Smart Sand, Inc. (SND)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered strong volume-led recovery: tons sold rose 33% q/q and 12% y/y to ~1.424M, driving revenue to $85.8M (+31% q/q, +16% y/y) and Adjusted EBITDA to $7.8M (+$6.3M q/q) despite lower ASPs and higher logistics costs .
• Reported net income was $21.4M ($0.54–$0.55 per diluted/basic share), largely due to a $(21.7)M non-cash tax benefit; management reiterated it does not expect to be a federal cash tax payer in 2025 .
• Capital returns remained a focal point: ~855K shares repurchased in Q2 for $1.8M and a $0.10/share special dividend declared payable Aug 14, 2025; YTD capital returned through Aug 14 totals $6.4M .
• Guidance: Sales volumes expected to align 2H with 1H and full-year 2025 free cash flow positive; capex maintained at $13–$17M .
• No earnings call transcript (company ceased conference calls starting with Q4’24), making press releases and filings the primary sources; narrative catalysts include volume growth in Utica/Canada, IPS traction, and shareholder returns .

What Went Well and What Went Wrong

What Went Well

• Robust sequential recovery in volumes and profitability: tons +33% q/q to ~1.424M; Adjusted EBITDA up to $7.8M (+$6.3M q/q) .
• Geographic and product traction: “Strategic investments in our Blair and Ottawa facilities and our Utica Shale terminals have driven higher frac sand sales into the Northeast United States and Canada, while our IPS business continues to gain traction” — CEO Charles Young .
• Shareholder returns: ~855K shares repurchased for $1.8M and special dividend of $0.10/share declared; total 2025 capital returns through Aug 14 of $6.4M .

What Went Wrong

• Margin headwinds vs Q2’24: gross profit fell to $9.0M from $13.1M y/y due to higher freight/transloading tied to delivery locations; contribution margin per ton declined to $11.08 from $15.53 y/y .
• Operating cash flow dipped: net cash used in operations of $(5.1)M vs $8.7M in Q1’25 and $14.9M in Q2’24, timing of collections/payables on increased shipments cited; free cash flow of $(7.8)M .
• Average selling prices lower sequentially amid balanced supply/demand; freight and delivery costs higher both q/q and y/y due to mix and third-party terminals .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

Values retrieved from S&P Global for margin percentages.

Segment/Revenue Breakdown

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Note: Smart Sand ceased earnings conference calls beginning with Q4’24; Q2’25 has no transcript .

Management Commentary

• “Smart Sand delivered robust sales volumes and improved profitability in the second quarter… Strategic investments in our Blair and Ottawa facilities and our Utica Shale terminals have driven higher frac sand sales into the Northeast United States and Canada, while our IPS business continues to gain traction.” — Charles Young, CEO .
• “We expect sales volumes in the second half of 2025 to align with the first half of 2025 and we anticipate being free cash flow positive for the year.” — Charles Young, CEO .
• “Long term fundamentals are strong for Northern White sand, driven by natural gas development in North America, LNG investments, and growing demand for data centers to support AI.” — Charles Young, CEO .

Q&A Highlights

Smart Sand does not host earnings conference calls beginning with Q4’24; no Q2’25 Q&A transcript is available . Notable clarifications from the release:

• Non-cash deferred tax benefit of $(21.7)M distorted GAAP net income; management does not expect to be a federal cash tax payer in 2025 and expects immaterial state taxes .
• Sequential margin recovery driven by higher volumes, partially offset by lower ASPs and elevated logistics; year-over-year margins lower chiefly due to higher freight/transloading .

Estimates Context

• S&P Global consensus: EPS and estimate counts unavailable for Q2’25; revenue consensus not available, with only reported actuals present via the data feed. As a result, a formal beat/miss assessment vs Wall Street consensus cannot be made at this time (S&P Global data).
• Implication: Given volume strength and reiterated FCF-positive guidance, sell-side models may emphasize volume trajectory, logistics cost mix, and tax normalization, but without a published consensus the magnitude of revisions is indeterminate .

Key Takeaways for Investors

• Sequential inflection: volumes +33% q/q to ~1.424M and Adjusted EBITDA up to $7.8M; watch for sustained Canadian/Utica momentum into 2H .
• Margin mix matters: delivery-location-driven freight/transloading costs are the principal headwind; margins improved q/q but remain below Q2’24 levels .
• Cash generation path intact: despite Q2 working capital timing driving $(5.1)M operating cash outflow, full-year FCF-positive guidance maintained; capex steady at $13–$17M .
• Capital return program ongoing: $0.10/share dividend paid in August and continued buybacks (~$7.9M remaining authorization as of 6/30) support shareholder yield .
• Tax normalization: large non-cash deferred tax swings can distort GAAP earnings; management indicates minimal cash taxes in 2025 — focus on non-GAAP metrics (contribution margin, Adjusted EBITDA, FCF) for core performance tracking .
• Strategic positioning: logistics footprint and fine mesh Northern White capacity underpin growth in Montney/Duvernay, Appalachian, and Bakken basins; IPS adds diversification .
• Near-term trading lens: absence of a formal call shifts information flow to press releases/filings; catalysts include tangible capital returns, volume updates, and quarterly logistics/margin mix disclosures .