Solaris Energy Infrastructure, Inc. (SEI) | The Buildout — AI Infrastructure
The Verdict
Solaris Energy Infrastructure designs and operates modular power-generation, control, and distribution systems, while its logistics segment makes equipment for oil and gas completions. In practice, it is building a vertically integrated behind-the-meter power chain for data centers and large industrial loads—from gas supply through generation, electrical balance of plant, storage, emissions controls, and O&M. The logistics business is retained as a cash engine.
| Market Cap | — |
| Revenue (TTM) | $692M |
| Revenue Growth | +86.3% |
| EBITDA Margin (TTM) | 36.3% |
| Net Debt | $1.3B |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Power Solutions is the AI-facing engine: Q1 FY2026 segment revenue was $128.5M, up from $49.3M a year earlier.
- Management reported ~2.3 GW under long-term contract by the August 2026 call, with ~800 MW of open capacity.
- The Q1 10-Q showed $3.5B of future minimum lease payments to be received under long-term lessor arrangements as of March 31, 2026.
- Capital structure was rebuilt with $1.3B of senior notes, a $650M revolver, and roughly $1.4B of liquidity.
- Logistics is a cash engine: over $20M per quarter of free cash flow, effectively sold out of top-fill equipment.
What We’re Watching
- September 2026: first deployment under the April 2026 tech contract is expected to energize.
- Q4 2026: Stateline JV energization ramp and first third-hyperscaler location are embedded in Q4 guidance.
- January 2027: Hatchbo 660 MW plant begins earning revenue.
- Watch whether ~800 MW of open capacity and 'multiple gigawatts' of negotiations convert to signed contracts.
The thesis is strengthening: contracted capacity, scope expansions, and capital structure all advanced. The open question is execution—whether the concentrated customer base, Stateline ramp, and third-hyperscaler energization stay on schedule.
Earnings Beat
Q1 FY2026 revenue was $196.2M, gross margin 37.1%, and EBITDA $75.3M, or 38.4% of revenue. Net income was $21.4M. The standout forward indicator was the 10-Q's $3.5B of future minimum lease payments to be received under long-term lessor arrangements as of March 31, 2026.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $196M | $180M | $126M | +55.3% |
| Gross margin | 37.1% | 30.7% | 30.5% | +660bps |
| EBITDA | $75M | $60M | $42M | +78.9% |
| EPS | $0.43 | $-0.03 | $0.15 | +195.3% |
| Future minimum lease payments to be received | $3,502.5M | n/a | n/a | — |
I think that the market may have gotten a little exuberant about how quick things are rolling out. I think we're measured in our approach and have been generally conservative, but our long-term targets are there.— Bill Zartler, Chairman and Co-CEO, 2026-04-28
Management tone: On the Q1 call, management described itself as measured and conservative while acknowledging market exuberance about rollout speed. It was candid about labor and supply-chain tightness and about quarterly lumpiness.
Management Guidance
On the Q1 call, management raised Q2 2026 adjusted EBITDA guidance to $83M–$93M, a 10% increase, and set initial Q3 2026 guidance at $80M–$95M. The Q3 guide reflected the Stateline temporary-to-permanent shift and H2 2026 equipment deliveries that begin earning revenue January 1, 2027. Management also presented a scenario where total company adjusted EBITDA could exceed $1B annually if all 3,100 MW were delivered and operating.
Trajectory
Revenue is growing from a low base, but the sequential pace has cooled to 9.2% in Q1 FY2026 from 18.2% in Q2 FY2025. Power Solutions leasing revenue reached $105.4M in Q1 FY2026, up from $39.1M a year earlier, while the segment's cost of revenue ex-D&A rose to 42% of revenue from 33%. EBITDA margin expanded, but free cash flow remains deeply negative as the buildout spends ahead of contracted capacity.
The Model
The model projects FY+1 revenue of $815M and EBITDA of $323M, a 39.6% margin. FY+2 rises to revenue of $1,125M and EBITDA of $488M, a 43.4% margin. Near-term is anchored by contracted capacity converting to earning MW; FY+2 depends on continued scope expansion and additional capacity sourcing.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $622M | $815M | $1.1B |
| YoY Growth | — | +31.0% | +38.0% |
| EBITDA | $218M | $323M | $488M |
| EBITDA Margin | 35.0% | 39.6% | 43.4% |
Projections are the median of 5 independent model runs. The model’s revenue sits 9.1% below analyst consensus.
On the Q1 call, management raised Q2 2026 adjusted EBITDA guidance to $83M–$93M, a 10% increase, and set initial Q3 2026 guidance at $80M–$95M. The Q3 guide reflected the Stateline temporary-to-permanent shift and H2 2026 equipment deliveries that begin earning revenue January 1, 2027. Management also presented a scenario where total company adjusted EBITDA could exceed $1B annually if all 3,100 MW were delivered and operating.
What Could Go Right — and Wrong
- Signed scope on customer B and C adds $100M+ in EBITDA potential.
- Balance-of-plant line of sight: $800M–$1B in additional capex at $160M–$200M incremental EBITDA.
- Conversion of ~800 MW open capacity and 'multiple gigawatts' under negotiation would expand the contracted base beyond ~2.3 GW.
- Ancillary services excluded from guidance drove Q2 Power EBITDA growth and could add upside.
- Hatchbo revenue starts January 2027; Stateline ramps Q4 2026.
- Customer concentration remains high: 88% of Power Solutions FY2025 segment revenue came from one data center customer.
- Power Solutions cost of revenue ex-D&A rose to 42% of segment revenue in Q1 FY2026 from 33% a year earlier.
- Q4 guidance depends on Stateline and third-hyperscaler energization; management warns quarterly timing swings with 'plus or minus a couple of months.'
- Equipment commitments are large: $1.33B in purchase obligations with cancellation penalties up to 90%.
- Roughly 1.35 GW of contracted capacity was not yet earning revenue as of Q2 2026; the conversion schedule is the key execution risk.
Looking Ahead
The next twelve months test whether contracted capacity converts to revenue on schedule. September 2026 brings the first third-hyperscaler energization; Q4 2026 brings the Stateline ramp and first location for that customer. January 2027 starts Hatchbo revenue. Beyond these, the company has ~800 MW of open capacity and negotiations for multiple gigawatts.
- September 2026Third-hyperscaler first deployment energizes. — Tests pulled-forward timeline; construction underway as of August 2026.
- Q4 2026Stateline JV energization ramp. — Embedded in Q4 adjusted EBITDA guidance of $100M–$120M.
- Q4 2026First third-hyperscaler location energizes. — Also embedded in Q4 guidance.
- January 2027Hatchbo 660 MW revenue start. — Civil construction began July 2026; >70% equipment available.
- 2026–2028Genco capacity additions. — 400 MW incremental; ~100 MW already operating/contracted.
- 2027–2029Baker Hughes turbine slot deliveries. — ~500 MW NovaLT16 capacity at fixed prices.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $313M | $622M | $692M | +98.7% |
| Gross Margin | 25.7% | 32.3% | 34.0% | +665bps |
| EBITDA | $100M | $218M | $836M | +117.8% |
| EBITDA Margin | 32.0% | 35.0% | 36.3% | +307bps |
| Net Income | $16M | $30M | $46M | +91.1% |
| Free Cash Flow | −$129M | −$438M | −$819M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)34.0%
- EBITDA Margin (TTM)36.3%
- Net Margin (TTM)6.7%
- ROIC6.4%
- FCF Conversion-232.2%
- SBC / Revenue3.3%
The Company
Solaris Energy Infrastructure provides modular and scalable equipment-based solutions for power generation, control and distribution, and for management of raw materials in oil and natural gas well completions. Its current strategic focus is the physical layer of the AI buildout: behind-the-meter gas-fired generation, electrical distribution, balance-of-plant, fuel delivery, and O&M for hyperscalers and AI compute companies.
The company reports two segments: Solaris Power Solutions and Solaris Logistics Solutions. It is building vertical integration across the power chain—gas supply, generation, distribution, storage, emissions controls, and services. Facilities span Texas, Mississippi, Tennessee, and New Mexico; the GESA acquisition added over 600 employees and a services platform with project experience in more than 30 countries.
Business Segments
Competitive Landscape
SEI's filings do not disclose a formal competitor set. The source set does not name competitors.
Supply Chain
Solaris sits between turbine and equipment suppliers and the data-center customers that need behind-the-meter power. Disclosed counterparties are largely unnamed.
More on SEI: Earnings recap