Solaris Energy Infrastructure (SEI) Q3 2024 earnings summary

Executive summary

• Completed the transformative acquisition of Mobile Energy Rentals (MER) on September 11, 2024, expanding into distributed power, rebranding as Solaris Energy Infrastructure, and diversifying end markets.

• Now operates two segments: Solaris Logistics Solutions (oil/gas logistics) and Solaris Power Solutions (mobile power generation), with strong service quality and performance across both.

• Returned $5 million to shareholders in Q3 2024 via dividends and announced a $0.12 per share Q4 dividend, marking the 25th consecutive payout.

• Entered a $325 million senior secured term loan and established a $75 million revolving credit facility to fund the MER acquisition and future capital expenditures.

• Signed new power service agreements totaling 450 MW, representing over 80% of expected 2025 capacity.

Financial highlights

• Q3 2024 revenue was $75 million, up 8% year-over-year, with Adjusted EBITDA of $22 million and Adjusted Pro Forma net income of $4 million, or $0.08 per share.

• Net loss attributable to shareholders was $1.2 million to $2 million, or $(0.04) per diluted share, compared to net income in prior periods.

• Free cash flow was negative $47 million in Q3, reflecting $58 million in capital expenditures, mainly for power equipment.

• Logistics Solutions segment generated $70 million in revenue and $24 million in segment-adjusted EBITDA; Power Solutions contributed $4.7–$5 million in revenue and $3 million in segment-adjusted EBITDA for the post-acquisition period.

• Cash and equivalents totaled $117 million, with $98 million restricted for growth capex; net debt at quarter-end was $315.3–$325 million.

Outlook and guidance

• Q4 2024 Adjusted EBITDA expected between $33–$36 million; Q1 2025 Adjusted EBITDA projected to exceed $40 million.

• Power Solutions fleet to grow to approximately 535 MW by Q3 2025, with over 80% of expected capacity already committed under multi-year contracts.

• Expects capital expenditures of $130 million in Q4 2024 and $295 million over the next four quarters, mostly for Power Solutions growth.

• Free cash flow expected to inflect positive in the second half of 2025 as growth capital plans complete.

• Q4 2024 logistics system count expected to decline about 10% due to seasonality.