Atlas Energy Solutions Inc. Q1 FY2025 earnings call

• Completed acquisition of Moser Energy Systems, successful equity raise, refinanced debt, set production records, and launched commercial operations for the Dune Express.
• Dune Express volumes are stabilizing, with Q2 expected to reflect，logistics margins from its economic benefits. Integration of Moser Energy Systems is progressing well with positive customer feedback.
• Focus on three core pillars: people, processes, and technology to drive operational excellence, including investments in leadership, standardized workflows, and data-driven technology.

For the first quarter of 2025, Atlas delivered revenues of $297.6 million. Profit sales totaled $139.7 million, logistics operations contributed $150.6 million, and power rentals added $7.3 million. Proppant volumes reached 5.7 million tons, while OnCore volumes were 1.7 million tons. Adjusted EBITDA was $74.3 million, representing a 25% margin. Total cost of sales, excluding DD&A, was $206.1 million, with per ton plant operating costs falling to $11.53 excluding royalties.

• 2025 budgeting $115 million in total CapEx with flexibility based on market conditions. Projecting Q2 volumes and EBITDA to be flat to up from Q1. Projected adjusted EBITDA run rate for 2025 is $70 million to $80 million, which could rise to $80 million to $100 million if deferred projects proceed.

• Macroeconomic and geopolitical uncertainties influencing customer spending behavior and deferring near-term activity. - Commodity price volatility pressuring activity levels. - Uncertainty around the full realization of economic benefits from the Dune Express in the near term.

Q: Could you give additional color on the guidance of flat to up sequentially assuming Dune Express ramping up and power business contribution?

A: Currently, no near-term upside seen in the market, but production response possible. Dune Express volumes ramping up, logistics margins expected to reach 20% in Q2 but still below full potential.

Q: Can you expand on the 22 million tons committed this year and confidence in hitting it?

A: 75%，of allocated volumes tied to efficient frac methods, over 70% committed to large cap operators, providing stability. Market has uncertainties but appears stable for now with potential upside in back half of year depending on oil price movement.

Q: Talk about Dune Express ramp-up, operational and commercial side, and near-term earnings power?

A: First and second quarters have commissioning costs, but ramping up with over 1 million tons shipped to date. Logistics margins expanded by 1,100 basis points in March with volumes ramping off Dune Express, expecting margins to expand further in Q2 with incremental tons highly accretive to margin.

Q: Walk through free cash flow profile, including 1Q and remainder of year?

A: Q1 had large CapEx spending and working capital build. Expect improved working capital efficiency moving forward, cash taxes minimal impact, with cash flow expected to improve as year progresses.

Q: Switching to power side, opportunities and future growth upside?

A: Moser integration going well, power business is cash flowing, with exciting opportunities in an inefficient market, but still early days with more to come in future.

Q: Thoughts on sand supply side and pricing after soft sand pricing?

A: Supply side capacity additions peaked, with competitor rationalization. Pricing in mid-teen range, operators focused on total delivered costs, and Atlas well-positioned with structural advantages on total delivered cost.

Q: Color on development project，deferrals, nature and confidence in second half target?

A: Deferrals due to macro uncertainty, not concentrated to few customers, with active dialogue to harvest savings. Confidence in 22 million tons allocated, with 3 million tons pending opportunities, but transparent about market realities.

Q: Color on contracted volumes price case and second half outlook?

A: Allocated tons at low-20s, spot price in mid- to high teens, incremental volumes accretive to financials. Focus on total，delivered costs which，customers are looking at, with benefits of，Dune Express expected as year，progresses.

Q: Color on development project deferrals and potential slipping into 2026?， A: 22 million，tons allocated with 3 million，tons pending opportunities, having confidence in 22 million tons being delivered this year with potential for incremental volumes, but transparent about market uncertainties.