Break-Even Analysis Components - Break-even analysis compares sales income to fixed business costs [1] - The five components are fixed costs, variable costs, revenue, contribution margin, and break-even point (BEP) [1] Break-Even Point (BEP) Calculation - Companies calculate BEP to identify sales needed to cover fixed costs before profit generation [1] - The BEP formula determines the break-even point in product units or sales dollars [1]

Core Insights - Smart Sand, Inc. reported strong sales volumes and improved profitability in Q2 2025, with sales volumes increasing by 33% sequentially and Adjusted EBITDA growing by $6.3 million compared to Q1 2025 [2][3][10] - The company is focused on returning capital to shareholders while optimizing its Northern White sand assets, having repurchased approximately 1 million shares and declared a $0.10 per share dividend [2][15][14] - Long-term fundamentals for Northern White sand remain strong, driven by natural gas development, LNG investments, and increasing demand for data centers supporting AI [2][10] Sales and Revenue - In Q2 2025, tons sold totaled approximately 1,424,000, reflecting a 33% sequential increase and a 12% year-over-year increase [3] - Revenues for Q2 2025 were $85.8 million, up from $65.6 million in Q1 2025 and $73.8 million in Q2 2024, primarily driven by higher sales volumes [4][8] - The increase in revenues year-over-year was attributed to higher sales volumes and higher average selling prices [4] Cost and Profitability - Cost of goods sold increased to $76.8 million in Q2 2025, up from $62.8 million in Q1 2025 and $60.7 million in Q2 2024, primarily due to increased sales volumes [5] - Gross profit for Q2 2025 was $9.0 million, compared to $2.8 million in Q1 2025 and $13.1 million in Q2 2024, with the sequential increase attributed to higher sales volumes [6][11] - Contribution margin in Q2 2025 was $15.8 million, or $11.08 per ton sold, compared to $9.6 million, or $8.96 per ton sold, in Q1 2025 [10][32] Net Income and Cash Flow - The company recorded a net income of $21.4 million in Q2 2025, a significant improvement from a net loss of $(24.2) million in Q1 2025 [9][35] - Free cash flow for Q2 2025 was $(7.8) million, with net cash used in operating activities at $(5.1) million [13][40] - The company anticipates being free cash flow positive for the year 2025 [13] Shareholder Returns and Liquidity - Smart Sand has returned a total of $6.4 million to shareholders through share repurchases and special dividends in 2025 [15] - As of June 30, 2025, the company had cash on hand of $4.3 million and $21.0 million in undrawn availability on its credit facility [16]

Core Insights - Smart Sand, Inc. reported a net loss of $24.2 million for Q1 2025, primarily due to non-cash deferred income tax expenses, following a profitable Q4 2024 [8][12][31] - The company generated $5.2 million in free cash flow and repurchased 135,196 shares during the quarter, indicating a commitment to returning value to shareholders [2][13][14] - Sales volumes decreased by 27% sequentially and 20% year-over-year, totaling approximately 1.1 million tons sold, attributed to a strong demand in the previous quarter [3][10][29] Financial Performance - Revenues for Q1 2025 were $65.6 million, down from $91.4 million in Q4 2024 and $83.1 million in Q1 2024, driven by lower sales volumes and moderated average selling prices [4][10][29] - Cost of goods sold decreased to $62.8 million, reflecting lower sales volumes and reduced logistics costs [5][10] - Gross profit was $2.8 million, a decline from $13.5 million in Q4 2024 and $11.8 million in Q1 2024, due to lower sales volumes and average selling prices [6][10][29] Operational Highlights - Operating expenses remained stable at $9.8 million compared to Q4 2024, down from $11.0 million in Q1 2024, primarily due to reduced wages and royalties [7][10] - Contribution margin for Q1 2025 was $9.6 million, or $8.96 per ton sold, down from $20.2 million and $13.80 per ton in the previous quarter [9][11][29] - Adjusted EBITDA was $1.4 million, significantly lower than $11.9 million in Q4 2024 and $9.3 million in Q1 2024 [9][30][31] Market Outlook - The company anticipates a significant increase in sales volumes for Q2 2025, projecting a rise of 10% to 20% compared to Q1 2025, driven by activity in the Marcellus and Utica basins [2][3] - Industrial sales reached a record high, with a 9% sequential increase, expected to account for about 5% of total sales volumes this year [2][3] - Capital expenditures are projected to increase over the next two quarters, aimed at maintenance and growth investments, while still maintaining positive free cash flow for the year [2][13] Liquidity and Capital Management - As of March 31, 2025, the company had $5.1 million in cash and $30.0 million in undrawn availability under its credit facility [15][10] - The share repurchase program allows for up to $10.0 million in ordinary shares to be repurchased, with $9.7 million remaining as of the end of Q1 2025 [14][10]