[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Q2 2025 net loss of $5.6 million due to increased expenses, despite asset growth from acquisitions and equity financing [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $2.25 billion by June 30, 2025, driven by the Moser acquisition, with equity increasing from an offering Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $334,459 | $289,418 | +15.6% | | Property, plant and equipment, net | $1,551,241 | $1,486,246 | +4.4% | | Goodwill | $137,326 | $68,999 | +99.0% | | Intangible assets, net | $198,155 | $105,867 | +87.2% | | **Total Assets** | **$2,247,775** | **$1,972,652** | **+14.0%** | | **Total Current Liabilities** | $214,748 | $243,065 | -11.7% | | Long-term debt, net | $492,069 | $466,989 | +5.4% | | **Total Liabilities** | **$976,443** | **$936,096** | **+4.3%** | | **Total Stockholders' Equity** | **$1,271,332** | **$1,036,556** | **+22.6%** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net loss of $5.6 million resulted from flat revenue, lower gross profit, and increased operating expenses, a sharp decline from prior year Quarterly Statement of Operations (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $288,676 | $287,518 | +0.4% | | Gross Profit | $52,139 | $60,355 | -13.6% | | Operating Income | $7,193 | $28,223 | -74.5% | | Net Income (Loss) | $(5,558) | $14,837 | -137.5% | | Diluted EPS | $(0.04) | $0.13 | -130.8% | Six-Month Statement of Operations (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $586,267 | $480,185 | +22.1% | | Gross Profit | $106,667 | $129,101 | -17.4% | | Operating Income | $22,524 | $67,900 | -66.8% | | Net Income (Loss) | $(4,339) | $41,624 | -110.4% | | Diluted EPS | $(0.04) | $0.39 | -110.3% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating cash flow decreased, with significant investing activities for acquisitions offset by financing from an equity offering and new debt Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $81,192 | $100,418 | | Net cash used in investing activities | $(268,770) | $(353,509) | | Net cash provided by financing activities | $194,683 | $147,640 | | **Net increase (decrease) in cash** | **$7,105** | **$(105,451)** | | Cash and cash equivalents, end of period | $78,809 | $104,723 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail company structure, recent acquisitions like Moser Energy Systems for $222.9 million, new debt, equity offering, and segment changes - The company now operates under two segments: Sand and Logistics, and the newly formed **Power** segment resulting from the Moser acquisition[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - On February 24, 2025, the company completed the acquisition of Moser Energy Systems for total consideration of **$222.9 million**, consisting of cash and stock[22](index=22&type=chunk)[85](index=85&type=chunk) - On March 5, 2024, the company completed the acquisition of Hi-Crush's Permian Basin operations for total consideration of **$456.1 million**[24](index=24&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2025 net loss to flat revenue, lower gross profit, and increased operating expenses, despite new Power segment contributions - Q2 2025 product revenue decreased slightly due to lower proppant prices, offset by higher sales volume and **$11.5 million** in shortfall revenue[248](index=248&type=chunk) - The acquisition of Moser added a new rental revenue stream, generating **$16.0 million** in Q2 2025[250](index=250&type=chunk) - Operating income for Q2 2025 dropped significantly to **$7.2 million** from **$28.2 million** in Q2 2024, impacted by higher SG&A, a **$4.1 million** credit loss expense, and increased amortization from acquisitions[247](index=247&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk) Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(5,558) | $14,837 | $(4,339) | $41,624 | | Depreciation, depletion and accretion | $41,717 | $25,886 | $79,981 | $43,893 | | Interest expense | $14,955 | $12,014 | $28,001 | $18,990 | | Income tax expense (benefit) | $(1,677) | $3,066 | $616 | $11,001 | | Other adjustments | $14,557 | $13,499 | $29,491 | $24,278 | | **Adjusted EBITDA** | **$70,459** | **$79,072** | **$144,750** | **$154,615** | [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk profile unchanged since year-end 2024, with reduced interest rate risk but increased credit risk due to a **$4.1 million** loss - As of June 30, 2025, the company had no variable-rate indebtedness outstanding, mitigating its exposure to interest rate fluctuations[329](index=329&type=chunk) - A credit loss expense of **$4.1 million** was recognized in Q2 2025 related to a dispute with a counterparty over shortfall receivables[330](index=330&type=chunk)[35](index=35&type=chunk) [Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of June 30, 2025, due to an un-remediated material weakness in IT general controls, Moser's controls excluded - A material weakness in IT general controls (ITGCs) related to program change management and logical access, first reported for the year ended December 31, 2024, has not yet been remediated[332](index=332&type=chunk)[333](index=333&type=chunk) - The internal controls of the newly acquired Moser business have been excluded from management's assessment for the quarter, in line with SEC guidance for recent acquisitions[335](index=335&type=chunk) [PART II. OTHER INFORMATION](index=66&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a derivative and class action lawsuit alleging breach of fiduciary duty related to its Up-C to C corporation reorganization - A shareholder filed a derivative and class action complaint on July 2, 2024, alleging breach of fiduciary duty related to the company's Up-C reorganization[338](index=338&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) New U.S. tariffs, including 10% on imports and 50% on steel, pose a material risk of increased costs and reduced demand - The company identifies new U.S. tariffs, including a **10%** general tariff and a **50%** tariff on steel imports, as a material risk that could increase input costs and potentially reduce customer demand[341](index=341&type=chunk)[342](index=342&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased 16,380 shares for $200,000, with **$199.8 million** remaining under its share repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Total Value (in thousands) | | :--- | :--- | :--- | :--- | | May 2025 | 16,380 | $12.21 | $200 | | **Total Q2** | **16,380** | **$12.21** | **$200** | - As of June 30, 2025, **$199.8 million** remains available under the company's share repurchase program, which is authorized through December 31, 2026[345](index=345&type=chunk)[346](index=346&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) An executive adopted a Rule 10b5-1 trading plan for the potential sale of up to 110,000 shares of common stock - An executive, Chris Scholla, adopted a Rule 10b5-1 trading plan for the potential sale of up to **110,000** shares of common stock[349](index=349&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including corporate documents, officer certifications, and XBRL data files

Financial Data and Key Metrics Changes - In Q2 2025, Atlas generated $70.5 million of adjusted EBITDA on $288.7 million of sales, resulting in a 24% adjusted EBITDA margin, which was at the low end of the guidance range of $70 million to $80 million [6][23] - The company experienced a slight sequential decline in volumes due to a slowdown in Permian Basin completion activity, primarily driven by customer pauses and delays rather than outright crew reductions [6][7] - Operating cash flow improved significantly to $88.6 million, driven by better working capital intensity and customer collections [27] Business Line Data and Key Metrics Changes - Proppant sales totaled $126.3 million, logistics contributed $146.4 million, and power rentals added $16 million in Q2 2025 [25] - Proppant volumes were 5.4 million tons, down approximately 4% from Q1 levels, with an average revenue per ton of $23.29, boosted by shortfall revenue [25] - The average sales price is expected to decline to approximately $20.5 in Q3 2025, reflecting ongoing market challenges [26] Market Data and Key Metrics Changes - The Permian frac crew count has declined from approximately 95 crews in Q1 2025 to around 80, the lowest since 2017, excluding the COVID downturn [7][8] - Atlas has expanded its market share from 15% at the time of its IPO to approximately 35% of all sand sold today, bolstered by the Hi Crush acquisition [8][9] - Spot prices for West Texas sand remain in the mid to high teens, insufficient for continued reinvestment by many in the industry [10] Company Strategy and Development Direction - Atlas aims to be the primary provider of sand and logistics in the Permian Basin, focusing on integration and operational efficiency to outperform competitors [19][20] - The company is strategically positioned to capitalize on pricing recovery when completion activity rebounds, with the Dune Express fully operational [10][11] - The acquisition of Mosier Energy Systems and PropFlo is part of a strategy to enhance market position and earnings potential through innovative solutions [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges in the West Texas oilfield services market but believes these conditions will create significant opportunities for Atlas [14][31] - The company expects third-quarter volumes to increase sequentially, driven by recent customer wins and new Dune Express trials, despite a forecasted decline in average proppant sales price [24] - Management is optimistic about the growth potential of the Power business, with a focus on longer-term contracts that stabilize cash flows [13][15] Other Important Information - The Dune Express has significantly reduced public road traffic and admissions in the area, enhancing operational efficiencies [11] - The company is maintaining its dividend of $0.25 per share, representing a 7.9% yield as of the last close [27] Q&A Session Summary Question: What is driving the share gains in the Permian market? - Management attributes share gains to a strong reputation as a reliable sand provider, operational efficiencies, and strategic investments in logistics and technology [35][39] Question: How does the company prioritize capital allocation in a soft market? - The company focuses on maintaining a low-cost structure while continuing to invest in logistics and technology, balancing capital returns to shareholders with necessary investments [45][48] Question: Can you elaborate on the opportunities in the power business outside of oil and gas? - Management highlights the potential for growth in commercial and industrial sectors, with a focus on long-term contracts that provide stable cash flows [53][56] Question: What evidence is there of supply contraction in the sand market? - Management confirms that some major mines have shut down, indicating a tangible reduction in supply capacity [60][63] Question: How is the operator mindset changing in the current market? - Operators are generally more cautious but are beginning to stabilize their strategies as they approach budget season [91]

Financial & Operational Highlights - Atlas Energy Solutions reported Q2'25 Revenue of $289 million[16] - The company's Q2'25 Adjusted EBITDA was $71 million[16] - Net Cash from Operating Activities for Q2'25 reached $89 million[16] - Q2'25 Adjusted Free Cash Flow was $49 million[16] - The company returned $314 million to shareholders since inception[16] - $229 million has been returned to shareholders since IPO[16] Market Position & Logistics - Atlas Energy Solutions is the largest Permian Basin Frac Sand Provider[21] - The company directs over 80% of its volumes to large-cap companies (defined as $10B+ market capitalization)[21] - The Dune Express is expected to reduce trucking miles by approximately 60-70%[33] - Atlas deliveries are expected to reduce emissions by approximately 60 to 70% relative to traditional deliveries[37] Distributed Power Solutions - The company has a generator fleet of over 900 natural-gas powered units, generating over 225 MW of power[25] - In-house remanufacturing costs are approximately 50%+ lower than third-party costs, providing a competitive advantage[27] Market Data - The company's market capitalization is $1.5 billion and enterprise value is $2.0 billion as of August 1, 2025[11]

Core Insights - Atlas Energy Solutions Inc. (AESI) reported revenue of $288.68 million for the quarter ended June 2025, reflecting a year-over-year increase of 0.4% [1] - The earnings per share (EPS) for the same period was $0, compared to $0.16 a year ago, indicating a significant decline [1] - The reported revenue fell short of the Zacks Consensus Estimate of $295.64 million by -2.35%, and the EPS missed the consensus estimate of $0.14 by -100% [1] Revenue Breakdown - Product revenue was reported at $126.33 million, slightly below the average estimate of $127.53 million, marking a year-over-year decline of -1.5% [4] - Rental revenue came in at $15.99 million, significantly lower than the estimated $18.86 million [4] - Service revenue was reported at $146.36 million, which was also below the estimated $146.76 million, representing a year-over-year decrease of -8.1% [4] Stock Performance - Over the past month, shares of Atlas Energy Solutions Inc. have returned -11.4%, contrasting with the Zacks S&P 500 composite's increase of +0.6% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Atlas Energy Solutions Inc. reported break-even quarterly earnings per share, missing the Zacks Consensus Estimate of $0.14, and showing a decline from $0.16 per share a year ago, resulting in an earnings surprise of -100.00% [1] - The company has not surpassed consensus EPS estimates over the last four quarters, with revenues of $288.68 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.35% [2] Financial Performance - The company reported revenues of $288.68 million for the quarter, slightly up from $287.52 million year-over-year [2] - Atlas Energy Solutions Inc. shares have decreased by approximately 43.6% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.13 for the coming quarter and $0.42 for the current fiscal year, with revenues expected to be $288.89 million and $1.16 billion respectively [7] - The Zacks Rank for Atlas Energy Solutions Inc. is currently 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Context - The Oil and Gas - Integrated - United States industry is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting a challenging environment for companies within this sector [8]

[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Results%20Overview) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Atlas Energy Solutions reported Q2 2025 revenue of **$288.7 million**, a net loss of **$5.6 million**, and Adjusted EBITDA of **$70.5 million**, while generating **$48.9 million** in Adjusted Free Cash Flow Q2 2025 Financial Summary (vs. Q1 2025 & Q2 2024) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Revenue** | $288.7M | $297.6M | $287.5M | | **Net Income (Loss)** | ($5.6M) | $1.2M | $14.8M | | **Adjusted EBITDA** | $70.5M | $74.3M | $79.1M | | **Adjusted EBITDA Margin** | 24% | 25% | 28% | | **Net cash from operating activities** | $88.6M | ($7.5M) | $60.9M | | **Adjusted Free Cash Flow** | $48.9M | $58.8M | $73.7M | - Maintained a quarterly dividend of **$0.25 per share**, which is scheduled to be paid on August 21, 2025[8](index=8&type=chunk) - Subsequent to the end of the quarter, Atlas acquired PropFlow, a patented sand filtration system designed to remove debris from proppant at the wellsite[8](index=8&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO John Turner highlighted strong free cash flow despite a Permian Basin slowdown, noting the Power segment's first full-quarter contribution and Dune Express's full operation - Despite a slowdown in Permian Basin activity, the company delivered **strong free cash flow** in Q2 2025[6](index=6&type=chunk) - The new Power segment provided its first full quarter of contribution, with the company evaluating further opportunities in production support, micro-grids, and commercial applications[6](index=6&type=chunk) - The Dune Express is now fully operational, with a majority of sand deliveries from the Kermit plant occurring at the End of Line and State Line facilities[6](index=6&type=chunk) - The company expects a challenging completions market in West Texas for the second half of 2025 but is positioned to gain market share as the leading low-cost provider of proppant and logistics[6](index=6&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Total sales for Q2 2025 decreased 3.0% sequentially to **$288.7 million**, driven by declines in product and service sales, offset by a 119.2% surge in rental revenue Q2 2025 Revenue Breakdown (vs. Q1 2025) | Revenue Category | Q2 2025 | Q1 2025 | Change (%) | | :--- | :--- | :--- | :--- | | **Product Sales** | $126.3M | $139.6M | (9.6)% | | **Service Sales** | $146.4M | $150.6M | (2.8)% | | **Rental Revenue** | $16.0M | $7.3M | 119.2% | | **Total Sales** | **$288.7M** | **$297.6M** | **(3.0)%** | - Sales volumes decreased by approximately **4.0%** sequentially to **5.4 million tons** in the second quarter of 2025[7](index=7&type=chunk) - Cost of sales (excluding D&A) decreased by **4.9%** sequentially to **$195.9 million**, while SG&A expenses remained consistent at **$34.4 million**[9](index=9&type=chunk)[10](index=10&type=chunk) [Liquidity and Capital Returns](index=2&type=section&id=Liquidity%20and%20Capital%20Returns) As of June 30, 2025, Atlas had total liquidity of **$203.6 million**, comprising cash and credit facility availability, and declared a **$0.25 per share** quarterly dividend - Total liquidity was **$203.6 million** as of June 30, 2025, which included **$78.8 million** in cash and cash equivalents and **$124.8 million** available under the 2023 ABL Credit Facility[11](index=11&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.25 per common share**, totaling approximately **$30.9 million**, payable on August 21, 2025[12](index=12&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) Management anticipates a modest decline in Q3 2025 consolidated revenue and adjusted EBITDA, driven by lower average proppant sales prices and reduced shortfall payments - Guidance for Q3 2025 indicates an expected **modest decline** in consolidated revenue and adjusted EBITDA[14](index=14&type=chunk) - The decline is anticipated as a sequential increase in proppant sales volume and Power segment contribution will be offset by a decrease in average proppant sales prices and shortfall payments[14](index=14&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company reported a net loss of **$5.6 million** for Q2 2025, resulting in a diluted loss per share of **$0.04**, primarily due to lower gross profit and higher interest expense Selected Income Statement Data (in thousands, except per share data) | Account | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Total revenue** | $288,676 | $297,591 | $287,518 | | **Gross profit** | $52,139 | $54,528 | $60,355 | | **Operating income** | $7,193 | $15,331 | $28,223 | | **Net income (loss)** | **($5,558)** | **$1,219** | **$14,837** | | **Diluted net income (loss) per share** | **($0.04)** | **$0.01** | **$0.13** | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash provided by operating activities was **$88.6 million**, with **$40.3 million** used in investing and **$38.2 million** in financing activities, ending with **$78.8 million** cash Summary of Cash Flows (in thousands) | Activity | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $88,642 | ($7,450) | $60,856 | | **Net cash used in investing activities** | ($40,268) | ($228,502) | ($115,790) | | **Net cash provided by (used in) financing activities** | ($38,239) | $232,922 | ($27,463) | | **Net increase (decrease) in cash** | $10,135 | ($3,030) | ($82,397) | | **Cash and cash equivalents, end of period** | **$78,809** | **$68,674** | **$104,723** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$2.25 billion**, total liabilities rose to **$976.4 million**, and total stockholders' equity grew to **$1.27 billion** Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $334,459 | $289,418 | | **Total assets** | **$2,247,775** | **$1,972,652** | | **Total current liabilities** | $214,748 | $243,065 | | **Total liabilities** | $976,443 | $936,096 | | **Total stockholders' equity** | **$1,271,332** | **$1,036,556** | [Non-GAAP Financial Measures and Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Explanation of Non-GAAP Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Free Cash Flow to assess core operating performance and cash generation, adjusting for non-recurring and non-cash items - Adjusted EBITDA is defined as net income excluding depreciation, depletion and accretion, amortization, interest expense, income tax, stock-based compensation, and other specified non-recurring costs[29](index=29&type=chunk) - Adjusted Free Cash Flow is defined as Adjusted EBITDA less Maintenance Capital Expenditures and is used to measure the business's ability to generate cash[29](index=29&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA and Adjusted Free Cash Flow](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Adjusted%20Free%20Cash%20Flow) For Q2 2025, Atlas reconciled its net loss of **$5.6 million** to an Adjusted EBITDA of **$70.5 million**, resulting in an Adjusted Free Cash Flow of **$48.9 million** after maintenance capital expenditures Q2 2025 Reconciliation of Net Income to Adjusted Free Cash Flow (in thousands) | Line Item | Q2 2025 | | :--- | :--- | | **Net income (loss)** | **($5,558)** | | Depreciation, depletion and accretion | $41,717 | | Amortization of intangibles | $6,465 | | Interest expense | $14,955 | | Income tax benefit | ($1,677) | | Stock-based compensation | $8,290 | | Other non-recurring & acquisition costs | $6,267 | | **Adjusted EBITDA** | **$70,459** | | Maintenance Capital Expenditures | ($21,589) | | **Adjusted Free Cash Flow** | **$48,870** | [Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow](index=8&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Adjusted%20Free%20Cash%20Flow) The company reconciled its Q2 2025 net cash provided by operating activities of **$88.6 million** to Adjusted Free Cash Flow of **$48.9 million**, adjusting for changes in operating assets, liabilities, and capital expenditures Q2 2025 Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow (in thousands) | Line Item | Q2 2025 | | :--- | :--- | | **Net cash provided by operating activities** | **$88,642** | | Change in operating assets and liabilities | ($35,232) | | Cash interest expense | $13,459 | | Maintenance capital expenditures | ($21,589) | | Other adjustments | ($3,412) | | **Adjusted Free Cash Flow** | **$48,870** | [Other Reconciliations](index=9&type=section&id=Other%20Reconciliations) This section provides supplemental reconciliations for key non-GAAP inputs, including property, plant, and equipment purchases to Maintenance Capital Expenditures, and GAAP income tax benefit to current income tax expense - For Q2 2025, total purchases of property, plant, and equipment of **$40.3 million** were reconciled to Maintenance Capital Expenditures of **$21.6 million** after adjusting for working capital changes and excluding growth capital expenditures[35](index=35&type=chunk) - The GAAP income tax benefit of **($1,677) thousand** was reconciled to a current income tax expense of **$1,325 thousand** by adjusting for deferred tax expense[37](index=37&type=chunk) - Net interest expense of **$14,798 thousand** was reconciled to cash interest expense of **$13,459 thousand** by adjusting for non-cash amortization of debt discount and financing costs[39](index=39&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) The company will host a conference call on August 5, 2025, at 9:00 am Central Time to discuss financial and operational results, with a live webcast and updated investor presentation available online [About Atlas Energy Solutions](index=2&type=section&id=About%20Atlas%20Energy%20Solutions) Atlas Energy Solutions Inc. is an energy industry solutions provider offering oilfield logistics, distributed power systems, and a large proppant supply network in the Permian Basin, focusing on efficiency and shareholder value [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This press release contains forward-looking statements concerning the company's future financial performance, business strategy, and growth prospects, subject to numerous risks and uncertainties

Market Overview - As of mid-May 2025, the S&P 500 has turned positive year-to-date for the first time in many weeks, indicating a broad recovery across multiple sectors from previous volatility [1][2] - Despite the market improvement, ongoing trade disputes and the Trump administration's tariff policies remain a concern [2] Cogent Communications - Cogent Communications is currently trading at $50.87, with a 12-month stock price forecast of $75.75, indicating a potential upside of 48.91% based on 8 analyst ratings [5][8] - The company has seen a significant drop in share price since February, nearing a one-year low, but has strong growth potential in wavelength services, which have more than doubled in revenue over two years [6][7] - Cogent expects to capture a quarter of the North American wavelength market in the next three years, with current revenue in this category at $7.1 million [7] Regeneron Pharmaceuticals - Regeneron Pharmaceuticals is trading at $571.36, with a 12-month stock price forecast of $890.60, suggesting a potential upside of 55.87% based on 26 analyst ratings [9][10] - The company has experienced a 20% decline year-to-date and a 42% drop over the last 12 months, reaching a multi-year low [10] - Regeneron benefits from a robust pipeline and recent sales growth, achieving $14 billion in sales in 2024, up from over $13 billion the previous year [11] - The company has a low debt-to-equity ratio of 0.09 and initiated dividend payments in February 2025, enhancing its appeal to investors [13] Atlas Energy Solutions - Atlas Energy Solutions is currently priced at $13.23, with a 12-month stock price forecast of $19.81, indicating a potential upside of 49.75% based on 12 analyst ratings [14][16] - The company has faced a 42% decline year-to-date amid broader energy sector turmoil but benefits from a specialized focus with little competition [14][15] - Atlas Energy's operations in the Permian Basin provide a geographic advantage, helping to reduce costs and streamline logistics [15]

Acquisitions and Mergers - The Company completed the Moser Acquisition on February 24, 2025, for a total consideration of $180.0 million in cash and approximately 1.7 million shares of common stock [222]. - The Moser Acquisition is subject to customary post-closing adjustments, and the Moser Stock Consideration is redeemable by the Company within 90 days of closing [222]. - The company completed the Moser Acquisition on February 24, 2025, for $180 million, impacting operational results [265]. Financial Performance - Net income for Q1 2025 decreased to $1.2 million from $26.8 million in Q1 2024, representing a decline of 95.5% [258]. - Total revenue increased to $297.6 million in Q1 2025, up from $192.7 million in Q1 2024, marking a growth of 54.4% [267]. - Adjusted EBITDA for Q1 2025 was $74.3 million, slightly down from $75.5 million in Q1 2024, a decrease of 1.6% [258]. - Service revenue surged to $150.6 million in Q1 2025, a 90.5% increase from $79.2 million in Q1 2024, driven by higher logistics sales volumes [269]. - Product revenue rose by $26.2 million to $139.6 million in Q1 2025, despite a $36.8 million decrease due to lower proppant prices [268]. - Gross profit for Q1 2025 was $54.5 million, down from $68.7 million in Q1 2024, a decline of 20.7% [267]. - Adjusted Free Cash Flow for Q1 2025 was $58.8 million, compared to $71.1 million in Q1 2024, reflecting a decrease of 17.3% [258]. Capital Expenditures and Investments - Capital expenditures for Q1 2025 were $52.4 million, down from $95.5 million in Q1 2024, a reduction of 45.1% [259]. - The Company has plans for future capital expenditures and expansion projects, which may be impacted by various risk factors [215]. Debt and Financing - The Second Term Loan Amendment increased the existing DDT Loan by $100.0 million to a total of $200.0 million, with an interest rate of 5.95% plus the greater of Term SOFR or 4.30% [227]. - Atlas LLC entered into a 2025 Term Loan Credit Agreement with Stonebriar, borrowing $540.0 million on February 21, 2025 [231]. - The 2025 Term Loan Credit Facility has a final maturity date of March 1, 2032, and bears interest at a rate of 9.51% per annum [233]. - Total debt increased to $527.2 million as of March 31, 2025, compared to $481.3 million a year earlier, an increase of 9.5% [262]. - The Company drew down $20.0 million from the DDT Loan, with an interest rate of 10.58%, payable in 69 monthly installments starting December 1, 2024 [305]. - The ADDT Loan was provided with an additional principal amount of $150.0 million at an interest rate of 10.86%, payable in 76 monthly installments of $2.7 million starting April 1, 2024 [312]. - The 2023 ABL Credit Facility provides revolving credit financing of up to $75.0 million, with a maturity date of February 22, 2028 [316]. - The Borrowing Base was initially set at $75.0 million and increased to $125.0 million following the First Amendment to the 2023 ABL Credit Agreement [319]. - The Company used a portion of the proceeds from the Equity Offering to repay the remaining $70.0 million of the outstanding principal balance of the 2023 ABL Credit Facility in February 2025 [341]. Market Conditions and Risks - The price for West Texas Intermediate (WTI) crude oil decreased by approximately 16% to $68.24 per barrel in Q1 2025 compared to $81.28 per barrel in Q1 2024 [242]. - The U.S. government imposed a 25% tariff on steel imports and a 10% tariff on product imports, potentially increasing raw material input costs [243]. - The Company is subject to various market risks, including interest rate risks and commodity pricing risks, with no material changes in risk exposure since December 31, 2024 [340]. Operational Highlights - The Company operates a differentiated logistics platform, including the Dune Express, aimed at enhancing efficiency and sustainability in the oil and gas industry [220]. - The Company has over 950 natural gas-powered generators, providing approximately 225 megawatts of power generation capacity across major U.S. resource basins [221]. - The Company is integrating autonomous driving technologies into its logistics operations, creating a semi-autonomous oilfield logistics network [220]. - All of the Company's sand reserves are located in Texas within the Permian Basin, focusing on high-quality proppant production [219]. - The Company is focused on maintaining market-leading uptime for its power generation fleet through in-house manufacturing and remanufacturing capabilities [221]. Shareholder Returns - The company declared a dividend of $0.25 per share of Common Stock on February 11, 2025, and another $0.25 per share on May 2, 2025 [241].

Financial Data and Key Metrics Changes - For Q1 2025, the company reported revenues of $297.6 million and adjusted EBITDA of $74.3 million, representing a margin of 25% [6][19] - EBITDA fell slightly below guidance due to elevated costs from commissioning the Dune Express and third-party trucking bonuses, reducing Q1 EBITDA by approximately $4 million [19][22] - Net income was $1.2 million, and earnings per share were $0.01 [22] Business Line Data and Key Metrics Changes - Proppant sales totaled $139.7 million, logistics operations contributed $150.6 million, and power rentals added $7.3 million [20] - Proppant volumes reached 5.7 million tons, up sequentially despite weather-related disruptions, while Encore volumes were 1.7 million tons, slightly down from Q4 [20] - Average revenue per ton was $24.71, boosted by shortfall revenue from unmet customer pickups [20] Market Data and Key Metrics Changes - The company entered 2025 with a strong allocation base of approximately 22 million tons, with 3 million tons of potential upside pending [23][86] - The WTI forward strip has declined approximately 20% since early April, influencing customer spending behavior and deferring some near-term activity [7] Company Strategy and Development Direction - The company completed the acquisition of Moser Energy Systems and launched commercial operations for the Dune Express, positioning itself for long-term growth [6][12] - The Dune Express is expected to enhance logistics margins and provide a long-term infrastructure advantage [11][12] - The company is focused on operational excellence, emphasizing people, processes, and technology to drive performance [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current uncertainty in the oilfield sector, emphasizing a position of strength rather than weakness [8][12] - The company anticipates that while short-term uncertainty remains, its long-term outlook is grounded in strategic clarity and operational discipline [12][26] - Management noted that economic and commodity price uncertainty is prompting caution among customers, with several Q2 development plans deferred to the second half of 2025 [22][86] Other Important Information - The company expects Q2 service margins to surpass 20% as the benefits of the Dune Express begin to materialize [19] - Total incurred CapEx was $38.9 million, including $23.4 million in growth CapEx, with a budget of $115 million for 2025 [22][24] Q&A Session Summary Question: Can you provide additional color on your guidance of flat to up sequentially? - Management indicated that there is currently no near-term upside in the market, with operators adopting a wait-and-see attitude [30][31] Question: What is the confidence level around the 22 million tons committed this year? - Management remains confident in the demand for the 22 million tons allocated, supported by strong fundamentals and commitments from large-cap operators [34][35] Question: Can you discuss the ramp-up of the Dune Express and its near-term earnings power? - Management noted that the Dune Express is in the commissioning phase, and while Q1 contributions were modest, they expect margins to expand as operations normalize [42][48] Question: How are deferred volumes impacting your outlook? - Deferred volumes are primarily driven by macro uncertainty, with operators hesitant to commit to new projects until they have more clarity [71][82] Question: What is the outlook for free cash flow moving forward? - Management expects improved working capital efficiency and cash flow generation as the year progresses, with Q1 being the largest spending quarter [52][54]

Financial Data and Key Metrics Changes - For Q1 2025, Atlas reported revenues of $297.6 million and adjusted EBITDA of $74.3 million, representing a margin of 25% [5][18] - EBITDA fell slightly below guidance due to elevated costs from commissioning the Dune Express and third-party trucking bonuses, reducing Q1 EBITDA by approximately $4 million [18] - Net income was $1.2 million, and earnings per share were $0.01 [21] Business Line Data and Key Metrics Changes - Proppant sales totaled $139.7 million, logistics operations contributed $150.6 million, and power rentals added $7.3 million [19] - Proppant volumes reached 5.7 million tons, up sequentially despite weather-related disruptions, while Encore volumes were 1.7 million tons, slightly down from Q4 [19] - Average revenue per ton was $24.71, boosted by shortfall revenue from unmet customer pickups, with an average price of $22.51 per ton excluding this [19] Market Data and Key Metrics Changes - WTI's forward strip has declined approximately 20% since early April, influencing customer spending behavior and deferring some near-term activity [6] - Atlas entered 2025 with a strong allocation base of approximately 22 million tons and continues to bid on meaningful new tenders [10] Company Strategy and Development Direction - Atlas aims to navigate the current oilfield sector uncertainty by controlling costs, prioritizing capital discipline, and innovating with purpose [7] - The Dune Express is expected to provide long-term infrastructure advantages and is entering a critical phase with stabilizing volumes [11] - The integration of Mosier Energy Systems is progressing well, with positive customer feedback and new business models being explored [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Atlas's ability to perform through cycles, emphasizing structural advantages that enable healthy free cash flow even in weak markets [10] - Short-term uncertainty remains, but the long-term outlook is grounded in strategic clarity and operational discipline [12] - Management noted that while some customers are pausing growth plans, they expect activity to resume as visibility improves [10] Other Important Information - Total incurred CapEx was $38.9 million, including $23.4 million in growth CapEx and $15.5 million in maintenance CapEx [21] - The company expects a sequential decline in CapEx in Q2, budgeting $115 million in total CapEx for 2025 with flexibility to adjust based on market conditions [21] Q&A Session Summary Question: Can you provide additional color on your guidance of flat to up sequentially? - Management indicated that they do not see near-term upside in the market, with a wait-and-see attitude prevailing among operators [28] Question: What is the confidence level around the 22 million tons committed this year? - Management remains confident in the demand for the 22 million tons allocated, supported by strong fundamentals and commitments from large-cap operators [34] Question: Can you elaborate on the ramp-up of the Dune Express? - The Dune Express is progressing well, with stable operations and consistent throughput expected to lead to margin expansion as operations normalize [44] Question: How should we think about the free cash flow profile moving forward? - Management noted that Q1 was the largest spending quarter for CapEx, with expectations for improved working capital efficiency and cash flow generation as the year progresses [50] Question: What is the outlook for sand pricing and supply impacts? - Management observed that supply capacity additions have peaked, with some competitors reducing production, which is seen as constructive for the industry [62]