Smart Sand 2025 Q1 Earnings Misses Targets as Net Loss Widens 11118%

Smart Sand (SND) reported its fiscal 2025 Q1 earnings on May 13th, 2025. Smart Sand's Q1 2025 revenue of $65.6 million surpassed the analyst estimate of $60 million, but the net loss of $24.2 million fell short of expectations, with earnings per share missing the estimated target, coming in at a loss of $0.62 per share. Despite the lower-than-expected sales volumes, the company maintains a cautious outlook for Q2 2025, anticipating a 10-20% increase in sales volumes. Smart Sand remains committed to delivering positive free cash flow for the year while navigating current economic uncertainties.

Revenue
Smart Sand's total revenue fell by 21.1% to $65.56 million in Q1 2025, with the sand segment contributing $64.46 million and the SmartSystems segment adding $1.09 million. This decline is reflective of the challenging market conditions the company faced compared to the previous year.

Earnings/Net Income
The company's losses deepened significantly, reporting $0.62 per share in Q1 2025, compared to a loss of $0.01 per share in Q1 2024. The net loss widened to $24.23 million, marking a dramatic increase from the $216,000 loss recorded in the same quarter last year. The EPS performance was notably poor, indicating significant financial challenges.

Post-Earnings Price Action Review
Smart Sand's post-earnings strategy of buying shares following a revenue raise and holding them for 30 days has historically yielded strong returns, as demonstrated by a 139% increase over the past five years. However, this approach is marked by volatility, with a recent 46% decline over three years and a 22% drop in the past quarter. Despite these fluctuations, the overall trend has been positive, suggesting that investors could benefit from this strategy if they can accurately pinpoint revenue raise events. Significant share price increases reflect strong investor confidence in Smart Sand's performance, underscoring the effectiveness of the strategy. The company's ability to increase revenue, particularly in late 2024, led to record-breaking performance, indicating that revenue raises can signal future growth. However, the strategy requires careful timing and market analysis due to natural market fluctuations. Insider confidence, supported by CEO Charles E. Young's substantial ownership stake, reinforces trust in the company's long-term prospects. Additionally, institutional interest from investors like Renaissance Technologies LLC signals recognition of Smart Sand's growth potential. While the strategy carries inherent risks, the overall positive returns suggest its potential value.

CEO Commentary
Smart Sand, Inc. Chief Executive Officer Charles Young expressed the company's commitment to generating positive free cash flow and returning value to shareholders, highlighting $5.2 million in free cash flow and the repurchase of 135,000 shares. He noted that sales volumes moderated in Q1 2025 after a record Q4 2024, but he anticipates a significant increase in sales volumes of 10% to 20% in the upcoming quarter, driven by activity in key basins. Young emphasized the importance of monitoring external factors affecting the industry, indicating a cautious approach to future guidance while focusing on operational excellence and shareholder value.

Guidance
The company expects a significant rise in sales volumes between 10% and 20% in Q2 2025 compared to Q1 2025, driven by increased activity in the Marcellus, Utica, Bakken, and Western Canadian Sedimentary Basins. While Smart Sand is increasing capital expenditures to support growth, it remains committed to delivering positive free cash flow for the year. The company has deferred full-year guidance due to current economic uncertainty but aims to provide updates in future earnings releases.

Additional News
Recently, Smart Sand announced its participation in the Sidoti Virtual Investor Conference on March 19-20, 2025, highlighting its efforts to engage with investors and present company developments. The company has also continued its shareholder return initiatives by repurchasing 135,000 shares in Q1 under its $10 million buyback program, demonstrating its commitment to enhancing shareholder value. With a focus on strategic growth, Smart Sand is expanding its reach into industrial markets, including glass, ceramics, and renewable energy sectors, which broadens its portfolio and aligns with evolving industry demands.