Mammoth Energy Services, Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto presented in this Quarterly Report and the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission, or the SEC, on March 6, 2026 and the section entitled “Cautionary Note Regarding Forward-Looking Statements” appearing elsewhere in this Quarterly Report.

Overview

We are an integrated, growth-oriented company focused on providing products and services to our customers primarily in the aviation, oil and natural gas and utility infrastructure industries. Our suite of services includes rental services, infrastructure services, natural sand proppant services, accommodation services and drilling services. Our rental services segment provides a wide range of equipment used in oilfield, construction and aviation activities. Our infrastructure services segment provides engineering, design and fiber optic services to the utility industry. Our natural sand proppant services segment mines, processes and sells natural sand proppant used for hydraulic fracturing. Our accommodation services provide housing, kitchen and dining, and recreational service facilities for workers located in remote areas away from readily available lodging. Our drilling services provide directional drilling to oilfield operators.

We are focused on driving returns through improved execution by prioritizing asset utilization, margin expansion, and capital efficiency across the portfolio. While macroeconomic uncertainty, including tariffs and demand volatility, continues to affect parts of the market, we remain proactive in repositioning Mammoth to perform through differing business cycles.

Business Developments

During 2025, we completed four strategic divestitures. On April 11, 2025, we sold a portion of our infrastructure services entities, including our distribution, transmission and substation operations, for aggregate proceeds of approximately $108.7 million. On June 16, 2025, we sold all of the equipment previously used in our hydraulic fracturing services for $15.0 million. On September 15, 2025, the Company completed the sale of assets related to its natural sand proppant operations at its Piranha Proppant LLC processing plant. On December 2, 2025, we completed the sale of our engineering services business, Aquawolf for approximately $30.0 million. The results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented and discussed in this report. Unless otherwise indicated, the information presented in this Management’s Discussion and Analysis relates only to our continuing operations.

To reflect how management evaluates the business after these divestitures, prior period segment information in our results of operations below has been recast to conform with our segment composition as of June 30, 2026. See Note 4. Discontinued Operations of the notes to our unaudited condensed consolidated financial statements for more information.

During the second quarter of 2026, we expanded our fiber optic services offering through the acquisitions of Mission Construction LLC and BERE Rentals LLC, both providers of fiber optic services to utility customers in the midwestern region of the United States. On June 12, 2026, we acquired all of the outstanding equity interests in Mission Construction LLC for aggregate consideration of $3.1 million and all of the outstanding equity interests in BERE Rentals LLC for aggregate consideration of $3.4 million. The acquisitions were funded with cash on hand. These acquisitions extend our presence in the fiber optic services market and broaden the range of services we provide to utility customers in the region.

Overview of Our Industries

Aircraft Industry

Demand for aviation assets remained favorable during the quarter, supporting increased utilization and revenue in our aviation rental business. We continue to evaluate opportunities to expand our aviation fleet as market conditions warrant.

Oil and Natural Gas Industry

Customer activity improved during 2026, contributing to higher utilization across our drilling, rental and accommodation businesses, although commodity price volatility continues to create uncertainty.

Infrastructure Industry

Demand for our fiber optic services continues to be supported by communications infrastructure investment and broadband deployment initiatives.

Settlement Agreement with PREPA

See Notes 2 and 18 for discussion of the PREPA Settlement Agreement.

Second Quarter 2026 Financial Overview

Revenue increased 110%, to $26.1 million during the second quarter of 2026, driven primarily by aviation, accommodation and drilling activities. Operating income improved to $2.6 million compared to an operating loss of $37.1 million in the prior-year period, reflecting higher utilization and the absence of the impairment charges recorded in 2025. Adjusted EBITDA improved to $2.6 million from a loss of $3.5 million in the prior year period. See “Non-GAAP Financial Measures” for a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA.

Future Results

We remain focused on increasing equipment utilization, expanding our aviation rental platform, developing our infrastructure services business and maintaining capital discipline. While uncertainty remains regarding commodity prices, tariffs and broader economic conditions, we believe our current liquidity position and operating platform will support continued execution of our business strategy during the remainder of 2026.

Results of Operations

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

(in thousands)

34

Revenue. Revenue for the three months ended June 30, 2026 increased $13.7 million, or 110%, to $26.1 million compared to $12.4 million for the same period in 2025. The increase in total revenue is primarily attributable to increases in revenue for rental, natural sand proppant, accommodation and drilling services during the three months ended June 30, 2026, which was partially offset by a decrease in revenue for infrastructure services. Revenue by segment was as follows:

Rental Services and Aviation Sales. Rental services and aviation sales revenue increased $7.1 million, or 229%, to $10.2 million for the three months ended June 30, 2026 compared to $3.1 million for the same period in 2025. The increase reflected $5.7 million from aviation fleet expansion, higher aviation utilization and increased aviation sales activity. Aviation utilization improved from 34% during the prior-year period to 71% during the current-year period, while fleet capacity increased through aircraft acquisitions completed during 2025 and 2026. The increase in aviation revenue was partially driven by the sale of an airframe and landing gear for $2.0 million. Revenue also benefited from a 38% increase in the average number of pieces of equipment rented to customers to 407 for the three months ended June 30, 2026 compared to 296 for the same period in 2025.

Infrastructure Services. Infrastructure services revenue decreased $0.5 million, or 36%, to $0.9 million for the three months ended June 30, 2026 compared to $1.4 million for the same period in 2025. The decrease in revenue was primarily due to a decrease in fiber optic revenue related to a loss of a customer and decreased activity. Infrastructure results also reflected transition-related costs and underutilization associated with customer changes and the integration of recent acquisitions. Management expects utilization and operating performance to improve as these acquisitions are further integrated and customer activity expands.

Natural Sand Proppant Services. Natural sand proppant services revenue increased $2.6 million, or 48%, to $8.0 million for the three months ended June 30, 2026 compared to $5.4 million for the same period in 2025 primarily due to a $2.9 million increase in freight revenue. This was partially offset by a 5% decrease in tons of sand sold to 229,031 tons for the three months ended June 30, 2026 compared to 241,763 tons for the same period in 2025, combined with an immaterial decline in the average price per ton of sand sold to $21.36 per ton during the three months ended June 30, 2026 compared to $21.41 per ton for the same period in 2025. The average price per ton of sand sold decreased primarily due to a shift of grade mix to include more coarse sand.

Accommodation Services. Accommodation services revenue increased $1.4 million, or 78%, to $3.2 million for the three months ended June 30, 2026 compared to $1.8 million for the same period in 2025. The increase reflected higher occupancy levels and improved utilization driven by increased customer activity. On average, 259 rooms were utilized during the three months ended June 30, 2026 as compared to 145 for the same period in 2025 for our accommodation services.

Drilling Services. Drilling services revenue increased $3.1 million or 443% to $3.8 million for the three months ended June 30, 2026 compared to $0.7 million for the same period in 2025. The increase in our drilling services revenue was primarily attributable to increased utilization, which increased to 43% for the three months ended June 30, 2026 compared to 16% for the same period in 2025. This was coupled with proceeds of $0.3 million from the sale of equipment damaged or lost down-hole and higher average day rates for our drilling services for the three months ended June 30, 2026.

Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion, increased $8.1 million to $19.2 million, or 74% of total revenue, for the three months ended June 30, 2026 compared to $11.1 million, or 90% of total revenue, for the same period in 2025. Cost of revenue by segment was as follows:

Rental Services and Aviation Sales. Rental services and aviation sales cost of revenue, exclusive of depreciation and amortization, increased $3.1 million, or 194%, to $4.7 million for the three months ended June 30, 2026 compared to $1.6 million for the same period in 2025. The increase was primarily attributable to higher operating activity associated with the aviation fleet expansion, increased utilization and the sale of an airframe and landing gear with a cost basis of $2.0 million. As a percentage of revenue, our rental services cost of revenue, exclusive of depreciation and amortization of $3.5 million and $0.9 million for the three months ended June 30, 2026 and 2025, was 46% and 52%, respectively. Despite the increase in operating costs, segment margins benefited from higher aircraft utilization and improved absorption of fixed operating expenses.

Infrastructure Services. Infrastructure services cost of revenue, exclusive of depreciation, increased $0.1 million, or 7%, to $1.5 million for the three months ended June 30, 2026 compared to $1.4 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation of $0.1 million for the three months ended June 30, 2026 and 2025, was 167% and 100% for the three months ended June 30, 2026 and 2025, respectively. The increase as a percentage of revenue is primarily due to an increase in compensation and benefits and fuel expense coupled with a decrease in utilization, resulting in a higher ratio of fixed costs to variable costs.

Natural Sand Proppant Services. Natural sand proppant services cost of revenue, exclusive of depreciation, depletion and accretion, increased $2.4 million, or 45%, to $7.7 million for the three months ended June 30, 2026 compared to $5.3 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion of $0.7 million and $1.4 million for the three months ended June 30, 2026 and 2025, was 96% and 98% for the three months ended June 30, 2026 and 2025, respectively. The decrease in cost as a percentage of revenue is primarily due to an increase in freight revenue, which was offset by a 5% decrease in tons sold and a nominal decline in average sales price per ton.

Accommodation Services. Accommodation services cost of revenue, exclusive of depreciation and accretion, increased $0.9 million, or 75%, to $2.1 million for the three months ended June 30, 2026 compared to $1.2 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation and accretion of $0.3 million and $0.3 million for the three months ended June 30, 2026 and 2025, was 66% and 67% for the three months ended June 30, 2026 and 2025, respectively. Operating costs increased as utilization improved; however, segment margins benefited from greater absorption of fixed operating costs resulting from higher occupancy.

Drilling Services. Drilling services cost of revenue, exclusive of depreciation, increased $2.2 million, or 275%, to $3.0 million for the three months ended June 30, 2026 compared to $0.8 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation of immaterial amounts for the three months ended June 30, 2026 and 2025, was 79% and 114% for the three months ended June 30, 2026 and 2025, respectively. The decrease as a percentage of revenue is primarily due to an increase in utilization, resulting in a lower ratio of fixed costs to variable costs.

Other Services. Other services cost of revenue, exclusive of depreciation, decreased $0.6 million to $0.3 million for the three months ended June 30, 2026 compared to $0.9 million for the same period in 2025. The decrease is primarily due to lower compensation and benefits expense and reduced insurance costs associated with non-operating legacy services.

Selling, General and Administrative. Selling, general and administrative expense decreased $0.8 million, or 16%, to $4.2 million for the three months ended June 30, 2026 compared to $5.0 million for the same period in 2025. The decrease was primarily attributable to lower corporate overhead and professional service costs. SG&A expense represented 16% of revenue during the three months ended June 30, 2026 compared to 40% during the prior-year period, reflecting improved operating leverage on higher revenue levels.

Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion totaled $4.6 million for the three months ended June 30, 2026 compared to $2.8 million for the same period in 2025. The increase is primarily attributable to increased depreciation of property, plant and equipment resulting from aviation assets being placed into service.

Gains on Disposal of Assets, Net. Net gains on the disposal of assets, net were $4.6 million compared to $1.1 million for the three months ended June 30, 2026 and 2025, respectively. Gains on the disposal of assets is primarily related to the sale of drilling rigs for the three months ended June 30, 2026 and trucks and field equipment for the same period in 2025.

Impairment of Long-Lived Assets. During the three months ended June 30, 2025, the Company’s management made the decision to market assets related to its natural sand proppant operations at its Piranha Proppant LLC and Muskie Proppant LLC processing plants. As a result, the Company recognized impairment expense on these assets totaling $31.7 million during the three months ended June 30, 2025. There was no similar activity during the three months ended June 30, 2026.

Operating Income (Loss). We reported operating income of $2.6 million for the three months ended June 30, 2026 compared to an operating loss of $37.1 million for the same period in 2025. The increase in operating income is primarily due to an increase in activity for our rental, accommodation and drilling services.

Interest (Expense) Income, Net. Interest expense was $0.8 million for the three months ended June 30, 2026 compared to interest income of $0.3 million for the same period in 2025. The increase in interest expense is primarily due to a one time charge of $1.2 million of unamortized debt issuance costs during the three months ended June 30, 2026 in relation to the new credit agreement.

Loss on Marketable Securities, Net. Net loss on marketable securities was $1.1 million for the three months ended June 30, 2026 compared to the prior‑year period in which no marketable securities were held.

Other Expense, Net. Other expense, net was $0.1 million for the three months ended June 30, 2026 compared to $0.6 million for the same period in 2025.

Provision (Benefit) for Income Taxes. We recorded income tax expense of $1.9 million on pre-tax income of $0.7 million for the three months ended June 30, 2026 compared to income tax benefit of $0.9 million on pre-tax loss of $37.5 million for the same period in 2025. Our effective tax rates were 282.9% and 2.5% for the three months ended June 30, 2026 and 2025, respectively. The increase in the effective tax rate was primarily attributable to changes in valuation allowances, interest and penalties, withholding taxes and other foreign tax items, as well as the change from a pre-tax loss for the three months ended June 30, 2025 to pre-tax income for the three months ended June 30, 2026.

Discontinued Operations. We recorded net income from discontinued operations, net of income taxes totaling $0.4 million during the three months ended June 30, 2026 compared to $45.4 million for the same period in 2025. See Note 4 of the notes to our unaudited condensed consolidated financial statements for a breakout of the results of operations for our discontinued operations.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

(in thousands)

Revenue. Revenue for the six months ended June 30, 2026 increased $24.1 million, or 100%, to $48.1 million from $24.0 million for the same period in 2025. The increase in total revenue is primarily attributable to increases in rental, accommodation and drilling services, partially offset by decreases in infrastructure services and natural sand proppant services revenue. Revenue by segment was as follows:

Rental Services and Aviation Sales. Rental services and aviation sales revenue increased $18.2 million, or 364%, to $23.2 million for the six months ended June 30, 2026 compared to $5.0 million for the same period in 2025. Revenue growth was driven by aviation fleet expansion, increased aircraft utilization and higher aviation sales activity. Aviation rental revenue increased $15.8 million and equipment rental revenue increased $2.4 million. The increase in aviation revenue was partially driven by the sale of an auxiliary power unit and an airframe and landing gear for $8.5 million. The increase in our equipment rental revenue was driven by a 51% increase in the average number of pieces of equipment rented to customers to 398 for the six months ended June 30, 2026 compared to 264 for the same period in 2025.

Infrastructure Services. Infrastructure services revenue decreased $0.9 million, or 43%, to $1.2 million for the six months ended June 30, 2026 compared to $2.1 million for the same period in 2025. The decrease in revenue was primarily due to a decrease in fiber optic revenue related to a loss of a customer and decreased activity. Infrastructure results also reflected transition-related costs and underutilization associated with customer changes and the integration of recent acquisitions. Management expects utilization and operating performance to improve as these acquisitions are further integrated and customer activity expands.

Natural Sand Proppant Services. Natural sand proppant services revenue decreased $0.3 million, or 2%, to $11.8 million for the six months ended June 30, 2026 compared to $12.1 million for the same period in 2025. The decrease in our natural sand proppant services revenue was primarily due to a 11% decrease in tons of sand sold to approximately 384,628 tons for the six months ended June 30, 2026 compared to approximately 430,783 tons for the same period in 2025, coupled with a 4% decrease in the average sales price per ton of sand sold to $20.60 per ton during the six months ended June 30, 2026 compared to $21.44 per ton for the same period in 2025. The average price per ton of sand sold decreased primarily due to a shift of grade mix to include more coarse sand.

Accommodation Services. Accommodation services revenue increased $2.9 million, or 76%, to $6.7 million for the six months ended June 30, 2026, compared to $3.8 million for the same period in 2025. Revenue growth reflected increased occupancy. On average, 267 rooms were utilized during the six months ended June 30, 2026 compared to 162 for the same period in 2025 for our accommodation services.

Drilling Services. Drilling services revenue increased $4.3 million, or 478%, to $5.2 million for the six months ended June 30, 2026, compared to $0.9 million for the same period in 2025. The increase in our drilling services revenue was primarily attributable to increased utilization, which increased to 32% for the six months ended June 30, 2026 compared to 15% for the same period in 2025. This was coupled with proceeds of $0.3 million from the sale of equipment damaged or lost down-hole and higher average day rates for our drilling services for the six months ended June 30, 2026.

Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion, increased $14.5 million to $35.7 million, or 74% of total revenue, for the six months ended June 30, 2026, compared to $21.2 million, or 88% of total revenue, for the same period in 2025. Cost of revenue by segment was as follows:

Rental Services and Aviation Sales. Rental services and aviation sales cost of revenue, exclusive of depreciation and amortization, increased $9.8 million, or 327%, to $12.8 million for the six months ended June 30, 2026 compared to $3.0 million for the same period in 2025. The increase reflected higher operating activity associated with aviation fleet expansion and increased utilization as well as the sale of an auxiliary power unit and an airframe and landing gear with an aggregate cost basis of $7.8 million. As a percentage of revenue, our rental services cost of revenue, exclusive of depreciation and amortization of $6.1 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively, was 55% and 60% for the six months ended June 30, 2026 and 2025, respectively. The decrease as a percentage of revenue is primarily due to an increase in utilization, combined with the investment in aviation assets, which produces a higher gross margin percentage.

Infrastructure Services. Infrastructure services cost of revenue, exclusive of depreciation, decreased $0.1 million, or 5%, to $2.1 million for the six months ended June 30, 2026 compared to $2.2 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization of $0.2 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively was 175% and 105% for the six months ended June 30, 2026 and 2025, respectively. The increase as a percentage of revenue is primarily due to an increase in compensation and benefits and fuel expense coupled with a decrease in utilization, resulting in a higher ratio of fixed costs to variable costs.

Natural Sand Proppant Services. Natural sand proppant services cost of revenue, exclusive of depreciation, depletion and accretion, increased $1.5 million, or 14%, to $12.2 million for the six months ended June 30, 2026 compared to $10.7 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion of $1.1 million and $2.3 million for the six months ended June 30, 2026 and 2025, respectively, was 103% and 88% for the six months ended June 30, 2026 and 2025, respectively. The increase in cost as a percentage of revenue is primarily due to an 11% decrease in tons sold and a 4% decrease in average sales price per ton.

Accommodation Services. Accommodation services cost of revenue, exclusive of depreciation and accretion, increased $1.6 million, or 59%, to $4.3 million for the six months ended June 30, 2026 compared to $2.7 million for the same period in 2025. The increase reflected higher operating activity associated with increased occupancy levels. As a percentage of revenue, cost of revenue, exclusive of depreciation and accretion of $0.6 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively, was 64% and 71% for the six months ended June 30, 2026 and 2025, respectively. Operating costs increased to support higher customer activity; however, revenue growth outpaced the increase in operating costs, resulting in improved operating leverage and greater absorption of fixed facility costs.

Drilling Services. Drilling services cost of revenue, exclusive of depreciation, increased $3.0 million, or 250%, to $4.2 million for the six months ended June 30, 2026 compared to $1.2 million for the same period in 2025. As a percentage of revenue, cost of revenue, exclusive of depreciation of an immaterial amount and $0.1 million for the six months ended June 30, 2026 and 2025, was 81% and 133% for the six months ended June 30, 2026 and 2025, respectively. The decrease as a percentage of revenue is primarily due to an increase in utilization, resulting in a lower ratio of fixed costs to variable costs.

Other Services. Other services cost of revenue, exclusive of depreciation, decreased $0.9 million to $0.5 million for the six months ended June 30, 2026 compared to $1.4 million for the same period in 2025. The decrease is primarily due to lower compensation and benefits expense and reduced insurance costs associated with non-operating legacy services.

Selling, General and Administrative. Selling, general and administrative expense decreased $1.3 million, or 14%, to $7.8 million for the six months ended June 30, 2026 compared to $9.1 million for the same period in 2025. The decrease was primarily attributable to reduced corporate and professional costs. SG&A expense represented 16% of revenue during the six months ended June 30, 2026 compared to 38% during the prior-year period, reflecting the Company’s ability to leverage its fixed overhead structure as revenue increased.

Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion increased $3.2 million to $8.1 million for the six months ended June 30, 2026 from $4.9 million for the same period in 2025. The increase is primarily attributable to increased depreciation of property, plant and equipment resulting from aviation assets being placed into service during the six months ended June 30, 2026.

Gains on Disposal of Assets, Net. Net gains on the disposal of assets were $5.3 million and $4.5 million for the six months ended June 30, 2026 and 2025, respectively. Gains on the disposal of assets is primarily related to the sale of drilling rigs for the six months ended June 30, 2026 and trucks and field equipment for the same period in 2025.

Impairment of Long-Lived Assets. During the six months ended June 30, 2025, the Company’s management made the decision to market assets related to its natural sand proppant operations at its Piranha Proppant LLC and Muskie Proppant LLC processing plants. As a result, the Company recognized impairment expense on these assets totaling $31.7 million during the six months ended June 30, 2025. There was no similar activity during the six months ended June 30, 2026.

Operating Income (Loss). We reported operating income of $1.8 million for the six months ended June 30, 2026 compared to an operating loss of $38.3 million for the same period in 2025. The increase in operating income was primarily due to $31.7 million in impairment expense recognized during the six months ended June 30, 2025 with no similar activity during the six months ended June 30, 2026.

Interest (Expense) Income, Net. Interest expense, net of interest income was $0.3 million for the six months ended June 30, 2026 compared to interest income, net of interest expense of $0.4 million for the same period in 2025. The increase in interest expense is primarily due to a one time charge of $1.2 million of unamortized debt issuance costs during the six months ended June 30, 2026 in relation to the new credit agreement.

Gain on Marketable Securities, Net. Net gain on marketable securities was $6.0 million for the six months ended June 30, 2026 compared to the prior‑year period in which no marketable securities were held.

Other Expense, Net. We recognized other expense, net of $0.7 million during the six months ended June 30, 2026 compared to $1.0 million for the same period in 2025.

Provision (Benefit) for Income Taxes. We recorded income tax expense of $3.3 million on pre-tax income of $6.8 million for the six months ended June 30, 2026 compared to an income tax benefit of $0.1 million on pre-tax loss of $38.9 million for the same period in 2025. Our effective tax rates were 48.7% and 0.2% for the six months ended June 30, 2026 and 2025, respectively. The increase in the effective tax rate was primarily attributable to changes in valuation allowances, interest and penalties, withholding taxes and other foreign tax items, as well as the change from a pre-tax loss for the six months ended June 30, 2025 to pre-tax income for the six months ended June 30, 2026.

Discontinued Operations. We recorded net income from discontinued operations, net of income taxes totaling $0.9 million during the six months ended June 30, 2026 compared to $47.1 million for the same period in 2025. See Note 4 of the notes to our unaudited condensed consolidated financial statements for a breakout of the results of operations for our discontinued operations.

Non-GAAP Financial Measures

Adjusted EBITDA from Continuing Operations

Adjusted EBITDA from continuing operations is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA from continuing operations as net income (loss) from continuing operations before depreciation, depletion, amortization and accretion, gains on disposal of assets, net, impairment of long lived assets, equity based compensation, stock based compensation, interest expense (income), net, (loss) gain on marketable securities, net, other (income) expense, net and provision (benefit) for income taxes. We exclude the items listed above from net income (loss) from continuing operations in arriving at Adjusted EBITDA from continuing operations because these amounts can vary substantially from company to company within our industries depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA from continuing operations should not be considered as an alternative to, or more meaningful than, net income (loss) from continuing operations or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA from continuing operations are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets, none of which are components of Adjusted EBITDA from continuing operations. Our computations of Adjusted EBITDA from continuing operations may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA from continuing operations is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

The following tables provide a reconciliation of Adjusted EBITDA from continuing operations to net income (loss) from continuing operations, the most directly comparable GAAP financial measure for the specified periods (in thousands):

Liquidity and Capital Resources

We require capital to fund ongoing operations including maintenance expenditures on our existing fleet of equipment, organic growth initiatives, investments and acquisitions, and the litigation settlement obligations described in Note 18. Commitments and Contingencies of the notes to the unaudited condensed consolidated financial statements and under “Capital Requirements and Sources of Liquidity” below. Our primary sources of liquidity have been cash on hand, borrowings under our revolving credit facility, proceeds from the sale of assets and cash flows from operations. Our primary uses of capital have been for investing in property, plant and equipment used to provide our services and to acquire complementary assets and businesses.

Liquidity

The following table summarizes our liquidity as of the dates indicated (in thousands):

(a) Net working capital (less cash, cash equivalents and restricted cash) is calculated by subtracting total current liabilities, cash and cash equivalents and restricted cash from total current assets.

As of August 4, 2026, we had unrestricted cash on hand of $40.4 million, marketable securities of $27.5 million, no outstanding borrowings under our revolving credit facility, leaving an aggregate of $20.0 million of available borrowing capacity under this facility, after giving effect to $5.0 million of outstanding letters of credit. As of August 4, 2026, we had cash, cash equivalents and marketable securities of $67.9 million.

Cash Flows

The following table sets forth our cash flows for the periods indicated (in thousands):

Operating Activities from Continuing Operations

Net cash used in operating activities from continuing operations was $10.2 million during the six months of 2026 compared to $7.8 million for the prior-year period. The increase primarily reflected investments in working capital, including increases in accounts receivable and inventories, partially offset by increases in accounts payable and accrued liabilities.

Investing Activities from Continuing Operations

Net cash used in investing activities from continuing operations was $45.1 million during the first six months of 2026, compared to $22.4 million during the prior-year period. The increase primarily reflected aviation fleet purchases, acquisitions and purchases of marketable securities, partially offset by proceeds from asset sales.

The following table summarizes our purchases of property, plant and equipment by segment for the periods indicated (in thousands):

(a) Capital expenditures primarily for expansion of our aviation rental fleet and equipment rental purchases for the three months ended June 30, 2026 and six months ended June 30, 2025.

(b) Capital expenditures primarily for equipment for our fiber optic fleets for the periods presented.

(c) Capital expenditures primarily for equipment for the periods presented.

Financing Activities from Continuing Operations

Net cash used in financing activities from continuing operations was $0.7 million during the six months of 2026, compared to $0.3 million during the prior-year period. The increase primarily related to repurchases of common stock and payments on finance lease obligations.

Net Working Capital

Our net working capital totaled $70.5 million and $107.1 million at June 30, 2026 and December 31, 2025, respectively. Our unrestricted cash balances were $50.9 million and $102.0 million at June 30, 2026 and December 31, 2025, respectively.

Revolving Credit Facility

Refer to Note 10 of the notes to the unaudited condensed consolidated financial statements for a description of the revolving credit facility. At June 30, 2026, the facility was undrawn and provided $20.0 million of remaining borrowing capacity after letters of credit.

Repurchase Program Authorization

On August 10, 2023, our board of directors approved a stock repurchase program pursuant to which we would be

authorized to repurchase up to the lesser of $55 million or 10 million shares of our common stock, subject to the factors discussed below. Any stock repurchases under this program may be made opportunistically from time to time in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Act of 1934, as amended, including any 10b5-1 plan, and will be subject to market conditions, applicable legal and contractual restrictions, liquidity requirements and other factors. The repurchase program has no time limit, does not require us to repurchase any specific number of shares and may be suspended from time to time, modified or discontinued by our board of directors at any time. Any common stock repurchased as part of such stock repurchase program will be cancelled and retired. We have repurchased and retired 230,730 shares of our common stock for approximately $0.5 million under the stock repurchase program during the six months ended June 30, 2026.

Capital Requirements and Sources of Liquidity

We expect cash on hand, marketable securities, operating cash flows and available borrowing capacity to be sufficient to fund anticipated capital expenditures, working capital requirements and other obligations. During the six months ended June 30, 2026, capital expenditures totaled $55.7 million. For 2026, excluding aviation acquisitions, capital expenditures are currently expected to total approximately $32.5 million. We continue to evaluate acquisition opportunities and may use cash, debt, equity or a combination thereof to finance future transactions.

There have been no material changes to the market risks disclosed in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025 except as described below.

Interest Rate Risk

At June 30, 2026, we had no borrowings outstanding under our revolving credit facility. Accordingly, we had limited exposure to changes in interest rates.

Marketable Securities Risk

As of June 30, 2026, the recorded fair value of our equity investments in publicly traded companies was $26.1 million. These investments are subject to market price volatility, and current global economic conditions add further uncertainty. However, our holdings are concentrated in publicly traded equity securities. Accordingly, we believe that a meaningful sensitivity analysis is not practicable. Because these securities are measured at fair value, changes in market prices are recognized in earnings each reporting period. As a result, future reported earnings may be materially affected by unrealized gains and losses associated with these investments, which may not be indicative of realized investment results or our underlying operating performance.

Foreign Currency Risk

Our remote accommodation services segment generates revenue and incurs expenses that are denominated in the Canadian dollar. These transactions could be materially affected by currency fluctuations. Changes in currency exchange rates could adversely affect our consolidated results of operations or financial position. We also maintain cash balances denominated in the Canadian dollar. At June 30, 2026, we had $6.2 million of cash, in Canadian dollars, in Canadian accounts. A 10% increase in the strength of the Canadian dollar versus the U.S. dollar would have resulted in an increase in pre-tax income of approximately $0.2 million as of June 30, 2026. We have not hedged our exposure to changes in foreign currency exchange rates and, as a result, could incur unanticipated translation gains and losses.

Customer Credit Risk

See Note 2 and Note 18 of the notes to the unaudited condensed consolidated financial statements for additional discussion of PREPA-related credit exposure.

Evaluation of Disclosure Control and Procedures

Under the direction of our Chief Operating Officer and Chief Financial Officer, we have established disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Chief Operating Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

At June 30, 2026, an evaluation was performed under the supervision and with the participation of management, including our Chief Operating Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Operating Officer and Chief Financial Officer have concluded that at June 30, 2026, our disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the risk factors previously disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on March 6, 2026. For a discussion of the trends and uncertainties impacting our business and risks associated with the Settlement Agreement with PREPA, see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of Our Industries—.”