Q2 2025 Atlas Energy Solutions Inc Earnings Call
Greetings and welcome to the second quarter, 2025 financial and operational results conference call.
At this time, all participants are in a listen-only mode. A question and answer session will follow the former presentation.
Hello and welcome to the Atlas Energy Solutions conference call and webcast for the second quarter of 2025 with us today are John Turner president CEO, Blake McCarthy, CFO Chris, Shola EVP and president of Saint and Logistics in Bud, briam executive chair. We will be sharing our comments on the company's operational and financial performance for the second quarter 2025 after which, we will open the call for Q&A.
Before we begin, our prepared remarks. I would like to remind everyone that this call will include forward-looking statements as defined in the US Securities laws.
Such statements are based on the current information and management's expectations as of this statement and are not guarantees of future performance.
We're looking at statements involve certain risk and certainties and assumptions that are difficult to predict as such are actual comments and results could differ materially, you can learn more about these risk in the annual report on form. 10K, we filed with the SEC on February 25th, 2025
Cash flow and other operating metrics and statistics, you will find the Gap reconciliation, comments and calculations in yesterday's press release.
With that said, I will turn the call over to John Turner.
Thank you. Kyle, for the second quarter Atlas generated 70.5 million of adjusted Eva de on 288.7 of sales, representing a 24% adjusted Eva doll margin,
Our second quarter results at the low end of our 788 million guidance range, reflected the well documented slowdown in permanent Basin and completion activity, resulting in a slight, sequential decline in volumes.
This was primarily driven by customer pauses extended delays between pads and schedule shifts rather than outright crew reductions as operators navigated recent commodity price uncertainty.
For the third quarter, we anticipate a sequential increase in volumes, supported by continued market share gains and the strength of our high-quality customer base, despite persistent challenges in the West Texas oil field services market through the end of 2025.
The permanent rack through count, which averaged over 90 active, crews in 2024 and peaked at approximately 95 Crews by March of 2025, have declined to around 80 the lowest since 2017. A excluding, the co downturn
This reduction has a magnified impact due to significant Frac efficiencies gains in recent years.
Daily sand pump for fleet. Has more than quadrupled since Atlas is founding in 2017 and risen approximately 25% since 2023.
As a key enabler of this industry transformation. Atlas benefits, long-term from increased sand consumption. But in today's market, where customers are delaying completions each crew reduction or delay has a high heightened effect
These deficiency improvements drive, better Wells and returns for our customers position atlases. As a primary beneficiary, when completion activity rebounds,
As the largest stand and logistics provider, our scale and the cost efficiencies of the Dune Express provide clear operational and economic advantages over competitors. However, we remain exposed to further declines in activity.
Despite an approximate 15% decline in sand volume from our first quarter, exit rates.
we anticipate year-over-year growth in annual sand volumes driven, primarily by our 22 million committed tons for 2025
Based on our internal estimates, Atlas is expanded. Its market share from just 15% at the time of our IPO.
To the high 20s by 2024 bolstered by the high-pressure acquisition to approximately 35% of all sand sold today.
As we prepare for the fall RFP season, we expect additional market share gains in 2026 as we secure contracts to optimize our productive capacity and maximize utilization of the Dune Express.
The synergies of our lowcost minds in integrated Logistics Network, provide a Competitive Edge in total delivery sand pricing, which we intend to leverage throughout the Contracting season.
Spot prices for West, Texas sand remain in the mid to high teens.
Levels insufficient to justify continued, reinvestment for much of the industry. Particularly as mind, space low utilization and challenges absorbing fixed costs.
While the supply stack has been resilient until recently, we are now seeing competitors idling underutilized minds and reducing shift schedules.
We expect further Supply rationalizations over the next few quarters and believe 2025 will Mark the first year, since the invasion sand Industries, Inception that total Supply capacity, contracts.
Combined with Rising per Fleet sand intensity. This sets, the stage for our pricing recovery when completion activity, rebounds, a recovery for which Atlas is strategically positioned to capitalize on.
The Dune Express is now fully operational with construction and the commissioning completed on time a milestone of many consider. Ambitious.
Currently the majority of the sand deliveries from our Kermit plant, utilize the Dune Express at our end of line and State Line facilities, which has reduced public road traffic and emissions in the area.
During the second quarter, we sent just over 1 and a half million tons of profit down the conveyor.
With the Dune, expresses operational. Efficiencies now tangible customers are actively securing, access to its benefits for 2026.
Alongside 5 million tons already contracted. For next year, we have identified over 12 million tons of additional sales opportunities, signaling, strong, demand, there won't be room for everyone.
The second quarter of 2025 represents, the First full quarter of our integrated power operations, following the acquisition of Mojo Energy Systems.
Integration of Mojo into the Atlas family has surpassed our expectations, reflecting the strong cultural alignment identified during the diligence process.
We are increasingly optimistic about the growth potential of our power business.
Our commercial team is actively evaluating over 200 megawatts of opportunity to cross commercial and Industrial micro grid and production support applications.
The well, documented surge in power demand across the broader economy has significantly expanded our potential customer base beyond our traditional oil and gas operators.
As the cost of generating capacity, rises in today's market, our ability to deliver tailored efficient power configurations to meet customers. Specific needs has driven strong traction within our existing customer base. And it's a new sectors, including manufacturing, technology, and other industrial markets.
As we enhance our visibility in the broader power Market, we anticipate further diversification of our customers in markets, creating growth opportunities for Atlas, that mitigate the volatility of the oil and gas industry.
A key commercial objective of the Mojo acquisition is to extend the duration of our contracts in this business. While our sales team is securing longer-term, contracts with Q oil and gas operators. The contract duration sought in these Emerging Markets, are significantly longer often exceeding. A decade a feature, we view as highly attractive or stabilizing cash, flows and reducing our exposure to historical and cyclicality.
Our power team is achieved significant process and enhancing operational efficiencies and expanding manufacturing capacity at our Casper Wyoming facility all while maintaining minimal capital expenditure as we finalize, the integration of Mojo Energy Systems. I am increasingly confident that our power business will serve as a critical growth, driver for Atlas in 2026 and Beyond.
Following the close of the second quarter. We acquired prop flow a patented on-site. Profit, filtration system. That enables 24-hour continuous pumping, which Crystal will discuss in further detail of your shortly.
Profit filtration has become an increasingly critical aspect of profit delivery and well side efficiency. And the addition of prop flow to the atlas portfolio positions us with what we believe is the industry's leading filtration system, I'd like to take a moment to warmly. Welcome the prop flow team to the atlas family.
In closing while we anticipate ongoing challenges in the west, Texas, oil field services Market through the end of 2025, we believe these conditions will accelerate the necessary steps to rebalance. The industry for Atlas. These challenges also create significant opportunities, the acquisition of Mojo Energy, Systems, and early 2025, and Propel more recently. Demonstrated our ability to capitalize on difficult Market Cycles. Enabling us to pursue strategic Acquisitions and enhance our Market position and through cycle earnings potential. We expect our growing structural advantage in sand and Logistics to deliver differentiated performance which will become increasingly evident as industry conditions improve. Meanwhile, our power business is well positioned to drive sustained growth for Atlas. Capitalizing on the secular Tailwind shaping, the broader power Market.
Now, I will turn over the call to our EVP and president of sand and Logistics Chris scholar.
Thanks John.
At Atlas, our Focus isn't just selling Sam. It's about unlocking the most cost-effective scalable businesses through Logistics Automation and integrated infrastructure.
The permium market is beginning to see that very clearly.
We delivered another quarter of record operational. Performance driven by our focus on customer alignment Relentless pursuit of efficiencies and discipline Capital execution.
In May our current plan and network of Encore Minds, both set all-time production records.
The Dune Express is fully commissioned and has removed almost 8 million sand truck miles from the Delaware Basin public roadways.
Our Logistics team set, a quarterly Vol record of 5.5 million tons delivered to the Well site.
We have now shipped almost a thousand truckloads autonomously and this quarter. We achieved our first autonomous multi-trauma.
Atlas continues to position itself as the logistics and infrastructure backbone of the permanent basin.
Let's talk about the Dune Express.
This system is not just a cosplay. It's a strategic unlock.
For years, the segments of the customer base has been locked in and Tethered to Legacy providers by high switching costs.
Fragmented Logistics and opaque pricing models.
The due is changing. All of that.
And compressing total landed cost. We're now opening doors to customers in the Delaware Basin that have never sourced a single tan directly from Atlas.
All while reducing the commercial truck traffic on the roads and therefore reducing our industry's impact on the community.
Let me be clear about our long-term strategy.
We are not content to be a vendor in the portfolio of our customers.
Our goal is 100% of the work, 100% of the time.
That means when an operator completes a pad in the Parian, Atlas is responsible for the sand from the mind to the Wellhead.
The reason is simple.
Integration outperforms coordination.
We know that if we can control the mind, the inventory, the delivery system, and the final handoff at the Well site, we can outperform on costs, reliability and safety.
By controlling that entire chain, we are positioned to deliver more than just tons. We can deliver certainty to our customers.
This integration is why we are so excited to add prop flow to our existing portfolio of Innovative Technologies.
And further, enhance our customer value proposition.
Front flows designed to fully eliminate profits debris at the Well site. While also removing the equipment and Associated maintenance from the resin.
This technology enables continuous pumping operations for our customers and makes it possible to virtually eliminate operational disruptions.
Prop flows existing customer base. Already features Blue Chip operators and we expect that roster to grow as we support the expansion of its Market penetration.
Increasingly our customers are recognizing that we are an operational extension of their completion programs.
In our customer base. We're seeing a clear Trend away from spot Market relationships, and towards fully integrated multi-page structures where Atlas owns the full delivery experience.
Approximately 60% of our active Last Mile Crews rely on Atlas to deliver 100% of the sand required for their face and specific completions program.
The highlights, the trust. We have built around execution with our customers and we expect this to shift to stopping.
It highlights the trust. We have built around execution with our customers and we expect this to ship to deeper stickier relationships to accelerate as we scale.
I will now turn the call over to our Chief Financial Officer. Blake McCarthy.
Thanks Chris.
In Q2 2025, Atlas generated revenues of $288.7 million and adjusted EBITDA of $70.5 million, a 24% margin.
EBA was at the low end of our 70 to 80 million. Guidance range as volumes came in slightly below expectations as operator schedule shifts. Deferred some second quarter volumes into the third quarter.
Additionally, cash sgna was elevated during the quarter due to third-party Consulting costs and litigation expenses.
Economic and commodity price, uncertainty is eliciting. Cautious behavior from our customers.
Which led several to the first scheduled completions from the second quarter to later in the calendar year.
We expect third quarter volumes to be up in the mid single digit sequentially with August and September slated, to be our strongest volume months of the year driven by recent customer wins and new D Express trials.
We expect our power business to generate incremental sequential growth driven by increased unit deployments. However, a forecasted decline in our average profit sales price and a reduction in shortfall revenue is expected to more than all set. These gains resulting in, a sequential decline in Consolidated revenue and ibida during the third quarter,
Breaking down revenue for the second quarter profit sales totaled, 126.3 million Logistics, contributed 146.4 million and power rentals, added 16 million.
Crop and volumes were 5.4 million tons down, approximately 4% from the levels in the first quarter.
Average revenue per ton was 23.29, boosted by shortfall revenue from unmet customer pit. Pickups
Excluding this, the average price was 21.17 cents per ton as of today. We expect our average sales price to decline to approximately $20.50 during the third quarter.
Total cost of sales. Excluding ddna was 195.9 Million comprised of 60.9 million in plant, operating costs, 123.9 million in service costs, 5 by 5.9 million in rental costs and 5.2 million in royalties.
Per ton plant operating costs fell to $11.23. Excluding royalties down. From q1 with further normalization, expected in Q3 due to higher anticipated, volumes and further operational efficiencies,
Cash SG&A for the quarter was $25 million, which included cash, transaction expenses, and other non-recurring items of $2.2 million.
8 million on a normalized basis.
Sgna is expected to remain around the 22 to 23 million range in the third quarter. Due to the aforementioned ele elevated, third-party Consulting costs and litigation expenses.
Ddna was 40.6 Million. Net income was was negative 5.6 million and earnings per share was a loss of 4 cents.
Operating cash flow for the second quarter was 88.6 million. A considerable Improvement relative to levels in the first quarter driven, primarily by an improvement in working capital intensity, that was in turn driven by an improvement in customer collections.
Adjusted free cash flow defined as adjusted. Evida less maintenance capex was 48.9 million or 17% of Revenue.
Total capex are in the second quarter is 34.1 million consisting of 12.5 million growth capex and 21.6 million in maintenance capex.
Bringing total capex for the first half to approximately 69.6 million.
We continue to budget, 115 million of total capex for 2025 and expect our second half capex to decline for first half levels.
We are maintaining our dividend of $0.25 per share, which represents a 7.9% yield as of Friday's close.
I'll now turn the call over to our executive chairman Bud Bigham for closing remarks.
thanks Blake, 40 years in oil and gas industry in parts of heart and Ox education, the note classroom can match
Payment bus Cycles drive home, a crucial lesson, while upswings rain profits on nearly everyone. True resilience and value are forged in the downturns when prices crater and competitors crumble.
this hard 1 wisdom is the foundation of our
we didn't build Atlas assuming Perpetual $40 sand prices. We Supply 1 of the most volatile Commodities in existence.
Recognizing that reality, we engineered Atlas differently as a low cost high margin operation. Designed not just to survive volatility, but to thrive, emitted our reputation is West Texas. Most reliable profit supplier wasn't earned during the easy post founding years, it was forged in The Crucible of the 2020 Co downturn.
when we honored every customer commitment, even as competitors abandoned theirs,
We've only grown stronger since the pandemic.
As the lowest cost profit producer in a state-of-the-art logistics provider. We both unique differentiated advantages including the Dune Express, autonomous and multitrade or Trucking and advanced Power Solutions.
Leveraging these strengths While others struggle to stay afloat. In this trial. We're playing offense.
As we've discussed, Atlas hasn't just expanded, our market share in profit and Logistics. We've also entered new markets.
Recent moves like the motion earlier this year and last week's proc flow deal underscore. How we're uniquely positioned to create value. While our competitors are constrained
I can't predict when this cycle will turn, but I know Atlas will emerge even stronger.
Poised to capture outside Financial rewards when it inevitably does.
That concludes our prepared remarks. Now we'll open it up for Q&A.
We will now be conducting a question-and-answer session.
If you would like to ask a question, please press star 1 on your telephone keypad, a confirmation toll will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue for participants using speaker equipment and may be necessary to pick up the handset before pressing the star keys.
1 moment, please while we pull for questions.
Our first question comes from the line of Stephen Gennaro with Stifel. Please proceed with your question.
Hey man. Are you are you on mute?
Oh sorry, I appreciate that. Sorry about that. I was on mute. Um, so thanks for taking the question. Good morning. Um, I'd like to start with, you know, you mentioned, you know, we all know the pruriens been pretty soft. You mentioned, where Spa prices are, but then you alluded to sort of the share gains that you've been seeing, can you just talk a little bit about more? What's what's driving? Those share gains and how you think that plays out over the next several quarters?
Yeah, thanks Stephen. Um, this is John and yeah, thanks for the follow-up.
Reporting to the market so that says it's set. There's 70 Crews act after crews out there. So anywhere between 70 and 80. Um, you know, our the number of Frack Crews that we're supplying sand and Logistics on. It's been pretty flat since the first quarter say roughly 24/25 depending on this the week. Um, so obviously flat. Um
With the first quarter when there were, you know, 95 Crews running we estimate today based on the number on a number say, 80 Crews that we are selling around 35% of all sand sold in the puran. You know, this number was high in the high 20s and 2024, you know, if our crew count is high and the and the numbers close to 70, that other reported them were obviously much higher than the 35% probably between 40 and 45% of the market. So, you know, that's obviously, you know.
Very powerful. Um, you know, and Chris, at least Chris alluded to this in his comments on on the Y. And I'm just going to, I'll just make some comments on why, you know, I kind of see, uh, you know, the trend that we see going on. And, you know, obviously first off is, you know, delivering sand. Um, sand and delivering it to the world boards. Obviously, uh, very important part to completion process. You know, we started selling sand back in 2018, 19. Um, and since we started doing that, Atlas is built as a re reputation as a reliable sand provider.
Yeah. Go back to Koh when we were the only Sand Company that kept both of our minds open and we're able to do uh this because of our low-cost operations commitment from Atlas and owners Executives employees to be the best Service Company period.
Fast forward to today, and Atlas is such a different company. Meaning, we're no longer just a sand provider.
After the acquisition of High Crush, we now have the largest network of invasive sand with both wet and dry options.
Atlas is built from the ground up, the largest Logistics offering of the permanent, which includes our own Fleet of trucks and our own trailers. And on top of that we developed an app that really streamlines and management of the logistics function, and we continue to develop this app to upgrade with offerings, that make our customers operations more efficient.
Add in there that didn't Express, which is probably the biggest game changer or biggest step change in sales and the logistics space ever.
You know, Atlas continues to be on the offensive, you know, we continue to make investments in innovate and the mind of blender space. The most recent is the acquisition of prop flow. Continuous pumping, is important to our customers which makes it important to atlas.
Atlas goes the extra mile to to meet our customers demands and we're not done yet as we continue to work on the technology.
And services that are most important to our customers.
And speaking of customers, our customer service, I think if you speak to any of our customers, I think they'll tell you that they get the best from Atlas, um, and the best of any company. When I was an operator, there was there was always, you know,
Many. This is an area where many of our our service companies go flat. Um they didn't they didn't necessarily treat us as a partner know over the years. I've made sure that here at Atlas that we excel at customer service. So those are some of the examples of why, um, and do I think it will continue. And I think the answer to that is, yes. I mean over the net past year, we've had a number of customers, um, ask us the sole source of Soul Source, their stand and Logistics. Um and this will continue because Atlas is committing to be in the best service company.
Um, and, um, and we've been here before in these market conditions, and we're currently demonstrating our customers, while we are a valued customer, you know, Atlas will continue to make those Investments and expand and to keep continuing to expand software into its valued customers.
Great, thanks. Thanks. Thanks. You for the detail. The other question I had was just around Capital allocation. I it sounds like you've had very good success with the with the trucks from Kodiak to start. And I think there's a a lot more on uh on order. And then when you sort of think about capex needs versus Capital returns to shareholders and kind of a sophomore Market, how do you prioritize?
Hey, Stevens Blake. Uh, good question. You know, uh, I think just to kind of reiterate what John said? Hey, it's no secret that the West Texas market is just lighting up right now. Uh, you know, and...
The playbook in and like a tough, the tough market like today is for the the general service industry is everybody. You know, slashes capex and goes to pricing levels to generate cash flow breaks levels almost immediately in order to preserve some type of utilization to keep the lights on.
you know, that ultimately we're results in our erosion of burning power and um,
You know, when the cycle recovers because necessary maintenance Capital uh that gets scrapped any type of investment Innovation, I guess pushed to the side.
Investing in the business while returning capital or shareholders.
You know, on the investment side that's not to say that we're going to, you know, spend money like drunken Sailors in all directions but um for instance, we're not currently investing in incremental Minds as the west Texas sand Supply. Stack is currently in the process of Contracting, which we think is necessary and a long-term benefit to atlas.
However, we are continuing to invest in our Logistics uh, platform as seen in our recent acquisition propo continued partnership with Kodiak. It's pointed out and some other things. We got in the hopper, uh, we're focused on widening. The gap between us and our competition when it comes to efficiency and customer experience, when others are forced to stand still. And I think that's going to become very evident when you look at the market share data and our ability to hold crew count flat while the market has been freefall over the past few months.
Uh, you know, on, on the power front, you know, we're very encouraged by the commercial developments. We've seen over the last few months. Uh, we're excited to see that begin bear fruit over the next few quarters.
You know, Capital allocation, there is a, a easier discussion as most, of those projects we're pursuing have longer duration contracts attached to them, uh, with quick cash flow, uh, generation. So it's, it's pretty simple return that, uh, balancing continued to invest in the market in the business, uh, versus cap versus attorney Capital shareholders. Obviously, in an important leg of that stool, too is uh, protecting the balance sheet.
You know, I think the the dividend remains very important to us. Uh, we are in the midst of a Down cycle, right now, with sand pricing at cash flow, Break, Even levels for the industry and we're still generating cash. Uh, so now we have, that means, we, we have to be official with our balance sheet management. We got to be tight on costs, and we've got to set a higher return threshold for capex to balance it all, but that's what this company was built for. Uh, we're investing to make this model even more durable and we're confident that that will really begin to shine through for investors as we work work through the rough second half of the year and into 2026.
So ultimately, you know, this down cycle is going to be proved proved to be very healthy for the west Texas sand market and the logistics industry and I think we're going to be in Prime position on the back side. So we're going to uh continue to to to to to butcher our position.
Great. Thanks B. Thanks for all the detail.
Thank you.
Our next question comes from the line of Derek Pizer with Piper Sandler. Please proceed with your question.
Hey, good morning. Um, so so John, I saw your commentary around the power business was interesting. Uh was first time you really talked about those opportunities for the business outside of oil and gas. Maybe can you expand on what these entail and maybe help frame for us? This size of this opportunity set?
yeah, so I'll um,
I'll go ahead and and set this up and then I'll let Tim answer their some of the questions. Uh, or follow up on it, Tim OnTrack, who's the head of our power business? Um, you know, the need for power, you know, obviously it's not constrained just to do, it's not just specific to move on a gas business before we acquired moer. We've done a lot of work on different markets and recognize this and whether it be commercial and Industrial technology, government data, centers or oil and gas, we are acquired mojer because it gave us the best platform from which to go our power business and all these areas.
You know, measure is, is about Mojo itself. It was much more than a generator shop over the years.
Excuse me. Over the years there's been a this team has been leading Innovations in the mobile in the mobile power space. Um and that Innovation continues today with some really exciting Technologies.
Mojo had a really deep bench of technical talent and since the acquisition we had made some key additions to the team that enable us to more quickly penetrate these attractive markets, whether it be building out micro grids providing, you know, Bridge power to permanent Power Solutions or providing power as a service. We believe are often as unique in our space and we are well positioned to serve those markets as far as the size of those markets. I mean we're still we're still evaluating that and we we mentioned a little bit about that on the call and Timmy you have anything else you want to say? Yeah. Uh
Derek, Tim and draw. How are you?
um, so on, on these opportunities uh we're not
We're not abandoning oil and gas. We still think the oil and gas space is attractive.
The in the tech space.
Um, they're in manufacturing, they're in different industrial processes where the need for power in.
the United States has created a situation where they need to bridge that Gap and we're in a perfect position to provide that
great. Um most helpful comments and then um maybe on just thinking about the supply stack and you know you guys seem pretty confident that we're going to see a real Supply contraction the first time since in Basin sand mines became a thing. Um so so maybe can you help us understand the tangible evidence and proof points that you're seeing of these tier 2 or 3 Minds actually shutting down and then maybe how much do you think will will come offline from the 90 million or 100 million. So of Supply in the Parian
Yeah, it's more on this is Chris, I think, um, you know, from a tangible proof evidence. What what we're seeing out there is we do have confirmation that 1 of the major minds of Kermit has has already actually shut down and released everyone except for, um, you know, management out there.
And and you look at that Supply stack and I think you know from a a you know the numbers you threw out.
While mechanically that all may be there for a total support basis, right? You got to have the mechanics, the electricians, the skills, the the people to operate all that. And what what we're seeing here in, you know, across the board is, you know, layoffs reduction in staff people working to get lean and mean in terms of, of popx, just to stay alive, right? Um, and, and I think that's really where, you know? We we see the market going. I think that that again, that Supply stack out. There is probably very overstated uh as to what what can actually be supplied in the market today? Um, we're already seeing you know, constraints for the first time come to come to fruition. So, you know, as we move into to Q4 with, you know, the the messy schedule, unknown schedules, that that are I think will continue to see uh, you know, that Supply stack diminished down and it's just a matter of time as to where, you know, our competitors continue to
To to not, you know, invest in their facilities and and won't be ready for the uptake.
Could you quantify? I mean, is it, are we talking 5 10 15?
Million tons potentially being stacked or coming out? Yeah, I would, I would probably say, on a, on a total Market basis, just my gut, you know, 20% of the market at least is is uh, not available.
Got it. Super helpful. Thanks guys. I'll turn it back.
Thank you. Our next question comes from the line of Jim Ryerson with Raymond James. Please proceed with your question.
Hey, good morning guys. Um, first question, just if if you kind of look at the market we've had and obviously operators have been very focused on minimizing well afes and pushing price on service companies as low as they can get it to to try and offset oil prices Etc. Would love to hear just kind of how you guys are responding to that from a cost perspective from a operations perspective, Etc.
Yeah, thanks Jim. This is Chris. I'll take that 1. Um, you know, you're you're absolutely right. Uh, the operator focus on on lowering. Well costs, it's it's pretty intense right now. I think our our sales team hears that just about every week. Um, you know, but at Atlas we really position ourselves to, to thrive in exactly that type of market, right? We look at that total delivered value, not just a a price point.
So looking at at that kind of total delivered cost perspective, right? We get a lot of questions, you know, on these calls around, you know, what's the price per ton at the sand mine and you know, from my perspective, that's that's really is yesterday's game, right? That is, that is the game from 5 years ago, we really moved on from that and focused on, you know, the the total delivered costs at the Well site.
and then as part of that, right, we're competing with the reliability and efficiency and ability to to execute
Enables the 24/7 pumping and expanse, you know, further into that value chain.
None of these things were were done on accident, right? Um, simply put we we have continued down the strategy of, you know, be the lowest cost structure and and be fundamentally lower.
And I think I think it's also you know, we operate even even when the Market's great we operate lean, right? But it's not just about being lean at this point, it's being it's being integrated.
You know, we we don't know the largest network of Mines, we control the logistics out there and we continue to invest in the technology, large infrastructure and automation, where where it truly matters. That's, that's really, you know, our differentiating Factor
And if you if you move on and look at at our customer base, right, we continue to align with those most efficient operators out there that that really stick with our Logistics footprint.
Um but they also have to share our operational philosophy, right? I mean, have we walked away from the low value opportunities to focus on those operators, that that value. Um, you know, our Logistics, Innovation, the reliability, and, and long-term Partnerships that at play, like, absolutely right. I think it's that type of discipline. Um, that's really allowed us to go capture a higher, you know, wallet, share from higher quality relationships. That's, that's really what's allowing us to to grow in this challenging Market.
I think just to be clear, we're, we're not out there at this point, chasing marginal tongues, or transactional pricing, just not interested, right? We're continuing to focus on deepening strategic Partnerships with the customers that share. Our long-term view of, you know what, what partnership really looks like.
Thanks for for that Chris, appreciate it. Um, follow-up question would be
You mentioned around, Dune Express, you know, obviously challenging time to bring that into the market, just as kind of all this craziness started happening. And obviously it's uh, customer reluctance to to to do anything. New Contracting wise is always seems to materialize in these kind of markets, but as you mentioned, a couple of different things about expanding your blue chip, customer base and and having increased conversations around doing Express heading into next year, would love to kind of get pick your brain or get your thoughts around. You know how confident you are that you'll actually see some of that incremental 12 million tons of of volumes that you're tracking for next year. If it's, you know, if you're already having conversations there, just whatever visibility or color, you can provide, that would be great given the kind of slow start with the market. We're in
Yeah, look, I mean we're we're definitely having those those conversations I think to to to kind of kick back a little bit, right? Taking the perspective. A lot of these guys didn't think that they didn't Express was actually going to happen and and uh operate efficiently. So you had a lot of operators really sit back and take this wait and see perspective. And is this going to work? Um, you know, meanwhile they they did have to support their programs in 2025 with with those contracts that they had and they continue to to you know, kind of sit with those those Legacy relationships, if you will that are that are long-standing relationships in in the Delaware I think. As, as customers have continued to come out and, you know, 1, you know, tour the facility, uh, look at the Dune Express. It's, it's a, it's a moment of, wow, this is really working, uh, this is impressive, right? Um, you know, 2, we've for for those customers that, uh, that did have, you know, those those open type of
Of uh of opportunities. You know we've been able to transition 1 customer that we had 1 Crew with to 100% of their work with 3 Crews. Now, just based on on the Dune we see that Trend continuing um, you know, but look like we've we've hit those early adopters. I think the early majority were were hitting in stride and and that late majority from that adoption Curve will will fall in here soon. Um, you know, but
Look the RFD season coming up is is really the perfect timing. And and quite honestly, some of the first openings that some of our customer base has, um, that look, these are guys that we haven't done business with and that's what really excites us, right? You look at historically, you know, out there. Um, we've got a number of of Delaware based and operators that we've never sold a ton to. And now we're in direct conversation with those guys from, you know, the Strategic differentiator that is the dude.
Perfect. Appreciate it. Thanks.
Thank you.
With Johnson rice, please proceed with your question.
Good morning guys, thanks for letting me in. Um I wanted to start with with the costs uh to produce at at your minds. Um, was there something in the
In the quarter that, you know, helped y'all along with that. Was it a new cutter head or anything like that? Because normally when we see, uh,
You know, volumes come in a little bit. We see the cost actually per ton go up a little bit, was there anything in the background there that, that we could point to?
No, I think I think operationally, right? We've talked, we've talked a while here in in terms of, uh, that operational excellence Trend and really, you know, continuing to operate lean and mean throughout I think at, you know, as we, uh, as we continue when when you know, operators hit on us, uh, for pricing, we're we're doing the same through our value chain, right? So you know, we're going out from a procurement perspective, looking at uncovering, every Rock trying to get, you know, as lean as mean as as we possibly can. But you know, from a from a operational basis I think 1 of those things that that you'll see and and you see these, these operational records, being hit by a facilities, we do continue to, you know, put the volume through those lowest cost facilities out there. And you know, with Kermit over performing expectations, that's really allowed us to to move, continue to move down that cost curve.
You know, just a continuation of of what we said in place as an operational strategy, a year ago, and I think you'll continue to see that through 2026 and I think and I think that, you know, Chris has done an excellent job when it comes to, you know, where we came from, and where we are today, and where we're going on this. I mean, that's a like, you know, that's something I noticed is like, wow, you know, volumes go down instead of sales are off expert time. That's not something you that you would notice, but I think our operations team is really stepped up and really done a great job. Understanding what the, what the what the mission is, and the goal is here at Atlas and, and, and poor Atlas to be, you know, obviously a profitable and generating cash flow for its investors.
But I appreciate that caller and just 1 on the power side for me, you know, the the conversations that you're having with operators out there, I'm I'm guessing they're for larger kind of micro grids, maybe in the 1020 30 megawatt. Um any of those can you elaborate on those conversations number 1? But number 2 we'll we'll any of those contracts that that you could potentially sign over the next couple quarters, come with any increased capex in in the Mojo side or or you have that covered already
Uh, yeah, this is this is Tim again. Um,
So those are, those are definitely projects we're looking at, um, you know, our capex budget is, is pretty well set for this year. I think, you know, when we, when we look at those opportunities, we think we're in a position to deploy, you know, somewhere between 40 and 50 megawatts between now and the end of the year.
Um, that's already built into capex. Um, and that allows us to be selective on the project that makes the most sense for us um and as John alluded to in his comments.
you know, we're we're evaluating
You know, over 200 megawatts of opportunities and, you know, those those kind of come to fruition, you know, in the next 12 months uh, for the majority of them. And so uh, as we as we look at those projects, we're
We're in a good position to take advantage of them. And you know, I think some of those we can we can use next year's capex to take advantage of them and The Operators that are looking at those micro grids. A lot of times have a solution in place and the micro grid is the next evolution of their power strategy versus uh just placing gen sets on on 1 path and uh empowering them set of Wells on that path. And I'd say some of that is not just that that 200 megawatts. I mean that's just what we're looking at now.
60% of that is is actually on the cni side too. So I mean and I don't think it's too much of a stretch for us to supply that to to to to, to explain that market either. I mean it's just an extension of what we're currently doing.
I appreciate the color. I'll turn it back. Thanks.
Thank you. Our next question comes from the line of Josh Jane with Daniel Energy Partners, please proceed with your question.
Over the next 12 to 24 months.
Yeah, I think you know, you look at you look at prop flow. Um you know they they've got those Innovative Technologies that that really further, enhance our our customer value proposition. I think it was the 1 part.
Of the wet sand value chain that, that we didn't have right in in going to the blender. And that really completes the offering
Um, you know, you look at the again, from a customer perspective. Um, you know, it limits that equipment in the red zone out there that allows for 24/7, continuous pumping and really enables our customers to continue to get more efficient. So, you know, to to us, you know, after we met the management team. Um, you know, culturally fit fit right in, but strategically, made a ton of sense, you know, as our as our wet Minds continue to be, uh, continue to be sold out. I think, you know, from a, from a wet and dry perspective. Um, you know, look as we talked about earlier, it's all about the total delivered cost, right? Um, you've got early adopters, you got some customers that that are segmented towards, you know, all wet or all dry and some that some that do both but at the end of the day, it really really boils down to, you know, the total delivered cost and what what value efficiency and reliability, your gift on customer. And and again, right? That's where our our network of Minds out.
Out there, you've got onesie twozies. Um, but our network of mine allows us to go, you know Supply those customers in full you know, delivered. So I I think that
You know, from a wet or dry at this point is, is there a lot of, a lot of people in the market going and putting more Capital into, um, expansion of Mines out there with, with the, uh, with, with where we're at in the market. Like, I just don't see that. Um, so I think you're going to remain pretty pretty stable of where you're at today for the for the foreseeable future.
Okay. Thanks and then, just a general 1 on uh customer mindset. And we've had a lot of changes in the macro environment over the last 90 to 100 days. Um, could you just talk through?
Uh operator mindset. And if it's changed post Liberation day and our operators, generally more comfortable today than they were, let's say, you know, 90 to 100 days a week ago.
But I think from an operator mindset, that that varies customer and customer, right? You've got you've got your big boys out there that are that are always going to pump through downturns. May may not you know, 100% um you all the way to your small Independence that that, you know, move move quickly in either direction. I think, I think what you're seeing is more broadly. Um the perspective of you know we're going to be flat for a little bit and kind of figure out where things go. I think a lot of our customers are still evaluating exactly what what their program looks like in Q4. Um,
Um, and I think we'll have a lot more insight in that, you know, September October time frame. Once we get through budget season, um, you know, and these guys can can provide their budgets for 26, um, you know, but but overall does is there, does there feel like there's a, there's less of a falling knife and more of a sense of stability in the market like, yeah, I would, I would, I would definitely say, you know,
You see that from our customers?
Understood. Thanks, I'll turn it back.
Thank you.
All right, next question comes from the line of Jeff. LeBlanc with tph, please. Proceed with your question.
Uh, good morning, John and team. Thank you for taking my question.
uh, you have a question I had is
Sorry, I guess the question is in logistics. Um, how should we be thinking about the magnitude of non-union Express Deliveries over the second half of the year and into 2026? First, I think the number was 4 million tons in Q2.
Yeah, I mean, I guess, uh,
Yeah, it's about. It's about 4 million. Uh, you know, I think that, uh, you know, we're looking at, uh,
Greek flattish dude. Express volumes through the back half of the year uh for now and then. Uh, so with the sequential increase in, you know, the total volume should be up mid single digits and so, uh, Mr. Lee, the non doing Express Logistics volume should be up
Approximately in line with those numbers.
Okay.
And then, I guess the follow-up would be, how should we be thinking about the margins on those deliveries versus the June Express? And then additionally, 4-digit Express margins, how's the progression from single to double or triple trailers going?
Approximately flat, uh, moving forward just because they didn't Express volumes are expected to be flat. Uh, multi- trailer margin are significantly higher than single trailer. Do Express margins, uh, which are in turn significantly higher than the traditional Logistics margins. Uh, you know, I think that it's a period of maturation for for the overall Logistics business. As we, you know, we're pushing people more towards the, the multitrack operations, uh, because it is, you know, it's more efficient for them. It's more fish for us. It's a win-win for all parties, uh, but that that takes a bit of time. Uh, you know, it's it evolves some changes in, in how people, you know, construct their plan, their their pads and, uh, the mindset around the allocation of equipment around the, well, the well side. So, uh, you know, we're, we're holding people's hand through that. And, uh, you know, I think once people, the people that have, I think it's Chris talked about like, the early adopters, you know, once they've gotten going on that. They're like, wow, this this really works. Uh, it is exciting and it's really sticky. Uh, so you know,
It's part of a, just a, an education phase that we're we're working through with our customers.
And I think, I think if you, you know, we run that analysis as well in terms of, you know, the dude, and if you look at the, the now that we have, you know, some some stable periods of of uh, of numbers behind us with the Dune. If you look at the cost of the Dune and and quite honestly, once we get it sold out, it's right in line with our expectations, if not just slightly below that um you know, and that that we would
Us from, you know, spreadsheet Theory and math to to Real World. Um, you know, transition in the margins.
Okay, uh, thank you for the color. I'll hand the call back to the operator. Thank you.
Thank you. Our next question comes from the line of Eddie Kim with Barclays. Please proceed with your question.
Hi, good morning. Um, just want to Circle back on your, your guidance for for 3Q volumes, uh, up mid single digits sequentially. I know you mentioned, some share gains, uh, and deliveries pushed out from 2 CE to 3 q. But, but, but still seems, uh, surprisingly good, uh, given the sequential declines that some of the pressure Pumpers have been have been guiding to, uh, so just curious, uh, on your, on your confidence level. Uh, there is, is most of that sort of, in, in hand at this point, or is there some, uh, downside risk? If, if permanent Fleet count, uh, declines more than your, your current expectations
Well, I mean, there's, there's, there's always downside. But there's also upside risk, uh, you know, we have those, uh, volume pretty heavily risked, but, uh, you know, I think that
Like you said a part of, you know, we keep harping on it, like Bo X at Atlas is executed right now and yes, uh, it is a really tough Market. Uh, depending on who you ask, we were you out somewhere between 70 to 80, uh, completion crews in West Texas right now. Uh, but you know, we've been able to hold that that crew cap pretty dark flat. Uh, and so that's just, you know, a testament to the the good
our operations team has been put forward, so um yeah that's
Think about that, you know, kind of the sequential, uh, you know, 4 to 5% volume growth is is where we're thinking right now in terms of our own internal models.
Got it, got it. Yeah, and definitely the, the market share games have been, uh, pretty impressive. Um, uh, my, my follow-up is, is just on early expectations on the trajectory of of 4 key. I mean, look, looking back the past 2 years, your 4 q is declined. Uh, in the, in the low double digits sequentially from both a revenue and volumes perspective, any reason this year might look different, or, or should we expect a similar sort of historical seasonality any, any thoughts? There would be great.
Yeah, you know, uh, we see the same seasonality. I mean I think that that's 3 pervasive across the entire service industry. I think it's it's a little early this year. Um,
you know, I I with this type of Market I I wouldn't be surprised if people do take, you know.
Uh, extended breaks during, uh, during the holiday season and, you know, it's Texas too, so they might take some long hunting trips as well. Uh, that being said, you know, we do have a number of opportunities. We we, as Chris mentioned, we're having discussions with some new customers, um, around 2026, and there's, you know, potential, uh, trial opportunities and stuff like that. So, it's a little early, um, for to see how Q4 shapes up, but, uh, I I wouldn't be surprised. If, you know, you solve just overall industry volumes down quarter report,
Understood understood. Thanks for that. I'll turn it back.
Operate. We probably have time for coming up on the hour here. We probably have time for 1 more question.
oh, uh
It appears there are no further questions queued up.
All right. Thank you. I'd like to thank our team for all their hard work and our investors for their continued support. You know. Well, market conditions are not ideal, you know, we're confident in our strategy and excited about the opportunities ahead as we drive growth in the coming quarters. Um, we look forward to reporting our third quarter numbers. Thanks guys.
Thank you. This concludes today's conference, and you may disconnect your line at this time.
Thank you for your participation.
Thanks.