Mammoth Energy Services Q3 Earnings Call Highlights

Key Points

• Profitability improved sharply: Third-quarter adjusted EBITDA more than doubled sequentially to $5.8 million, with margins expanding to 27.2% from 10%. Mammoth raised its 2026 adjusted EBITDA margin outlook to the mid-teens.
• Aviation leasing became the primary earnings driver: The fleet grew to 44 assets, with 29 leased and a 66% deployment rate. Aviation leasing generated three-quarters of segment adjusted EBITDA, while the company secured up to $58 million in new fleet-backed financing.
• Other segments showed mixed trends: Sand profitability improved despite lower revenue, and accommodations utilization strengthened, while drilling declined and infrastructure remained loss-making. Management expects seasonal softness through year-end but forecasts more than 90% revenue growth in 2026 and over 40% adjusted EBITDA growth in 2027.

Mammoth Energy Services NASDAQ: TUSK reported a sharp improvement in third-quarter profitability, driven by increased aviation leasing activity, stronger sand margins and higher accommodations utilization. The company also raised its full-year adjusted EBITDA margin outlook to the mid-teens and said it expects 2027 adjusted EBITDA to increase by more than 40% from its anticipated 2026 level.

Chief Financial Officer Mark Layton said adjusted EBITDA more than doubled sequentially to $5.8 million, while adjusted EBITDA margin expanded to 27.2% from 10% in the second quarter. Third-quarter revenue totaled $21.3 million, nearly twice the level reported a year earlier but lower than the prior quarter, largely because the second quarter included aviation asset sales that did not recur.

Layton said the company’s revenue mix shifted toward higher-margin aviation leasing while lower-margin sand freight revenue declined. “The shift toward higher-margin aviation leasing, combined with our lean operating model, drove significant profitability improvement despite the lower sequential revenue,” he said.

Aviation leasing becomes primary earnings driver

Aviation leasing generated three-quarters of segment adjusted EBITDA during the quarter, according to Layton. Mammoth expanded its aviation fleet to 44 assets at Sept. 30, up from 38 assets at the end of June and 15 assets a year earlier. The fleet included 14 aircraft, 14 engines and 16 auxiliary power units, or APUs.

Chief Operating Officer Bernie Lancaster said 29 aviation assets were on lease at quarter-end, compared with 23 at the end of the second quarter. That brought the deployment rate to 66%, from 61% in the prior quarter. The leased assets included 10 aircraft, nine engines and 10 APUs.

During the quarter, Mammoth added six assets: two narrowbody engines, one regional engine, two wide-body APUs and one regional APU. Lancaster noted that five of the six additions arrived in September and had limited time to contribute during the quarter. The company is focused on placing its remaining 15 assets on lease, he said.

Rental segment revenue was $9.6 million, more than triple the prior-year quarter. Revenue was down 6% sequentially because of the prior quarter’s aviation asset sales, but Layton said rental revenue rose 17% excluding those sales. Segment adjusted EBITDA increased to $5 million from $3.7 million in the second quarter, and segment margins exceeded 50%.

Mammoth invested $41.8 million during the quarter, including $40.1 million in rentals, primarily aviation assets. The total cost of the aviation portfolio reached approximately $134.9 million at Sept. 30, compared with $108.1 million three months earlier.

New financing facility supports fleet growth

The company announced a senior secured term loan facility with Bank7 providing commitments of up to $58 million, subject to the facility’s terms and conditions. The financing consists of a $25 million Term Loan A and a $33 million Term Loan B, with the second tranche subject to certain conditions. Both loans mature in October 2030.

Layton said the facility is Mammoth’s first financing secured by its aviation fleet. The company had funded the fleet’s initial growth with its own capital, including proceeds from divestitures completed in 2025. Those four divestitures generated more than $150 million in proceeds, according to Layton.

At quarter-end, Mammoth had no funded debt, $13.1 million in cash and cash equivalents, and $24.5 million in marketable securities, for combined liquidity of $37.6 million. Its aviation fleet was unencumbered at the end of the quarter. The company said its actionable aviation investment pipeline stood at approximately $24.5 million.

Sand margins improve despite lower revenue

Sand segment revenue declined to $5.2 million from $8 million in the second quarter, primarily due to lower freight revenue. However, segment adjusted EBITDA improved to $1.5 million from a $0.4 million loss in the prior quarter.

Mammoth sold approximately 228,000 tons of sand, roughly in line with the second quarter, at an average price of $22.18 per ton, up from $21.36 per ton. Lancaster attributed the improvement to a more favorable sales mix between produced and brokered sand, as well as efficiency gains in freight operations and at the wash plant.

The company invested approximately $1.2 million in new screeners at the sand plant. The project is expected to be completed in the fourth quarter and should increase production capability. In response to an analyst question, Layton said the screeners could increase production capacity by an estimated 10% to 15% for the same number of shift hours.

Layton said Mammoth has begun discussing 2027 sales volumes with customers and sees demand “firming up,” particularly in the Montney region of Western Canada. He said the company’s activity is also focused on the Utica and Marcellus regions.

Other operating segments and outlook

Accommodations segment revenue increased 6% sequentially to $3.4 million and rose 48% from a year earlier. Average rooms utilized climbed to 270 from 259 in the second quarter, while room nights on rent increased 5% sequentially to approximately 24,800. Segment adjusted EBITDA margin expanded to 32% from 25% in the prior quarter.

Drilling revenue declined to $2.1 million from $3.8 million in the second quarter as utilization fell to 32% from 43%. The segment was approximately break-even on an adjusted EBITDA basis. Mammoth expects seasonally softer activity through year-end in drilling, sand and accommodations as customers work through annual budgets.

Infrastructure revenue totaled $1.1 million, up 38% year over year, while the segment recorded an adjusted EBITDA loss of $0.9 million, consistent with the second quarter. Lancaster said this was the first full quarter including Mission Construction and BERE Rentals, with equipment and crew utilization averaging just below 50%. He said project awards and customer onboarding accelerated later in the quarter and activity is expected to build in the fourth quarter.

For 2026, Mammoth reaffirmed its expectation for revenue growth of more than 90% and raised its adjusted EBITDA margin forecast to the mid-teens. The outlook assumes no additional aviation asset sales, which Layton said would be additive if completed. Through the first nine months of 2026, Mammoth’s adjusted EBITDA margin was 15%.

Net income from continuing operations was $0.3 million, or $0.01 per diluted share. Gross margin before depreciation rose to 47% from 26% in the second quarter, while selling, general and administrative expense was $4.1 million, compared with $4.2 million in the prior quarter.

About Mammoth Energy Services (NASDAQ:TUSK)

Mammoth Energy Services, Inc 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.

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