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DATE

Tuesday, Feb. 24, 2026, at 10 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — John G. Turner
  • Chief Financial Officer — Blake McCarthy
  • President of Power — Tim Ondrak
  • Executive Chairman — Bud M. Brigham

TAKEAWAYS

  • Revenue -- $249 million for the quarter and $1.1 billion for the year, with full-year logistics contributing $558.8 million, proppant $478 million, and Power $58.5 million (year-end breakouts do not sum to total due to offsetting adjustments).
  • Adjusted EBITDA -- $36.7 million for the quarter (15% margin), $221.7 million for the year (20% margin).
  • Quarterly volumes -- 5.3 million tons of proppant sold, flat sequentially, with logistics delivering 4.9 million tons; Dune Express reached a record 2.1 million tons in the quarter, and a monthly record of 760,000 tons in November.
  • Average sales price -- $19.85 per ton for the quarter, with Q1 guidance to decline to about $18 per ton.
  • Plant operating cost per ton -- $12.28 per ton, down sequentially, but elevated versus normalized historical level due to dredge limitations at Kermit; new dredges are set to be commissioned in Q2.
  • Adjusted free cash flow -- $22.9 million for the quarter, representing 9% of revenue.
  • Capital expenditure -- $14.4 million in quarterly maintenance CapEx, $5.1 million in growth CapEx for Power and dredging; 2026 cash CapEx expected at $55 million (with $45 million maintenance and $10 million growth split evenly across major businesses).
  • Customer demand and pricing environment -- Management cited logistics and sand pricing at or below marginal cost of production, with "increasingly irrational behavior" from competitors, and volume-weighted market share gains for Atlas.
  • Dune Express utilization -- Achieved highest utilization to date, materially reduced truck traffic by over 21 million miles, and expected to deliver over 10 million tons in 2026.
  • Power segment developments -- Announced order of two 40 MW generation packages and successful Permian microgrid deployment; company expects 30 MW of long-term contracts deployed in 2026, targeting 500 MW fleet deployment by 2027.
  • Hybrid power system -- Initial deployments of patented battery/generator tech aim to improve cost and maintenance; commercial potential extends outside oilfield applications.
  • Cost savings execution -- Full $20 million annualized cost savings target achieved through headcount, third-party last-mile equipment elimination, and procurement actions.
  • Winter storm impact -- Q1 2026 experienced four days of production loss, expected to reduce quarterly EBITDA by about $6 million.
  • Financing -- $375 million lease facility secured for power assets; related payments of $190 million expected in the second half of 2026.
  • First quarter guidance -- Volume expected up about 10% sequentially, but lower sand price and winter storm to pressure margins; EBITDA guided as approximately flat with Q4, improving through March.

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RISKS

  • Permian completion activity and sand/logistics pricing were both described as challenging, with CFO Blake McCarthy stating, "has fallen to completely unsustainable levels, well below those seen during COVID."
  • Winter storm in January caused approximately four days of lost production in the Permian, with negative impact on Q1 2026 EBITDA of approximately $6 million.
  • Per-ton operating costs at the Kermit Complex remain elevated due to dredge feed limitations, with improvements dependent on successful commissioning of new dredges in Q2.
  • Management indicated limited visibility into customer activity beyond the first half of 2026, highlighting macroeconomic and oil-price uncertainty affecting second-half outlook.

SUMMARY

Atlas Energy Solutions (AESI +2.23%) reported quarterly and annual revenue and EBITDA in line with internal expectations, while facing margin compression from unsustainable industry pricing. The company accelerated its transition into power-as-a-service by ordering two 40 MW generation packages and advancing microgrid deployments, anchoring its shift to long-term behind-the-meter contracts across diverse industries. Management confirmed execution of targeted $20 million cost savings and reported record Dune Express utilization, which materially reduced truck traffic and logistics costs. Major customer and market wins contributed to new customer acquisition and larger wallet share, though severe winter weather caused temporary operational setbacks. Atlas secured $375 million in lease financing to support power equipment expansion, with initial deliveries to commence in 2026 and flexible funding for fleet growth.

  • Company expects 30 MW power deployed under long-term contracts this year, with a pathway to 500 MW fleet deployment by 2027, and line of sight to equipment availability for those needs.
  • Modular and scalable project capabilities were reinforced by the Moser acquisition, enhancing engineering depth and supporting bespoke power projects with contract terms of five to fifteen years.
  • Management highlighted ongoing sectoral power demand shifts, citing grid challenges and surging U.S. electricity demand as drivers for the transition to on-site power solutions.
  • Continuous pumping and sand intensity per crew are increasing, with Atlas's proprietary storage pile and PropFlow systems deployed to support customer efficiency initiatives.
  • CFO Blake McCarthy provided specific interest expense and CapEx guidance by quarter for 2026, and confirmed ongoing commitment to margin and cost optimization as volumes rise.

INDUSTRY GLOSSARY

  • Dune Express: Atlas proprietary high-capacity conveyor system for proppant transport, reducing truck mileage and logistics costs in the Permian Basin.
  • Behind-the-meter power: On-site electrical generation and supply solutions dedicated to a customer facility, not directly integrated into the regional utility grid.
  • Proppant: Granular material, such as sand, used in oil and gas hydraulic fracturing to keep fractures open and maintain flow of hydrocarbons.
  • Continuous pumping: A fracturing technique that maintains uninterrupted sand and fluid flow to the wellbore, increasing operational efficiency and maximizing sand consumption per crew.
  • Hybrid power system: Atlas's combination of battery storage and generator technology, designed to enhance efficiency, reduce maintenance, and lower operating costs for on-site power applications.

Full Conference Call Transcript

Kyle D. Turlington: Hello and welcome to the Atlas Energy Solutions Inc. conference call and webcast for the 2025 fourth quarter and year end. With us today are John G. Turner, President and CEO; Blake McCarthy, CFO; Tim Ondrak, President of Power; and Bud M. Brigham, Executive Chairman. John, Blake, and Bud will be sharing their comments on the company's operational and financial performance for 2025, after which we will open the call for Q&A. Before we begin our prepared remarks, I would like to remind everyone that this call will include forward-looking statements as defined under the U.S. securities laws. Such statements are based on the current information and management's expectations as of this statement and are not guarantees of future performance.

Forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks in the annual report on Form 10-Ks we will file with the SEC on 02/24/2026, our quarterly reports on Form 10-Q, and current reports on Form 8-Ks and our other SEC filings. You should not place undue reliance on forward-looking statements; we undertake no obligation to update these forward-looking statements. We will also make reference to certain non-GAAP financial measures such as adjusted EBITDA, adjusted free cash flow, and other operating metrics and statistics. You will find the GAAP reconciliation comments and calculations in yesterday's press release.

With that said, I will turn the call over to John Turner.

John G. Turner: Thank you, Kyle. For the fourth quarter, Atlas generated $36,700,000 of adjusted EBITDA on $249,000,000 of revenue representing a 15% adjusted EBITDA margin. For the full year 2025, we delivered $221,700,000 of adjusted EBITDA on $1,100,000,000 of revenue, achieving a 20% adjusted EBITDA margin. Our Q4 results exceeded our initial expectations. Volumes came in at 5,300,000 tons, flat sequentially with the third quarter. The typical end-of-year seasonality was notably muted as customers took minimal downtime around the holidays. This was particularly encouraging following the steep decline in West Texas completion activity we experienced over the summer.

It now appears that most operators have adjusted their activity levels to align with the $50 to $60 WTI strip and are comfortable maintaining operations at these levels. The quarter also marked the highest utilization we have seen to date on the Dune Express as Delaware Basin customers increasingly recognize the efficiency and reliability benefits this system brings to their logistics supply chain. We view this as a strong indicator of the system's performance heading into 2026.

John G. Turner: In November, we announced the order of two 40 megawatts power generation equipment, accelerating our strategic evolution into a leading provider of behind-the-meter long-term power solutions across a broad range of domestic industries. We see the evolving power market over the next decade as a truly generational opportunity and we are moving aggressively to capitalize on it. After years of relatively flat U.S. electricity consumption, the grid is now confronting surging demand which hit record levels in 2025 and is projected to grow by as much as 25% by 2030, driven by the explosive expansion of data centers and the resurgence in domestic manufacturing. Utilities are struggling to keep pace amid infrastructure constraints and reliability challenges.

Our rising residential electricity prices, up 7.4% in 2025 alone, are creating political and economic pressure for more affordable, dependable alternatives. This dynamic is pushing developers to secure dedicated behind-the-meter power assets to de-risk their projects and meet timelines. For many of these companies, grid constraints represent a new and urgent challenge, compressing decision-making windows dramatically. Since 2024, Atlas has been positioning itself as the go-to solution in this space. The Moser acquisition completed this time last year provided a cash flow platform and critical engineering expertise that complements our strength in large-scale project execution.

Over the past nine months, we have been actively transitioning the business from a traditional short-term generator rental model to a power-as-a-service approach, selling electrons under longer-term arrangements. This shift has involved upgrading communication systems, refining our sales process, and focusing our commercial efforts towards customers seeking dense, long-term deployments. We are encouraged by the progress. We have reached a tipping point in this transformation. Earlier this year, we successfully deployed our first microgrid with a Permian E&P customer, which has since been upsized. In 2026 alone, we anticipate deploying at least 30 megawatts under long-term microgrid multi-basin contracts with 50% of our fleet under long-term contracts by year end.

January also marked the initial deployment of our patented hybrid battery solution which integrates with generators as a grid-forming system, delivering meaningful improvements in cost and maintenance efficiency. The commercial potential for this technology extends far beyond the oilfield. While these advancements in our existing power business are promising, the larger behind-the-meter projects represent the true step-change opportunity for Atlas. We have active commercial negotiations underway and expect to provide greater visibility on equipment placement and the resulting economic impact to Atlas in the near term.

John G. Turner: Our pipeline features a broad range of behind-the-meter power projects across multiple industries including energy, data centers, manufacturing, and others, with contract terms typically spanning five to fifteen years, creating durable long-term cash flows. We have particular strength in C&I with especially compelling risk-adjusted returns in projects in the 50 to 500 megawatt range, where our modular platform enables efficient execution and high-density deployments. At the same time, our differentiated track record with large CapEx infrastructure projects, such as our high-capacity plants and the Dune Express conveyor system, combined with our scalable design and growing expertise, advantage us for the execution of even larger-scale opportunities as customer demand intensifies.

The opportunity set continues to expand rapidly, with several prospects advancing from initial discussions to formal proposals and active negotiations. We are targeting more than 500 megawatts deployed across our fleet in 2027, with the potential for substantial additional growth beyond that as we secure larger-scale projects and build on our initial orders. The ordered equipment is slated for delivery starting in 2026 with energization targeted to begin in Q1 2027. Each of these projects has the potential to meaningfully enhance Atlas’ cash flow profile and I am very excited to share more details with you as we close transactions. So stay tuned for the updates.

I will now turn the call over to our CFO, Blake McCarthy, to go through our financials in more detail.

Blake McCarthy: Thanks, John. The underlying performance in our sand and logistics business improved in the fourth quarter, despite a continued challenging pricing environment. Plant operating expense per ton declined sequentially to $12.28 despite elevated costs in October related to the operational challenges in Q3 and higher maintenance spending during December. Our cost of production, although improved, remain elevated at our flagship Kermit Complex due to current limitations on our dredge feed and is expected to be alleviated with the deployment of our two new Twinkle dredges, which are scheduled for commissioning in the second quarter. The market backdrop for West Texas sand and logistics remains challenging, with current pricing at the industry's marginal cost of production.

Permian completion activity is expected to be down year over year, although it appears to have stabilized at Q4 levels for now. Despite the challenging market environment, Atlas’ commercial team has positioned us well to grow volumes in 2026. Leaning on our cost-advantaged mines and logistics network, we were able to increase our share of current customers’ sand procurement spend while also adding some key new customers, relationships we expect to grow and scale over the course of 2026 and beyond. The current oil macro environment remains quite opaque, so we do not have significant visibility into all of our customers' full-year plans. But our Q1 schedule is very busy.

Sales volume is expected to be up approximately 10% sequentially, and further growth is expected in the second quarter. The winter storm in January impacted everyone's operations in the Permian, and we lost approximately four days of production and deliveries. This temporary shutdown is expected to negatively impact Q1 EBITDA by approximately $6,000,000. However, I am proud to say Atlas was the last sand provider delivering in the Delaware before we had to shut down due to ice. That was made possible by the Dune Express removing so much road mileage and the related risks. Speaking of the Dune Express, it continues to run extremely well. January 12 marked the one-year anniversary of its first commercial delivery.

Thanks to our partners, I am proud to announce that we have eliminated more than 21,000,000 miles of truck traffic in the Delaware Basin. We are very proud of the fact that the Dune Express is materially improving the quality of life and safety for families and the broader community in the region. The Dune Express achieved record shipments in the fourth quarter of approximately 2,100,000 tons, including a monthly shipment record in November of 760,000 tons. For the first quarter, we expect new customer wins and continued spot volumes to drive improvements in Dune Express volumes. We believe we are positioned to deliver north of 10,000,000 tons via the Dune Express this year.

We are grateful to our customers for partnering with us to make the Permian Basin a safer place to live and work. All that said, the obvious question is, if the Dune Express is working so well, why were Q4 service margins so weak? While Q4 numbers were burdened by large load bonuses to ensure driver availability through the holidays, the real answer to that question is simply pricing. Logistics pricing in the Permian has fallen to completely unsustainable levels, well below those seen during COVID. To compete with the Dune Express, we have seen increasingly irrational behavior from some of our logistics competitors, which we believe sets both them and their customers up for eventual problems and disruptions.

We believe several companies are currently delivering standard prices where they are effectively subsidizing their customers. Thus, the margin differential provided by the Dune Express is there, it is just partially insulating us from historically bad pricing. Encouragingly, we are seeing signs of this market beginning to break the other way. Third-party trucking rates are beginning to see upward momentum, echoing what we are seeing in the broader over-the-road market. That is typically the first sign that trucking companies are tired of subsidizing their customers, and as a result margins have to come up.

Blake McCarthy: In November, Atlas introduced our first last mile storage pile system to the market. While other pile systems in the market essentially use mining equipment that has been reapplied for the oilfield, our system is built for purpose. Today, we have six systems in place to support our wet sand operations, with testing underway for deploying the system in dry sand operations. These systems are key to continuing our further enabling of our customers' continuous pumping initiatives, which are driving record sand consumption per completion crew.

While the market for sand and logistics in 2026 looks like it will remain challenging, we are looking to take advantage of the weaker market conditions to cement Atlas’ position as the provider of choice. Pricing in our industry has swung too far for too long, and the pricing rubber band is certainly tight. We are hearing more anecdotes of competitors struggling to fulfill customer obligations, and I will echo the comments from the large-cap oilfield services calls when I say that it is only going to take a very small increase in completions activity for pricing to move. This RFP season, we saw market share shift to the higher-quality suppliers with fewer volumes being spread amongst lower-quality mines.

The supply-demand for sand in the Permian is much tighter than the market realizes, especially for dry sand. On our last conference call, we set a cost savings target of $20,000,000 in annualized savings. As it stands today, we have executed upon that target through a combination of the elimination of third-party last mile equipment, reductions in rental equipment, headcount optimization, and procurement savings. Despite the early success of these efforts, we will continue to push for further cost optimization as we look to lower the fixed cost structure of our business across the organization.

Blake McCarthy: Moving to our financials. As John touched on earlier, Atlas recorded full-year 2025 revenue of $1,100,000,000. Total company adjusted EBITDA was $221,700,000, or 20% of revenue. Deconstructing full-year revenues, proppant sales totaled $478,000,000 on volumes of 21,600,000 tons, while Logistics and Power contributed $558,800,000 and $58,500,000 respectively. Fourth quarter 2025 revenue of $249,400,000 broke down to the following: proppant sales totaled $105,200,000, logistics contributed $126,100,000, and Power Rentals added $18,100,000. Total proppant sales volume was slightly up sequentially to 5,300,000 tons, while our logistics business delivered approximately 4,900,000 tons. Our average sales price for the fourth quarter was approximately $19.85 per ton.

For the first quarter, we expect volumes to be up approximately 10% sequentially with the average sales price of sand to be approximately $18 per ton. Q4 cost of sales excluding DD&A were $187,300,000 consisting of $60,600,000 in plant operating costs, $115,200,000 of service costs, $7,000,000 in rental costs, and $4,500,000 in royalties. For the fourth quarter, our per-ton plant operating costs were approximately $12.28 including royalties, down sequentially from the third quarter, but still elevated versus our normalized levels. Higher volumes and a reduction in extraneous costs at the plants from Q3 levels drove the lower plant operating costs.

For the first quarter, we expect our OpEx per ton to be approximately in line with the levels in the fourth quarter, reflecting the impact of the severe weather in January. Over the course of 2026, we expect to see improvements in our realized variable cost as the new dredges are commissioned at our Kermit facility.

Blake McCarthy: Cash SG&A for the quarter was $22,600,000. SG&A excluding litigation expenses is expected to decline in the first quarter due to our previously announced cost-cutting initiatives. Adjusted free cash flow, which we define as adjusted EBITDA less maintenance CapEx, was $22,900,000 or 9% of revenue. Growth CapEx equated to $5,100,000, the majority of which was tied to our Power segment, preparations related to the dredging, and maintenance CapEx during the quarter was $14,400,000. The elevated maintenance CapEx spend was primarily tied to wet plant operations at Kermit ahead of the Twinkle dredge deliveries. We expect cash capital spending in 2026 to be approximately $55,000,000, down significantly year over year and heavily weighted to the first half.

Maintenance CapEx of approximately $45,000,000 is planned. Approximately $10,000,000 is dedicated to growth, evenly split between Sand, Logistics, and Power. Additionally, we expect to make progress payments on the two 40 megawatts of power assets we have on order as they begin to be delivered over the course of the second half of the year. Payments will be financed from our recently announced lease facility with Eldridge and are expected to total approximately $190,000,000 over the course of the second half of the year. Net interest expense is expected to be approximately $16,500,000 in the first and second quarters, rising to approximately $20,500,000 in the third quarter and $22,000,000 in the fourth quarter.

As John also touched on in his remarks, our plants have begun the year quite busy with WTI prices hovering around $60. Oil prices will dictate if we continue to keep this pace up. We have a clear line of sight on strong volumes for the first half of this year, but many of our customers are taking a wait-and-see approach with respect to their second half completion schedules. Our recent market share gains are a testament to Atlas' efforts to position ourselves as the reliable partner of choice to the best operators in the Permian Basin.

For the first quarter, while volumes are expected to be up sequentially, we expect a decline in sales price per ton combined with the lost days of revenue due to the winter storm will be a headwind to margins. Additionally, our logistics business was burdened by load bonuses to ensure driver availability around the turn of the calendar, which will mute logistics margins improvement until later in the quarter. However, we are seeing a return to a more normal cost structure as the quarter progresses, which combined with a growing delivery schedule should yield an improved margin structure through the quarter. Additionally, the Power business is expected to generate a greater contribution sequentially.

Thus, we expect EBITDA to be approximately flat with Q4 levels with the company exiting the quarter at a higher run rate in March versus January. I will now hand the call over to our Executive Chairman, Bud Brigham, for some closing remarks before we turn the call over for Q&A.

Bud M. Brigham: Thanks, Blake. While we are navigating another cyclical trough in oil prices, the future for Atlas has never been brighter. Just as we were ideally positioned for the post-COVID Permian recovery, which substantially expanded our cash flows, we are primed for the inevitable rebound in oil and gas activity today. But in addition, as I stated on our last call, we are going hybrid. Today, Atlas is laying the groundwork for transformative long-term growth through behind-the-meter power contracts. These five to fifteen year agreements are expected to deliver robust revenue visibility paired with predictable costs including fixed and stable expenses for SG&A, maintenance, and interest, complementing our powerful but more volatile oil and gas revenue streams.

Our proven expertise in large-scale infrastructure, amplified by the Moser acquisition, uniquely equips us to power the surge in AI, robotics, and manufacturing. We see these initial permanent power projects as a strategic springboard, drawing in more customers and building a portfolio of assets that generate steady recurring cash flows. As discussed by John, demand for behind-the-meter power is accelerating rapidly, fueled by rising costs and potential grid shortfalls that are pushing commercial, industrial, and data center users towards swift commitments for bridge and permanent solutions. We are witnessing a seismic shift in power sourcing. To borrow from our partners at Bloom Energy, on-site power has evolved from a last resort to a business necessity.

U.S. power demand is growing at its fastest rate in decades. Let me emphasize, the Atlas investment story is more exciting than ever. Chronic underinvestment in exploration spending, coupled with shale’s maturation and steep decline rates, sets the stage for what I believe will be a prolonged upcycle. While most U.S. shale basins struggle with inventory depletion, the Permian, where Atlas leads in proppant production and logistics, will be key to meeting rising oil demand. Even at today's cyclical lows in sand and logistics pricing, our low-cost model shines through thanks to the Dune Express and efficient mining operations.

When activity rebounds—and it is a question of when, not if—we anticipate stronger utilization, pricing, and margins, sparking a sharp profitability upturn. By investing ahead of this oil upcycle while we are also launching our high-potential power business, Atlas offers investors dual catalysts for substantial growth. I am deeply grateful to our exceptional team, the true innovators fueling our advancements. Their dedication has me more optimistic than ever about Atlas' future. Thank you for joining our fourth quarter and year-end conference call. I will now hand it over to the operator for Q&A.

Operator: Thank you. The floor is now open for questions. Our first question is coming from James Michael Rollyson of Raymond James. Please go ahead.

James Michael Rollyson: Hey, good morning everyone. John, you talked a bit about the power side. Obviously, a quarter ago, you ordered the two 40 megawatts. I am pretty sure you mentioned then you had line of sight on customer opportunities there. You have since secured financing, which I presume does not happen without similar line of sight. So maybe just an update on what has taken a little while on getting that contracted and do you have good line of sight on where that equipment is actually going at this point since we are less than a year out from its deployment?

John G. Turner: Yes. Great question, Jim. Thanks for asking. Yes, we do have strong visibility into the customers that are expected to take a substantial majority of this equipment package which is on track for delivery. Deliveries begin in 2026. These are high quality creditworthy counterparties that are across diversified markets and have indicated meaningful follow-on requirements beyond their initial commitment, providing for clear pathways for additional equipment orders and sustained growth into the future. Our strategy still remains solely focused on behind-the-meter power solutions. We are not pursuing grid-interconnected or utility-scale opportunities. Instead, we are delivering reliable on-site power directly to customers facing grid constraints.

In many cases, these engagements begin with bridge power to address immediate needs, which generate significant near-term cash flow and accelerate our path to full development. These bridge arrangements quickly transition into the long-term behind-the-meter agreements that we primarily are working on as customers recognize prolonged grid timelines and the value of our integrated approach. So, yes, we do have clear line of sight, and we expect to be reporting on that here shortly.

James Michael Rollyson: Appreciate that. And maybe as a follow-up, related to strategy. I see two approaches in the market: renting power equipment versus providing full turnkey solutions with balance of plant. Which strategy fits yours and how do you see the return opportunity?

Blake McCarthy: Jim, good question. Most folks can underwrite the equipment rental return—cost X, rent for Y. But behind-the-meter solutions vary widely by customer facility needs and the required balance of plant. That changes both upfront dollars per megawatt and pricing. Our strategy is to get in early with customers making big facility investments, understand their goals, and do the front-end engineering to build fit-for-purpose solutions. That means a range of facility costs and rates, but we always target strong unlevered returns. With project-level leverage, ROE becomes very attractive. We will be transparent on economics as deals are consummated.

John G. Turner: And that engineering and planning intensity is also why agreements take longer to sign. These are not simple generator rentals; they require detailed design, equipment alignment, and execution planning, which also makes the relationship stickier because the solution is bespoke and integrated.

James Michael Rollyson: Makes sense. Thanks.

Kyle D. Turlington: Thanks, Jim.

Operator: Thank you. The next question is coming from Derek John Podhaizer of Piper Sandler. Please go ahead.

Derek John Podhaizer: Hey, good morning guys. I want to keep going on the economics. There are numbers out there—around plus or minus $300,000 per megawatt per year of EBITDA. Compared to your financing costs and including resets and balance of plant, how should we think about economics and earnings on these potential projects?

John G. Turner: Economics depend on site specifics—balance of plant, development scope, and contract term. We focus on longer initial terms for stability and target attractive IRRs above our cost of capital with upside from extensions and expansions.

Kyle D. Turlington: Derek, to give you a framework, we are targeting unlevered IRRs in the high teens given the contracted nature of cash flows. Layering leverage on those contracted cash flows drives attractive ROE. The $300k/MW/yr can be a proxy for equipment-only in some cases, but it is too simplistic for bespoke facilities. Using IRR targets against known equipment and facility spend is the best way to back into project cash flow estimates.

Derek John Podhaizer: Thanks. Follow-up on lead times. To reach 400–500 MW of deployed capacity, is that a continuation of the two 40 MW packages and 4 MW recip units you ordered? Delivery timing? And visibility on orders beyond 500 MW?

John G. Turner: Our OEM relationships and execution track record helped us secure the initial two 40 MW packages of 4 MW reciprocating units, with deliveries later in 2026. Lead times for additional 4 MW recips are now extending into late 2027 given strong demand. Our $375,000,000 lease facility provides flexible, non-dilutive funding with milestone payments during build and term financing at delivery, supporting our initial 40 MW commitment and near-term deployments. As we move toward 500 MW by 2027—most under long-term contract—we anticipate additional financing to support further orders. Today the focus is on 4 MW recips, but we will remain flexible if other solutions fit customer needs.

Tim Ondrak: On equipment sourcing, two pools tend to open up: cancellations or delays that free up units, and OEM-directed allocations to trusted counterparties. Our team’s relationships and Atlas’ execution reputation position us well to access redirected capacity. We have line of sight to equipment to take us to 500 MW.

Operator: Thank you. Our next question is coming from Stephen David Gengaro of Stifel. Please go ahead.

Stephen David Gengaro: Thanks. Staying on power, deploying and operating on-site assets needs specific skill sets. What internal expertise do you have to execute these behind-the-meter projects?

Kyle D. Turlington: Atlas has built large, complex assets from the ground up—the Kermit and Monahans plants and the 42-mile Dune Express. That capability resonates with new customer sets. The Moser acquisition brought deep electrical expertise, and we have added strong talent since then. As customers learn who Atlas is and meet our technical team, commercial discussions progress quickly.

Tim Ondrak: Moser brought a fifty-year operating history. We added C&I and large-MW deployment talent, and built an operating team with 20+ years in large engine systems. Combining these with Atlas’ project execution, we can deliver in power as we do in sand and logistics.

Stephen David Gengaro: Helpful. Second, grid interconnection delays make “bridge to permanent” feel long. What are you hearing on utility queues for large loads, and how does it impact your planning?

Tim Ondrak: Every project and region is different, but themes are consistent: utilities are delayed and cannot meet full requested loads. Interconnection timing we hear ranges 2028 to 2034 across the U.S., with variations by district. Bridge systems address near-term needs, but our thesis is a long-term infrastructure play: install purpose-built permanent systems for reliability, fuel efficiency, and footprint. We talk about 5–15 year contracts, but these are really 30-year facilities.

Kyle D. Turlington: Headlines keep pushing interconnects to the right, and affordability pressures may lead utilities to stiff-arm some requests. It is in everyone’s interest for private solutions to fill the gap.

John G. Turner: Even where grid power is available, it often will not cover total needs. Providers are asking customers to self-supply a portion to qualify for additional grid power. We consistently hear that timelines move and utilities will not meet full load.

Operator: Thank you. The next question is coming from Doug Becker of Capital One. Please go ahead.

Doug Becker: Thanks. First, on sand and logistics: first-half volumes look strong. Any range for full-year production growth to frame expectations?

Blake McCarthy: Visibility is better for 1H than 2H as customers keep optionality. Macro views three months ago pointed to $45–$50 oil, but we are at ~$66 WTI today with geopolitical risk embedded. Our team did well securing volumes for a strong first half. We expect overall volumes up year over year, with second-half activity dependent on commodity. Pricing remains challenging, so we are focused on controllables—driving down variable cost, commissioning new dredges at Kermit, and cementing our position as the leading Permian supplier so we are the sticky choice when the cycle turns.

Doug Becker: On logistics margins, with trucking challenges but some upward momentum in rates, what is the margin outlook with Dune Express?

Blake McCarthy: We ended 2025 and started 2026 at a low base. Load bonuses in late Q4 and early Q1 weigh on margins but ensure delivery through holidays and bad weather. We secured attractive work that will drive incremental Dune Express volumes, creating margin differential even in weak pricing. Expect Q1 logistics margins similar to Q4, with December/January the low points. Q2 takes a nice step up into double digits—maybe not mid-teens—but a big gap versus the market.

Operator: Thank you. The next question is coming from John Daniel of Daniel Energy Partners. Please go ahead.

John Daniel: Thanks. Can you speak to the volume of power demand increase from E&Ps for microgrids? And are you trying to tie sand volumes to power contracts?

Kyle D. Turlington: In two of our three most active basins, roughly half of new wellsite generator requests are for some form of microgrid, typically tying two to four pads. We expect to allocate more units to these systems as the year progresses. On tying sand to power, teams are often separate inside customers, but we aim to be a broad solutions provider and will pursue opportunities to link offerings where it makes sense.

Operator: Our next question is coming from Edward Kim of Barclays. Please go ahead.

Edward Kim: Good morning. On volumes, you mentioned adding new customers and greater share with existing ones. Are those wins reflected in Q1 or do they kick in later?

John G. Turner: Not fully reflected in Q1—weather depressed January. You will see some impact in Q1 with more in Q2 and Q3 as activity ramps.

Blake McCarthy: January starts slow, then ramps, and the winter storm cost about four and a half days across the basin. We expect Q2 volumes to step up from Q1.

Edward Kim: E&Ps seem to be operating as if mid-$50s WTI. What oil price would trigger second-half volume reductions?

Blake McCarthy: Budgets are generally based on $50–$55. Current West Texas activity reflects that strip, and E&Ps will not change near-term on price gyrations. If higher prices persist, confidence builds and activity can be steady through year-end; it depends on the tape.

Operator: Thank you. The next question is coming from Michael Scialla of Stephens. Please go ahead.

Michael Scialla: Good morning. On the last mile storage system enabling continuous pumping of wet sand—you are testing a dry sand solution. What needs to happen for success and what is the opportunity?

John G. Turner: We launched a system late last year to increase wellsite sand availability and timeliness, enabling more downhole sand. All wet sand systems are deployed and customers want more. Dry sand requires additional work—we are testing now and results are promising. Continuous pumping is a key customer requirement. Dune Express, wet sand, and now pile systems are steps toward enabling that efficiency.

Blake McCarthy: Continuous pumping crews consume multiples of sand versus traditional zipper crews. Wellsite footprint is the constraint; boxes and silos hit limits. Pile systems put more sand on site; our system does piles efficiently with clean sand. Combined with PropFlow, it enables very efficient continuous pumping and supports rising sand intensity per crew. If budgets migrate above $50 oil, incremental activity tightens the market quickly.

Michael Scialla: And your hybrid power system—what differentiates it and what is the opportunity?

Tim Ondrak: Our hybrid pairs in-house, patented battery tech—funded via a 2018 DOD grant—with generators as a grid-forming system. It runs generators at peak efficiency, uses the battery to distribute power, and cycles gensets off to cut runtime. That extends maintenance from monthly to 45–60 days, lowers fuel costs, and reduces shutdown risks at customer sites. We have proven it on multiple wellsites and see applications across industries needing clean, reliable on-site or backup power.

Operator: Thank you. Our final question today is coming from Jeffrey Michael LeBlanc of TPH. Please go ahead.

Jeffrey Michael LeBlanc: Good morning. Color on expected cost savings in 2H after the Twinkle dredges come online?

Blake McCarthy: We have not had steady dredge feed at Kermit for over a year. The plant is designed for clean, steady dredge feed; without it, bottlenecks raised OpEx per ton. When running right, Kermit is the lowest-cost facility in the Permian. The two Schenkel F150 dredges will significantly improve feed consistency, which benefits wet shed, reduces dryer stress, and lifts overall efficiency. Variable costs have been elevated by about $1/ton across the complex due to feed issues. As volumes hold and dredges come online through 1H, OpEx/ton should improve meaningfully into 2H, subject to throughput.

Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Turner for closing comments.

John G. Turner: Thank you, operator, and thank you all for joining us and for the great questions. We truly appreciate the time you have taken with us. To our exceptional team, thank you for all the hard work; to our customers, thank you for your partnership and trust; and to our investors, thank you for your committed and continued support and belief in Atlas. We look forward to reporting our results going forward in 2026 and our first quarter results here in two or three months. Thanks everyone for joining, and that ends the call.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time. Enjoy the rest of your day.