Smart Sand (SND) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $73.8 million, with adjusted EBITDA of $11.9 million and sales volumes just under 1.3 million tons, up 15% year-over-year for the first six months.

• Contribution margin improved to $19.8 million ($15.53/ton), and free cash flow turned positive at $13.5 million for Q2.

• Net loss for Q2 2024 was $0.4 million, primarily due to higher income tax expense, compared to net income of $6.3 million in Q2 2023.

• Efficiency initiatives and cost reductions supported margin improvements and positive cash flow.

• Demand remains strong in key basins, with expansion into Canada and Utica Shale markets.

Financial highlights

• Q2 2024 sales volumes: 1.27 million tons, down 5% sequentially from Q1, but up year-over-year.

• Q2 revenue: $73.8 million, down from $83.1 million in Q1, nearly flat year-over-year.

• Adjusted EBITDA: $11.9 million in Q2, up from $9.3 million in Q1 and $11.3 million in Q2 2023.

• Free cash flow: $13.5 million in Q2, compared to negative $5.5 million in Q1 and $10.8 million in Q2 2023.

• Cash and cash equivalents at Q2 end: $6.3 million; available liquidity exceeds $28 million.

Outlook and guidance

• Expect to remain free cash flow positive for the full year 2024.

• Full-year capital expenditures expected at $10–$13 million, focused on process improvements and terminal buildouts.

• Q3 sand sales volumes expected in the 1.0–1.2 million ton range; contribution margin guidance: $14–$16 per ton.

• Anticipate some pullback in Marcellus/natural gas volumes due to low prices, offset by growth in Bakken and Utica.

• Plans to announce shareholder return initiatives later in 2024.