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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
Values with * retrieved from S&P Global.
Segment revenue breakdown:
KPIs and cash metrics:
Guidance Changes
Earnings Call Themes & Trends
Note: Smart Sand discontinued hosting earnings calls beginning with the Q4 2024 release; no Q1 2025 call transcript is available .
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 .