Solaris Energy Infrastructure (SEI) Q3 2026 earnings review
Solaris locks in a 15-year power deal, while debt climbs
Solaris Energy Infrastructure, which builds and rents mobile gas power plants for data centers and oilfields, grew rapidly through engineering services and equipment sales while its active rental fleet temporarily shrank. Third-quarter revenue more than doubled from a year ago to $341 million and Adjusted EBITDA doubled to $136 million, far above what the company's own plan pointed to. Co-chief executives Bill Zartler and Amanda Brock signed a 15-year, 900-megawatt power deal and raised their targets, expecting 2027 Adjusted EBITDA to more than double 2026.
| Revenue | $341.1M +104% from a year ago (+55% from last quarter) |
|---|---|
| Adjusted EBITDA | $136.1M +100% from a year ago (beat $90–105M plan) |
| Long-term contracted power | 3.2 GW up from 2.3 GW after new 900 MW deal |
| Near-term Adjusted EBITDA outlook | Raised Q4 to $165–185M; Q1 2027 to $220–260M |
⚖️ Verdict: 🟢 Bullish
The story got better because the 900-megawatt deal locks in nearly all of Solaris's planned turbine fleet through 2029, removing the risk that it was ordering equipment without buyers. One caution: average active megawatts fell 14% from last quarter as temporary rented turbines rolled off, while capital spending hit $547 million and pushed net debt to $2.1 billion by our math.
The question now is whether the third-quarter profit jump came from recurring maintenance contracts or one-off equipment sales and setup work from the July GESA acquisition. If the work is recurring, earnings will compound as new turbines start up; if it was one-time, rental capacity must ramp fast to meet the fourth-quarter target. Fourth-quarter leasing revenue and active megawatts will tell.
🐂 Bull Case
New 900 MW Deal Fills Open Capacity
Solaris builds and operates mobile gas turbines that supply electricity directly to data centers and industrial sites. Because buyers face multi-year waits to connect to the public power grid, they are locking in long-term private power. Still, Solaris carried about 800 megawatts (MW) of uncontracted turbines last quarter against non-cancellable factory orders. That raised the risk that the company was ordering equipment without guaranteed buyers.
"Last week, we signed our largest and longest power contract to date, a 15-year, 900 MW contract with a leading industrial and technology investment-grade customer," co-chief executives Bill Zartler and Amanda Brock said. The buyer can extend the deal for another 15 years. Solaris also bought another 200 MW of turbines for 2027 deployment "ahead of long OEM queues", referring to backlogs at original equipment manufacturers.
The 900 MW contract shrinks that open-capacity risk because it lifts long-term contracted power from 2.3 gigawatts (GW) to 3.2 GW. Even after adding the newly purchased 200 MW to the fleet plan, total capacity reaches 3.5 GW by 2029, leaving only about 300 MW uncontracted by our math. What to watch: the start of deployments under this 900 MW agreement in the first half of 2027. On-time delivery will show whether Solaris can build out the site on schedule.
Services And Equipment Sales Carry Power Growth
Solaris is expanding beyond turbine rentals into a full-service power contractor that sells equipment, builds sites, and runs customer-owned power plants. In July, it bought Global Energy Services Alliance (GESA), an engineering and maintenance provider, and this quarter it signed a new seven-year deal to manage 400 MW of power equipment owned by an existing customer.
- Service revenue: $199.2 million, up 78% from last quarter and up 137% from a year ago
- Product sales: $51.3 million, up from $2.0 million last quarter
- Power Solutions revenue per average MW: $347 thousand by our math, up from $167 thousand last quarter
This shift matters because installation, maintenance, and equipment sales lifted Power Solutions Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and one-offs) by 32% from last quarter to $127.0 million, "due primarily to increased services revenue". What to watch: the revenue split between multi-year maintenance contracts and one-time equipment sales in the quarterly filing. A higher recurring share would show that this third-quarter jump will repeat.
Earnings Outlook Steps Up Through Next Year
Solaris has beaten the top end of its own quarterly Adjusted EBITDA target in five of the last six quarters, by an average of 17% against the middle of the range by our math. Earlier targets for full-deployment earnings also had no calendar year attached, leaving investors to guess when the new power contracts would actually show up in profits.
This quarter, Adjusted EBITDA reached $136.1 million, beating the middle of the Q2-issued target range by 40% — more than double the company's usual beat margin. Zartler and Brock raised the fourth-quarter target to $165–185 million and the first-quarter 2027 target to $220–260 million, and stated that "we expect 2027 Adjusted EBITDA to be more than double 2026, with further growth beyond that."
Because nine-month actuals plus the fourth-quarter plan put 2026 Adjusted EBITDA near $503 million by our math, doubling that figure puts 2027 above $1 billion and attaches a hard date to the long-term target. What to watch: fourth-quarter Adjusted EBITDA against the $165–185 million plan. Delivering that step-up will confirm that new turbine deployments are replacing one-off service work.
🐻 Bear Case
Turbine Leasing Shrank While Services Carried Results
Management frames the quarter around a growing fleet of contracted turbines, and the company depends heavily on a few big buyers, with one customer accounting for 63% of revenue last quarter. Even so, both the new 900 MW generation deal and the 400 MW maintenance contract were signed with "an existing customer", which keeps revenue concentrated in the same hands.
Meanwhile, the core turbine-rental activity shrank during the third quarter. Average power capacity earning revenue fell 14% from last quarter, dropping from 950 MW to 820 MW "due to the planned release of temporary third-party generation as we transition to owned capacity under long-term contracts". As a result, leasing revenue fell 14% from last quarter to $90.6 million.
That drop cuts against the narrative of steady fleet expansion because the entire third-quarter revenue beat came from lower-margin services and product sales rather than turbine rentals. What to watch: single-customer revenue share and average MW earning revenue in the third-quarter filing and fourth-quarter release. Returning above 950 MW while lowering the top buyer's share would show the owned fleet is scaling across multiple customers.
Debt And Capital Spending Outpace Earnings
Building a 3.5 GW power fleet requires heavy upfront cash before the turbines earn a dollar of rental revenue. Last quarter, Solaris faced a credit facility test on September 30 limiting net debt to 5.25 times trailing twelve-month EBITDA (or 5.50 times after certain acquisitions), while its annual capital spending plan had already jumped 45% in a single quarter.
- Q3 capital expenditures: $547.2 million, 7% above the $510 million outlook
- Consolidated net debt at September 30: $2.10 billion ($2.60 billion debt minus $498 million cash), or 5.3 times trailing Adjusted EBITDA of $396.8 million by our math
- Operating margin: 19.6%, down 3.1 percentage points from a year ago as overhead rose 3.2 points to 12.5% of revenue and depreciation rose 1.7 points to 15.1%
After quarter-end, Solaris issued another $1.25 billion of senior notes and added $200 million of bank credit commitments. Rising debt and depreciation keep standard net income ($39.3 million) at less than a third of Adjusted EBITDA, because interest expense reached $22.9 million and stock compensation hit $14.8 million. What to watch: updated 2027 and 2028 capital spending targets in the conference call slides. Another spending increase would mean the new $1.5 billion financing is already spoken for.
Risks This Quarter Didn't Answer
One legacy business continued to shrink in the third quarter, while five standing questions about fleet maintenance, accounting, and contract details depend on the quarterly filing or conference call.
- Logistics Solutions erosion: revenue in the oilfield sand-hauling unit fell 7% from last quarter and 8% from a year ago to $56.9 million "due to lower last-mile transportation activity", reducing the cash available to fund the power build-out.
- Contracted lease payment schedule: not in the earnings release; the quarterly filing's leasing footnote will show how much the July and October contract expansions added to the $6.1 billion backlog.
- April 640 MW contract energization: the release did not state whether the first site started up in September as planned; the conference call will clarify if customer site delays occurred.
- Turbine wear and overhaul costs: fired hours and maintenance spending per MW were not disclosed; any update on four-year engine overhaul costs on the call will test long-term margins.
- Acquisition accounting and per-contract returns: preliminary accounting for GESA, joint-venture consolidation details, and profit per MW by contract remain undisclosed ahead of the quarterly filing.
💲 Other KPIs
Profit per fully diluted share, excluding one-offs and assuming all partnership units convert to common stock, rose 15.4% from last quarter and 55.2% from a year ago. It reversed last quarter's dip from $0.44 to $0.39, though higher interest expense ($22.9 million) and depreciation ($51.5 million) kept per-share profit growing slower than revenue.
Total diluted shares — which include Class A and Class B stock plus shares from convertible bonds — rose 2.8% from last quarter and 18.6% from a year ago, landing in line with the 96 million plan. The company has issued stock to fund acquisitions like GESA and Genco rather(than) buying back shares, diluting per-share earnings growth.
🔮 Guidance
Raised. The middle of the range moved up $12.5 million to $175 million, pointing to a 28.6% jump from the third quarter and 154.5% growth from a year ago by our math. That follows an interim raise from the $100–120 million range set in August (+$52.5M, then +$12.5M). If the six-quarter average beat of 17.4% holds, Q4 would reach about $205 million by our math.
Raised. Management lifted the middle of the range by $20 million to $240 million, which points to a 37.1% sequential increase over the fourth-quarter plan and 187.1% growth from a year ago by our math. With the co-chief executives expecting 2027 Adjusted EBITDA to more than double 2026's implied $503 million, the rest of 2027 needs at least $766 million, or 82.6% growth by our math.
Unchanged. The board approved a $0.12 per share quarterly cash payout for a 33rd straight quarter, keeping the cash dividend flat while Solaris directs its capital toward turbine purchases and power plant construction.
❓ Key Questions
How much of Q3 service and product revenue is recurring?
Service revenue jumped 78% from last quarter to $199.2 million and product sales reached $51.3 million after the GESA acquisition. Management did not break out how much came from multi-year maintenance contracts versus one-time equipment sales and commissioning.
Did the 900 MW contract increase single-customer concentration above 63%?
One customer accounted for 63% of revenue and 68% of receivables in the second quarter. Because both the new 900 MW generation deal and the 400 MW maintenance contract were signed with an existing customer, dependency on that buyer may have grown.
What is the updated capital spending plan through 2028?
After third-quarter capital spending hit $547.2 million (above the $510 million target), Solaris signed a 900 MW contract, bought 200 MW of additional turbines, and raised $1.5 billion in new debt and credit commitments without publishing updated annual spending numbers in the release.
Where did net leverage land against the September 30 covenant?
By our math, consolidated net debt reached $2.10 billion, or 5.3 times trailing twelve-month Adjusted EBITDA of $396.8 million, right on the 5.25x to 5.50x credit agreement limit first tested on September 30. The release did not provide the exact covenant calculation.