Operator

Thank you for standing by. This is the conference operator. Welcome to the Source Energy Services First Quarter 2026 Results Conference Call. [Operator Instructions]

And the conference is being recorded.

[Operator Instructions]

I would now like to turn the conference over to Scott Melbourn, CEO. Mr. Melbourn, please proceed.

Scott Melbourn
President, CEO & Director

Thank you, operator. Good morning, and welcome to Source Energy Services First Quarter 2026 Conference Call. My name is Scott Melbourn. I'm the CEO of Source. I'm joined today by Derren Newell, our CFO. This morning, we will provide a brief overview of the quarter, which will be immediately followed by a question-and-answer period.

Before I get started, I would like to refer everyone to the financial statements and the MD&A that were posted to SEDAR and the company's website last night and remind you of the advisory on forward-looking information found in our MD&A and press release.

On this call, Source's numbers are in Canadian dollars and metric tonnes, and we will refer to adjusted gross margin, adjusted EBITDA and free cash flow, which are non-IFRS measures as described in our MD&A. Except for the items just mentioned, our financial information is prepared in accordance with IFRS.

As we expected, first quarter activity levels were slower than the record levels we experienced in the first quarter of 2025. We sold 872,000 tonnes of sand in the quarter, a 16% decrease from the first quarter of 2025. Over the balance of the year, we are still expecting 2026 sales volumes to be very similar