Source Energy Services Reports Q1 2025 Results

Core Insights - Source Energy Services Ltd. reported strong financial results for Q1 2025, achieving record sand sales volumes and revenue, driven by increased demand and operational efficiency [1][4][7]. Financial Performance - Sand volumes reached 1,041,223 metric tonnes (MT), up from 874,849 MT in Q1 2024, representing a 19% increase [3][4]. - Sand revenue was $162.9 million, a 22% increase from $132.9 million in Q1 2024 [3][4]. - Total revenue for the quarter was $208.6 million, an increase of $39.0 million or 23% compared to the previous year [4][7]. - Net income surged to $23.6 million, up from $1.9 million in Q1 2024, reflecting improved business performance and a legal settlement [4][7]. - Adjusted EBITDA increased by 5% to $33.8 million, compared to $32.0 million in Q1 2024 [11][28]. Cost and Margin Analysis - Gross margin was $36.8 million, a slight increase from $35.6 million in Q1 2024 [4][9]. - Adjusted Gross Margin was $46.2 million, up 7% from $43.2 million in the same quarter last year [4][31]. - Cost of sales increased due to higher sand sales volumes and transportation costs, with a notable impact from the weakening Canadian dollar [8][9]. Operational Highlights - The company achieved 88% utilization across its eleven-unit Sahara fleet, indicating strong operational efficiency [4]. - The initial phase of the Peace River facility expansion was completed, with a new rotary dryer fully operational [4][17]. - The first phase of operations at the Taylor transload facility commenced, enhancing logistics capabilities [4][17]. Business Outlook - Source anticipates continued strong customer activity levels in the Montney basin through Q2 2025, supported by recent expansions and operational improvements [17][20]. - The company is focused on increasing its logistics services in response to customer demand, aiming to enhance its service offerings [21][20].