Smart Sand, Inc.

What they do

Smart Sand mines and processes low-cost Northern White sand used as a proppant in hydraulic fracturing and for industrial applications. The Sand segment consists of its Oakdale, Wisconsin facility (approximately 5.5 million tons of annual processing capacity), its Ottawa, Illinois facility (approximately 1.6 million tons), and its Blair, Wisconsin facility (approximately 2.9 million tons), plus a network of in-basin rail transloading terminals it controls or accesses in the Bakken, Appalachian, and other basins. The SmartSystems segment provides wellsite proppant handling services and equipment, including proprietary SmartDepot storage silos, the SmartPath proppant management system, and the SmartBelt conveyor. An Industrial Products Solutions business started in late 2021 sells sand for glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf and landscape, retail, and recreation uses.

Revenue drivers

• Sand Segment - frac sand — Sells Northern White proppant to oil and gas exploration and production companies and oilfield service companies through long-term contracts, short-term supply agreements, and spot sales; the core of the business and the source of substantially all revenues.
• Sand Segment - Industrial Products Solutions (IPS) — Started in late 2021 to diversify into consumer-driven industrial sand markets such as glass, foundry, filtration, and building products; management said in the 2Q 2026 release that IPS sales volumes grew sequentially and it expects continued growth.
• Logistics and transloading — Provides mine-to-wellsite proppant supply and logistics through five directly controlled in-basin transloading facilities and access to third-party terminals; management cited more cost-efficient logistics per ton when volumes move through Smart Sand controlled terminals.
• SmartSystems Segment — Well site proppant storage and handling services using the proprietary SmartDepot silos, SmartPath management system, and SmartBelt conveyor under flexible, customer-tailored contract terms.

Recent performance

Second quarter 2026 revenue was $115.1 million, a record, versus $93.1 million in 1Q 2026 and $85.8 million in 2Q 2025, with tons sold of approximately 1,864,000 versus 1,492,000 and 1,424,000 in those periods. Gross profit was $19.8 million, up from $6.1 million sequentially and $9.0 million year over year, and net income was $10.2 million. Contribution margin was $27.1 million and Adjusted EBITDA was $18.7 million, while cash flow provided by operations was $3.4 million and free cash flow was $(1.4) million. Full-year revenue grew every year from $126.6 million in 2021 to $330.2 million in 2025, but net income declined from $4.6 million in 2023 to $3.0 million in 2024 and $1.3 million in 2025.

Strategy

Smart Sand's stated approach is to combine low-cost Northern White sand production with owned and controlled logistics to offer complete mine-to-wellsite proppant supply. It has expanded processing capacity through the 2020 Ottawa, Illinois and 2022 Blair, Wisconsin acquisitions and added or expanded rail terminals in North Dakota, Pennsylvania, and Ohio, most recently completing a Dennison, Ohio terminal expansion in the third quarter of 2025. It started the IPS business in late 2021 and expanded IPS blending and cooling equipment at Ottawa in the fourth quarter of 2023 to reduce exposure to oilfield price volatility. The company returned approximately $12.1 million of capital to shareholders year to date in 2026 through share repurchases and dividends, including a dividend paid August 12, 2026, and declared dividends of $0.10 per share in 2024 and $0.15 per share in 2025.

Risks

• Oil and gas activity dependence — Substantially all revenues come from oil and natural gas industry customers, so demand depends on drilling, completion, and proppant-use activity levels.
• Commodity price volatility — Oil and gas price swings beyond the company's control could depress exploration, development, and well completion activity and reduce demand for its proppant and wellsite storage solutions.
• Oakdale concentration — The 10-K risk factors cite dependence on the Oakdale mine and processing facility for a significant portion of current sales.
• Competition and substitutes — The company faces competition from new or existing sand supply, including mines located close to or within oil and gas basins, and from alternative proppants or processes that reduce or replace frac sand.

Outlook

Management said it expects strong demand to continue into the second half of 2026, with activity levels remaining strong through the third quarter and potentially into the fourth quarter. It guided to 2026 sales volumes 10% to 20% above 2025 levels and expects to generate positive free cash flow in 2026. The company points to expected long-term growth in North American natural gas demand from LNG export capacity and gas-fired power generation for data centers as supporting well completion activity, particularly in the Appalachian Basin and Canadian shale basins.