管理層發言
Greetings. Welcome to the Mammoth Energy Second Quarter 2026 Earnings Conference Call. Please note, this conference is being recorded. At this time, I'll turn the conference over to Mohammed Topiwala with Vizara Advisors Investor Relations. Please go ahead.
Thank you, operator, and good morning, everyone. We appreciate you joining us for Mammoth's Second Quarter 2026 Earnings Conference Call. Joining us on the call today are Mark Layton, Chief Financial Officer, and Bernard 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 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 second 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, Mohammed, and good morning, everyone. I'll start with our second quarter results, the key themes driving the quarter's performance, capital allocation, and our updated outlook for 2026. I'll then turn it over to Bernard Lancaster, our Chief Operating Officer, to walk through operational performance by segment. I'll then come back to cover the financials, balance sheet, and our repurchase activity, after which we'll open the line for questions. We delivered another strong quarter: revenue growth, a second consecutive quarter of positive adjusted EBITDA, and adjusted EBITDA margins of 10%, well ahead of plan. Importantly, the growth this quarter was driven by sand, drilling, infrastructure, along with the recurring rental revenue continuing to grow as aviation, leasing, and equipment rental activity expanded. I'll cover the drivers thematically here, and the segment-level detail will come in my financial review later in the call.
Total revenue for the second quarter was $26.1 million, up 19% sequentially, and up 110% year-over-year. Adjusted EBITDA was $2.6 million, up 37% sequentially, compared to a loss of $3.5 million in the second quarter of last year. In our Rentals segment, lease revenue grew well ahead of the 19% headline rate. Higher utilization and continued asset deployment drove meaningful sequential revenue growth across both our aviation leasing and equipment rental businesses. Overall, rentals revenue declined, and that decline is entirely attributable to the swing in aviation asset sale revenue. In regards to aviation asset sale revenue, I want to be straightforward about how we think about it. We are focused on returns. If we can sell an asset for a better return than we might earn by continuing to lease it, we will sell it. That means asset sale revenue will not always be linear quarter-to-quarter, but our decision-making will remain guided by returns.
Our Sand and Drilling segments both outperformed this quarter, underpinned by improving activity in the basins where they work, and more importantly, we saw the Drilling segment turn adjusted EBITDA positive, and in sand, gross margin turned positive. Turning to capital allocation, we invested $44 million in the quarter, our most active quarter of capital deployment since we began building the aviation platform. A good example of how we approach these opportunities: during the quarter we acquired a Boeing 747 package that included the airframe, two installed engines, a spare engine, and spare parts inventory. We placed the engines on lease with a blue-chip customer and subsequently sold the airframe and landing gear for $2 million, recovering a portion of our cost basis while retaining the highest returning components of the package. That is the discipline we intend to apply to every dollar we put to work in this business.
We also completed our first acquisitions of operating businesses in eight years. On June 12, we acquired Mission Construction LLC and BERE Rentals LLC for combined consideration of $6.5 million, funded entirely with cash on hand. Both are providers of fiber optic services to utility customers in the Midwestern United States, and both sit within our Infrastructure segment, where we are seeing a growing opportunity set. These acquisitions extend our presence in the fiber optic services market, broaden our fleet of fiber equipment, and add experienced fiber crews. We are pleased to welcome both teams to the Mammoth family. In total, including these acquisitions, we deployed approximately $50 million of capital during the quarter. Turning to the macro backdrop across our end markets. On the natural gas side, LNG-driven demand continues to support activity in the Montney, where gas demand and production are both running at record levels heading into the back half of the year.
A constructive setup for our sand business. In aviation, industry-wide demand for leased aircraft, engines, and auxiliary power units remain strong, with OEM production and maintenance capacity still constrained, a dynamic that favors the leasing model we've built our platform around. And in the Permian, drilling activity firmed through the second quarter after a choppier start to the year, consistent with the utilization improvement Bernard will walk through in drilling. As we look to the balance of the year, it's worth reflecting on how much the business has progressed over the last five months. When we set our initial 2026 guidance in March, we guided to revenue growth of greater than 50% for 2026 and said positive adjusted EBITDA was back within reach. At that time, we viewed mid-teens adjusted EBITDA margins as a 2027 objective. Following a strong first quarter, we raised our outlook in May to greater than 60% revenue growth and committed to being adjusted EBITDA positive for the full year.
Today, after another quarter of broad-based execution and the contribution from the assets acquired during the second quarter, we're raising our outlook again. We now expect full-year 2026 revenue growth of greater than 90% and adjusted EBITDA margins in excess of 10%. Achieving double-digit margins this year puts us roughly a year ahead of where we expected to be at the start of 2026, marking our second upward revision in just five months on both revenue and profitability. That progress reflects what we're seeing across the business. Our aviation fleet continues to scale on plan. Activity has improved across our Sand and Drilling segments. Our cost structure is materially lower than it was a year ago. Put simply, our strategy is working, first in aviation and now increasingly across the rest of the portfolio. One final point on the revenue outlook. First half results included approximately $8.5 million of aviation asset sales.
Because we do not forecast asset sales, our second half outlook is based entirely on recurring operating revenue. In other words, our guidance reflects the underlying earnings power of the business as it stands today, and any future asset sales would represent upside to the outlook we've provided. With that, I'll turn it over to Bernard to walk through the operational performance in more detail.
Thanks, Mark, and good morning, everyone. Let me walk through the operational performance by segment. Starting with rentals, in our equipment rental business, our average pieces of equipment on rent increased to 407 from 389 in the first quarter, continuing the build we've seen over recent quarters. Demand across our gas-weighted basins remains strong, and the customer and fleet mix work we began earlier this year continues to gain traction. It is showing up in both utilization and in the quality of the revenue we are capturing. In aviation, we ended the quarter with 38 assets in the fleet, up from 27 at the end of the first quarter, with 23 generating revenue on lease compared to 21 last quarter. As we've noted before, there is a natural lag between acquiring an asset and placing it on lease. This quarter's fleet growth outpaced lease placement, which we expected given our pace of acquisition.
We look for the on-lease count to continue building as the 11 recently acquired assets, a mix of aircraft, engines, and APUs, are placed on lease. In accommodations, facility occupancy softened modestly quarter-over-quarter in Q2, consistent with the seasonal trends we historically experience during this period. More importantly, occupancy grew more than 79% year-over-year versus Q2 of 2025, underscoring the continued strength of underlying demand. In drilling, we saw a meaningful step-up in activity as utilization more than doubled quarter-over-quarter. We believe that the underlying demand from our customer base is there for us to build on a fantastic quarter from the team. In sand, we sold approximately 229,000 tons in the quarter, up from roughly 156,000 tons in the first quarter. Average price per ton was $21.36 compared to $19.49 in the first quarter, as we saw improved pricing during the quarter alongside increased activity levels.
We saw a meaningful quarter-over-quarter improvement in results, and we will continue to build on that progress. We are expecting a much stronger second half of 2026 from sand. Finally, in infrastructure, the operational focus this quarter was on the two fiber optic services businesses we acquired. Integration is underway and progressing well. We are aligning safety programs, project management systems, and fleet maintenance practices with ours, and the crews and customer relationships that came with these businesses are already broadening the work we can pursue. These acquisitions meaningfully strengthen the organization we have been rebuilding in fiber, and our focus now is on monetizing that expanded capability as we see meaningful growth opportunities ahead. With that, I'll turn it back to Mark to cover the financials.
Thanks, Bernard. Let me now go through the second quarter results by segment, and then I'll cover consolidated profitability, the balance sheet, capital expenditures, and our repurchase activity. Rentals segment revenue was $10.2 million, down 22% sequentially, but up 229% year-over-year. The more useful number is segment adjusted EBITDA, which was $3.7 million, up 3% sequentially at a 36% margin versus 28% in the first quarter. Revenue and earnings moved in opposite directions because aviation asset sales during the quarter were close to their cost basis. The auxiliary power unit sale in the first quarter resulted in $6.5 million of revenue against the $5.8 million cost basis. Compared to the first quarter, there was a $4.5 million decline in that revenue stream to $2 million this quarter. It took revenue down materially and earnings very little. Our aviation and equipment platforms continue to gain momentum during the quarter with higher utilization and ongoing asset deployment driving strong sequential revenue growth.
Accommodations segment revenue was $3.2 million, down 9% sequentially and up 78% year-over-year. Nights on rent decreased sequentially, as Bernard noted. The sequential revenue decline reflects the normal seasonality in this business, while underlying utilization remains strong. Drilling segment revenue was $3.8 million, up 171% sequentially and up 443% year-over-year. The segment generated positive adjusted EBITDA of $0.6 million, ahead of the timeline we laid out on our last call. Sand segment revenue was $8 million, up 105% sequentially and up 48% year-over-year, driven by the volume increases Bernard just described, along with freight revenue. Segment gross margin turned positive this quarter, and while adjusted EBITDA remains negative, the loss narrowed by roughly 71% sequentially. Infrastructure segment revenue was $0.9 million, up sequentially off the reset low, though still down year-over-year as the operational reset in that business continues.
It is worth noting that the two acquisitions closed on June 12, so this quarter reflects just under three weeks of contribution from them. With both businesses now in the fold and integration underway, we expect this segment's contribution to build through the second half of the year and into 2027. Turning to consolidated profitability, we recorded a net loss from continuing operations of $1.2 million, or $0.02 per diluted share, compared to net income of $4.7 million, or $0.10 per diluted share, in the first quarter, and a net loss of $36.5 million, or $0.76 per diluted share, in the second quarter of 2025, which included a $31.7 million non-cash impairment. The sequential change is driven almost entirely by several items which are below the operating line. SG&A expense was $4.2 million in the second quarter, compared to $3.6 million in the first quarter, driven in part by a $0.3 million increase in transaction costs associated with the aviation fleet growth.
We remain on track toward our targeted exit run rate of $11 million to $12 million. Turning to the balance sheet, we remain completely debt-free. We ended the quarter with cash and cash equivalents of $50.9 million and marketable securities of $26.1 million, or a combined $77 million. Capital expenditures were $44 million in the quarter compared to $11.7 million in the first quarter. Of that, approximately $41.2 million went into rentals, almost entirely into aviation assets, consistent with the fleet growth Bernard described. With these additions, we now have over $100 million deployed in our aviation portfolio. The remainder of our CapEx was spread across sand, infrastructure, drilling, and accommodations. During the quarter, we repurchased approximately 43,000 shares at an average price of $2.99 per share. Our approach here is unchanged from what we described last quarter. We weigh repurchases against the returns available from deploying capital into the businesses, and we will be opportunistic on both sides of that comparison.
This quarter, the opportunities in front of us, particularly in aviation, were the priority for our capital, and the pace of repurchases reflects that discipline rather than a change in our view of the value of the equity. To close, the second quarter reinforced what we said in the first. This is a business that is growing, generating positive adjusted EBITDA for a second consecutive quarter, and doing so with a debt-free balance sheet. Looking ahead, we'll be watching lease placement progress on the aviation assets we added this quarter, continued margin improvement in sand and drilling, and the pace of growth in infrastructure as the acquired businesses are integrated. Thank you to our employees for their work this quarter and to our shareholders for their continued support. With that, operator, we'll open the line for questions.
分析師問答
The first question is from the line of Joshua Jayne with Daniel Energy Partners.
First one, I wanted to touch on the sand business, just given the sequential uptick there, and you also talked about an improving market in the second half of 2026. Could you just go into a little bit more detail on what you're seeing on the volume and price side heading into the back half of 2026, and maybe if you're having conversations on 2027 at all?
Yes. As we look at the sand business, we're seeing increasing demand in terms of volume. There's been a little bit of a shift inside of late Q2 relative to coarse grade sands. But as we look at that business, we see firming volumes throughout Q3 and into the remainder of the year. And we're also having some encouraging conversations with customers for the back half of 2026 and into 2027 relative to supply agreements. I think as we look at that business, I'd also add that we're focused on margin improvement, as Bernard alluded to, and we're deploying some CapEx that we think will help us on the fixed cost side relative to that business on a go-forward basis and benefit gross margin.
And then as a follow-up just on that business, how close are you today? I know your capacity is above 2 million tons, but I think that there's some runway with what you're generating today from a volume standpoint. How close are you to effective capacity today? How close are you with what you're staffed for today and the volumes that you're putting out?
Staffing today, we're nearing capacity. That being said, we've got the capability to add shifts as well as personnel that will meaningfully influence capacity on a go-forward basis.
Switching gears a little bit, the equipment rental business, we've heard of some tightness emerging out of a number of different pockets here. Could you just talk to what you're seeing in that business? And is anything changing with respect to customer conversations, term of rental?
There is definitely some tightening, such as delays in being able to find and purchase certain equipment. It is starting to impact pricing positively. That's what we're seeing, and I expect that to continue in the near term. I don't have any reason to believe in the short term that will change.
And then as my final one, you just alluded to it a little bit with some delays in people receiving equipment and supply chain disruptions. Have you seen any supply chain disruptions in any of your business lines? And if so, what are you doing to mitigate them? When do you think they might be resolved?
Internally, we haven't seen a lot of disruptions. We hear a lot about them externally, but we're trying to get ahead of them and purchase when we can while items are available. Thankfully, it has not impacted us that much thus far.
I'd just add that one of the benefits of the clean balance sheet and the liquidity that we've got available is we have the opportunity to move quickly and deploy that capital. So we're trying to use that position to get front in line to acquire equipment that we think has desirable returns.
The next question is from the line of Doug Garber with Westport Alpha.
I wanted to ask, you said the share repurchases are a trade-off between CapEx and investments, and not a reflection of the share price, but you also have north of $50 million of cash and a good balance sheet. Help me understand how you gauge attractive price points for repurchases. Any color on how the Board thinks about tangible book value, replacement value, free cash yields, and when and how much you pull the trigger?
That's a good question. The Board views the current share price as trading below where we see the value. If you look at metrics like tangible book value or just the value of cash, marketable securities, and the aviation portfolio we've built, we're trading below those metrics. But repurchases are more opportunistic. We deployed a lot of capital in Q2 related to aviation. I'd also point out that we're limited based on trading windows and volume in terms of what we can repurchase. So that's a factor the Board considers.
Is there a governor or a limit, like 5% or 10% of volume that you could be?
Yes. There are limitations on trailing volume that prevent us from purchasing above those trailing windows. We're also limited based on trading windows. So anytime there's a material non-public event, we're restricted on when we can repurchase.
And going forward with your capital allocation, how are you thinking about where to put it? Obviously, the fiber business and more aviation. You obviously sold some aviation as well. Help us think about the top one or two places you're seeing in your current pipeline for investments.
Near term, we've got about $15 million in capital to deploy across the operating businesses, excluding aviation, where we see discrete opportunities. We've touched on supply chain and some equipment rental assets that we've acquired. We're also seeing robust deal flow in aviation. In our current pipeline, we have $40-plus million in actionable aviation deals that we think have very attractive return profiles.
And when you put all of this together, what's the path to free cash flow being positive?
I think we're close. We continue to scale the aviation portfolio, and that's where we've deployed most of the capital over the last year. That business is a revenue and cash flow stream that's well suited to leverage, so we believe there's further scale available. We're also seeing encouraging factors in equipment rental. The accommodations business has been a steady contributor for years. Drilling has stepped up. We have some work to do on gross margin in sand and have deployed some capital to address that. So across the board, we're seeing encouraging factors, and we're nearing the point to be cash flow positive overall.
Thank you. At this time, we've reached the end of our question-and-answer session, and I'll turn the floor back to management for closing comments.
Thank you again for joining us today. We look forward to updating you next quarter.
Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.