0001558370-25-009911
SEC filingSolaris Power Solutions drove huge revenue growth, now contributing over 2/3 of segment EBITDA.
Total revenue for Q2 2025 was $149.3 million, more than double the $73.9 million in Q2 2024, with the increase entirely driven by the new Solaris Power Solutions segment. For the six months ended June 30, 2025, revenue reached $275.7 million compared to $141.8 million in the prior year, a 94% increase. Cost of revenue (excluding D&A) totaled $79.2 million in Q2, yielding a gross margin (revenue minus cost of revenue) of 46.9%, though this metric is not directly reported; management instead focuses on segment cost margins. Solaris Power Solutions cost margin was 37%, while Solaris Logistics Solutions cost margin rose to 69% from 62% due to the absence of a $1.8 million property tax reversal that benefited Q2 2024. Depreciation and amortization nearly doubled to $18.4 million, primarily from Power Solutions equipment. SG&A expenses increased 80% to $14.9 million, largely from higher headcount and stock-based compensation cash settlements. Interest expense jumped to $5.5 million from $0.7 million due to higher borrowings. The effective tax rate increased to 19.8% from 12.0%.
Solaris Power Solutions is now the dominant growth driver, contributing $75.6 million in Q2 revenue (none in prior year) and representing over two-thirds of total segment Adjusted EBITDA. This segment benefits from strong demand for behind-the-meter power solutions for data centers and energy customers, with 75% of its 1,700 MW expected capacity already committed under multi-year contracts (67% data center, 8% energy). Capital expenditures are heavily weighted here, with $190 million of the remaining $295 million 2025 capex allocated to Stateline, a joint venture with a customer. Solaris Logistics Solutions faced headwinds from lower crude oil prices, with fully utilized systems down 4% sequentially. Q2 revenue was essentially flat (-0.2%) year-over-year but up 6% for the six months, driven by higher last mile tonnage. Margin pressure from rising system costs is evident, with cost margin expanding 700 bps annually.
Management expects Solaris Power Solutions to remain the dominant segment for revenue and EBITDA contribution. The remainder of 2025 capital expenditures are projected at $295 million consolidated, mostly for power equipment, funded by cash, operating cash flows, the revolving credit facility, and Stateline's $550 million delayed draw term loan (initial draw $72 million). Purchase commitments total $743 million, with $222 million due within 12 months. Management believes liquidity (cash $139 million, $56 million revolver availability, and Stateline's remaining $446 million facility) is adequate. No explicit revenue guidance is provided, but the committed capacity and long-term contracts provide visibility. Key risks include commodity price softness affecting Logistics and the non-recurrence of the property tax reversal that boosted prior-year margins.
CFO of $49.9M comfortably covered net income of $37.1M (coverage ratio 1.35x), driven by $38.4M depreciation, $12.2M stock-based compensation, and $9.1M deferred tax. However, a $41.8M surge in accounts receivable (likely from new contracts) absorbed much of the cash generation. Capex skyrocketed to $329.5M (6.6x CFO), primarily for power generation equipment related to the Stateline joint venture, producing negative free cash flow of -$279.6M. Capital returns: dividends of $9.6M were paid, but no share repurchases. Financings: $227M in debt/convertible notes and $86M from non-controlling interest (CTC) funded the capex gap. The working capital swing in receivables is a key anomaly to monitor; if collections accelerate, CFO could improve substantially. Overall, the company is in a heavy investment phase, relying on external financing to support growth.