Solaris Energy Infrastructure (SEI) Q3 2024 earnings summary

Executive summary

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

• 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.

• Integration of the new power business is progressing rapidly, with significant commercial opportunities and new contracts totaling 450 MW signed.

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

• Returned $5 million to shareholders via dividends in Q3; approved a $0.12/share Q4 dividend, marking the 25th consecutive quarterly payout.

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 ($0.08 per share).

• Net loss attributable to shareholders was $1.2–$2 million, or $(0.04) per 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.

• Operating cash flow for nine months ended September 30, 2024 was $46.3 million; cash and equivalents totaled $117 million, with $98 million restricted for growth capex.

• Returned over $190 million to shareholders since 2018 through dividends and share repurchases.

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 ~535 MW by Q3 2025, with over 80% of expected capacity already committed under multi-year contracts.

• Q4 2024 capital expenditures forecast at $130 million, trending down to $15 million by Q3 2025; $295 million in capex planned over the next four quarters.

• Anticipate free cash flow to inflect positively in the second half of 2025 as growth capital plans complete.

• Expects Q4 2024 logistics system count to decline ~10% due to seasonality.