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    SEI
    Earnings call· Jun 2026(Q2 FY26)

    Solaris Energy Infrastructure Q2 FY26 earnings call SEI

    Aug 6, 2026 Source

    Executive summary

    Solaris Energy Infrastructure, Inc. Q2 FY26 — Record Quarter Driven by Data Center Demand and Strategic Acquisitions

    Solaris Energy Infrastructure delivered a record second quarter, driven by strong demand for its distributed power solutions for data centers and strategic acquisitions enhancing its full-cycle power services. The company successfully transformed its capital structure, securing significant liquidity to support its growth plan. Management emphasized the increasing importance of its turnkey solutions amidst grid delays and the long-term value proposition of its expanded contract scope and vertical integration strategy.

    Highlights

    5

    • Generated record adjusted EBITDA of approximately $108 million, up 30% sequentially.

    • Power Solutions segment revenue increased 23% sequentially to approximately $158 million.

    • Secured $1.4 billion in liquidity, including $800 million in cash and a fully undrawn $650 million revolving credit facility.

    • Expanded scope of two existing data center contracts and one large energy customer contract, including a 660-megawatt plant conversion and a 640-megawatt generation expansion.

    • Successfully issued $1.3 billion of senior unsecured notes and secured new credit facility, achieving corporate credit ratings of BB- (S&P), Ba3 (Moody's), and BB (Fitch).

    Concerns

    2

    • Logistics segment revenue decreased 10% sequentially to $61 million due to lower last-mile transportation activity.

    • Grid interconnection delays continue to be widespread, with one customer facing a 7-8 year delay, necessitating contract extensions and capacity increases for Solaris's solutions.

    Guidance & targets

    4
    CategoryTargetConfidence
    Adjusted EBITDA
    $90 million to $105 million
    high materiality
    High
    Adjusted EBITDA
    $100 million to $120 million
    high materiality
    High
    Hatchbo contract term
    Up to 18 years
    medium materiality
    High
    Large energy customer contract term
    6 years
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Power Solutions
    Growth driven primarily by increased ancillary service revenue.
    Average capacity earning revenue: 950 megawattsSequential capacity earning revenue growth: 4%
    		$158 million—23%$96 million Adjusted EBITDA
    Logistics
    Revenue decrease due to lower last-mile transportation activity, but Adjusted EBITDA increased due to higher activity and a more favorable project mix. Consistently produces over $20 million per quarter of free cash flow.
    		$61 million—-10%$25 million Adjusted EBITDA

    Operational metrics

    16
    Adjusted EBITDA
    $108 million30% sequentially
    Q2 FY26

    Company-wide adjusted EBITDA.

    Adjusted EBITDA attributable to Solaris
    $111 million
    Q2 FY26

    Excluding the impact of noncontrolling interest in Stateline joint venture.

    Net income
    $25 million
    Q2 FY26

    GAAP net income.

    Adjusted pro forma net income
    $37 million
    Q2 FY26

    Adjusted pro forma net income.

    Adjusted pro forma EPS
    $0.39
    Q2 FY26

    Adjusted pro forma earnings per fully diluted share.

    Cash and equivalents
    $800 million
    Q2 FY26 end

    Cash balance at quarter end.

    Revolving credit facility
    $650 millionfully undrawn
    Q2 FY26 end

    New 5-year revolving credit facility, fully undrawn at quarter end.

    Total liquidity
    $1.4 billion
    Q2 FY26 end

    Combined cash and undrawn revolver capacity.

    Corporate credit rating
    BB-
    Q2 FY26

    Assigned corporate credit rating from S&P.

    Corporate credit rating
    Ba3
    Q2 FY26

    Assigned corporate credit rating from Moody's.

    Corporate credit rating
    BB
    Q2 FY26

    Assigned corporate credit rating from Fitch.

    Dividend per share
    $0.12
    Q3 FY26

    Board approved third quarter dividend, representing the 32nd consecutive dividend.

    Open capacity
    800 megawatts
    Current

    Approximately 800 megawatts of open capacity with attractive nearer-term delivery timelines, with line of sight to additional capacity through OEM channels and secondary market.

    GESA workforce
    600
    Current

    Workforce added through the GESA acquisition.

    Deployable Energy SMR criticality
    —
    Q2 FY26

    Deployable Energy, in which Solaris made an equity investment, achieved criticality under a Department of Energy program, validating its core design and marking a step towards commercial readiness.

    Turbine wear and tear
    —
    Current

    Management addressed concerns about turbine wear and tear in data centers, stating their turbines are in great shape and their designs manage difficult loads without accelerating life cycles, often by pairing with buffer solutions.

    Industry KPIs

    7
    MetricValueDetails
    Rpo backlog2.3 gigawattsGW
    FCF CAPEX leverage$20 million per quarterUSD
    M a integration progress—
    Aftermarket installed base—
    Orders bookings by segment2.3 gigawattsGW
    Segment adjusted EBITDA margin—
    Data center new energy revenue capacity950 megawattsMW

    Orderbook & backlog

    2
    Long-term contracted capacity2.3 gigawattsQ2 FY26

    Capacity currently under long-term contract, with a clear path to significant free cash flow.

    Open capacity800 megawattsQ2 FY26

    Open capacity with attractive nearer-term delivery timelines, with line of sight to additional capacity.

    Deals & partnerships

    5
    Global Energy Services Alliance (GESA)Acquisition of full-cycle power services provider, formed from Baseload Power and Pro-Per Energy Services.

    GESA supports utilities, IPPs, governments, and OEMs, servicing a wide range of generation technologies including large gas turbines. Brings in-house installation, commissioning, long-term O&M, repair, refurbishment, and 24/7 emergency response. Acquired in early July.

    Deployable EnergyEquity investment in an early-stage nuclear small modular reactor (SMR) company.

    Deployable Energy achieved criticality under a Department of Energy program, validating its core design. Solaris will work with Deployable to commercialize their technology, which is believed to complement existing power generation capabilities.

    HatchboAmendment to convert original power capacity agreement into a comprehensive capacity and operating agreement.Up to 18 years (10-year base, 8-year extension)

    Term extended from up to 15 years to up to 18 years. Civil construction commenced in July. Over 70% of required equipment is available.

    Third investment-grade global technology customerExpansion of contract scope for generation capacity.

    Contract executed in April. First deployment under this contract is on time, under construction with energization expected next month.

    Large energy customerExpansion and extension of existing contract due to grid interconnection delays.6 years

    Customer informed that grid interconnect time is now 7 to 8 years away, highlighting widespread delays.

    Capital programs

    2
    Hatchbo 660-megawatt power plantunderway
    Spent to date: More than 70% of equipment available
    Start: July 2026 (civil construction commenced)

    Benefit: 660 megawatts

    Amendment finalized to convert original power capacity agreement into a comprehensive capacity and operating agreement, including additional balance of plant and batteries, and full O&M services. Term extended from up to 15 years to up to 18 years. Civil construction commenced in July, with revenue earning expected to begin in January 2027.

    Third hyperscaler customer first locationunderway

    First deployment under this contract is on time, under construction with energization expected next month. This is for the third investment-grade global technology customer.

    Risks & headwinds

    4
    Grid interconnection delaysLong-term

    7 to 8 years for one large energy customer

    Mitigation: Solaris provides bring-your-own-power solutions and expanded contracts to address customer needs; company's flexible solutions allow it to go anywhere with gas access.

    Market bottlenecks (equipment, labor, permitting)Ongoing

    Labor market for experienced and skilled labor is exceptionally tight.

    Mitigation: Strategic acquisitions like GESA (adding 600 skilled personnel) enhance execution capabilities and derisk ability to deliver for customers. Internal training programs and critical mass from GESA address labor needs.

    NIMBYism (Not In My Backyard) for new power facilitiesOngoing

    Not quantified, but described as 'clearly real'.

    Mitigation: Focus on expanding existing accepted locations rather than starting new greenfield projects. Solaris's flexible solutions and ability to build projects anywhere help navigate local opposition.

    Turbine wear and tear from data center loadsLong-term operational

    Not quantified, but discussed as a market concern.

    Mitigation: Solaris has engineered and designed solutions, including pairing with buffer solutions (batteries/fuel cells), to manage difficult loads and prevent accelerated life cycles. Running on clean natural gas is less impactful.

    What to watch in Q3 FY26

    5

    Q3 Adjusted EBITDA guidance

    next quarter
    Current$108 million (Q2 actual)
    Target$90 million to $105 million

    Why it matters

    This is the company's updated short-term profitability outlook, incorporating the GESA acquisition and continued execution.

    We have increased our third quarter adjusted EBITDA guidance to $90 million to $105 million, reflecting the contribution of the GESA acquisition as well as our expectations for continued execution.

    Q&A highlights

    7

    How has Solaris's strategy evolved beyond turbines, considering GESA and SMRs, and what's the outlook for combined cycle plants or reciprocating engines?

    The strategy hasn't changed but is now showing up, focusing on turnkey solutions and broadening capabilities through acquisitions like GESA. Solaris remains technology-agnostic, evaluating smaller-scale steam generation and larger units to enhance existing 500MW-1GW plants. The company anticipates growing existing accepted locations rather than starting new greenfield sites due to NIMBYism.

    “I think the strategy is not -- the strategy is -- it's showing up now more than changing. I think we've always believed and understood that adding the balance of plant scope was something that we were looking at. The acquisition strategy to broaden our capabilities is really our view of the market needs and how do we provide those turnkey solutions to the customers.”

    asked by David Arcaro · answered by William Zartler

    3 min read8 chapters

    Detailed Narrative

    01

    Record-Setting Quarter and Strategic Execution

    Solaris achieved a record-setting second quarter, demonstrating significant progress on its growth path. The company is executing its strategy operationally, commercially, and strategically, consistently providing dedicated power to two data centers with high reliability. This performance has led to long-term contracts with three investment-grade technology companies, with two contracts expanded in the last six months and a third expansion with a large energy customer. Management believes current cash flow from contracts significantly exceeds the company's enterprise value.

    02

    GESA Acquisition and Vertical Integration

    The acquisition of Global Energy Services Alliance (GESA) in early July is the latest and largest example of Solaris's strategy to build a diversified, integrated power and infrastructure service company. GESA, formed from Baseload Power and Pro-Per Energy Services, extends Solaris's capabilities to full-cycle power services, including generation aftermarket, installation, commissioning, and long-term O&M. This acquisition adds over 600 skilled personnel, derisks execution by addressing labor shortages, and strengthens the ability to earn new business by providing turnkey solutions.

    03

    Deployable Energy Investment and SMR Technology

    Solaris made an equity investment in Deployable Energy, an early-stage nuclear small modular reactor (SMR) company. Deployable Energy recently achieved criticality under a Department of Energy program, a foundational milestone validating its core design and derisking the technology. Solaris plans to help commercialize this technology, believing it can complement existing power generation capabilities and offer an environmentally friendly solution to future power needs, potentially accelerating timelines with federal support.

    04

    Power Solutions Segment Performance

    The Power Solutions segment averaged approximately 950 megawatts of capacity earning revenue during the quarter, a 4% increase from Q1. Segment revenue grew 23% sequentially to approximately $158 million, and segment adjusted EBITDA increased 34% to approximately $96 million. This growth was primarily driven by increased ancillary service revenue, highlighting the value of Solaris's integrated offerings.

    05

    Logistics Segment Performance

    The Solaris Logistics segment continued to perform well, consistently producing over $20 million per quarter in free cash flow, which is being reinvested into the power and infrastructure services business. While segment revenue of $61 million was down 10% sequentially due to lower last-mile transportation activity, segment adjusted EBITDA increased 7% to $25 million, attributed to higher activity and a more favorable project mix. The company notes robust fundamentals for this business, with top-fill equipment effectively sold out.

    06

    Capital Structure Transformation and Liquidity

    Solaris successfully transformed its capital structure in Q2, issuing $1.3 billion of senior unsecured notes and securing a new $650 million five-year revolving credit facility. These financings resulted in corporate credit ratings of BB- from S&P, Ba3 from Moody's, and BB from Fitch. The company ended the quarter with over $800 million in cash and a fully undrawn revolver, providing approximately $1.4 billion in liquidity to support current projected growth.

    07

    Customer Contract Expansions

    Solaris finalized an amendment to its Hatchbo agreement, converting it into a comprehensive capacity and operating agreement for a 660-megawatt plant, extending the term to 18 years. A second contract expansion with a third investment-grade global technology customer increased scope from 640 megawatts to include incremental balance of plant and natural gas procurement. Additionally, a contract with a large energy customer was expanded from 60 megawatts to 80 megawatts and extended from 4 to 6 years due to grid interconnection delays.

    08

    Market Demand and Tailwinds

    Demand for islanded behind-the-meter power with grid connectivity remains exceptionally strong, with Solaris actively negotiating for multiple gigawatts of additional demand with hyperscalers and AI compute companies. Tailwinds include grid interconnection delays, focus on speed to compute, and regulatory emphasis on consumer prices. The company's flexible solutions allow it to operate effectively despite data center moratoriums in certain jurisdictions, leveraging local development support.

    AI-generated summary of the company’s earnings call. Not investment advice.