Solaris Energy Infrastructure, Inc. Q4 FY2024 earnings call

• 2024 was a year of transformation with strong free cash flow from legacy Logistics business reinvested into Power Solutions. - Power Solutions fleet grew from ~150 MW to aiming for 1.4 GW by early 2027, with new 700 MW order and strategic long-term partnership with a customer for ~500 MW over 6 years. - Solaris Logistics saw increased activity in Q1 due to technology adoption and market share gains, expecting ~75% of site staff to have multiple systems. - Board approved 26th consecutive dividend of $0.12 per share. - Both businesses are cash generative, supporting shareholder returns and growth.

Solaris Logistics: Observed a significant increase in activity in Q1 with at least a 15% sequential increase in fully utilized systems despite a flat oil and gas completions outlook. Driven by new technology adoption and market share gains. Financial impacts from new equipment on location expected to double earnings potential per location over coming quarters. Solaris Power Solutions: Began with over 150 MW of generation assets, aimed to grow to around 700 MW by early 2026, and announced an order for an additional 700 MW to reach ~1.4 GW by early 2027. Contributes over 50% of adjusted EBITDA in Q4 and on track to contribute nearly 80% after on-order fleet deployment. Adjusted EBITDA at full deployment of power solutions fleet expected to be $475M - $500M consolidated, with net to Solaris ~$400M - $425M.

• Q1 2025: Solaris Power Solutions expects average megawatts earning revenue to increase 20% to 360 MW; Solaris Logistics expects fully utilized systems to grow over 15% to ~90-95 systems. Adjusted EBITDA for Q1 expected between $44M - $48M, Q2 between $50M - $55M. - Full deployment of power solutions fleet expected to generate $475M - $500M consolidated adjusted EBITDA, with net to Solaris ~$400M - $425M. - JV structure expected to reduce Solaris' capital requirements by ~$215M. - Dividend of $0.12 per share declared, to be paid on March 21, 2025.

• Supply chain constraints and potential tariff impacts on equipment costs. - Market competition in the power solutions and logistics spaces. - Uncertainties related to grid interconnection wait times and their impact on behind-the-meter power demand.

Q: What does the vision look like for Solaris two or three years out in terms of the new relationship and opportunities?

A: Bill Zartler mentioned balancing execution speed with growing the team and equipment supplies, with plenty of growth opportunities in the market.

Q: Has there been a material change in the price per megawatt given demand and supply chain?

A: Bill Zartler said prices have slowly crept up, with tariffs impacting supply chain, but not material yet. Kyle Ramachandran added on modular equipment being more cost-effective for longer-term solutions.

Q: How aggressively will Solaris market the 450 MW of uncontracted capacity?

A: Bill Zartler said they're in active discussions, with timing being over a year out, and it'll likely be in similar tenure contracts.

Q: How important are lower emission solutions to data center customers?

A: Bill Zartler said they have SCRs and start with low NOx emissions, making the emissions profile competitive.

Q: How much of the Q1 deployment increase relates to accelerated deliveries vs. leasing third-party equipment?

A: Kyle Ramachandran said it's a mix of accelerated deliveries of their own equipment and leasing some third-party units.

Q: Can Solaris get new orders quicker than typical 36-month lead times?

A: Kyle Ramachandran said it's due to bold decision-making and visibility into demand, with different lead times based on turbine size.

Q: When will the 32% uncontracted capacity be contracted?

A: Bill Zartler expects it to be contracted well within six to nine months.