Atlas Energy Solutions (AESI) Q2 2025: Market Share Climbs to 35% as Permian Sand Supply Contracts
Atlas Energy Solutions advanced its market share to 35% of Permian sand sales amid deepening basin contraction and industry supply rationalization. Despite a challenging oilfield services environment, Atlas leverages its integrated logistics, automation, and expanding power business to reinforce structural advantages for the next cycle. Management signals further customer penetration and contract wins as the Dune Express and new acquisitions reshape the competitive landscape heading into 2026.
Summary
- Permian Leadership: Atlas now supplies 35% of all Permian sand, up from high 20s in 2024.
- Logistics and Technology Edge: Integrated Dune Express and PropFlow drive efficiency and customer adoption.
- Power Diversification: Power business expands beyond oil and gas, targeting long-term contracts for cash flow stability.
Performance Analysis
Atlas delivered $288.7 million in revenue and $70.5 million in adjusted EBITDA for Q2, with margins pressured by a soft Permian completion market and customer scheduling delays. Volumes fell approximately 4% sequentially, reflecting a 15% drop from Q1 exit rates, as the active frac crew count in the basin declined to the lowest levels since 2017 (excluding COVID). Despite this, Atlas maintained flat crew count exposure, underscoring market share gains as competitors retrenched.
Profit sales, logistics, and power rentals contributed $126.3 million, $146.4 million, and $16 million respectively. Logistics set a quarterly record with 5.5 million tons delivered, and the Dune Express moved over 1.5 million tons, removing nearly 8 million truck miles from public roads. Cost discipline was evident as per-ton plant operating costs fell, bucking typical volume-driven cost inflation. Cash SG&A remained elevated due to non-recurring items, but operating cash flow rebounded sharply on improved collections.
- Supply Rationalization: Major competitors have begun shutting down mines, with Atlas expecting at least 20% of market capacity to be unavailable going forward.
- Margin Resilience: Integrated logistics and mine utilization offset pricing headwinds, keeping per-ton costs below expectations.
- Power Segment Growth: Power rentals generated $16 million, with over 200 megawatts of new opportunities in the pipeline.
Atlas’s structural low-cost position and integration across the value chain enabled it to preserve profitability and cash generation while others cut investment, setting up for further gains as the market tightens.
Executive Commentary
"Based on our internal estimates, Atlas has 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."
John Turner, President and CEO
"The playbook is like a tough market like today is where the general service industry is everybody slashes CapEx and goes to pricing levels and generate cash flow breaking levels almost immediately in order to preserve some type of utilization to keep the lights on. That ultimately results in an erosion of earnings power. On the flip side of that, you know, our position is the low cost supplier that enables us to go to those pricing levels while still generating a healthy amount of operating cash flow, which in turn enables us to continue investing in the business while returning capital to our shareholders."
Blake McCarthy, Chief Financial Officer
Strategic Positioning
1. Logistics Integration and Dune Express Scale
Atlas’s logistics platform, anchored by the Dune Express conveyor system, is transforming sand delivery economics in the Permian. By removing long-haul trucking and reducing delivery volatility, Atlas is winning new customers and deepening wallet share. The Dune Express is now fully operational, with customer demand for its capacity outstripping supply for 2026. Multi-trailer autonomous trucking and proprietary logistics software further widen the efficiency gap versus peers.
2. Market Share and Customer Stickiness
Atlas now supplies 35% of all Permian sand, up from 15% at IPO, driven by an integrated approach—owning the mine, logistics, and last-mile delivery. Approximately 60% of last-mile crews use Atlas for 100% of their sand needs. The shift from transactional to multi-pad, integrated contracts is accelerating, locking in “stickier” customer relationships and recurring revenue.
3. Power Business Diversification
The Mosier Energy Systems acquisition positions Atlas to capture secular growth in distributed power, targeting commercial, industrial, and technology customers beyond oil and gas. Over 200 megawatts of opportunities are under evaluation, with contract durations often exceeding a decade. This transition aims to stabilize cash flows and reduce cyclicality, with the power segment expected to become a critical growth driver in 2026 and beyond.
4. Supply Rationalization and Future Pricing Power
Atlas expects at least 20% of Permian sand supply to be unavailable, as underutilized mines are shuttered and fixed costs become unsustainable for competitors. This is the first year since the in-basin sand industry’s inception that total capacity is set to contract, setting the stage for a future pricing recovery as activity rebounds.
5. Technology and Automation Expansion
The PropFlow acquisition completes Atlas’s wet sand value chain, enabling 24-hour continuous pumping and reducing operational disruptions. Autonomous trucking trials and continued investment in logistics automation further enhance reliability and cost leadership.
Key Considerations
Atlas’s Q2 results reveal a business doubling down on integration, disciplined investment, and customer-centric innovation as competitors retrench. The company is leveraging the downturn to expand its competitive moat and enter new markets.
Key Considerations:
- Customer Migration to Integration: 60% of active last-mile crews now rely solely on Atlas, reflecting a shift to deeper, multi-year contracts.
- Secular Power Demand Tailwind: Atlas is targeting long-term, high-visibility power contracts in C&I and tech, extending its business model beyond oil and gas.
- Supply Contraction Creates Upside: With 20% of market supply offline, Atlas is poised for pricing leverage as demand recovers.
- Cost Structure and Efficiency: Per-ton plant costs fell despite volume declines, highlighting operational discipline and asset utilization.
- Capital Allocation Discipline: Growth capex is focused on logistics and power, while mine expansion is paused until market conditions warrant.
Risks
Atlas remains exposed to further declines in Permian completion activity, with Q3 and Q4 volumes dependent on customer schedules and broader commodity price stability. Spot sand prices remain below reinvestment thresholds for much of the industry, and any delay in market recovery could pressure margins further. Integration of recent acquisitions, as well as customer adoption of new logistics models, will require continued execution to realize projected gains.
Forward Outlook
For Q3 2025, Atlas guided to:
- Mid-single digit sequential growth in sand volumes
- Sequential decline in consolidated revenue and EBITDA due to lower average sand sales price and reduced shortfall revenue
For full-year 2025, management maintained guidance:
- Total capex of $115 million
- Dividend of $0.25 per share
Management highlighted several factors that will shape the outlook:
- Further market share gains expected in fall RFP season and into 2026
- Power business to drive incremental growth and cash flow stability
Takeaways
Atlas is leveraging the downturn to expand its market share and deepen integration, positioning for outperformance as the Permian recovers.
- Integrated Model Drives Share Gains: Atlas’s full-stack approach in sand and logistics is locking in sticky, high-value customer relationships.
- Power Segment Provides Diversification: Expansion into long-term C&I power contracts will help mitigate oilfield cyclicality and stabilize earnings.
- Supply Rationalization Sets Up Future Upside: Industry-wide contraction in sand supply positions Atlas for pricing power and margin expansion in the next cycle.
Conclusion
Atlas Energy Solutions is executing a counter-cyclical strategy, using the current market trough to consolidate share, invest in logistics and automation, and diversify into power. While near-term headwinds persist, Atlas’s integrated model and capital discipline position it for structural outperformance as market conditions improve.
Industry Read-Through
The Permian sand and logistics market is undergoing a major reset, with persistent price pressure forcing supply rationalization and accelerating the shift toward integrated providers. Atlas’s gains signal a broader trend: customers increasingly demand end-to-end solutions, reliability, and automation, pressuring fragmented or single-service competitors. The move into distributed power reflects a growing need for energy infrastructure solutions across industrial sectors, with implications for oilfield service peers and industrial equipment providers targeting the same secular demand tailwinds. Investors should expect further consolidation and technological differentiation to drive the next cycle’s winners.