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    SEI
    Earnings call· Dec 2025(Q4 FY25)

    Solaris Energy Infrastructure Q4 FY25 earnings call SEI

    Feb 25, 2026 Source

    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

    7
    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

    2
    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

    Operational metrics

    9
    Revenue
    $622 millionnearly doubled year-over-year
    FY25

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

    Adjusted EBITDA
    $244 millionmore than doubled
    FY25

    adjusted EBITDA of $244 million more than doubled.

    Power Solutions earnings contribution
    70%heading to 90% contribution
    current

    Power now accounts for roughly 70% of our earnings and is heading to 90% contribution

    Top-fill system utilization rate
    mid-90%nearing 100% in the first quarter
    Q4 2025

    Our top-fill system utilization rate was in the mid-90% in the fourth quarter and now nearing 100% in the first quarter.

    Data center infrastructure and compute capex
    $600 billionroughly a 70% increase from 2025 levels and nearly double the spending seen in 2024
    2026

    the 4 largest global technology companies have recently guided to combined capital expenditures exceeding $600 billion in 2026, focused primarily on data center infrastructure and compute.

    Pro forma total company earnings
    over $600 million
    annual

    we continue to expect pro forma total company earnings of over $600 million, before considering any additional project scope or growth with our existing customers or new opportunities.

    Power Solutions segment adjusted EBITDA
    >$63.6 millionincrease by more than 20%
    Q1 2026

    We expect Power segment adjusted EBITDA for the first quarter to increase by more than 20%, as both owned and third-party leased capacity generating revenue should increase.

    ERCOT queue backlog
    230 gigawatt
    current

    ERCOT whose recent push to batch large-load studies for requests over 75 megawatts is a necessary step forward to clearing the estimated 230 gigawatt queue backlog fueled by data center demand.

    Temporary application duration for modular/mobile turbines
    24 monthsfrom 12 to 24
    current

    These changes provide clarification and support for operating modular and mobile turbines in temporary applications for up to 24 months, bridging the gap before permanent behind-the-meter air permits or grid connections are secured.

    Industry KPIs

    3
    MetricValueDetails
    FCF CAPEX leverageover $80 millionUSD
    M a integration progress—
    Data center new energy revenue capacityover 500 megawattsMW

    Orderbook & backlog

    2
    New long-term power agreementover 500 megawattsFebruary 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 agreement500 to 900 megawatts2025

    upsized

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

    Deals & partnerships

    4
    initial major data center customerExpanded partnership and upsized long-term power agreement500 to 900 megawatts15-year

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

    HVMVLVAcquisition 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 companyLong-term power generation agreementover 500 megawatts10-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 manufacturerSmall 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

    1
    Colossus 2 Data Center Power Deploymentunderway

    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

    5
    Less favorable project mix and related timing impacts on costs in Power Solutions segmentQ4 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 capacityQ4 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 solutionsongoing

    more demand than we have capacity

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

    OEM delivery delays for equipmentnear-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 profitabilityQ1 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

    5

    Additional long-term power contracts

    near future
    Currentactive negotiations
    TargetAnnouncement 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.

    Q&A highlights

    6

    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 read7 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    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.

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