Greg Wasikowski

Greg Wasikowski asked for the general percentage of Kirby's inland term contract book that typically rolls over in Q4 versus other quarters. He also inquired about the revenue cycle for the data center business, from order to recognition, and Kirby's capacity to handle larger, gigawatt-scale projects, including any operational or OEM supply limitations.

Answer

David Grzebinski (President and CEO) explained that approximately 40% of the inland term contract portfolio renews in Q4, sometimes extending into Q1. For data centers, the revenue cycle from order to delivery can be 1-2 years, depending on OEM engine supply. He mentioned Kirby is developing higher power node offerings (15-20 MW range) to participate in larger projects, leveraging EFRAC experience, and revenue is recognized as shipped, not on a percentage-of-completion basis.

Greg Wasikowski asked for the general percentage of inland term contracts that roll over in Q4 compared to other quarters, and for details on the revenue cycle for the data center business, including timing from order to delivery, capacity for larger projects, and revenue recognition practices.

Answer

David Grzebinski, Kirby's Chief Executive Officer, stated that approximately 40% of the inland term contract portfolio (which constitutes 70% of the book) typically renews in the fourth quarter. For data centers, he explained that the revenue cycle from order to delivery can range from one to two years, depending on OEM engine supply. He also mentioned that Kirby is developing higher power node offerings (15-20 MW range) to participate in larger projects and confirmed that revenue is recognized as shipped, not on a percentage-of-completion basis, contributing to quarterly lumpiness.

Greg Wasikowski from Webber Research & Advisory sought clarification on the backlog's delivery timeline into 2023 and asked about the leading demand segments and partnership strategy in the U.S. market.

Answer

CEO and Founder Thomas Speidel reiterated that the current backlog is scheduled for delivery through the end of 2023 and highlighted that long component lead times necessitate early procurement. For the U.S. market, he identified the automotive OEM dealership network as a key segment, noting that their partnership with GenZ, similar to their JOLT partnership in Europe, is addressing this area.