MAMMOTH ENERGY SERVICES, INC. (TUSK)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 marked a portfolio transformation—Mammoth closed two divestitures (T&D/substation businesses for $108.7M; frac equipment for $15M) and expanded aviation rentals with eight leased aircraft—driving revenue up sequentially to $16.4M, though an impairment ($31.7M) produced a GAAP net loss from continuing operations of $35.7M (-$0.74 per share) .
• Adjusted EBITDA from continuing operations was a loss of $2.8M; SG&A excluding the 2024 PREPA charge was 32% of revenue in Q2, vs 29% in Q1 and 38% in Q2 2024, reflecting proactive cost measures amid macro uncertainty .
• Liquidity is strong: $127.3M unrestricted cash at 6/30, undrawn revolver; post-quarter borrowing base reset to $50M and total liquidity of $161.0M as of 8/6; management reiterated debt-free status and capital deployment flexibility .
• H2 2025 guidance: adjusted EBITDA loss of $3–4M; discontinued ops cash burn $4–5M; 2025 CapEx budget (continuing ops, ex-acquisitions) raised to $42M, largely for aviation/equipment rentals .
• Near-term catalysts: immediate positive EBITDA from aviation assets, targeted IRRs of 25–35% (2–3x MOIC over 3–5 years), potential buyback execution when blackout periods lift; sand volumes surged YoY and remain weighted to Western Canada’s Montney .

What Went Well and What Went Wrong

What Went Well

• Rental Services revenue rose 72% YoY to $3.1M, supported by expansion into aviation rentals; average equipment on rent climbed to 296 vs 223 in Q2 2024 .
• Infrastructure Services revenue increased 20% YoY to $5.4M, driven by fiber activity; COO highlighted strong demand tailwinds tied to “data centers, AI, and nuclear developments” .
• Sand volumes rose 72% YoY (242k tons vs 141k), with management stating aviation investments are “positive EBITDA from day one” and targeting IRRs of 25–35% with 2–3x MOIC over three to five years .

What Went Wrong

• Non-cash impairment of $31.7M (Northern White Sand mine) led to a GAAP loss from continuing operations of $35.7M in Q2; adjusted EBITDA remained negative at ($2.8M) .
• Accommodation Services revenue fell to $1.8M from $2.7M YoY; sand pricing declined ~6% YoY ($21.41/ton vs $22.73/ton) offsetting higher volumes .
• SG&A ratio rose to 32% in Q2 from 29% in Q1, with management citing a $2.0–$2.5M legal fee overhang in H2 tied to Puerto Rico litigation; buyback execution constrained by blackout windows around transactions .

Financial Results

Note: S&P Global consensus estimates were unavailable for Q2 2025 and the prior two quarters; estimate comparisons could not be made using Wall Street consensus data.

Segment revenue breakdown:

KPIs:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our aviation investments this year have generated positive EBITDA from day one…we believe this is an area that will continue to compete for capital inside our portfolio.” – CFO Mark Layton .
• “We continue to see strong demand…driven by macro tailwinds around data centers, AI, and nuclear developments.” – COO Bernard Lancaster .
• “We expect…adjusted EBITDA loss from continuing operations ranging from $3 million to $4 million [in H2], and…cash burn related to discontinued operations to range from $4 million to $5 million.” – CFO Mark Layton .
• “Mammoth remains debt free…we intend to utilize this dry powder to substantially invest in the company for future growth.” – CFO Mark Layton .

Q&A Highlights

• Capital returns in aviation: management is underwriting IRRs of 25–35% with 2–3x MOIC over 3–5 years; aviation and accommodations can both compete for capital near these return levels .
• Sand market mix: while not disclosing exact split, majority sales historically into Western Canada’s Montney; expectation for continued weighting there .
• Buyback execution: board-approved program; constrained by blackout periods around transactions; generally lifts two full trading days post-earnings absent actionable deals .
• Path to free cash flow: aviation assets are positive contributors; FCF neutrality expected as litigation-related SG&A ($2.0–$2.5M in H2) dissipates .
• Leverage posture: currently debt free; leverage may be considered opportunistically depending on asset type .

Estimates Context

• S&P Global consensus EPS and revenue estimates for Q2 2025 and the prior two quarters were unavailable; only actual results were accessible, preventing beat/miss analysis versus Wall Street consensus. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Portfolio pivot de-risks cyclicality: divesting T&D/substation and frac equipment while adding leased aircraft establishes recurring rental revenue and immediate EBITDA contribution .
• Near-term financials are troughing: impairment drove GAAP loss; adjusted EBITDA losses are narrowing sequentially, with cost actions underway and SG&A mix improving YoY vs 2024 .
• Strong liquidity and no debt support optionality: $161M liquidity as of 8/6 and an undrawn revolver enable accretive M&A and organic investments across aviation, rentals, and accommodations .
• Aviation returns could re-rate the equity: targeted 25–35% IRRs and positive EBITDA day one create a clear capital deployment narrative; monitoring scaling pace and lease coverage is key .
• Sand business levered to Western Canada: volumes strong despite lower pricing; Montney exposure to Tier 1 acreage suggests resilient demand but ASP remains a watch point .
• Buyback execution window: trading below cash/book cited by investors; program could be active post-blackout, offering a potential near-term stock support catalyst .
• H2 2025 guardrails: plan for $(3)–$(4)M adjusted EBITDA loss and $(4)–$(5)M discontinued ops cash burn; CapEx budget stepped up to $42M for continuing ops, mostly growth in aviation/rentals—track returns and spending discipline .

Citations: Earnings call transcript ; Q2 2025 press release/8-K ; Q1 2025 press release ; Q4 2024 press release .