Mammoth Energy Services Q1 2025 Earnings Report

Mammoth Energy Services EPS Results

• Actual EPS: -$0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Mammoth Energy Services Revenue Results

• Actual Revenue: $62.47 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Mammoth Energy Services Announcement Details

• Quarter: Q1 2025
• Date: 5/7/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 7, 2025
• Conference Call Time: 11:00AM ET

Mammoth Energy Services (NASDAQ:TUSK) (NASDAQ:TUSK) is an energy infrastructure and services company headquartered in Oklahoma City, Oklahoma. The company provides services to electric utilities, oil and gas producers, and other energy-related customers in the United States and Canada.

Its infrastructure services include the construction, maintenance, repair, and restoration of electric transmission and distribution systems, substations, and related facilities. Mammoth also provides engineering, procurement, and construction services, as well as emergency response and storm-recovery work for utility infrastructure.

Historically, the company has also operated businesses supporting oil and gas exploration and production. These activities have included well servicing, hydraulic fracturing and related completion services, contract land drilling, and the mining, processing, transportation, and transloading of proppant sand used in well completion operations. Mammoth Energy Services became a publicly traded company in 2016.

Mammoth Energy Services Q1 2025 Earnings Call Transcript

Key Takeaways

• Purchased eight passenger aircraft for $11.5 M under long-term leases, immediately accretive and diversifying the rental services fleet.
• Sold three infrastructure subsidiaries for $108.7 M―over four times tangible book value and a 9× trailing EBITDA multiple―demonstrating execution of value-enhancing transactions.
• Q1 revenue was $62.5 M, up 17% sequentially, with adjusted EBITDA turning positive at $2.7 M versus a $4.8 M loss in Q4 and net loss narrowing to $0.5 M.
• Maintained a debt-free balance sheet with total liquidity of $202.9 M after completing recent transactions.
• Management warned that tariffs, OPEC+ production increases and heightened competition in gas basins may pressure margins in the near term.

Presentation

[Operator]

Reminder, this conference is being recorded. It is now my pleasure to introduce your host, Zach Vaughan. Thank you. You may begin.

[Zach Vaughan, Head of Investor Relations at Mammoth Energy Services]

Thank you, Operator, and good morning, everyone. We appreciate you joining us for the Mammoth Energy Services Conference Call to review 2025 first quarter results. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section of www.mammothenergy.com. Information reported on this call speaks only as of today, May 7th, 2025. Please be advised that any time-sensitive information may no longer be accurate as of any subsequent date. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, are forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

[Zach Vaughan, Head of Investor Relations at Mammoth Energy Services]

We will be making forward-looking statements as part of today's call that, by their nature, are uncertain and outside of the company's control. Actual results may differ materially. Please refer to the earnings press release that was issued today for our disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP measures, including adjusted EBITDA. The definition of this non-GAAP measure and its reconciliation to the most directly comparable GAAP financial measure can be found at the end of our earnings release and in our investor presentation, which can be found on our website. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. I would now like to turn it over to Mammoth Energy's CEO, Phil Lancaster.

[Phil Lancaster, CEO at Mammoth Energy Services]

Thank you, Zach. Good morning, everyone. Nice to speak to you all again this quarter in what will be my last earnings call as CEO of Mammoth Energy Services. Given our significant cash position, management has and will continue to evaluate potential strategic opportunities to add accretive assets while maintaining the strength of the balance sheet. As a reminder, as management evaluates the existing businesses and new opportunities to unlock value, Mammoth may be buyers or sellers, at sometimes both. April was a great example of this as the company completed two transactions, one as a buyer and one as a seller. As a buyer, we purchased eight small passenger aircraft in early April for approximately $11.5 million. These aircraft will add meaningful scale and further diversify Mammoth's rental services fleet.

[Phil Lancaster, CEO at Mammoth Energy Services]

Also, each of these planes are under long-term leases with a commuter airline, so this purchase will be immediately accretive to our financial results. As a seller, we completed a transaction in April selling three infrastructure subsidiaries: Five Star Electric, I Power Electrical, and Python Equipment to Peak Utility Services Group for an aggregate sales price of $108.7 million. This was a monumental transaction for Mammoth and demonstrated the ability for us to repeatedly grow businesses organically with our enterprise. We originally purchased these businesses for less than $10 million in 2017, and over the past eight years, we've significantly grown these businesses and increased revenue. To give you a sense of the magnitude, associated revenue has exceeded $90 million in each of the last three years.

[Phil Lancaster, CEO at Mammoth Energy Services]

This transaction was especially accredited because it was completed at over 4x tangible book value and a trailing 12-month EBITDA multiple of nine. As part of the infrastructure deal, I will be transitioning out of the CEO role and will become an employee of Peak. I'll start at Peak on July 1st. Currently, our board of directors is conducting a search for a successor CEO. I've been at Mammoth since the inception of our infrastructure business in 2017, and we've had a lot of success growing these assets during that time. I feel a natural tie to that business, and it makes the most sense for me to follow those assets. While it is difficult to leave, I have full confidence in the Mammoth team to continue to drive value for shareholders.

[Phil Lancaster, CEO at Mammoth Energy Services]

I have no doubt that this experienced management team and my successor will lead this company forward to achieve success in all future endeavors. I'll now touch on a few highlights from the quarter and address some of the uncertainty that is present in today's market environment before turning the call over to Mark to elaborate on the first quarter financial performance and provide the outlook for Mammoth going forward. We are pleased with the strength of our first quarter results that generated positive adjusted EBITDA. During the quarter, we experienced incremental growth in all key financial metrics, sequentially from the fourth quarter that rebounded off the lows of 2024. We benefited from the incremental pressure pumping utilization during the quarter that drove a 32% sequential increase in well completions revenue, and we continue to see strong demand throughout our various businesses, including engineering and TD services.

[Phil Lancaster, CEO at Mammoth Energy Services]

We recognize that there is a level of uncertainty in the market currently stemming from the tariffs, the state of our economy, and geopolitical events such as OPEC+'s decision to increase production. These factors have already started to weigh on oil prices as a result. We anticipate potential increased competition in the gas basins in which we operate, given the strong fundamental support for natural gas later this year and into 2026, tied to increased LNG capacity. This increased competition may squeeze margins slightly in the near term, but we largely expect this to be a short-term headwind as service companies will naturally return to the oily basins once commodity prices permit. Our near-term target continues to achieve a utilization excess of 1.5 active fleets, which would enable us to generate free cash flow.

[Phil Lancaster, CEO at Mammoth Energy Services]

Now, let me turn the call over to Mark to take you through our first quarter financial performance highlights by segment and the company's outlook.

[Mark Layton, CFO at Mammoth Energy Services]

Thank you, Phil. I hope everyone is doing well, and we appreciate you joining us today. I'll take this time to provide commentary around our overall financial performance during the quarter, including a deeper dive into the results by segment before touching on our plans for the future. A detailed breakdown of our results can be found in our earnings release and in our 10-Q once it is on file with the SEC. Mammoth's total revenue during the first quarter of 2025 came in at $62.5 million, which represents a 17% sequential increase over the fourth quarter of 2024. Our first quarter results benefited from increased utilization and demand for our services in both our well completions and infrastructure services segments.

[Mark Layton, CFO at Mammoth Energy Services]

We continue to believe there are positive demand implications for natural gas resulting from incremental LNG export capacity and growing electricity demand requirements, which we expect to materialize late this year and into 2026. Despite the uncertainty that is present in energy markets and the resulting demand implications, we have implemented various cost-cutting measures that should further support improvements in our overall financial performance. Additionally, we will continue to evaluate strategic opportunities to deploy capital in ways that will be accretive and value-enhancing. Divisionally, the well completions services segment saw further improvement in utilization during the first quarter after activity bottomed out in mid-2024. Well completions generated revenue of $20.9 million with an average of 1.3 active pressure pumping fleets, compared to $15.8 million with 1.1 average active fleets in the fourth quarter of 2024. This increase in utilization helped drive the improvement in financial results.

[Mark Layton, CFO at Mammoth Energy Services]

As we look at the remainder of 2025, commodity prices will likely result in a somewhat flat activity environment. We expect completions activity to be relatively steady, although should uncertainty subside, there is a potential for upside into 2026 driven by incremental demand associated with natural gas. Macroeconomic uncertainty, tariff implications, and OPEC+ production increases have placed significant pressure on the energy market and, more specifically, commodity prices. This has widely softened expectations for activity levels throughout 2025. However, we continue to believe there are demand implications for natural gas-directed activity that may shift market dynamics later in the year in a way that benefits our well completions services segment. We will remain disciplined stewards of capital and continue to align our spending appropriately with the demand that we see from our customers.

[Mark Layton, CFO at Mammoth Energy Services]

Our sand segment sold approximately 189,000 tons of sand in the first quarter at an average sales price of $21.49 per ton, compared to 129,000 tons of sand at an average sales price of $22.54 during the fourth quarter of 2024. Sales volumes were up, and pricing remained relatively stable during the first quarter, which primarily stemmed from increased utilization. We expect incremental demand to drive improved results in the sand segment in 2025. As expected, the legacy infrastructure services segment executed well and delivered strong results during the first quarter. Revenue for this segment was $30.7 million for the first quarter of 2025, which represents a 10% sequential increase compared to the fourth quarter.

[Mark Layton, CFO at Mammoth Energy Services]

Following the sale of the three subsidiaries, we will play to our strengths while continuing to strategically deploy capital to pursue opportunities within this sector as we focus on the areas with the greatest potential for improved returns. On a go-forward basis, after the sale of the three subsidiaries, our infrastructure services segment will be comprised of engineering and fiber. Our engineering group continues to do well, and we have secured a strong backlog of business that will drive growth in future periods. We will continue to evaluate and make strategic investments in this segment as appropriate to capitalize on the significant macro tailwinds that are supporting the demand cycle, such as data centers, AI, and nuclear developments. For the first quarter of 2025, revenue for our engineering and fiber businesses was $4 million and $0.7 million, respectively.

[Mark Layton, CFO at Mammoth Energy Services]

For the full year of 2024, revenue for our engineering and fiber businesses was $17.3 million and $1.5 million, respectively. Returning to consolidated results, our net loss for the first quarter was $0.5 million, or a loss of $0.01 per diluted share, compared to a net loss of $15.5 million, or a loss of $0.32 per diluted share in the fourth quarter of 2024. Adjusted EBITDA, as defined and reconciled in our earnings release, was a +$2.7 million in the first quarter compared to a -$4.8 million for the fourth quarter of 2024. Selling, general, and administrative expenses decreased by approximately 34% sequentially to $6.5 million in the first quarter of 2025. After the sale of the three infrastructure subsidiaries, we expect SG&A to decline 20%-25% from the Q1 amount on a go-forward basis. CapEx for the first quarter of 2025 was $7.2 million.

[Mark Layton, CFO at Mammoth Energy Services]

This was primarily related to upgrades and maintenance of our pressure pumping fleet. Our 2025 CapEx budget, excluding acquisitions, remains at $12 million, which is primarily comprised of growth CapEx for our equipment rentals business and maintenance CapEx for our pressure pumping business. We will approach tier four pressure pumping fleet conversions with a measured pace to be as cost-effective and efficient as possible. We will also continue to monitor the uncertainty within our markets to determine potential impacts on commodity prices and resulting activity levels. We will adjust our spending as necessary to align with the activity levels of our customers. Additionally, we see many opportunities to strategically allocate capital to grow our existing businesses that are generating the greatest returns. We've identified numerous opportunities to deploy capital, specifically around equipment rentals, which we expanded and diversified with the purchase of eight planes last month.

[Mark Layton, CFO at Mammoth Energy Services]

There will continue to be various opportunities to invest back into our business in the near term to address demand, as well as to purchase and upgrade equipment with our improved cash position. As of March 31, 2025, we had unrestricted cash on hand of approximately $56.7 million. This cash balance excludes restricted cash of $21.6 million, which would bring our total cash on hand to $78.3 million. Our revolving credit facility was undrawn, and we had approximately $22.7 million in available borrowing capacity. Our total liquidity was approximately $79.4 million. As of May 2, 2025, after completing the sale of three infrastructure subsidiaries and the purchase of eight aircraft, Mammoth had unrestricted cash on hand of $135.4 million, excluding $19.6 million of restricted cash, and total liquidity of $202.9 million. As of today, Mammoth remains debt-free.

[Mark Layton, CFO at Mammoth Energy Services]

To conclude our call, we would like to thank our 300 employees throughout the company for their hard work, dedication, and commitment to maintaining safe and sustainable work sites for themselves and their teammates. We continue to see significant opportunities to unlock value for both Mammoth and its shareholders. We executed two value-enhancing transactions last month, and we look forward to sharing additional strategic developments with you in the coming quarters. We plan to continue managing the company opportunistically while closely monitoring the evolving energy landscape and are prepared to implement strategic cost management initiatives if necessary. We maintain a debt-free balance sheet and a significant cash position of approximately $155 million. This further expands our deployment opportunities, and we intend to utilize this dry powder to substantially invest in the company for future growth.

[Mark Layton, CFO at Mammoth Energy Services]

We are open for business and are focused on building a better, more resilient company for the future. We plan to utilize the tools at our disposal to sustain our recent momentum in the coming quarters and will strategically deploy capital as attractive value-enhancing opportunities present themselves. Finally, we believe our operational expertise, efficiency, strong balance sheet, and the strategic actions we are taking every day will unlock meaningful shareholder value, which is paramount. Operator, we would now like to open the call up for questions.

[Operator]

Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you 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. Once again, that's star one at this time. One moment while we pull for our first question. Our first question comes from Josh Jayne with Daniel Energy Partners. Please proceed.

[Josh Jayne, Managing Director at Daniel Energy Partners]

Thanks. Good morning. First question I had was just on the sand business. Could you talk about the uplift in volumes in Q1, maybe expand a little bit on your outlook for the rest of the year and how you ultimately see sand prices in the near to intermediate term?

[Mark Layton, CFO at Mammoth Energy Services]

Sure. For Q1, we saw strong demand into Western Canada. In regards to pricing, we see a fairly stable environment right now and expect that to persist through the remainder of 2025.

[Josh Jayne, Managing Director at Daniel Energy Partners]

Okay. Thanks. When we think about, I think you had alluded to the one and a half active fleets that you were expecting on average over the course of the year, but in the event that there is some potential weakness in the back half of the year, there were some cost actions that you could potentially take. Could you just go into a little bit of detail of what those are and how you are thinking about maybe adjusted EBITDA over the course of the year relative to your CapEx spend? That would be great. Thanks.

[Mark Layton, CFO at Mammoth Energy Services]

Good question. As we look at the pressure pumping business for the remainder of the year, the biggest lever that we can pull on that side in regards to utilization is on both the staffing front as well as on the repairs and maintenance side. Historically, the team has done an excellent job of managing their cost structure. To the extent we see weakness in utilization for the remainder of 2025, we will certainly lean on that team to cut costs where they can to manage the business according to demand.

[Josh Jayne, Managing Director at Daniel Energy Partners]

Okay. Thanks very much.

[Mark Layton, CFO at Mammoth Energy Services]

Thank you.

[Operator]

Thank you. This now concludes the Q&A session. At this time, I would like to turn it back to management for closing comments.

[Mark Layton, CFO at Mammoth Energy Services]

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.

[Operator]

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

Participants

Executives

• Phil Lancaster, CEO
• Mark Layton, CFO
• Zach Vaughan, Head of Investor Relations

Analysts

• Josh Jayne, Managing Director at Daniel Energy Partners