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Solaris (SEI) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Energy· Feb 25, 2026

Source: earnings call transcript

Executive summary

Solaris Q4 FY25 — Power Solutions Drives Record Growth and Secures Major New Data Center Contract

Solaris delivered a strong Q4 and full-year 2025, driven by the rapid expansion of its Power Solutions segment, which now accounts for approximately 70% of earnings. The company secured a significant 10-year contract for over 500 megawatts with a major technology firm, validating its behind-the-meter strategy. With regulatory tailwinds and robust demand, Solaris is actively pursuing additional capacity to meet accelerating customer needs, while its Logistics segment continues to generate strong free cash flow.

Highlights

5

  • Full-year 2025 revenue nearly doubled year-over-year to $622 million.

  • Full-year 2025 adjusted EBITDA more than doubled to $244 million.

  • Secured a new 10-year agreement (with 5-year extension option) to provide over 500 megawatts of power generation to an investment-grade global technology company, starting January 1, 2027.

  • Logistics Solutions segment contributed over $80 million of free cash flow in 2025.

  • Q1 2026 adjusted EBITDA guidance increased to $72 million to $77 million, up from prior guidance of $70 million to $75 million.

Concerns

3

  • Q4 Power Solutions segment adjusted EBITDA decreased modestly from Q3 due to a less favorable project mix and timing impacts on costs.

  • Q4 Power Solutions segment experienced lower margin mix due to increased selective use of third-party power generation capacity.

  • The company has more demand than current capacity and is actively exploring ways to access new capacity.

Guidance & targets

CategoryTargetConfidence
Total Adjusted EBITDA
$72 million to $77 million
high materiality
High
Total Adjusted EBITDA
$76 million to $84 million
high materiality
High
Pro Forma Total Company Earnings
over $600 million
high materiality
High
Logistics Segment Adjusted EBITDA
relatively flat
medium materiality
Medium
Logistics Segment Adjusted EBITDA
relatively flat
medium materiality
Medium
Power Segment Adjusted EBITDA
increase by more than 20%
medium materiality
High
Colossus 2 Power Deployment
full 900 megawatts
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Power Solutions
Q4 impacted by units rotating off utility project for refurbishment and redeployment, and increased use of third-party capacity for second data center site, contributing to a lower margin mix.
Revenue-generating capacity: 780 megawatts (Q4 2025, relatively flat QoQ)
modest decline——$53 million
Logistics Solutions
Benefited from increased completions activity and continued adoption of top-fill solution. Expected to remain relatively flat for Q1 and Q2 2026.
Fully utilized systems: 93 (Q4 2025 average, +11% from Q3)
———$23 million

SEI operating KPIs by quarter

SEI operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Dec 2025 Q4 FY25 Mar 2026 Q1 FY26Change vs prior quarter
Average fully utilized systems Logistics Solutions
93 In our Logistics segment, we averaged 93 fully utilized systems, an increase of 11% from the third quarter. Source: earnings call transcript
104 In Logistics, we averaged 104 fully utilized systems and segment adjusted EBITDA was approximately $23 million, a 2% increase over the fourth quarter of 2025. Source: earnings call transcript
+11.8%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

New long-term power agreement over 500 megawatts February 2026

new contract

10-year term with 5-year extension option, begins January 1, 2027, with phased energization in Q1 2027.

Upsized long-term power agreement 500 to 900 megawatts 2025

upsized

15-year joint venture and upsized long-term power agreement with initial major data center customer.

Deals & partnerships

initial major data center customer Expanded partnership and upsized long-term power agreement 500 to 900 megawatts 15-year

Finalized a 15-year joint venture and upsized the associated long-term power agreement for approximately 500 to 900 megawatts.

HVMVLV Acquisition of specialty provider of voltage distribution and control equipment

acquired a specialty provider of voltage distribution and control equipment that has now been integrated into Solaris Power Solutions.

leading investment-grade, global technology company Long-term power generation agreement over 500 megawatts 10-year term with a 5-year extension option

The initial 10-year term begins January 1, 2027, with energization targeted to be phased in, in the beginning of the Q1 of 2027.

an SCR manufacturer Small inorganic investment in an SCR manufacturer

Additionally, we recently made a small inorganic investment in an SCR manufacturer, bolstering our ability to further integrate these technologies.

Capital programs

Colossus 2 Data Center Power Deployment underway

Benefit:900 megawatts

We feel very good about the Colossus 2 project with respect to the total 900 megawatts that will be deployed there... still on track for Q1 of next year to be at the full 900 megawatts at Colossus 2.

Risks & headwinds

Less favorable project mix and related timing impacts on costs in Power Solutions segment Q4 2025

modest decline in Power Solutions Q4 EBITDA

Mitigation:owned generation units rotated off a utility resiliency project and into planned refurbishment before being redeployed under a long-term contract in the first quarter of 2026.

Lower margin mix due to increased use of third-party power generation capacity Q4 2025

contributed to a lower margin mix in Power Solutions

Mitigation:selective use of third-party power generation capacity as activity continued to ramp at our second data center site

Demand exceeding current capacity for power solutions ongoing

more demand than we have capacity

Mitigation:actively pursuing new capacity additions to support incremental opportunities.

OEM delivery delays for equipment near-term

timing of equipment getting deployed, most of that is out of our control. That's obviously subject to the OEM.

Mitigation:We have had these conversations warm for quite some time, and those dialogues are very healthy. ability to put more power out there on a temporary basis to allow the customer to ramp their demand potentially ahead of when the permanent power comes into play.

Winter storm impact on Logistics segment profitability Q1 2026

some downtime during the storm

Mitigation:additional growth in the business that's offsetting that... we are growing maybe faster than the current pressure pumping market

What to watch in Q1 FY26

Additional long-term power contracts

near future
Current active negotiations
Target Announcement of new signed contracts

Why it matters

Securing additional contracts is crucial for continued growth and validates the company's ability to monetize its capacity and meet high demand.

We're in advanced negotiations to contract our remaining open capacity and are actively pursuing new capacity additions to support incremental opportunities. Simply put, we believe we have more demand than we have capacity and are actively exploring innovative ways to access new capacity to ensure we can meet the growing needs of all our existing and potential new partners.

Find out whether SEI delivers this. Inve re-checks your case every morning.

Q&A highlights

Where do negotiations stand with additional customers to allocate remaining capacity, and what is the potential timing?

Management confirmed active negotiations with multiple customers for remaining capacity, with 'paper flying back and forth.' They expect 'good news here in the near future' and reiterated their policy of announcing signed and completed contracts.

“these are active negotiations. So we expect to have good news here in the near future.”

asked by David Arcaro · answered by Amanda Brock

2 min read 7 chapters

Detailed narrative

Diversified Growth Strategy

Solaris successfully executed its strategy in 2025, nearly doubling full-year revenue to $622 million and adjusted EBITDA to $244 million. The company has diversified its services and solutions, expanding its customer base across data centers, energy infrastructure, and industrial markets, positioning itself for accelerated growth in 2026 and 2027.

Power Solutions as Growth Engine

The Power Solutions segment has emerged as the primary growth driver, now contributing approximately 70% of earnings and projected to reach 90%. Solaris is capitalizing on rapid demand for data center power by providing reliable, integrated "molecule to electron" solutions, including gas sourcing, generation, distribution, storage, and delivery.

Strategic Partnerships and Acquisitions

In 2025, Solaris expanded its partnership with a major data center customer, finalizing a 15-year joint venture and upsizing a long-term power agreement for 500-900 megawatts. The acquisition of HVMVLV deepened capabilities in voltage distribution and control equipment, enabling integrated solutions for multiple data centers and industrial sites.

New Long-Term Contract

In early February, Solaris announced a significant 10-year agreement (with a 5-year extension option) to provide over 500 megawatts of power generation to an investment-grade global technology company. This contract, starting January 1, 2027, validates Solaris' strategy of securing generation capacity in advance and positions the company for further capital deployment and enhanced returns by expanding scope to include balance-of-plant equipment.

Regulatory Tailwinds and Market Demand

Regulatory changes, such as the EPA's subpart KKKKa amendments, support modular and mobile turbine operations for up to 24 months, mitigating grid connection delays. ERCOT's batching of large-load studies also highlights grid backlog, further favoring Solaris' rapid deployment behind-the-meter solutions. The four largest global technology companies are projected to increase data center capex by 70% in 2026 to over $600 billion, underscoring the immense market opportunity.

Logistics Solutions Performance

The Logistics Solutions segment performed well, contributing over $80 million in free cash flow in 2025. Fourth-quarter activity increased, driven by high utilization of top-fill systems (mid-90s%), with momentum expected to continue through H1 2026, generating cash to fund broader growth initiatives.

Financial Strength and Capacity Expansion

Solaris strengthened its balance sheet in 2025 through convertible bond issuances and JV financing, achieving significant interest cost savings and financial flexibility. The company is fully funded for its expected deliveries to reach 2,200 megawatts of pro forma generation capacity and is actively pursuing new capacity additions to meet demand that currently exceeds supply.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.