What Solaris Energy Infrastructure (SEI) Said on Its Q3 Earnings Call

Key Points

• Record Q3 results drove higher guidance: Revenue rose 55% sequentially to $341 million and adjusted EBITDA increased 26% to $136 million. Solaris raised its Q4 2026 and Q1 2027 adjusted EBITDA outlook.
• A new 15-year power contract expands the backlog: The agreement covers about 900 megawatts for an investment-grade customer, with deployment expected to begin in the first half of 2027. Contracted backlog now exceeds $16 billion, and Solaris expects more than $1.6 billion in annual run-rate adjusted EBITDA once contracted equipment is deployed.
• Solaris says it is funded for planned growth: The company added nearly $1.5 billion in liquidity in October and said it is fully funded for announced projects and capacity additions. Expected capital spending through 2029 increased by about $600 million to support additional capacity and contracts.

Solaris Energy Infrastructure NYSE: SEI raised its earnings outlook after reporting record third-quarter revenue and signing a 15-year power contract with an existing investment-grade customer.

The company reported revenue of $341 million, up 55% from the second quarter, and adjusted earnings before interest, taxes, depreciation and amortization of $136 million, up 26% sequentially. Net income was $35 million, while adjusted pro forma net income was $43 million, or $0.45 per fully diluted share.

Solaris increased its fourth-quarter adjusted EBITDA guidance to $165 million to $185 million from $145 million to $180 million. It also raised its first-quarter 2027 range to $220 million to $260 million from $200 million to $240 million.

New contract extends power backlog

Co-CEO Amanda Brock said the company’s new agreement covers approximately 900 megawatts of generation capacity, associated equipment and operations and maintenance services for an existing diversified industrial technology customer. The contract has an initial 15-year term and an option to extend for another 15 years.

The equipment is not tied to a specific site and can be deployed across different locations, Brock said. President Kyle Ramachandran said the project is expected to begin energizing in the first half of 2027 and ramp through mid-2028.

CFO Steve Tompsett said contracted backlog exceeded $16 billion in revenue, supported by 3.2 gigawatts of long-term power contracts with a weighted average term of 11 years. Together with 300 megawatts of additional, unallocated capacity, the company expects more than $1.6 billion in annual run-rate adjusted EBITDA once all equipment is deployed under contract.

Ramachandran said Solaris expects the unallocated capacity to be delivered and working under additional long-term contracts in 2029. The company also recently acquired another 200 megawatts of capacity, which it allocated to the new 15-year agreement and expects to begin generating revenue in 2027. Brock said the equipment included both new and refurbished units.

Brock said all of Solaris’ long-term customers have investment-grade credit ratings. Once currently contracted equipment and projects are fully operational, the company estimates that no single customer will represent more than 35% of its expected adjusted EBITDA.

Power services and acquisitions drive growth

Power Solutions revenue rose 79% sequentially to $284 million, while segment adjusted EBITDA increased 32% to $127 million. Tompsett attributed the growth to increased owned capacity and higher service revenue, both organically and through acquisitions.

Solaris averaged 820 megawatts of revenue-earning capacity during the quarter. Although its owned capacity rose 20% sequentially, the total fell 14% because of the planned release of temporary third-party generation, Tompsett said.

Chairman and Co-CEO Bill Zartler said the company operates about 1 gigawatt of its own capacity and another 3 gigawatts of third-party-owned power globally. Solaris also signed new service contracts during the quarter, including a seven-year operations and maintenance agreement and several site preparation and turbine refurbishment agreements through teams acquired with Omega and GESA, Brock said.

Zartler cautioned that construction work can be uneven, while saying maintenance and turbine services could benefit over time as recently installed generation equipment requires major overhauls. Ramachandran said the company has less visibility into its services business than into its long-term power contracts and was not prepared to provide specific guidance beyond the first quarter.

In Logistics Solutions, revenue was $57 million, down primarily because of lower last-mile transportation activity, Tompsett said. Segment adjusted EBITDA was $24 million, in line with expectations in the prior quarter. Ramachandran said Solaris expects a small increase in the business in the fourth quarter.

Executives address permitting and funding

Asked about political and permitting concerns surrounding data centers, Zartler said Solaris has very little power operating in Texas and that most of its power is outside the state. He emphasized that the company’s contracts allow equipment to move between locations as customers’ needs change.

Brock said the contracts contain termination-for-convenience provisions that generally provide Solaris with 50% of undiscounted future revenue while allowing it to retain the equipment. She characterized a termination as unlikely.

Third-quarter capital spending totaled approximately $547 million, below guidance because of payment timing, Tompsett said. Expected capital spending through 2029 rose by about $600 million to account for the additional 200 megawatts and equipment supporting recent contracts.

Tompsett said Solaris added nearly $1.5 billion of liquidity in October through a $1.25 billion senior unsecured notes offering and $200 million in additional bank commitments. The company’s $850 million revolving credit facility was undrawn, and Solaris is fully funded for its announced projects and capacity additions, he said.

The board approved a fourth-quarter dividend of $0.12 per share, which will be the company’s 33rd consecutive quarterly dividend once paid.

About Solaris Energy Infrastructure (NYSE:SEI)

Solaris Energy Infrastructure, Inc provides infrastructure solutions for energy-intensive industries in North America. The company develops, deploys and operates power-generation and power-management systems designed to deliver reliable electricity to customers with substantial or specialized energy needs, including data centers and other high-demand facilities.

Solaris also provides logistics infrastructure and related services for the oil and natural gas industry. Its offerings have included mobile and fixed proppant-management systems, silo storage, transloading and last-mile delivery solutions used to transport and manage sand and other materials at wellsites.

Founded in 2014 as Solaris Oilfield Infrastructure, the company historically focused on improving the efficiency of oilfield logistics before expanding into broader energy infrastructure and power solutions.

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