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Solaris Energy Infrastructure, Inc. (SEI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered strong sequential growth: revenue $149.3M (+18% q/q) and Adjusted EBITDA $60.6M (+29% q/q), with GAAP diluted EPS $0.30 and adjusted pro forma EPS $0.34; performance was driven by rapid scale-up in Power Solutions to ~600 MW average capacity earning revenue .
  • Material consensus beats: revenue beat by ~20% vs S&P Global consensus ($149.3M vs $123.7M*), adjusted EPS beat ($0.34 vs $0.182*) and EBITDA beat ($60.6M vs $52.1M*). Management raised Q3 Adjusted EBITDA guidance to $58–$63M (from $55–$60M) and set Q4 guidance at $58–$63M .
  • Balance sheet/financing catalysts: $155M of 4.75% senior convertible notes; Stateline JV closed $550M senior secured loan (initial draw $72M); consolidated debt/cash of ~$535.5M/$139.0M; debt/cash attributable to SEI of ~$500.0M/$118.7M at quarter-end .
  • Near-term stock narrative: Power Solutions momentum (AI/data centers, microgrids), guidance raise, and dividend continuity ($0.12 declared for Q3 2025) support sentiment; watch for logistics softness and legal headlines tied to class-action filings as risk factors .

What Went Well and What Went Wrong

  • What Went Well

    • Power Solutions scaled rapidly: average MW earning revenue rose to ~600 from ~390 in Q1; segment revenue $75.6M (+53% q/q) and segment Adjusted EBITDA $45.7M (+43% q/q) on owned MW growth, leased capacity contribution, and pull-forward commissioning revenues .
    • Guidance raised: total Adjusted EBITDA guidance increased to $58–$63M for Q3 (from $55–$60M); Q4 introduced at $58–$63M, signaling sustained profitability trajectory .
    • Management tone on AI/microgrids: “Solaris delivered another quarter of strong results… prospects for continued growth in our Power Solutions segment look strong” (CEO); reiterated turnkey solutions and emissions-control progress (SCR), plus in-house monitoring app “Solaris Pulse” for efficiency .

  • What Went Wrong

    • Logistics softness: fully utilized systems fell to 94 (-4% q/q) with segment revenue $73.7M (-4% q/q) and segment Adjusted EBITDA $22.7M (-13% q/q), reflecting lower commodity prices and fixed-cost absorption .
    • One-time revenue timing: Q2 benefited from start-up/commissioning revenue pull-forward that is unlikely to repeat at similar magnitude in any single quarter, tempering near-term comparability .
    • Legal overhang: multiple investor law firm releases in May point to class-action filings alleging misstatements around the MER acquisition and depreciation practices; SEI intends to defend (risk factor for sentiment) .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$73.9 $126.3 $149.3
Diluted EPS ($)$0.20 $0.14 $0.30
Total Adjusted EBITDA ($USD Millions)$20.8 $46.9 $60.6

Q2 2025 Actual vs S&P Global Consensus

MetricConsensus Q2 2025Actual Q2 2025
Revenue ($USD Millions)$123.7*$149.3
Primary EPS ($)$0.182*$0.34 (Adjusted Pro Forma EPS – diluted)
EBITDA ($USD Millions)$52.1*$60.6 (Total Adjusted EBITDA)

Values with an asterisk (*) were retrieved from S&P Global.

Margins

MetricQ1 2025Q2 2025
EBITDA Margin %27.58%*41.87%*

Values with an asterisk (*) were retrieved from S&P Global.

Segment Breakdown (Revenue and Segment Adjusted EBITDA)

SegmentQ2 2024Q1 2025Q2 2025
Power Solutions Revenue ($USD Millions)$0.0 $49.4 $75.6
Power Solutions Adj. EBITDA ($USD Millions)$0.0 $31.9 $45.7
Logistics Solutions Revenue ($USD Millions)$73.9 $77.0 $73.7
Logistics Solutions Adj. EBITDA ($USD Millions)$28.2 $26.0 $22.7

KPIs and Balance Sheet Highlights

KPIQ2 2024Q1 2025Q2 2025
Avg MW earning revenue (Power)—~390 ~600
Fully utilized systems (Logistics)——94
Capital Expenditures ($USD Millions)$0.7 $144.3 $185.1
Consolidated Total Debt ($USD Millions)——$535.5
Consolidated Cash ($USD Millions)——$139.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Adjusted EBITDA ($M)Q3 2025$55–$60 $58–$63 Raised
Total Adjusted EBITDA ($M)Q4 2025—$58–$63 Established
Power Solutions Activity (Avg MW earning revenue)Q3 2025—≥600 MW Established outlook
Logistics Solutions Fully Utilized SystemsQ3 2025—Down ~10–15% q/q Established outlook
Dividend per Share ($)Q3 2025—$0.12 (record 9/16/25; payable 9/26/25) Announced

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
AI/data center powerSecured 700 MW orders; new 6-yr 500 MW contract; fleet to ~1,400 MW by H1’27 Formed Stateline JV (900 MW site); updated financing ~600 MW avg working; commissioning accelerated; SCR install progress; guidance raised Strengthening
Balance-of-plant/tech——Focus on transformers/switchgear; “Solaris Pulse” app for remote monitoring; partnerships to expand turnkey offering Expanding scope
Supply chain and grid—Tariff baseline 10% risk to input costs Texas SB6 and PJM auction implications support distributed generation economics Supportive policy backdrop; watch costs
Product performance (Logistics)Seasonal softness; 78 systems Rebound expected to ~90–95 systems 94 systems; expect 10–15% decline in Q3 on oil price softness Softening near-term
Regulatory/legal—JV governance/risks disclosed Multiple class-action notices (MER/acct. allegations) Legal overhang rising

Management Commentary

  • CEO prepared remarks: “Solaris delivered another quarter of strong results… continued growth in our Power Solutions segment… expanded power fleet, accelerated power delivery on our initial data center project, welcomed new customers, and began installing critical emissions control equipment” .
  • CFO prepared remarks: Power Solutions contributed ~67% of segment Adjusted EBITDA; Adjusted EBITDA attributable to Solaris shareholders ~$62M; guidance implies modestly higher Power Solutions EBITDA over next two quarters, offset by lower Logistics outlook; commissioning revenue pull-forward unlikely to repeat .
  • Strategy: Generation-agnostic, modular microgrids tailored to AI/data center and energy customers; integrating SCRs and balance-of-plant; turnkey approach to differentiate “power-as-a-service” .
  • Financing: $155M 4.75% senior converts; JV $550M loan (initial $72M draw); moderated CapEx profile in H2’25 before final equipment payments in 2026 .

Q&A Highlights

  • Owned vs re-rented capacity mix: Near-term flattish MW outlook with improving EBITDA/MW as owned assets replace third-party rentals; 3–4 year paybacks on owned capacity .
  • Capacity pipeline and ordering: Buy vs build decisions assessed by asset quality/emissions; potential expansion tied to specific projects; M&A only if fit-for-purpose .
  • Logistics outlook: Modest decline into Q4 implied; focus on cutting-edge completions (simul/trimul-fracs) to gain share despite macro softness .
  • Microgrid contracts beyond oil & gas: Similar tenor/pricing vs data centers; customer credit quality strong; building cross-industry relationships for electrification trend .
  • Permitting: Title V air permit obtained at first data center; second site in process; SEI supports permit assembly with equipment specifics .
  • Balance-of-plant: Tight supply chains; growing in-house and partnered capabilities for transformers/switchgear/software to widen addressable market .

Estimates Context

  • Q2 2025 beats relative to S&P Global consensus: Revenue $149.3M vs $123.7M*; Primary EPS (Adjusted Pro Forma – diluted) $0.34 vs $0.182*; EBITDA (Total Adjusted) $60.6M vs $52.1M* .
  • Forward estimates: Consensus for Q3 2025 (post-results) Revenue ~$140.8M*, EPS ~$0.244*, EBITDA ~$61.0M*; Q4 2025 Revenue ~$164.6M*, EPS ~$0.293*, EBITDA ~$69.1M*. Management guidance for Q3/Q4 EBITDA ($58–$63M) is broadly in line with Q3 consensus and below Q4 consensus midpoint, reflecting conservative outlook for Logistics and limited startup revenues .
    Values with an asterisk (*) were retrieved from S&P Global.

Key Takeaways for Investors

  • Power Solutions is the growth engine: Scaling to ~600 MW with improving mix toward owned assets should lift EBITDA/MW and margins; sustained AI/data center demand and policy support (SB6, PJM signals) underpin trajectory .
  • Earnings quality: Q2 included pull-forward commissioning revenue; expect flattish total EBITDA in Q3/Q4 with Power Solutions gains offset by Logistics softness; watch for normalization in H1’26 as deliveries pick up .
  • Balance sheet capacity: Recent converts/JV financing cover remaining CapEx commitments; moderated H2’25 CapEx provides flexibility heading into 2026 .
  • Dividend continuity adds support: $0.12/share declared for Q3; ongoing shareholder returns alongside growth investments .
  • Legal risk management: Class-action filings present headline risk; monitor disclosures and 10-Q/10-K risk factor updates .
  • Trading setup: Near-term catalysts are estimate revisions (up on Power Solutions momentum), contract announcements for data center/microgrid capacity, and clarity on Logistics utilization; a guidance raise in Q3 was positive, but mix/one-time revenue timing warrants diligence in modeling .
  • Medium-term thesis: Turnkey distributed generation with emissions control and balance-of-plant capabilities positions SEI to capture multi-GW opportunity across AI, energy, and industrial end-markets; execution on fleet delivery, contracting, and margin mix is key .