantly, the segment also generated positive free cash flow as a result of the positive EBITDA and no CapEx for the segment during the quarter. These results reflect improved operational efficiency. In the near term, we expect drilling to continue performing well as activity levels remain stable, and we execute on additional initiatives to further enhance profitability and cash conversion, including pricing. This performance validates our focus on the Permian and reinforces the value of concentrating capital in our core markets. Turning to our consolidated results, net loss from continuing operations for the third quarter was $12.1 million, or a loss of $0.25 per diluted share, compared to a loss of $8.9 million, or $0.18 per diluted share, for the third quarter of 2024. The net loss in the third quarter of 2025 included a non-cash charge of $2.4 million related to Piranha.

From A Loss in Q2.

Importantly, the segment also generated positive free cash flow as a result of the positive Vivid de and no capex for the segment during the quarter.

These results reflect improved operational efficiency.

In the near term. We expect drilling to continue performing well as activity levels, remain stable and we execute on additional initiatives to further enhance profitability and cash conversion including pricing.

This performance validates our focus on the Parian and reinforces the value of concentrating capital in our core markets.

turning to our Consolidated results.

Net loss from continuing operations. For the third quarter was 12.1 million or a loss of 25 cents per diluted share.

Compared to a loss of 8.9 million or 18 cents per diluted share for the third quarter of 2024.

The net loss in the third quarter of 2025 included, a non-cash charge of 2.4 million related to pyranha.

Mohammad Tobewalla: Adjusted EBITDA from continuing operations, as defined and reconciled in our earnings release, was a loss of $4.4 million in the third quarter compared to a loss of $2.9 million in the prior year period. While headline profitability remains under pressure, we continue to take meaningful steps to improve the bottom line through a relentless focus on cost structure and efficiency. Selling, general and administrative expenses were $5.2 million in the third quarter of 2025, reflecting a significant reduction from last year as we have streamlined operations and simplified the organization. Excluding bad debt expense, we have meaningfully lowered our SG&A run rate from approximately $35 million in 2024 to around $21 million exiting the third quarter, a reduction of roughly 40%. Importantly, when adjusting for $1 million of Puerto Rico-related legal expenses incurred this quarter, our normalized SG&A run rate is effectively cut in half compared to last year.

Adjusted EBITDA from continuing operations, as defined and reconciled in our earnings release, was a loss of $4.4 million in the third quarter, compared to a loss of $2.9 million in the prior year period.

While headline profitability remains under pressure, we continue to take meaningful steps to improve the bottom line through a relentless focus on cost structure and efficiency.

Selling General and administrative expenses for 5.2 million in the third quarter of 2025.

reflecting a significant reduction from last year.

As we have streamlined operations and simplified the organization.

Excluding bad debt, expense? We have meaningfully lowered our sgna run rate from approximately 35 million in 2024 to around 21 million exiting the third quarter.

A reduction of roughly 40%.

Importantly, when adjusting for $1 million of Puerto Rico-related legal expenses incurred this quarter.

Our normalized SG&A run rate is effectively cut in half compared to last year.

Mohammad Tobewalla: These results reflect the progress we've made to create a leaner, more efficient organization. We are executing against a detailed cost roadmap that focuses on consolidating support functions, improved shared service efficiency, and maintaining strict discipline on discretionary spending. This structural reset is not just about reducing expenses, it's about building a stronger foundation for sustainable profitability and margin expansion as our portfolio continues to evolve. At quarter end, we maintained a strong balance sheet with $110.9 million of unrestricted cash, cash equivalents, and marketable securities, and total liquidity of approximately $153.4 million, including our undrawn credit facility. Mammoth Energy Services remains debt-free, providing the flexibility to fund operations and invest in opportunities that offer attractive returns.

These results reflect the progress we've made to create a leaner, more efficient organization.

We are executing against a detailed cost roadmap that focuses on consolidating support functions.

Improved shared service, efficiency.

And maintaining strict discipline on discretionary spending.

Profitability and margin expansion as our portfolio, continues to evolve.

At quarter end, we maintained a strong balance sheet, with 110.9 million of unrestricted Cash, Cash equivalents and marketable securities.

And total liquidity of approximately 153.4 million, including our undrawn credit facility.

Mammoth remains debt-free, providing the flexibility to fund operations and invest in opportunities that offer attractive returns.

Mohammad Tobewalla: Subsequent to quarter end, approximately $19.8 million of the $29.5 million in restricted cash related to the letter of credit for PREPA was released back to the company, meaningfully improving our effective liquidity position. This equates to roughly $0.41 per diluted share of incremental value, and we believe it's important to underscore that this cash is now available and no longer encumbered. The market has historically discounted this balance, but with the release of these funds, our liquidity profile is even stronger than reflected at quarter end. Restricted cash stood at $29.5 million as of September 30, and with this subsequent release, we've effectively unlocked a significant portion of that value. These actions highlight the underlying strength and flexibility of our balance sheet.

Subsequent to quarter end, approximately 19.8 million up to 29.5 million, in restricted, cash related to the letter of credit for prepa.

was released back to the company, meaningfully improving our effective liquidity position.

This equates to roughly $0.41 per diluted share of incremental value. We believe it's important to underscore that this cache is now available and no longer encumbered.

The market has historically discounted this balance.

But with the release of these funds, our liquidity profile is even stronger than reflected at quarter-end.

Restricted cash stood at $29.5 million as of September 30.

And with this subsequent release, we've effectively unlocked a significant portion of that value.

Together.

Mohammad Tobewalla: With over $170 million in total liquidity pro forma for the release, we are well-positioned to fund our ongoing transformation, support organic investments, and pursue strategic opportunities that align with our return and risk framework. Capital expenditures for the quarter totaled $17.3 million, primarily related to aviation and maintenance projects. We continue to expect full year 2025 CapEx to remain within our previously communicated range, weighted toward initiatives with clear payback and margin improvement potential. Our disciplined approach to capital allocation, combined with a conservative balance sheet, positions us well to navigate market volatility and pursue strategic growth as opportunities arise. Every business within Mammoth Energy Services competes for capital, and we continue to evaluate opportunities that fit our return and risk criteria. Our priorities remain clear: enhance margins, improve asset returns, and preserve balance sheet strength.

These actions highlight the underlying strength and flexibility of our balance sheet.

With over 170 million in total liquidity, proforma for the release.

We are well positioned to fund our ongoing transformation.

Support organic Investments and pursue strategic opportunities that align with our return and risk framework.

Capital expenditures for the quarter totaled $17.3 million.

Primarily related to Aviation and maintenance projects.

We continue to expect full year 2025 capex to remain within our previously, communicated range.

Weighted toward initiatives with clear, payback and margin Improvement potential.

Our disciplined approach to Capital, allocation combined, with a conservative balance sheet positions us. Well, to navigate Market volatility and pursue strategic growth as opportunities arise.

Every business within Mammoth competes for capital, and we continue to evaluate opportunities that fit our return and risk criteria.

Our priorities, remain clear.

Enhanced margins improve asset returns.

Mohammad Tobewalla: We have the right assets, the right team, and the financial flexibility to execute our plan. Looking ahead, while Q4 will reflect continued portfolio transition, we expect improved cash generation and margin recovery in 2026 as our transformation initiatives take hold. The organization today is leaner, more focused, and better aligned with the opportunities ahead of us. On behalf of the leadership team, I want to thank our employees for their dedication and our shareholders for their continued support. We believe Mammoth Energy Services is on the right path, and we're confident the steps we're taking today will translate into sustainable value creation in the years ahead. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. 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.

And preserve balance sheets strength. We have the right assets, the right team and the financial flexibility to execute our plan.

Looking ahead.

While Q4 will reflect continued. Portfolio transition.

We expect improved cash generation and margin recovery in 2026.

As our transformation initiatives take hold.

The organization today is leaner, more focused, and better aligned with the opportunities ahead of us.

On behalf of the leadership team.

I want to thank our employees, for their dedication and our shareholders, for their continued to support.

We Believe Mammoth is on the right path and we're confident the steps we're taking today, will translate into sustainable value Creation in the years ahead.

That concludes our prepared remarks operator, please open the line for questions.

Mohammad Tobewalla: The confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment, please, while we poll for your questions. Our first questions come from the line of Colby Sasso with Daniel Energy Partners. Please proceed with your questions.

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

The confirmation tone will indicate your line is in the question queue.

You may press *2 if you would like to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for your questions.

Our first questions come from the line of Colby Sasso, with Daniel Energy Partners, please proceed with your questions.

Colby Sasso: Hi. Thanks for having me on the call. I just wanted to ask, can you speak on the visibility for sand volumes in 2026, ideally with some color on the basins you serve?

Hi, thanks for having me on the call.

I just wanted to ask, um,

Can you speak on the visibility for sand volumes in 2026, ideally with some color on the Basin you serve?

Mark Layton: Sure. As we look at 2026, our primary logistic advantage is into Western Canada, into the Montney, and then into the northeast, so into the Utica Marcellus. As we look at 2026 volumes, we certainly expect an increase compared to what we saw in Q3 that we framed as a low watermark or a reset. The conversations that our sales team is having are encouraging as it relates to 2026.

We, we certainly expect that an increase compared to what we saw in Q3 that we framed as, as a low water, mark or a reset, uh, but the the conversations that our sales team is having or or encouraging as it relates to 2026.

Colby Sasso: That's all for me. I'll turn it back.

Mark Layton: Thank you.

That's all for me. I'll turn it back.

Mohammad Tobewalla: Thank you. Our next questions come from the line of Doug Garber with Westport Alpha. Please proceed with your questions.

Thank you.

Thank you. Our next questions, come from the line of Doug, Garber with Westport Alpha, please proceed with your questions.

Doug Garber: Hey, Mark. How's it going?

Mark Layton: Good. How are you, Doug?

Hey Mark, how's it going?

Doug Garber: Good. I wanted to just start on the balance sheet. Your cash and marketable securities is about $123 million as of 10/31. I wanted to just confirm that does not include, you still have, what, $10 million from escrow from the recent sale and another, call it, $5 to $10 million from land rigs held for sale that are not included in that number that should be a cash inflow. Do I have that right? Are there other big things that you're expecting to collect?

Good. How are you Doug?

Good. I wanted to start on the balance sheet. Um,

you, you're

Your cash and marketable securities is about 123, as of 1031. And I wanted to just confirm that does not include you still have what 10 million from escrow from the recent sale and another call at 5 to 10 from Land rates held for sale that are not included in that number. That should be a cash, inflow. Do I have that right? And are there other

Mark Layton: Yeah. High level, there's about $5 million held for sale that primarily relates to the drilling rig assets. You identify the $10 million that remains in escrow relative to the T&D transaction that occurred in April of this year, which we expect to be released in April of 2026 at the earliest.

Big, uh, other things that you're expecting to collect.

Yeah. High level there's uh about 5 million in held for sale that primarily relates to the drilling rig assets.

And then you identify the $10 million that remains in escrow relative to the T and D transaction that occurred in April of this year.

Uh, we expect to be released in April of 2026 at the earliest.

Doug Garber: Okay. Can you just remind us on the PREPA puts and takes, how much you still have? I think a $20 million left in AR to collect, and you also have a tax liability. If I have that in the $20 million net liability range between those two items, is that a fair way to think about it?

Okay.

And can you just remind us on the, um, the prepa puts and takes? How much, um, do you still have? I think $20 million left in our to collect, and then you also have a...

A tap, slide ability. And if I have that in the 20-ish million dollar net, liability range between those 2 items.

Is that a fair way to think about it?

Mark Layton: Yeah. As you look at the PREPA receivable, you're correct. That's $20 million that's due when PREPA exits bankruptcy. I think that date is undetermined at this particular point in time. The majority of the tax liability that sits on the balance sheet relates to Puerto Rico activities. As you look at that, that's at the gross amount. To reduce that, to reflect the write-off, we'll take some negotiations with the tax department in Puerto Rico. What you're seeing on the balance sheet is the gross tax amount, non-reflective of the write-off that we took last year.

Yeah, so if you look at the prep, I received bull, you're correct, that's 20 million dollars. That's due when prepa exits bankruptcy, I think that that date is undetermined at this particular point in time.

And then the majority of the tax liability that sits on the balance sheet relates to Puerto Rico activities.

Uh, and as you look at that, that's at the gross amount, um, to reduce that to reflect the write off. We'll we'll take some negotiations with the tax department in Puerto Rico. Uh, so what you're seeing on the balance sheet is the gross tax amount non-reflective of the write off that we took last year.

Doug Garber: Okay. I also want to dig into the sand business. It's a decent drag on free cash flow here. Can you help me understand the path, how much of it was one-time for rail rental car returns of a drag? What is your path to getting that business back to free cash flow neutral in 2026 or even next quarter?

Okay.

and,

I also want to dig into the sand business. It's a decent drag.

On free cash flow here.

Can you help me understand the path? How much of it was one-time for a rail, uh, rental car returns of a drag and.

What, what is your path to get in that business? Back to free cash flow neutral in in 206 or even next quarter.

Mark Layton: There are several levers. First, it comes down to sales, and the sales dialogue is encouraging as it relates to '26. As you pointed out, Q3 included some one-time charges associated with returning railcars of about $550,000. While we incurred that cost during the quarter, it reduces our fixed cost profile on a go-forward basis and moves us a step closer towards right-sizing our railcar fleet.

There are several levers. First, it comes down to sales, and the sales dialogue is encouraging as it relates to 26.

Uh, but as you pointed out, Q3 included some 1-time charges associated with returning rail cars, uh, of about 550,000 dollars.

Uh, so why did we incur that cost during the quarter? It reduces our fixed cost profile on a go-forward basis and moves us a step closer towards right-sizing our rail car fleet.

Doug Garber: How much did it reduce your cost, and what's your total railcar liability monthly?

How much did it reduce your cost? And what's your total? Uh, rail car liability monthly.

Mark Layton: Yeah. As we look at the total railcar monthly right now, it's about $120,000 a month. We reduced it by about $30,000 per month by returning this set of cars. I think the next set of cars that becomes available releases in February or March timeframe of 2026. We'll continue to evaluate that fleet based on demand.

Yeah, so as we look at the total rail car monthly right now.

It's about 120,000 a month, uh, we reduced it by about 30k per month by returning this set of cars. I think the next set of cars that becomes available releases in February or March time frame of 26.

Doug Garber: Yeah, we've reduced our fleet count this year about 30%, trying to right-size where we're at. Is it a volume, or where's the price in on that sand? Are you still in the $20 per ton kind of FOB range?

And we'll continue to evaluate that fleet based on demand.

Yeah we've reduced our sorry, this is Bernie. Uh We've reduced our Fleet count this year about 30% trying to write size where we're at.

And is it a volume or where's the price in on that sand? Are you still in the in the $20 per ton, kind of

Uh, fob range.

Mark Layton: We were a little below $20 during the quarter. Some of that related to offloading some $30,000, $50,000 that allowed us to reposition some of the railcars that we were returning. We continue to see demand and pricing in that $20 range for $40,000, $70,000.

Change for 4070.

Mohammad Tobewalla: Thank you. This now concludes our question-and-answer session. I would now like to turn the floor back over to Mark Layton for any closing comments.

Thank you. This now, concludes our question and answer session, I would now like to turn the floor back over to Mark Leone for any closing comments.

Mark Layton: Thank you again for joining us on the call today. We continue to focus on positioning Mammoth Energy Services for future growth and unlocking value. We will achieve this through operational excellence, efficiency, and strategic capital deployment. This concludes our conference call, and we look forward to speaking to you all again next quarter.

Thank you again for joining us on the call. Today we continue to focus on positioning Mammoth for future growth and unlocking value.

We will achieve this, through operational excellence, efficiency and strategic Capital deployment, this concludes our conference call and we look forward to speaking to you all again, next quarter.

Mohammad Tobewalla: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines. Enjoy the rest of your day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference you may now disconnect your lines, enjoy the rest of your day.