0001628280-26-029046
SEC filingRevenue surged 55% YoY to $196.2M driven by 160% growth in Power Solutions segment as deployed MW capacity more than doubled.
For the three months ended March 31, 2026, total revenue increased 55% to $196.2 million compared to $126.3 million in the prior year period. The growth was primarily driven by the Solaris Power Solutions segment, whose revenue more than doubled to $128.5 million, up 160% year-over-year. This was fueled by a 133% increase in deployed megawatt capacity, reaching approximately 910 MW versus 390 MW in Q1 2025. The Solaris Logistics Solutions segment experienced a 12% revenue decline to $67.7 million, attributable to lower last-mile transportation activity, despite a 6% increase in fully utilized system count to 104.
Gross profit, measured as revenue less cost of revenue (exclusive of depreciation and amortization), rose 66% to $97.5 million, with gross margin expanding from 46.4% to 49.7%. The margin improvement reflects the favorable mix shift toward the higher-margin Power Solutions business, which now represents 65% of total revenue. Operating income grew 129% to $50.5 million, with operating margin expanding 830 basis points to 25.7%. Net income increased 147% to $32.0 million, benefiting from higher operating income and lower interest expense, partially offset by a $1.3 million loss on debt extinguishment and a higher effective tax rate (32.2% vs 23.2%).
Solaris Power Solutions is the primary growth engine, with revenue of $128.5 million representing 65% of total revenue. The segment's cost of revenue increased to $53.7 million (42% of segment revenue) from $16.5 million (33%) in the prior year, reflecting higher deployment activity. The segment's gross profit (excl. D&A) was $74.8 million, up 127% year-over-year. Management expects Power Solutions to remain the dominant segment, with the majority of future capital expenditures allocated to power generation growth.
Solaris Logistics Solutions revenue declined 12% to $67.7 million, but the segment maintained a stable cost of revenue margin of 67%. The decrease in revenue was driven by lower last-mile transportation activity, partially offset by higher labor and repair costs to support the increased system count. Fully utilized systems grew to 104 from 98 in Q1 2025, indicating underlying equipment demand remains resilient.
Management provided a positive outlook for Power Solutions, citing strong demand from data center and AI computing customers. The company has secured contracts for over 500 MW with Hatchbo (10-year term) and over 600 MW with another global technology leader. Total power generation capacity is expected to reach approximately 3,100 MW by the end of 2029. For the remainder of 2026, consolidated capital expenditures are expected to be approximately $1,263 million, heavily weighted toward Power Solutions. Financing is expected from operating cash flows, existing debt facilities, and the Stateline term loan. Management also noted the ability to cancel purchase orders with penalty if needed. No specific revenue or margin guidance was provided for future periods.
As of March 31, 2026, Solaris Energy Infrastructure held cash and equivalents of $344.5M, down slightly from $353.3M at year-end 2025. Total debt (including convertible notes and current portion) reached $1,596.7M, a significant increase from $1,064.4M at December 31, 2025, driven by the Genco Acquisition and related financing. Shareholders' equity grew to $1,104.7M (up from $827.3M) due to the issuance of Class A common stock in the acquisition. Inventory totaled $19.3M (current plus non-current), and deferred revenue surged to $75.9M from $5.8M, reflecting advance lease payments.
Purchase commitments for power generation equipment totaled $1,330.4M as of March 31, 2026, with $824.6M due within the next year. The largest component is a non-cancellable $364.9M obligation under the Baker Hughes turbine supply contract, along with $257.3M in commitments related to the Stateline VIE (non-recourse to the company). Additionally, future minimum lease payments to be received from long-term lessor arrangements amount to $3,502.5M, including $299.7M for the remainder of 2026.
No share buybacks were announced during the quarter. The company paid $6.9M in dividends ($0.12 per share), consistent with the prior quarter. Net debt increased by $532.3M, primarily from $399.0M in new borrowings (Bridge Term Loan, Stonebriar Term Loan, and Caterpillar Term Loans) used to fund the Genco Acquisition and the NovaLT16 turbine purchase. Capital expenditures were $343.4M, or 175% of total revenue, reflecting heavy investment in power generation equipment.
The company operates two reportable segments: Solaris Power Solutions and Solaris Logistics Solutions. For Q1 2026, Power Solutions generated $128.5M in revenue (65% of total), up from $49.3M a year ago, driven by leasing revenue from new data center contracts. Logistics Solutions revenue declined to $67.7M from $77.0M, reflecting lower activity in oil and gas completions. Segment-level operating income is not disclosed; the chief operating decision makers use Adjusted EBITDA for performance evaluation.
Net income of $32.1M was lower than operating cash flow of $79.0M due to non-cash adjustments (depreciation $24.8M, stock comp $6.7M, deferred tax $15.2M) and a large increase in deferred revenue ($64.9M). However, working capital consumed cash: accounts receivable increased $45.1M and accounts payable declined $11.8M.
Capital expenditures of $343.4M (4.3x operating cash flow) were heavy, funded mostly by debt ($399.0M in borrowings) and a $108.4M asset acquisition. The company also paid $6.9M in dividends and $2.3M in distributions to minority interests.
Overall, the company generated strong operating cash flow but relied heavily on external financing to cover its large investment cycle.