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Solaris Energy Infrastructure, Inc. (SEI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong beats: revenue $166.8M (+12% q/q) and diluted EPS $0.31; Adjusted EBITDA $68.0M (+12% q/q). Versus S&P Global consensus, revenue beat by ~$26.0M and EPS beat by ~$0.08 as actual “Primary EPS” came in at $0.32* .
  • Guidance raised: Q4 2025 Total Adjusted EBITDA to $65–$70M (from $58–$63M); introduced Q1 2026 Total Adjusted EBITDA guidance of $70–$75M; declared a $0.12 dividend for Q4 2025 .
  • Growth was powered by Power Solutions: avg. 760 MW earning revenue (vs. 600 MW in Q2), segment revenue $105M (+39% q/q) and segment Adjusted EBITDA $58M (+27% q/q); Logistics softened on lower oilfield activity (84 fully utilized systems, -11% q/q) .
  • Strategic catalysts: ordered ~500 MW of generation and lifted pro forma fleet goal to ~2,200 MW by early 2028; closed HVMVLV acquisition; executed $748M 0.25% 2031 converts to repay the term loan and fund growth, unlocking ~$45M interest/Amort savings over next four quarters .

What Went Well and What Went Wrong

What Went Well

  • Power Solutions outperformance: Q3 avg. 760 MW (+27% q/q), revenue $105M (+39% q/q), segment Adjusted EBITDA $58M (+27% q/q); management highlighted powering a second data center site and strong execution capability .
  • Guidance and financing upgrades: Q4 2025 Adjusted EBITDA raised to $65–$70M and Q1 2026 introduced at $70–$75M; $748M 0.25% converts reduced financing costs and removed restrictive covenants, with ~$45M near‑term annualized savings .
  • Capacity and capability build: order of ~500 MW lifts pro forma fleet to ~2.2 GW by early 2028 and HVMVLV acquisition enhances balance‑of‑plant (transformers/switchgear/engineering), creating a differentiating “all‑of‑the‑above” solution set .

What Went Wrong

  • Logistics Solutions slowdown: revenue $62M (-16% q/q), segment Adjusted EBITDA $17M (-23% q/q) on lower fully utilized systems (84, -11% q/q) and fixed cost absorption in a weaker U.S. oil & gas completion backdrop .
  • Mix/supply dynamics: management expects a mix impact from lower spot utilization/commissioning and noted tighter OEM delivery slots, requiring selective third‑party capacity sourcing .
  • Higher Q3 interest expense ahead of the refinance: interest expense rose to $9.0M from $5.5M in Q2; the October converts should ease run‑rate interest burden from Q4 onward .

Financial Results

Consolidated P&L and Profitability (YoY and QoQ)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$75.0 $149.3 $166.8
Diluted EPS ($)-$0.04 $0.30 $0.31
Adjusted EBITDA ($M)$22.2 $60.6 $68.0
Adjusted EBITDA Margin (%)29.6% (calc. from 22.2/75.0) 40.6% (calc. from 60.6/149.3) 40.8% (calc. from 68.0/166.8)

Notes: EBITDA margins are calculated from cited revenue and Adjusted EBITDA.

Results vs S&P Global Consensus (current and next quarter)

MetricQ3 2025 ConsensusQ3 2025 ActualDeltaQ4 2025 Consensus
Revenue ($M)$140.8*$166.8 +$26.0*$164.6*
Primary EPS ($)$0.244*$0.32 (Primary/Adj. Pro Forma) +$0.076*$0.293*

*Values retrieved from S&P Global.

Segment Breakdown

SegmentQ3 2024 Revenue ($M)Q2 2025 Revenue ($M)Q3 2025 Revenue ($M)Q3 2024 Adj. EBITDA ($M)Q2 2025 Adj. EBITDA ($M)Q3 2025 Adj. EBITDA ($M)
Solaris Power Solutions$4.7 $75.6 $104.9 $3.1 $45.7 $58.1
Solaris Logistics Solutions$70.3 $73.7 $61.9 $24.4 $22.7 $17.4
Corporate & Other (Adj. EBITDA)———-$5.3 -$7.8 -$7.6
Total Adjusted EBITDA———$22.2 $60.6 $68.0

Operating KPIs

KPIQ1 2025Q2 2025Q3 2025
Avg. MW Earning Revenue (Power)~390 ~600 ~760
Fully Utilized Systems (Logistics)—94 84

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Adjusted EBITDA ($M)Q4 2025$58–$63 $65–$70 Raised
Total Adjusted EBITDA ($M)Q1 2026—$70–$75 Introduced
Net Interest Expense ($M)Q4 2025—$5 Introduced
Net Interest Expense ($M)Q1 2026—$8 Introduced
D&A ($M)Q4 2025—$25–$28 Introduced
D&A ($M)Q1 2026—$28–$31 Introduced
Weighted Avg Total Shares (M)Q4 2025—88 Introduced
Weighted Avg Total Shares (M)Q1 2026—88 Introduced
Effective Tax Rate (%)Q4 2025—26% Introduced
Dividend ($/sh)Q4 2025—$0.12 (pay 12/18 to holders 12/8) Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/data center power demand & scalingJV upsized to ~900 MW, avg. contract tenor >5 yrs; power‑as‑a‑service economics and emissions profile emphasized .Second data center powered; avg. 760 MW on revenue; pipeline “enormous”; pro forma capacity goal to ~2.2 GW by early 2028 .Strengthening, scaling faster.
Supply chain & OEM slotsOEM lead times tightening; secured 330 MW 16.5MW turbines; frame units scarce .Additional ~500 MW order; delivery concentrated 2026–2027; tight OEM capacity; exploring multi‑source generation .Tight; proactive ordering and flexibility.
Balance‑of‑plant/vertical integrationSCR mobility, in‑house components, app “Solaris Pulse”; exploring deeper BOP integration .HVMVLV acquisition to bolster transformers/switchgear/engineering; integrated, “all‑of‑the‑above” solution differentiation .Expanding capabilities.
Financing & liquidity$155M 2030 converts; JV $550M facility term sheet .$748M 0.25% 2031 converts; repaid term loan; ~$45M interest/amort savings next 4 quarters .Lower cost, more flexibility.
Logistics macro & activityAnticipated H2 softness tied to oil & gas completions .Fully utilized systems down to 84 (-11% q/q); expect near‑term trough with slight Q4 improvement .Weak but stabilizing.
Regulatory backdropTX SB6 supportive; “bring your own power” narrative .Longer contract tenors as grid delays persist; hybrid on‑site + grid seen as optimal .Supportive; pushing longer tenors.

Management Commentary

  • “Solaris continues to demonstrate significant growth and execution in our Power Solutions segment as well as strong execution and free cash generation in our Logistics Solutions segment.” – Bill Zartler, Co‑CEO .
  • “We began powering a second data center site during the third quarter, showcasing…a swift and successful deployment.” – Bill Zartler .
  • “We…secured additional generation capacity…we now expect to have pro forma generation capacity of approximately 2,200 MW by early 2028…We raised significant capital in the form of…convertible notes to pay off our existing term loan.” – Prepared/Call remarks .
  • “HVMVLV…provider of specialty voltage distribution and regulation equipment and engineering services…strengthens our solutions offering by giving us exposure to new high growth end markets.” – Management .
  • “Over the next four quarters, we now expect to save approximately $45 million in the form of interest and amortization savings as compared to our prior capital structure.” – Kyle Ramachandran, CFO .

Q&A Highlights

  • Supply chain tightness and OEM slots: Management acknowledged extended lead times; secured capacity via relationships and is exploring multiple generation sources to meet timing and reliability needs .
  • Economics/mix: Q3 benefited from commissioning contributions; returns per MW remain in line with prior indications, with mix impacts from re‑rented assets near‑term .
  • Competitive differentiation: Balance‑of‑plant capabilities (transformers, switchgear, protection) and integration seen as the “mortar,” enabling multi‑source solutions beyond owning generation alone .
  • JV cash flow flexibility: Stateline JV debt serviced at JV level; board may distribute cash or reinvest to expand capacity depending on needs .
  • Fleet ramp and deliveries: 2026 growth from ~900 MW JV permanent power and ~400 MW deliveries placed in March; 2027 growth driven by latest order; full fleet stands up by 2028 .

Estimates Context

  • Q3 2025 beat: Revenue $166.8M vs $140.8M consensus (+$26.0M); Primary EPS $0.32 vs $0.244 consensus (+$0.076)*; management’s GAAP diluted EPS was $0.31 and Adjusted Pro Forma EPS $0.32 .
  • Q4 2025 setup: Consensus revenue $164.6M and Primary EPS $0.293*, while company raised Q4 Adjusted EBITDA guidance to $65–$70M and guided net interest/D&A/shares/tax for modeling .
  • Implications: The magnitude of the Q3 beat and higher Q4 EBITDA guide suggest upward revisions to near‑term EBITDA and potentially to revenue/EPS tracks, especially if Power Solutions MW sustain and Logistics stabilizes; however, mix (lower spot utilization/commissioning) may temper per‑MW profitability in Q4 .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Power Solutions is the engine: 760 MW avg. on revenue drove record revenue/EBITDA; segment growth offset Logistics softness and underpins raised guidance .
  • Clear line‑of‑sight to scaling: ~500 MW ordered lifts pro forma fleet to ~2.2 GW by early 2028; multi‑year tenure and second data center on‑line enhance visibility .
  • Balance‑of‑plant moat: HVMVLV adds transformers/switchgear/engineering, strengthening Solaris’ integrated “all‑of‑the‑above” value proposition for large, reliable microgrids .
  • De‑risked capital structure: $748M 0.25% converts retired the term loan and free ~$45M interest/Amort over the next four quarters, providing growth funding and flexibility .
  • Logistics near a trough: 84 fully utilized systems and segment EBITDA decline reflect macro softness, with management expecting slight Q4 improvement .
  • Guidance reset: Q4 2025 Adjusted EBITDA $65–$70M and Q1 2026 $70–$75M, with modeling guardrails (interest, D&A, tax, shares) now provided .
  • Watch for contract conversions: Management signals confidence new capacity will convert into long‑term contracts; new awards are a key stock catalyst alongside continued execution on fleet deliveries and BOP integration .
Citations:  
- Q3 2025 8‑K and Exhibit 99.1: **[1697500_0001697500-25-000037_sei-20251103x8k.htm:0]**–**[1697500_0001697500-25-000037_sei-20251103xex99d1.htm:11]**  
- Q3 2025 earnings call transcript: **[0001697500_2231295_0]**–**[0001697500_2231295_13]**  
- Q3 2025 earnings slides: **[0001697500_2228467:0]**–**[0001697500_2228467:11]**  
- Q2 2025 earnings call: **[0001697500_2295210_0]**–**[0001697500_2295210_14]**  
- Q1 2025 8‑K (preliminary metrics) and Q1 call: **[1697500_0001193125-25-107559_d939534d8k.htm:0]**–**[1697500_0001193125-25-107559_d939534dex101.htm:49]**, **[1697500_1979379_0]**–**[1697500_1979379_12]**  
- S&P Global consensus via GetEstimates (asterisked values).