Source Energy Services (SHLE) Q4 2025 earnings summary

Executive summary

• Achieved record annual sand sales volumes of 3.71 million MT in 2025, up 5% year-over-year, with total revenue of $700.3 million, a $26.4 million increase from 2024.

• Net income rose to $33.1 million, up $23.6 million from 2024, with EPS of $2.48 versus $0.70 last year.

• Adjusted EBITDA for 2025 was $112.3 million, a decrease of $11.6 million from 2024, mainly due to a Q3 slowdown and higher costs at Peace River.

• Expansion of domestic sand production capacity to 1 million MT was completed, including the first phase of Peace River and Taylor Terminal.

• Shareholder returns improved via a share repurchase program, with 464,800 shares repurchased and canceled, and a CAD 23.7 million reduction in term loan.

Financial highlights

• Gross margin for 2025 was $116.6 million (down 8%), and Adjusted Gross Margin was $159.3 million (down 2%) year-over-year.

• Free Cash Flow for 2025 was $17.0 million, down from $46.6 million in 2024, impacted by higher capital expenditures and a Q3 activity slowdown.

• Working capital surplus at year-end was $48.3 million, with $19.9 million in cash on hand.

• Net debt (including ABL) was $142.5 million at year-end 2025.

• Operating expense increased by $4.8 million year-over-year, mainly from higher royalties and compensation.

Segment performance

• Q4 sand sales were 907,000 MT, generating $135.3 million in revenue; sand revenue rose by $17.7 million year-over-year.

• Well site solution revenue for Q4 was $28.3 million, up 6% from Q4 2024, driven by higher last-mile logistics volumes.

• Terminal services revenue increased in Q4 due to higher chemical elevation volumes and storage rate increases.

• Sahara fleet utilization averaged 74% in 2025, with US units at 100% utilization in Q4.

• Record sand sales and well site deliveries were achieved in the first half of 2025.