SEI Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: Approximately $219 million, up 12% sequentially.

Adjusted EBITDA: Approximately $108 million, a 30% sequential increase; adjusted EBITDA attributable to Solaris was approximately $111 million.

Net Income: $25 million; adjusted pro forma net income was $37 million, equating to $0.39 per fully diluted share.

Power Solutions Segment: Revenue of approximately $158 million, up 23% sequentially, with adjusted EBITDA of approximately $96 million, increasing 34%.

Logistics Segment: Revenue of $61 million, down 10% due to lower last-mile transportation activity; adjusted EBITDA increased 7% to $25 million.

Liquidity: Over $800 million in cash, with a fully undrawn $650 million revolving credit facility.

2Strategic Updates and Business Highlights

Record Quarter: The company reported a record-setting quarter, emphasizing growth in operational, commercial, and strategic areas.

Long-term Contracts: Secured contracts with three leading investment-grade technology companies, including expansions of existing contracts.

Acquisitions: Recently acquired Global Energy Services Alliance (GESA), enhancing capabilities in full-cycle power services and aftermarket support.

Investment in Nuclear Technology: Made an equity investment in Deployable Energy, a small modular reactor company that achieved criticality, marking a significant milestone toward commercial readiness.

Market Demand: Strong demand for behind-the-meter power solutions, with ongoing negotiations for additional gigawatts of capacity with hyperscalers and AI compute companies.

3Forward Guidance and Outlook

Adjusted EBITDA Guidance: Increased for Q3 to $90 million to $105 million, and initial guidance for Q4 set at $100 million to $120 million.

Capacity Expansion: Approximately 800 megawatts of open capacity available for near-term delivery, with ongoing discussions for long-term contracts.

Dividend Program: Continued commitment to dividends, with a third-quarter dividend of $0.12 per share approved.

4Bad News, Challenges, or Points of Concern

Logistics Segment Decline: Revenue in the logistics segment decreased by 10%, indicating potential challenges in that area.

Grid Interconnection Delays: Significant delays in grid interconnections (up to 7-8 years) are impacting project timelines and customer commitments.

Market Competition: The competitive landscape remains challenging, with ongoing pressures from other energy solutions providers.

Supply Chain Risks: Potential risks associated with supply chain disruptions and the integration of new acquisitions.

5Notable Q&A Insights

Growth Potential: Management highlighted significant upside potential from GESA's platform and ongoing market opportunities, particularly in the aftermarket services sector.

Technology Agnosticism: The company remains open to various power generation technologies, including combined cycle plants and reciprocating engines, to enhance their offerings.

Customer Engagement: Customers are increasingly interested in turnkey solutions, leading to expanded contract scopes and longer terms.

Labor Market Challenges: The integration of GESA's skilled workforce is expected to alleviate some labor shortages and enhance execution capabilities.

Future Strategy: The company anticipates a material evolution by 2030, driven by ongoing contract expansions, strategic acquisitions, and a focus on enhancing operational efficiencies. Overall, Solaris demonstrated strong financial performance and strategic growth initiatives, while also facing challenges related to logistics and market competition. The outlook remains positive, with significant opportunities for expansion and innovation in the power solutions sector.