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

Cautionary Statement Regarding Forward-Looking Statements This statement highlights inherent risks and uncertainties in forward-looking statements about future business strategy and financial outcomes - The report includes forward-looking statements concerning business strategy, future profitability, capital expenditures, and market impacts, which involve inherent risks, uncertainties, and assumptions[9] - Key factors that could cause actual results to differ materially include domestic spending levels, access to capital markets (power generation, oil & natural gas), changes in tariffs and trade barriers, geopolitical risks (Russia-Ukraine, Israel-Hamas conflicts), inflationary risks, interest rate increases, supply chain constraints, and the success of the Stateline venture[10][12] PART I: FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with comprehensive notes for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Metric (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total Assets | $1,472,730 | $1,122,881 | $349,849 | 31.16% | | Total Liabilities | $692,407 | $456,152 | $236,255 | 51.79% | | Total Stockholders' Equity | $780,323 | $666,729 | $113,594 | 17.04% | - The significant increase in total assets is primarily driven by a substantial rise in equipment held for lease, net, from $339,932 thousand to $671,741 thousand, reflecting growth in the Solaris Power Solutions segment[17] - Total liabilities increased significantly due to higher long-term debt and the introduction of convertible notes, reflecting increased financing activities[17] Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 Metric (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Total Revenue | $149,328 | $73,886 | $75,442 | 102.11% | | Operating Income | $35,569 | $11,854 | $23,715 | 200.06% | | Net Income | $24,129 | $9,824 | $14,305 | 145.61% | | Net Income Attributable to Solaris Energy Infrastructure, Inc. | $11,955 | $6,208 | $5,747 | 92.58% | | Basic EPS | $0.30 | $0.20 | $0.10 | 50.00% | | Diluted EPS | $0.30 | $0.20 | $0.10 | 50.00% | Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :----------------------------- | :----------------------------- | :----- | :------- | | Total Revenue | $275,660 | $141,776 | $133,884 | 94.43% | | Operating Income | $57,624 | $21,810 | $35,814 | 164.21% | | Net Income | $37,097 | $17,124 | $19,973 | 116.64% | | Net Income Attributable to Solaris Energy Infrastructure, Inc. | $17,275 | $10,525 | $6,750 | 64.13% | | Basic EPS | $0.44 | $0.35 | $0.09 | 25.71% | | Diluted EPS | $0.44 | $0.35 | $0.09 | 25.71% | - Revenue growth was primarily driven by the newly established Solaris Power Solutions segment, which contributed significantly to total revenue in 2025, having no comparable revenue in 2024[19][181] Condensed Consolidated Statements of Changes in Stockholders' Equity This section outlines the changes in the company's stockholders' equity for the six months ended June 30, 2025 - Total stockholders' equity increased from $666,729 thousand at December 31, 2024, to $780,323 thousand at June 30, 2025, primarily due to capital contributions from non-controlling interest in Stateline ($86,023 thousand) and net income ($24,129 thousand for Q2 2025)[22] - The Company exchanged 2,128 thousand Solaris LLC units and Class B common stock for Class A common stock, increasing Class A common stock and additional paid-in capital while reducing non-controlling interest[22] Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | | :-------------------- | :----------------------------- | | Stock-based compensation | $5,368 | | Distributions to non-controlling interest unitholders | $(3,237) | | Dividends paid (Class A common stock) | $(4,868) | | Capital contribution from non-controlling interest in Stateline | $86,023 | | Net income | $24,129 | Condensed Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $49,903 | $35,751 | $14,152 | | Net cash used in investing activities | $(336,999) | $(3,640) | $(333,359) | | Net cash provided by (used in) financing activities | $266,271 | $(32,885) | $299,156 | | Net decrease in cash, cash equivalents and restricted cash | $(20,825) | $(774) | $(20,051) | - The significant increase in cash used in investing activities is primarily due to $329.5 million in capital expenditures, largely for the Solaris Power Solutions segment's growth[27][46][212] - Financing activities shifted from a net use of cash in 2024 to a substantial net provision of cash in 2025, driven by $227.0 million in debt financing and $86.0 million in capital contributions from non-controlling interest in Stateline[27][213] Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements 1. Business and Basis of Presentation This note describes the company's business operations and the accounting principles used in preparing the financial statements - 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, serving U.S. markets including energy, data centers, and other commercial/industrial sectors through its Solaris Power Solutions and Solaris Logistics Solutions segments[28] 2. Variable Interest Entities This note explains the company's involvement with variable interest entities, specifically the formation and consolidation of Stateline Power, LLC - On April 28, 2025, Solaris formed Stateline Power, LLC (Stateline) with CTC Property LLC (later assigned to MZX Tech LLC) to provide off-grid power to CTC's data center campus via a long-term equipment rental arrangement[31][32] - Solaris contributed **$8