Solaris Oilfield Infrastructure(SOI) - 2025 Q2 - Quarterly Results

Company Overview & Q2 2025 Highlights Solaris Energy Infrastructure reported strong Q2 2025 results, driven by Power Solutions growth, with the CEO expressing satisfaction Second Quarter 2025 Highlights Solaris Energy Infrastructure announced strong Q2 2025 financial and operational results, driven by Power Solutions growth and substantial free cash flow from Logistics Solutions - Solaris delivered another quarter of strong results, executing its strategy of growing the Power Solutions segment while generating substantial free cash flow in the Logistics Solutions segment[3] - Key activities included expanding the power fleet, meaningfully accelerating power delivery on the initial data center project, welcoming new customers, and installing critical emissions control equipment for multi-year contracts[4] CEO Commentary CEO Bill Zartler expressed satisfaction with the company's Q2 2025 performance across financial, operational, and commercial aspects, highlighting strong prospects for continued growth in the Power Solutions segment - CEO Bill Zartler commented on strong Q2 results, emphasizing growth in Power Solutions and free cash flow in Logistics Solutions[3] - Expressed satisfaction with financial, operational, and commercial performance, noting strong prospects for continued growth in the Power Solutions segment[4] About Solaris Energy Infrastructure, Inc. Solaris Energy Infrastructure, Inc. (NYSE:SEI) provides mobile and scalable equipment-based solutions for distributed power generation and raw material management in oil and natural gas wells, serving diverse U.S. end markets including energy, data centers, and other commercial and industrial sectors - Solaris Energy Infrastructure, Inc. provides mobile and scalable equipment-based solutions for distributed power generation and raw material management in oil and natural gas wells[13] - The company serves multiple U.S. end markets, including energy, data centers, and other commercial and industrial sectors[13] Segment Performance The Power Solutions segment showed significant growth in Q2 2025, while Logistics Solutions experienced a decline due to lower activity and commodity prices Solaris Power Solutions The Power Solutions segment demonstrated strong sequential growth in Q2 2025, with revenue increasing 53% to $76 million and Segment Adjusted EBITDA rising 43% to $46 million, driven by increased capacity and accelerated project delivery. The segment also increased its Q3 2025 Adjusted EBITDA guidance and approved a $0.12 per share dividend Solaris Power Solutions Q2 2025 Performance (Sequential) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----------------------------------- | :-------- | :-------- | :----------- | | Revenue | $76 million | $49.4 million | +53% | | Segment Adjusted EBITDA | $46 million | $31.9 million | +43% | | Average MW of capacity earning revenue | ~600 MW | ~390 MW | +53.8% | - Increased third quarter 2025 Adjusted EBITDA guidance to $58-63 million from previous $55-60 million, and established fourth quarter 2025 Adjusted EBITDA guidance in-line with third quarter at $58-63 million[6] - Closed $155 million of 4.75% senior convertible notes and the Stateline JV closed a $550 million senior secured loan facility, with an initial draw of $72 million[6] - Approved third quarter 2025 dividend of $0.12 per share, representing Solaris' 28th consecutive dividend[6] Solaris Logistics Solutions The Logistics Solutions segment experienced a sequential decline in Q2 2025, with revenue decreasing 4% to $74 million and Segment Adjusted EBITDA falling 13% to $23 million, primarily due to a 4% reduction in fully utilized systems amidst lower commodity prices Solaris Logistics Solutions Q2 2025 Performance (Sequential) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----------------------------------- | :-------- | :-------- | :----------- | | Revenue | $74 million | $77 million | -4% | | Segment Adjusted EBITDA | $23 million | $26 million | -13% | | Fully utilized systems | 94 | 98 | -4% | - The decline in activity and profitability was primarily due to the decrease in fully-utilized system count and higher fixed cost absorption amidst lower commodity prices[9] Consolidated Financial Statements Solaris reported strong year-over-year growth in Q2 2025 consolidated revenue and net income, with detailed segment performance and cash/debt figures Consolidated Statements of Operations Solaris Energy Infrastructure reported significant year-over-year growth in total revenue, operating income, and net income for both the second quarter and the first six months of 2025, reflecting strong overall financial performance Consolidated Statements of Operations (Three Months Ended June 30, 2025 vs 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Total revenue | $149,328 | $73,886 | +102.1% | | Operating income | $35,569 | $11,854 | +200.1% | | Net income | $24,129 | $9,824 | +145.6% | | Net income attributable to Solaris Energy Infrastructure, Inc. | $11,955 | $6,208 | +92.6% | | Earnings per share of Class A common stock - diluted | $0.30 | $0.20 | +50.0% | Consolidated Statements of Operations (Six Months Ended June 30, 2025 vs 2024) | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------- | :--------------------- | :----------- | | Total revenue | $275,660 | $141,776 | +94.4% | | Operating income | $57,624 | $21,810 | +164.2% | | Net income | $37,097 | $17,124 | +116.6% | | Net income attributable to Solaris Energy Infrastructure, Inc. | $17,275 | $10,525 | +64.1% | | Earnings per share of Class A common stock - diluted | $0.44 | $0.35 | +25.7% | Segment Reporting Solaris' segment reporting details the financial performance of its Power Solutions and Logistics Solutions segments. In Q2 2025, Power Solutions generated $75.6 million in revenue and $45.7 million in Adjusted EBITDA, while Logistics Solutions contributed $73.7 million in revenue and $22.7 million in Adjusted EBITDA. Capital expenditures were significantly higher for Power Solutions, reflecting its growth strategy - Solaris evaluates the performance of its two distinct business segments, Power Solutions and Logistics Solutions, based on Adjusted EBITDA[19] Segment Financial Information (Three Months Ended June 30, 2025) | Metric | Solaris Power Solutions (in thousands) | Solaris Logistics Solutions (in thousands) | Corporate and other (in thousands) | Total (in thousands) | | :-------------------- | :------------------------------------- | :--------------------------------------- | :--------------------------------- | :------------------- | | Revenue | $75,625 | $73,703 | - | $149,328 | | Adjusted EBITDA | $45,657 | $22,714 | $(7,764) | $60,607 | | Capital expenditures | $183,510 | $1,491 | $123 | $185,124 | Segment Financial Information (Six Months Ended June 30, 2025) | Metric | Solaris Power Solutions (in thousands) | Solaris Logistics Solutions (in thousands) | Corporate and other (in thousands) | Total (in thousands) | | :-------------------- | :------------------------------------- | :--------------------------------------- | :--------------------------------- | :------------------- | | Revenue | $125,000 | $150,660 | - | $275,660 | | Adjusted EBITDA | $77,562 | $48,688 | $(18,762) | $107,488 | | Capital expenditures | $325,588 | $3,693 | $173 | $329,454 | Cash and Debt Attributable to Solaris As of June 30, 2025, Solaris reported consolidated cash of $139 million and consolidated total debt of $535 million. After accounting for the non-controlling interest in Stateline JV, cash attributable to Solaris was $119 million and debt attributable to Solaris was $500 million Cash and Debt Attributable to Solaris (June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------------- | :----------------------------- | :------------------------------- | | Consolidated cash | $139,042 | $159,867 | | Cash and cash equivalents and restricted cash attributable to Solaris | $118,711 | $159,867 | | Consolidated debt and convertible notes | $535,499 | $315,730 | | Debt attributable to Solaris | $499,978 | $315,730 | Non-GAAP Financial Measures & Reconciliations Solaris uses non-GAAP measures like Adjusted EBITDA and Adjusted Pro Forma Net Income to provide insights into core operating results and facilitate period-over-period comparisons About Non-GAAP Measures Solaris utilizes non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted pro forma net income, and Adjusted pro forma earnings per fully diluted share to provide investors with insights into core operating results and facilitate period-over-period comparisons, emphasizing their supplemental nature to GAAP measures - Management believes non-GAAP financial measures (EBITDA, Adjusted EBITDA, Adjusted pro forma net income, Adjusted pro forma EPS) provide useful information by reflecting core operating results and facilitating comparisons across periods[12] - These non-GAAP measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP[12] EBITDA and Adjusted EBITDA Reconciliation Solaris defines EBITDA as net income adjusted for depreciation, interest, and income tax expense, and Adjusted EBITDA further includes stock-based compensation and certain non-cash or non-recurring items. For Q2 2025, Total Adjusted EBITDA was $60.6 million, and Adjusted EBITDA attributable to Solaris was $62.2 million - EBITDA is defined as net income plus depreciation and amortization expense, interest expense, and income tax expense[26] - Adjusted EBITDA is defined as EBITDA plus stock-based compensation expense and certain non-cash items and extraordinary, unusual or non-recurring gains, losses or expenses[26] EBITDA and Adjusted EBITDA (Three Months Ended June 30, 2025 vs 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | | Net income | $24,129 | $9,824 | | EBITDA | $53,946 | $21,419 | | Total Adjusted EBITDA | $60,607 | $20,797 | | Adjusted EBITDA attributable to Solaris | $62,237 | $20,797 | Adjusted Pro Forma Net Income and EPS Reconciliation Adjusted pro forma net income assumes the full exchange of all outstanding LLC interests for Class A common stock, adjusted for non-recurring items, to facilitate comparisons. For Q2 2025, Adjusted pro forma net income was $24.6 million, resulting in Adjusted pro forma earnings per fully diluted share of $0.34 - Adjusted pro forma net income represents net income attributable to Solaris assuming the full exchange of all outstanding membership interests in Solaris Energy Infrastructure, LLC for shares of Class A common stock, adjusted for certain non-recurring items[32] - Adjusted pro forma earnings per fully diluted share is calculated by dividing adjusted pro forma net income by the weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding units of Solaris LLC[32] Adjusted Pro Forma Net Income and EPS (Three Months Ended June 30, 2025 vs 2024) | Metric | Q2 2025 (in thousands, except per share) | Q2 2024 (in thousands, except per share) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income attributable to Solaris | $11,955 | $6,208 | | Adjusted pro forma net income | $24,634 | $5,965 | | Adjusted pro forma earnings per share - diluted | $0.34 | $0.13 | Additional Information This section provides details for the Q2 2025 conference call, outlines forward-looking statement disclaimers, and lists investor relations contacts Conference Call Details Solaris will host a conference call on Thursday, July 24, 2025, at 8:00 a.m. Central Time to discuss its second quarter 2025 results, with dial-in and live webcast options available, and an audio replay accessible for approximately seven days - A conference call to discuss second quarter 2025 results is scheduled for Thursday, July 24, 2025, at 8:00 a.m. Central Time[10] - Participants can join via dial-in or live webcast, with an audio replay available for approximately seven days after the call[10][11] Forward-Looking Statements This press release contains forward-looking statements regarding business strategy, future profitability, and industry conditions, which are inherently subject to uncertainties and risks detailed in SEC filings, and actual results may differ materially from expectations. The company disclaims any obligation to update these statements unless legally required - The press release contains forward-looking statements regarding business strategy, future profitability, industry, and economic conditions, subject to inherent uncertainties, risks, and changes in circumstances[14] - Actual results may differ materially from those contemplated by forward-looking statements, as detailed in the company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC[14] - The company undertakes no obligation to publicly update or revise any forward-looking statement, except as may be required by law[14] Contacts Contact information for investor relations is provided for inquiries - Yvonne Fletcher, Senior Vice President, Finance and Investor Relations, is the contact for inquiries[36]