Smart Sand, Inc. (SND)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered solid sequential growth: revenue rose to $92.8M, Adjusted EBITDA to $13.6M, free cash flow to $14.8M; gross profit and contribution margin improved on higher volumes, pricing, and a $4.4M contractual payment for prior-period excess tons .
• EPS normalized to $0.08 (vs. $0.54 in Q2), with management emphasizing that quarterly GAAP tax volatility (not cash taxes) drives swings; company expects no federal cash taxes for 2025 .
• Management guided FY25 sales volumes to 5.1–5.4M tons and reiterated positive FCF for 2025; capex outlook nudged up to $15–$17M from $13–$17M prior .
• Capital returns continued: $0.10 special dividend paid Aug 14 and a new $0.05 special dividend declared Nov 18; repurchases YTD total ~1.0M shares with $7.9M authorization remaining as of 9/30/25 .

What Went Well and What Went Wrong

• What Went Well
  • Record Canadian volumes, broader Industrial Product Solutions (IPS) customer base, and expanded Utica presence drove higher volumes and contribution margin; CEO: “record sales volumes into Canada…broaden…Industrial Product Solutions…expanded our presence in the Utica shale” .
  • Profitability inflected sequentially: gross profit $14.9M (from $9.0M), Adjusted EBITDA $13.6M (from $7.8M), FCF $14.8M (from $(7.8)M), helped by higher volumes/pricing and the $4.4M excess-tons payment .
  • Strategic positioning for gas-led cycle: management cites LNG export growth and AI-driven electricity demand as long-term tailwinds for natural gas and Northern White sand .
• What Went Wrong
  • Logistics and freight headwinds: higher freight/transloading costs tied to delivery locations and third-party terminals weighed on COGS and gross profitability .
  • EPS declined vs. Q2 due to tax effects: net income fell to $3.0M ($0.08/sh) from $21.4M ($0.54/sh) as GAAP deferred tax swings distorted quarterly EPS; company reiterates minimal 2025 cash taxes .
  • Potential seasonal slowdown flagged for Q4 despite a strong start, implying softer sequential exit rate into year-end .

Financial Results

Performance vs. prior periods (oldest → newest)

• Note: Q3 2025 revenue includes a $4.4M contractual payment for excess tons from a prior period .
• GAAP tax volatility (depletion-driven) materially affects quarterly EPS; management does not expect to pay federal cash taxes in 2025 .

Margins and efficiency (calculated from cited values)

Segment revenue mix

Operating cash and capex

Contribution margin

Guidance Changes

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in the document set; themes below synthesize recurring management commentary from quarterly releases.

Management Commentary

• “Smart Sand delivered another strong quarter with third quarter sales volumes, contribution margin, Adjusted EBITDA and free cash flow all increasing from second quarter results.” — Charles Young, CEO .
• “Record sales volumes into Canada…broaden[ed] our customer base in Industrial Product Solutions and…expanded our presence in the Utica shale through our Ohio terminals.” .
• “We believe the long-term fundamentals for natural gas are strong…to support growing LNG export capacity…as well as the continued need for increased electric power to support growing AI demand.” .
• “Fourth quarter demand has started off strong, but we do anticipate some potential seasonal slowdown as we approach year end.” .

Q&A Highlights

A Q3 2025 earnings call transcript was not available; there were no accessible Q&A exchanges to summarize. Notable clarifications from management’s materials: GAAP EPS is heavily influenced by non-cash tax effects driven by depletion deductions (company expects minimal 2025 cash taxes), and Q3 revenue included a $4.4M contractual payment for prior-period excess tons .

Estimates Context

• S&P Global consensus for Q3 2025 EPS and revenue was not available at the time of this analysis for SND; as such, no definitive beat/miss vs. Street can be reported. Values retrieved from S&P Global.*
• Actuals: Revenue $92.8M; Adjusted EBITDA $13.6M (company-reported) .

Key Takeaways for Investors

• Sequential operating leverage returned: revenue +8% q/q and Adjusted EBITDA +75% q/q on stronger volumes/pricing and a one-time $4.4M excess-tons payment; margins improved despite persistent freight/transloading cost pressure .
• EPS volatility remains an accounting/tax story rather than a cash story; management expects no federal cash taxes in 2025, supporting continued FCF generation and capital returns .
• Strategic mix shift is constructive: record Canadian volumes, growing IPS, and Utica expansion diversify demand beyond legacy basins; positions SND for gas-led cycles and LNG/AI-driven power demand .
• FY25 outlook: sales volumes 5.1–5.4M tons and positive FCF maintained; capex raised at the low end to $15–$17M, balancing maintenance and growth investments .
• Capital returns are active and incremental: $0.10 special dividend (Aug), $0.05 special dividend (Dec), and ongoing buybacks with $7.9M authorization remaining at 9/30/25 .
• Short-term watch items: seasonal slowdown into Q4 and continued elevated logistics costs could temper sequential trajectory; monitor delivery mix and freight trends .
• Medium-term thesis: high-quality Northern White reserves plus logistics network create leverage to a multi-year natural-gas completion cycle; IPS adds non-E&P optionality .

Citations:

• Q3 2025 press release and financials
• Q3 2025 Form 8-K with EX-99.1 and reconciliations
• Q2 2025 press release and 8-K
• Q1 2025 press release and 8-K
• Special dividend press release (Nov 18, 2025)

Footnote: *Consensus figures were not available for SND from S&P Global at the time of this analysis; where estimates would typically appear, they are omitted. Values retrieved from S&P Global.