Mammoth Energy Services, Inc.

Greetings and welcome to the Mammoth Energy Services third quarter earnings conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mohamed Tobiwala, Investor Relations at Bizarre Advisors. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. We appreciate you joining us for Mammoth's third quarter 2025 earnings conference call. Joining us on the call today are Mark Bladen, Chief Financial Officer, and Bernie Lancaster, Chief Operating Officer. We will start today with our prepared remarks and then open it up for questions. I want to remind everyone that some of today's comments include forward-looking statements. These statements are subject to many risks and uncertainties. that could cause our actual results to differ materially from any expectation expressed herein. Please refer to our latest Securities and Exchange Commission filing 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, Mohamed, 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 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 25 cents per diluted share. 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 reshape 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. 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 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 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. 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. 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. These investments have added meaningful scale, strengthened the recurring earnings profile of our rental 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 for sustainable returns. It won't be an overnight process, but the actions we're taking today, asset sales, and disciplined reinvestment to portfolio optimization and improved cash generation are 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. With that, I'll turn the call over to Bernie Lancaster.