Stabilis Solutions, Inc. (SLNG) Earnings

Management highlights

- Overall Business Trajectory * Q1 2026 was the low point of the year following the completion of large end-2025 contracts, with meaningful activity strengthening in Q2. * Management expects 2026 to be a pivotal year: the business troughed in early 2026, will recover through the second half, and will set the stage for a record 2027. - Growth End Markets * Data center power generation is the primary driver of current and future growth, with four distinct project types: construction, commissioning, bridge power, and long-term backup power. * A large 6-month data center commissioning contract was secured in Q2, expected to start in Q3 2026, with potential for extension. * The company's largest ever contract, a 2-year behind-the-meter bridge power project for a U.S. data center, is scheduled to start in early 2027, extending into 2029, with expected annual revenue of ~$100 million. $25 million in total customer prepayments have been received as of early Q3 2026 to fund preparations, and the project remains on schedule. * Aerospace is a second key long-term growth avenue: launch activity and LNG demand are climbing, the company currently serves three major rocket launch customers and expects to add a fourth in 2026, with growth driven by the company's specialized high-purity product and custom engineering capabilities. - Core Business Model Strength * The asset-light, flexible business model combines in-house LNG production, third-party supply, logistics, mobile equipment, engineering, and field services to meet demand across most U.S. locations. This allows the company to pursue large contracts without building excess pre-emptive capacity. * The fixed corporate cost base is largely in place already, and will not grow proportionally with revenue as new contracts launch. Commodity price risk is fully passed through to customers per contract terms. - Galveston LNG Project * The proposed small-scale LNG bunkering project remains on the Gulf Coast, and achieved a key regulatory milestone in July 2026 when the U.S. Coast Guard issued a waterway suitability recommendation. However, final investment decision is still pending completion of commercial offtake and financing arrangements, and no firm timeline for FID is provided. The project is a long-term opportunity and does not overshadow near-term growth in other segments.

Guidance

- Second half 2026 revenue is expected to increase by more than 50% compared to first half 2026, with incremental improvements in revenue and profitability in both Q3 and Q4 2026 as new contracts come online. - Full year 2027 total company revenue is expected to exceed $300 million, with 2027 projected to be a record year for both revenue and profitability. No formal full-year 2027 guidance is provided at this time. - Adjusted EBITDA margin is projected to expand to the high teens in 2027 as large project execution accelerates, driven by disproportionate fixed cost leverage and the asset-light growth structure.

Segment performance

Total company revenue for Q2 2026 was $11.9 million, representing a 31% year-over-year decrease driven by the completion of two large multi-year contracts at the end of 2025. Adjusted EBITDA for the quarter was $0.1 million, down from $1.5 million in Q2 2025; this adjusted figure excludes $2.9 million in extraordinary, non-recurring vessel charter costs related to a terminated marine bunkering contract. The Aerospace segment achieved 71% year-over-year revenue growth, with LNG volumes sold up 79% year-over-year and 87% sequentially. Non-power generation industrial business saw LNG volumes grow more than 67% year-over-year. No explicit revenue contribution percentages are provided for individual segments.

Risks & headwinds

- Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from projected outcomes, with additional risk factors detailed in the company's SEC filings. - The Galveston LNG project faces uncertainty around securing required commercial offtake agreements and financing, with no firm timeline for final investment decision at this time. - Current aerospace demand is concentrated among a small number of customers, with most existing demand only visible 18 months out and no long-term fixed-volume contracts secured to date due to inconsistent launch cadence and ongoing R&D in the commercial space industry. Launch activity growth may not translate to sustained long-term contracted demand for the company. - Data center projects rely on timely infrastructure connection timelines for power and pipeline, and customer demand for different project types is dependent on broader infrastructure development delays and customer strategic decisions that may not materialize as expected.

Analyst Q&A

• Q: Martin Malloy (Johnson Rice) asked management to break down the profile of different types of data center projects Stabilis pursues. /

  A: Management outlined four core project categories: construction (often 24-month duration, lower fuel volumes), commissioning (typically 6 months, 50-75MW of power for pre-connection testing), bridge power (1-5 year terms for customers wanting to launch operations before grid/pipeline connections are complete, with the 2027 project being a 2-year committed bridge contract), and long-term backup power (standby generation similar to a peaker plant for grid/pipeline outages). The company is active on the first three categories, has not yet secured any long-term backup contracts, though it is in active discussions for these opportunities.

• Q: Malloy followed up asking if longer-term aerospace contracts are possible as LNG demand grows in that sector. /

  A: Management noted that most commercial space customers have preferred to handle supply in-house historically, and consistent long-term launch cadences have not yet developed as the sector still has significant ongoing R&D. Management currently has 18 months of visible demand but no long-term contracts beyond that window. As growing data center demand tightens domestic small-scale LNG supply, management expects customers may become more willing to lock in long-term supply commitments as their launch cadences stabilize over the next 1-2 years.

• Q: Matt Dane (Titan Capital) asked for details on the data center opportunity pipeline, including where most opportunities are concentrated. /

  A: Management explained that the largest number of current active opportunities are in construction and commissioning, while the largest potential revenue opportunities in the pipeline are larger bridge power projects. Long-term backup power is viewed as a large untapped future opportunity that will grow over the next 1-3 years. The existing business model for standby winter peaking power for Northeast utilities is directly transferable to data center backup, so Stabilis already has relevant experience.

• Q: Dane asked what is driving data centers to shift from diesel backup to LNG. /

  A: Management explained that modern hyperscale data centers are increasingly using natural gas for prime or secondary on-site power generation to compete with grid pricing, which they cannot do cost-effectively with diesel. LNG backup power aligns with the existing natural gas infrastructure these new facilities are already installing, creating a natural opening for Stabilis' services.