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Smart Sand, Inc. (SND)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $65.6M, down 28% sequentially and 21% YoY, on lower tons sold and moderating average selling prices; GAAP diluted EPS was $(0.62), largely driven by non‑cash deferred tax expense distorting interim results .
  • Management guided to a significant volume rebound in Q2, expecting tons sold to rise 10–20% QoQ, with strengthening activity in Marcellus/Utica, Bakken, and Western Canadian Sedimentary Basin; full‑year guidance deferred amid macro/political uncertainty .
  • Industrial sand sales set a record in Q1, up 9% QoQ, with SmartSystems utilization improving and turning positive contribution margin; free cash flow was $5.2M despite the revenue decline .
  • Capital expenditures will ramp over the next two quarters, with 2025 capex maintained at $13–17M; liquidity remains solid with $5.1M cash and $30M undrawn ABL capacity; share repurchases continued ($0.3M, 135k shares) .
  • Stock narrative catalysts: near‑term volume ramp, continued FCF generation despite tax‑driven GAAP loss, industrial growth, and potential additional buybacks/special dividends; estimates comparison unavailable due to lack of S&P Global consensus for Q1 .

What Went Well and What Went Wrong

What Went Well

  • Free cash flow of $5.2M with $8.7M cash from operations, reflecting conversion of strong Q4 sales into cash and disciplined spending .
  • Record industrial sales (+9% QoQ) and improved SmartSystems utilization with positive contribution margin, diversifying revenue and margins .
  • Management expects Q2 volumes up 10–20% vs Q1, with regional strength in Marcellus/Utica, Bakken, and WCSB, indicating near‑term demand tailwinds; “we anticipate sales volumes to rise significantly, increasing between 10% and 20%” .

What Went Wrong

  • Tons sold fell to ~1.069M (−27% QoQ, −20% YoY) with revenue down to $65.6M (−28% QoQ, −21% YoY) on moderating pricing and deferred winter slowdown .
  • Gross profit compressed to $2.8M and adjusted EBITDA to $1.4M, with contribution margin per ton down to $8.96, reflecting lower volumes and pricing pressure .
  • GAAP net loss of $(24.2)M and diluted EPS $(0.62) driven primarily by non‑cash deferred income tax expense that distorts interim results; management does not expect paying federal cash taxes in 2025 .

Financial Results

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$83.1 $63.2 $91.4 $65.6
Diluted EPS ($)$(0.01) $0.00 $0.09 $(0.62)
Adjusted EBITDA ($USD Millions)$9.3 $5.7 $11.9 $1.4
Contribution Margin ($USD Millions)$18.5 $13.2 $20.2 $9.6
Contribution Margin per Ton ($/ton)$13.85 $11.09 $13.80 $8.96
Total Tons Sold (000s)1,336 1,189 1,464 1,069
Margin MetricQ1 2024Q3 2024Q4 2024Q1 2025
Gross Profit Margin %14.22%*10.27%*14.72%*4.23%*
EBITDA Margin %9.84%*4.57%*11.87%*0.53%*
Net Income Margin %−0.26%*−0.16%*4.09%*−36.96%*

Values with * retrieved from S&P Global.

Segment revenue breakdown:

SegmentQ1 2024Q4 2024Q1 2025
Sand Revenue ($USD Millions)$79.7 $90.6 $64.5
SmartSystems Revenue ($USD Millions)$3.3 $0.7 $1.1
Total Revenue ($USD Millions)$83.1 $91.4 $65.6

KPIs and cash metrics:

KPIQ1 2024Q4 2024Q1 2025
Gross Profit ($USD Millions)$11.8 $13.5 $2.8
Cash from Operations ($USD Millions)$(3.9) $1.0 $8.7
Free Cash Flow ($USD Millions)$(5.5) $(0.8) $5.2
Capital Expenditures ($USD Millions)$1.6 $1.9 $3.5
Share Repurchases (Shares / $USD)00135,196 / $0.3M
Cash on Hand ($USD Millions)$4.6 $1.6 $5.1
ABL Undrawn Availability ($USD Millions)N/A$30.0 $30.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales VolumesQ2 2025N/AUp 10–20% vs Q1 2025 Raised (near‑term)
Full‑Year Sales VolumesFY 2025Flat to up ~5% vs 2024 (Q4 FY24 release) Deferred due to economic uncertainty Deferred
Contribution Margin per TonFY 2025“Consistent with 2024 levels” (Q4 FY24 release) No update provided; full‑year guidance deferred Maintained/Deferred
Capital ExpendituresFY 2025$13–$17M $13–$17M; increase over next two quarters for maintenance and growth Maintained (near‑term cadence up)
Shareholder Returns2025$0.10 special dividend paid in Q4 2024; $10M buyback authorization Continued buybacks ($0.3M in Q1); exploring additional buybacks/special dividends Maintained/Exploring
Tax Cash PaymentsFY 2025N/ANot expected to pay federal income tax; immaterial state taxes New disclosure

Earnings Call Themes & Trends

Note: Smart Sand discontinued hosting earnings calls beginning with the Q4 2024 release; no Q1 2025 call transcript is available .

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Supply/Demand & PricingPricing pressure; supply/demand more balanced; volumes −7% QoQ Record volumes; pricing improved; contractual charges benefited revenue Volumes moderated; average selling prices moderated Stabilizing with near‑term volume rebound expected
Regional ActivityAnticipated growth in US/Canada; Utica activity Strength in Bakken, Marcellus; expansion to Utica/Canada Expect strength in Marcellus/Utica, Bakken, WCSB in Q2 Strengthening in Q2
SmartSystemsRevamp/testing, utilization decreased Continued operations; no call commentary Increased fleet utilization; positive contribution margin Improving
Industrial SandN/AN/ARecord quarter; industrial ~5% of 2025 volumes expected Growing mix
Liquidity/ABLNew $30M ABL facility $30M undrawn availability $30M undrawn availability; $5.1M cash Stable
Tariffs/Political/MacroN/AAI data center demand to lift natural gas demand; LNG exports supportive Monitoring tariffs/political developments; deferring full‑year guidance Macro uncertainty acknowledged

Management Commentary

  • “We anticipate sales volumes to rise significantly, increasing between 10% and 20% compared to first quarter results… activity to strengthen in the Marcellus and Utica… and in the Bakken and Western Canadian Sedimentary Basin” — Charles Young, CEO .
  • “Industrial sales marked a record‑breaking quarter… expect this… to account for about 5% of our total sales volumes this year. Additionally, our SmartSystems business… increased fleet utilization and positive contribution margin” .
  • “While we remain proactive in monitoring tariffs, political developments… the current economic uncertainty has led us to defer full year guidance at this time” .
  • “In the quarter, the Company generated $5.2 million in free cash flow and repurchased 135 thousand shares” .
  • Prior quarter strategic framing: “We expect domestic LNG export capacity expansion and AI data center development to increase domestic demand for electricity and natural gas… supportive of frac sand demand” .

Q&A Highlights

  • No Q1 2025 earnings call held; Smart Sand discontinued conference calls beginning with the Q4 2024 release and invites investors to contact the CFO directly with questions .

Estimates Context

  • S&P Global consensus for Q1 2025 was unavailable for both revenue and EPS at the time of this analysis; actual revenue was $65.6M (per company release). Where estimates are missing, comparisons cannot be made. Values retrieved from S&P Global.
  • Implication: Sell‑side models may need to reflect a tax‑driven GAAP loss, lower Q1 volumes and pricing, and near‑term volume rebound with capex ramp; industrial mix and SmartSystems improvements could modestly support margins in Q2 .

Key Takeaways for Investors

  • Near‑term setup constructive: management sees Q2 volumes +10–20% QoQ with strengthening activity in key basins; this volume inflection is the primary catalyst .
  • Q1 margin compression reflected lower volumes/pricing; contribution margin per ton fell to $8.96 and adjusted EBITDA to $1.4M, but cash generation remained solid (CFO $8.7M; FCF $5.2M) .
  • GAAP loss is largely a tax accounting artifact; management does not expect federal cash taxes in 2025, reducing concern about cash drain despite the reported net loss .
  • Capex will step up over the next two quarters within the maintained $13–17M plan, targeting maintenance and growth; expect temporary FCF impact with full‑year FCF still positive .
  • Industrial and SmartSystems are improving (record industrial volumes; SmartSystems positive contribution margin), offering diversification benefits and potential incremental margin lift as utilization improves .
  • Balance sheet/liquidity supportive of flexibility: $5.1M cash, $30M undrawn ABL, and ongoing buybacks ($0.3M in Q1); potential for further buybacks or special dividends .
  • Watch pricing trajectory and macro/tariff developments; full‑year guidance deferred signals caution, but near‑term operational momentum (Q2 rebound) is favorable for trading setups .