AESI · Atlas Energy Solutions Inc.

Atlas Energy Solutions announced a significant expansion of its Power segment with a 5-year power purchase agreement (PPA) for 120 MW of private generation capacity. The agreement, executed by wholly-owned indirect subsidiary Atlas Energy Solutions Socorro, LLC, includes options to renew for two additional five-year terms. Management expects the deployment to generate approximately $50 to $55 million of Adjusted Free Cash Flow on an annualized basis once operational in the first half of 2027. The equipment represents 50% of the 240 MW generation capacity previously ordered from a Caterpillar Inc. dealer. Additionally, a bridge power rental agreement was executed on March 19, 2026, to provide mobile generation during the construction phase.

Concurrently, the Company updated its Q1 2026 financial guidance, citing severe winter weather in January that disrupted West Texas oilfield activity. Adjusted EBITDA is now expected to be approximately $26-30 million, down from prior guidance of approximately flat with Q4 2025 levels. The weather event necessitated incremental maintenance spending at the Kermit facility to address production inefficiencies, which constrained production and sales inventory during February and early March. While sand sales volume is expected to remain in-line with prior guidance at 5.8 million tons, the Company was required to purchase approximately 150 thousand tons of third-party sand to meet customer obligations, negatively impacting margins. Additional margin pressure resulted from a temporary spike in third-party trucking rates and higher diesel prices.

Management indicated that the Kermit facility is now positioned to operate efficiently amid improving market conditions. The Company has contracted an incremental one million tons of sand for the remainder of 2026, with mining operations effectively sold out for Q2 at current production levels. For the second quarter, Atlas expects Adjusted EBITDA of approximately $50 million, driven by higher sales volume, improved margin flow-through in sand and logistics, and increased power contribution. Power segment contracts executed during Q1 are expected to contribute approximately $35 million in incremental Adjusted EBITDA over the remaining nine months of 2026.