Source Energy Services (SHLE) Q1 2026 earnings summary

Executive summary

• Q1 2026 activity was slower than Q1 2025, with sand sales volumes of 871,581 MT (down 16–23% year-over-year) and sand revenue of $125.8 million.

• Total revenue declined to $160.2 million, a decrease of $48.3 million from Q1 2025, reflecting lower customer activity and a shift to lower-priced domestic sand.

• Net loss was $3.3 million, a significant reduction from Q1 2025, which benefited from a lawsuit settlement and higher sales.

• Adjusted EBITDA was $26.3 million, down $7.4 million from Q1 2025.

• Sahara fleet utilization was 78% overall, with 100% utilization in the U.S.

Financial highlights

• Gross margin was $22 million (down 40% year-over-year); adjusted gross margin was $35.4 million (down 23%).

• Adjusted gross margin per MT was $40.61, compared to $44.37 in Q1 2025.

• Free cash flow was negative $3.9 million, compared to $11.9 million in Q1 2025.

• Operating and G&A expenses decreased by $3.4 million year-over-year.

• Available liquidity at quarter end was $28.6 million; working capital surplus was $51.9 million.

Outlook and guidance

• Full-year 2026 sales volumes and Canadian customer activity expected to be similar to 2025, with an even sales profile across quarters.

• Q2 activity expected to mirror Q1, with mine gate sales into the U.S. lower 48 states becoming a larger part of the sales mix.

• LNG projects and increased natural gas demand are expected to drive incremental proppant demand in Western Canada.

• Continued growth anticipated from Montney development and expanded chemical transloading capabilities.

• Ongoing focus on expanding logistics services and leveraging terminal infrastructure.