Q3 2025 Solaris Energy Infrastructure Inc Earnings Call

Good day and welcome to the Solaris energy. Infrastructure, third quarter, 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero.

After today's presentation, there will be an opportunity to ask questions to ask a question. You may press start and 1 on a touchtone phone to withdraw your question. Please press star then 2 please note. This event is being recorded. I will now like to turn the conference over to Yvonne Fletcher senior Vice President of Finance and investor relations. Please go ahead.

Thank you, operator. Good morning and welcome to the Solaris third quarter 2025 earnings conference call. Joining us today are our chairman and co-ceo sales Artur, and our co-ceo and director Amanda Brock and our president and CFO Kyle ramachandran,

before we begin, I'd like to remind you of our standard cautionary, remarks regarding the forward-looking nature of some of the statements that we will make today

Such forward-looking statements may include comments regarding future, Financial results, and reflects a number of known and unknown risks.

Please refer to our press release issued yesterday, along with other recent public filings with the Securities and Exchange Commission that outlined those risks.

We also encourage you to refer to our earnings supplement fee, slide deck which was published last night on the investor relations section of our website under events and presentations.

I would like to point out that our earnings release in today's conference call will continue discussion of non-gaap financial measures which we believe can be useful in evaluating our performance.

The presentation of this additional information, should not be considered in isolation or as a substitute for results prepared in accordance with gaap.

Reconciliations to comparable, gaap measures are available in our earnings release, which is posted in the news section on our website.

For more details on the company's earnings guidance. Please refer to the earnings supplement, slide deck published on our website.

I'll now turn the call over to our chairman and co-ceo stills our alert.

Thank you, Yvonne and thank you everyone for joining us this morning. Solaris had a great third quarter achieving record levels of quarterly, revenue and profit. Our strong results demonstrate that we are executing well, and are also showing significant progress on our growth.

Solaris is at the center of what appears to be a massive and growing Market opportunity, demand for Reliable and power generation is accelerating as data center investment and Associated power demand continues to grow at a scale and Pace that is providing significant attractive growth opportunities for Solaris.

Many data centers now require more than 1 gigawatt of electricity demand per site, which in some cases represents only the initial phase of what is likely to evolve into a multi gigawatt facility.

Many of these key. Artificial intelligence players are now planning numerous locations of this size with multi-year development plans.

Power is a key bottleneck for many of these projects grid, delays extended equipment lead times regulatory, mandates and surging demand are leading data center developers and hyperscalers to select locations where they can quickly secure significant power from multiple years.

Over the course of the last 18 months Solaris has positioned itself to provide critical infrastructure and services to support this massive investment cycle in that short time, Solaris has quickly become recognized as a leading Power Solutions company. This is attributable to our successful track record of delivering a scalable reliable, and flexible Power Solutions offering.

In order to continue our growth trajectory we must execute well in all aspects of the business. This includes growing a capable team. While maintaining our culture, developing a strong balance sheet, and creating power offerings that optimize capacity, timing capital and flexibility.

The optimal Power Solutions for our customers will likely vary based on the application scale location, Capital efficiency and importantly the timing needs of each unique project Solaris is in a position to provide our customers with the most appropriate solution or solutions for their range of needs at any particular site. We can provide multiple generation sources to our customers as well as gas supply infrastructure, power, distribution equipment and resiliency equipment, such as battery, energy storage systems or best.

Our Solutions can include a combination of natural, gas turbines natural gas reciprocating engines grid power, Beth fuel cells and other renewable Technologies. It is quickly becoming a parent that in all of the above generation approach could be necessary to meet the rapidly growing power demand.

In a positioned us for substantial growth. First, we continue to demonstrate strong execution.

We operate at approximately 760 megawatts during the third quarter up from approximately 150 megawatts only a year ago.

Our growing proprietary operational. Know-how and strong. Track record of uptime position us as a reliable provider of power.

We began successfully providing primary power to a second data center during the third quarter highlighting our ability to again rapidly deploy Power Solutions supported by effective collaboration between our employees, our supply chain partners, and our customers.

We secured additional capacity to position our business, to enable us to react swiftly, and comprehensively to the numerous meaningful commercial opportunities. We are pursuing.

With the order of 80 megawatts announced, a few weeks ago and an additional order of just over 400 megawatts. We now expect to have proforma generation capacity of approximately 2,200 megawatts, by early 2028, compared to our prior plan for 1,700 megawatts. By the first half of 2027.

Third. We raise significant capital in the form of a new convertible notes to pay off our existing term load. Providing us the financial and operational flexibility to continue our growth. Kyle will share more detail on this shortly.

Forth. Our commercial pipeline is deep and growing as we are currently evaluating a number of potential long-term opportunities.

The combination of growing project size tenor, timing and reliability, has resulted in an increasing interest in solution like ours, our recognized track record of execution and Investments. We've made in capacity as positioned us at the Forefront for many of these opportunities. And we are confident that the additional capacity we have on order will convert into long-term contracts.

Fifth. We have expanded our capabilities and customer base through m&a in the third quarter, we Acquired and welcomed HV mvl Z provider of specialty, voltage distribution, and regulation equipment and Engineering Services, HV mvl stands for high voltage, medium voltage, low voltage, just so you know.

Bringing these capabilities in-house further. Strengthens our our Solutions offering by giving us exposure to new high growth and markets important. These mounts of plant Solutions are essential across all electricity, use cases regardless of generation source.

Our acquisition strategy demonstrates how we are strategically. Both vertically integrating and expanding our technology offering further enabling us to offer a truly power agnostic approach to meet our customers power needs.

Finally, we have welcomed additional talent to complement our existing team and drive further commercial and operational success, we've added a high impact team members to our engineering operations, commercial, and support functions. We've also enhanced our executive leadership team with the addition of Amanda Brock as my co-ceo, Amanda has been a trusted partner of mine for the last decade and brings a proven complimentary skill set to the office of the CEO. She has an extensive background in building and managing infrastructure, including both water and power and in leading teams to success. These capabilities come to us at a critical time as we rapidly scale, our operations for the significant growth ahead. As I've been asked many times, I would like to make it clear that, I have no current plans to retire. This co-ceo appointment is about covering more ground and accelerating our growth.

Moving now to a discussion of our Logistics solution segment, I've often referred to our Logistics solution business as the "Engine That Could." While less than a third of our business today, we would not have the success we've had in Power Solutions without the stable cash flow provided by this basis segment.

This business also is a critical piece of the national gas value chain required for the power solution segment.

We also continue to earn the operational and financial returns on the investments we've made in our logistics systems, which continue to help drive efficiencies for our customers. For example, we have increased our deployment of multiple solar systems on customer locations, which enables more efficient throughput of raw materials and, in turn, helps our customers accelerate their development schedules year to date. We've deployed multiple solar systems on 90% of our customer locations, which compares to approximately 60% a year ago and 40% the year before that.

We believe that our technology portfolio positions, Solaris as the partner of choice for operators and service companies pursuing the industry's Leading Edge completions designs.

During the third quarter, lower 48 oil and gas industry activity, contracted to what we believe. Reflects a near-term trough as evidenced by early fourth quarter activity levels. We believe this segment will continue to generate significant free cash flow while providing a highly reliable and efficient system for our customers.

Received during the quarter we're confident that the growing demand for our power services will continue and we're a demonstrating that confidence. There are incremental generation orders as well as our continued inorganic investment. We're also taking deliberate steps to ensure that we have the right balance sheet and the right people in place to position Solaris for continued growth as has been emphasized by our country's leaders winning the AI race is an imperative strategic objective for the US. Solaris can play an important role in advancing this objective by using its technology to efficiently, generate and deliver large-scale reliable clean energy.

With that, I'll turn it over to Kyle.

Thanks, Bill, and good morning, everyone. Flores's third quarter demonstrated another quarter of significant growth and solid execution in our power solutions segment, as well as continued execution and strong free cash flow generation in our logistics solutions sector.

This growth and execution, we're driven by the dedication and skills of our team that continued support of our customers and the dependability and flexibility of our suppliers.

During the third quarter Power Solutions contributed more than 60% of our revenue and over 3/4 of our segment level adjusted. Evida

These results are attributable, not only to a robust industry backdrop but also to the value of the Solaris offering and the team's execution.

As Bill highlighted, in addition to the previously announced 80 megawatts. We recently ordered we have also secured additional generation capacity for a total of approximately 500 megawatts. This brings our pro-forma expected generation capacity to approximately 2.2 gigawatts by early 2028 which compares to our prior order book of approximately 1.7 gigawatts.

As previously announced concurrent with our recent convertible financing. We expect the first 80 megawatts of our new orders to be delivered by year end.

the remaining delivery schedule is concentrated around the second half of 2026 and the second half of 2027, with final deliveries of this most recent order occurring in early 2028,

Capital expenditures associated with the 500 megawatts total approximately 450 million consisting mostly of turbines and Associated emissions. Control equipment. Once equipment is contracted at a particular site. We expect to add additional project scope to accommodate the unique specifications of Any Given location and customer need.

this increased content would be expected to generate Returns on invested Capital comparable to the economics of our current Power Solutions offering

As a result of our recent financing and the ongoing cash flow generation ahead of these deliveries. We have sufficient cash to fund these incremental generation orders

In early October Solaris raised approximately 748 million in the form of senior convertible notes due 2031 with a 0.25% coupon.

please from this offering we're used to repay our existing Term Loan and will be used to fund the 500 megawatt or

This financing. Also unlocks significant flexibility for Solaris given the removal of restrictive covenants, as well as a meaningful incremental near-term. Cash. Flow it unlocks.

Over the next 4 quarters. We now expect to save approximately 45 million in the form of interest and amortization savings as compared to our prior capital structure.

Turning now to a review of our third-quarter results and our outlook for the next two quarters.

During the third quarter Solaris generated revenue of 167 million in adjusted evaa of 68 million on a Consolidated basis.

Our adjusted Eva, dog. Grew 12% from the prior quarter and increased more than 3 times as compared to the same quarter last year, driven by the acceleration of our Power Solutions segment.

The primary driver of growth versus the prior quarter is continued activity growth and Power Solutions, which more than offset, a modest decline in logistic Solutions activity.

We generated revenue from approximately 760 megawatts of capacity during the third quarter.

Which reflects an increase of more than 27% from the prior quarter.

This increase in activity was driven by increased and accelerated demand from our customers, which we are meeting using a combination of new turbine, deliveries, as well as selective short-term sourcing of third-party generation capacity.

Segment adjusted Eva for the power solution. Segment was 58 million. A 27% increase from the second quarter.

We expect segment adjusted Eva next quarter to be relatively flat as a full quarter's benefit from the ramp and operated megawatts. And the HV MZ LV acquisition is offset by a mixed impact from lower spot utilization and commissioning work.

Adjusted Eva for Power Solutions, higher sequentially relative to the fourth quarter of this year.

In our Logistics Solutions segment, we averaged 84 fully utilized systems a decline of 11% from the second quarter.

We believe, the third quarter represents a near-term, bottom in drilling and completion activity, and expect our segment, adjusted evaa to improve slightly in the fourth quarter.

Netting these factors and considering corporate and other expenses, total adjusted EBA dog guidance for the fourth quarter is now $65 to $70 million, up from the prior guidance of $58 to $63 million and relatively flat from the third.

We're also introducing our first quarter 2026 total adjusted. EBA guidance of 70 to 75 million

the county for expected longer. Term tenor, are fully delivered, 2,200 megawatt, generation capacity. And our recent acquisition, our new estimate of pro-forma earnings of the company could be over $600 million before considering any additional scope or growth with our existing customers or new opportunities.

We are excited about the accelerating growth of the industry and about these significant strategic steps, we've taken to maximize our opportunity to continue to grow.

Our priority remains to deliver strong Returns on invested Capital as we continue to develop our Power Solutions business, while sustaining leading market, share and strong, cash flow generation from our Logistics Solutions operations.

With that. We'd be happy to take your questions.

Are you ready for questions, sir?

We will now begin the question-and-answer session. To ask a question, you may press start and 1 on your touchtone telephone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster.

the first question is from Dave Anderson, uh Barkley's please call

Hi, good morning. I was wondering if you could talk a little bit about how you see the supply chain today. Um, you're placing orders. Now for 2028 deliveries, uh, is this starting to get stretched out a bit more than say a year ago and I would imagine a competition for OEM slots has become substantially tighter. The last few months, I was wondering if you could talk about some of those challenges that you're facing as you look to to build out the power business. Thank you.

No, I think you you surmised it. Well, David the the the supply chain is growing out. We were lucky to get the slots we have with our relationships and we're exploring, you know, other other other avenues for for getting power. Hence, the hence, I think what, what we referred to as multiple sources of generation to power these things, especially in in, in timing wise, um, and we're spending a lot of time on the distribution side and the equipment side. We had a team, uh, over in Asia last week, you know, looking at, at a couple of OEM flexibility options around, you know, how we, um, get ahead of and Transformers and switch gear and Breakers. And, and those kind of things on a, on a portable basis, as well, as for permanent equipment. So, I think that is a, that's a very important part. As I said, we needed to, we need to execute on All Phases of the business. And supply chain is clearly 1 of those phases. That's really driving a lot. A lot of things today, and I think that's also coming at a time where the customers are recognizing that the sort of opportunity of speed here to build behind the meter solution.

Track record, I think of finding unique ways to to find capacity. Uh, we we continue to benefit from a team that's got tremendous experience and Legacy. Um, in looking at generation over decades all over the world. And I think that really positions us somewhat differently than than, um, maybe maybe others in the market that are trying to just getting into it. So we, we've got literally Decades of, of experience, um, both on the generation side, as well as on all the distribution side, within the company. Now, um, that we're really able to benefit from

So I I think this is actually a big distinction about how you're actually already managing the megawatts today and you've talked about the balance of plant and how kind of the challenges actually manage this power is more than just owning owning it um, you made that acquisition uh, over the summer. Um, that HV mvl V. I did it. Um, I'll be back to Vision in terms of the balance of plan. I also noticed this quarter of the megawatt. So Revenue per megawatts, increased about 10% this quarter.

Are, are we starting to already see the impact on the balance of plant? Or is that more about efficiency and utilization of the equipment? And could you tell me how we should be thinking about modeling that going forward? Is that a number? We should be kind of steadily increasing over time.

I I it's there's a lot of puts and takes in that and I think if we specifically look at the third quarter, what we were able to do was to deploy a significant amount of, um, additional generation, that was sort of beyond what we initially guided to. And so we are benefiting in the third quarter with some level of uh, contribution from some of our commissioning efforts. I think the fundamental Returns on the equipment are still sort of, in line with where we've indicated in the past, the other kind of puts and takes on it. Uh, a lie with duration and as we think about different customer mix and different duration, mix, uh, there could be some, some, some different ways of looking at at returns.

Okay, thank you, Kyle.

Thanks David.

Next question, is from, Derek witfield Texas Capitol? Please go ahead. Good morning all, congrats on your update and Amanda congrats on your appointment.

Thank you.

For my, uh, first question, I wanted to focus more on the competitive landscape with this announcement. It's clear that you feel confident in your ability to place your power generation capacity. With that said to, to what the degree to the recent announcements from Halo bird and Liberty. Change your view on the size of the growth opportunity for Solaris.

You know, we're having our own discussions and I what what others do, don't necessarily impact it. I don't think that this is a very, very large Market. If you look at the numbers and it's going to require multiple companies to to perform to to satisfy the needs of The Growing Power demand. So I think it's you know, that has not changed our Outlook at all in any way. Yeah, and I'd say just to put it in context so the 2,200 megawatts we're talking about here.

To satisfy the Leading Edge, sort of.

Incremental data center, I'm not sure that satisfies even 2 at this stage. So the sizes of these, these infrastructure projects continue to grow to Bill's points. Such that, uh, it's just a large Market.

Yes Fair Point and maybe just to build on that uh based on the the flurry of recent power AI development announcements across West Texas and the amount of BTC miners that are converting to Data Centers. Do you guys see an opportunity to co these developments um with those operators to meet reliability needs of the incline?

I think that's 1 of the points on the flexible generation here. Is that, is that the distribution equipment in the packaging up of multiple sources and the way that gets run is, is something that I think we're developing a pretty good expertise on, um, and I think that's that will be the way some of this gets executed is a combination of multiple sources whether it's excess grid power, that a, that, a Bitcoin miner may have been using. Whether they've got

Um, at a at a moment's times notice. And so that's allowed us to be very Nimble and I think that'll be a continued to be a, a Paramount, sort of culture tenant to to our business.

And, and as, uh, to the engineering team that is associated with the Legacy business, and our ability to, you know, take a look at this power generation business and modify equipment to make it more mobile. Um, I think the oil field led the way, uh, in developing and partnering to make the mobile turbines to start with. And then the addition of of Mobility around the, uh, the Cadillac reforming technology, you know, we've modified and build our own, with our own in-house engineering, uh, mobile strs, that pair up quite quickly quite easily minimize downtime um for the emission control system. So I think that that combination of of engineering know-how and the focus on you know mobility and and quick execution has been a, a Paramount to The Continuous success in both both businesses.

Great update. Thanks for your time.

Uh, hopefully y'all are doing well this morning. Um,

Given that. I'm 1 of the only analysts that that covered both errors and Solaris, I have kind of unique, uh,

impact or or relation to, uh,

Amanda, um, just a quick question on the co-CEO role. Is it expected to be kind of divide and conquer, or are you all going to make decisions together? And kind of as a second part of that question, Amanda, I know you've only been there a week or so, but what are your initial impressions on how the team is put together and your initial impressions as you kind of get into work?

That you start? Yeah, certainly and thanks Don. Um,

So look, I'm I'm very happy to be here. Um, with this team I've known Kyle since, you know, I think 2017. And it's great to still be side by side with Bill and anybody. Who knows bill and I know that we are different, but have very sort of complimentary skill sets. So some of it is and Bill will talk about it, you know, divide and conquer, so we can cover more ground. Um, and of course, you know, not getting each other's way and make decisions that are going to enhance the effectiveness. And to use cars, word nimble, this of the company in terms of observations, actually, this is the beginning of week 3 because there was no downtime and it is

Really drinking from the proverbial fire hose, the speed at which this market is moving is unprecedented. There are huge tailwinds and opportunities for us as we focus on delivering these power solutions into a market where power is emerging as a critical bottleneck.

Um, the deals we're engaging on and the deals that I've gone straight into work on are real and tangible with very credible counterparties.

Um, we have the distinctive advantage to have already demonstrated our ability to deliver. I mean, we've been out there, we've been operating and that just gives you a real perspective and as bill is repeatedly emphasized, we've got this track record of executing on large scale and getting larger data center projects and have developed know-how software proprietary processes that we can apply on new projects and and that is an advantage. So,

high-quality opportunities for continued growth and very optimistic. I'm happy to be here and there's 1. Incredible road ahead of us. So Bill, you know as the divide and conquer you discovered it all. So no need to double up.

I I appreciate that color and and you know, a big question coming into this earning cycle is going to be whether or not you announced a new contract or not but I think

You you have said, in, in past calls and whatnot, that you wouldn't order any additional equipment. If you weren't close on, on another contract signing for a data center or a large project is is, is that still the case? And, um, you know, I know you don't want to give specific timing, but should we assume something in the next, you know, 90 to 180 days that that could kind of soak up all that equipment you have on order today.

That is still the case in your assumptions; they are pretty good.

Okay, I appreciate the color. Thanks, I'll turn it back.

Thanks Don.

Is from direct photo 5% left. Please go ahead.

Investors whose best position and what the different, uh, differentiating factor. And you could just help us understand your differentiating Factor versus your peers. Meaning, this integrated solution which is just both been bolstered by hbm the LD, just, just help us and investors how we should really think about that.

Well, I think you you think about it from from actual operations and skill sets. And then when we add on

What comes out of a generator isn't what feeds the data center or any other utility. You have to regulate that power; you have to convert it to the right voltage level. You have to get it to what the...

step to control.

Um, lots of elements of that with switch gears and you got to, you got to protect it, um, with Breakers and switch gears. So the, the notion that that the rest of that stuff really does Drive the generation source. And as we mentioned, you know, there's going to be multiple sources of generation to supply this demand because it's too fast and, and too quick. And as that happens, it's more and more imperative that you pair up, the right set of, um, electoral distribution equipment, Downstream of that. And so, as a as a edge and the ability to engineer design, um, and operate those systems, I think we we have a pretty unique um, Advantage with that, with respect to the turbines. It it's it's you know, the the modeling of these businesses and I think we we set a little bit of a trap up on you know megawatts times a dollar equals this times a multiples of value but there's a lot more to this around protecting that business building the mode around.

operating processes and technology and

the pieces of electrical equipment that that blew it all together. So, you know, a house, a set of bricks doesn't really work without the mortar and that's the mortar in this business.

Got it, that's helpful. Um, and then maybe back to your comments about your all the above power approach, you know, historically, you've been, uh, heavy on the turbines. Obviously, the 5.76 38, but sounds like you'll be exploring, you know, Battery Systems, uh, potentially recepts just, you know, could you help us understand? Kind of that all the above approach and then maybe just your latest, you know, they additional 400 megawatts. Was that all turbines, was that a mix of a different type of Kit? Just just, maybe a little bit more color around that.

Yeah, and I think we will the the the view forward is the turbine is going to be the the Workhorse of the power generation industry. It's no different than um the way the utilities work, the the gas turbine is driving our system in this country of power so that will be our Workhorse as we complement things for timing. Um, and flexibility the turbines have unique curves with with heat and altitude, um, that change their output and so pairing, that up with an engine. That doesn't have quite the quite the turn down in the heat like a like a large reciprocating generation and and Generator, and we're running them as part of the kit today. So it's not unique. It's A Small Piece doesn't grow slightly, I think we'll see it. Growing as part of the generation piece slightly going forward, you know.

Batteries are an important, you know, part of this, you know it comes down to what is the reliability that you're looking for uh, in data centers? You know, that there's an element of this that they have to have virtually 100% reliability when it hits the cooling system to keep, keep the the buildings, cool and the chips are melting down, the investment is enormous. So, you know, thinking about how batteries both provide protection against the volatile loads coming out of the chips as well as a very short-term Bridges, you know, as you have Flex with your, um, redundancy built into the to the power grid. And not every data center is, is the same. And so there's a, not a standard design gigawatt data center. They're, they're they're built in multiple data Halls, the data Halls can be powered independently, they can be powered together, they can power the cooling systems different from the chip systems. And so the, the notion that it's just kind of 1 size fits, all is there. And that's why 1 of the other reasons, why the, uh, the distribution part of this is so important. So you can match up what the actual data center power needs look like with the generation equipment.

Got very helpful caller. Thank you. Alright bye.

Next question is from Scott, Gruber City Group. Please go ahead.

Yes, good morning. Um, good morning.

Uh you know, some growth capex in your 27 Outlook, um, curious, um about the, the state line JV. You know, once the 900 megawatts is deployed, if the JV expected to send cash back up to Solaris, or do you pay down the term loan? What does that cash get recycled back into expanding the JV, just some thoughts on on how to think about the the JV, uh, and the JV cache flow, once the 900 megawatts is deployed.

Within the constructs of that debt instrument that do allow us to send cash up to both ourselves, as well as our, our partner in that JV, um, options with respect to what to do with that cash. You know, the, the board of the JV, which is composed of both Solaris and our customer, um, can choose to distribute the cache or to your to your point that we could make a choice of of keeping cash there and continue to invest at that level, to provide additional power to that customer which, which obviously has ongoing and Growing Power needs and demands. So a lot of flexibility um, in in that structure and we were able to obviously finance that at a pretty attractive rate with respect to the Advance rate on the equipment. So that structure, you know, we feel is, is, is going to provide a lot of flexibility, um, and ability to drive returns for us.

All right, thanks for that Kyle. And then just some color on, um, how you see megawatts, deployed over the next several quarters and how you see the transition from, you know, third-party reruns to to wholly owned capacity based upon the delivery schedule. Um, and what seems to be, you know, greater obviously greater demand. Um, you know, from the customer. What, what when do you see kind of fully get getting the, the kind of fully owned capacity in the field?

Good question. Obviously that's continued to change and extend as we've added capacity into the order book. Um, as we look at next year, there's really 2 legs of growth as far as operating capacity. The first is um the JV getting getting stood up with respect to its permanent Generation. Um and we are supporting the power needs of our customers. That will ultimately be

Funded with the JV Visa V, uh, some of the re-rented assets today, as well as some of our own assets. So, so, next year, we'll see the construction of of roughly 900 megawatts of permanent power for the JV. Um, and then we'll also see delivery of about 400 megawatts. That was, uh, placed back in March of of this year. So those are the 2 Avenues of growth, um, for 26. And then, as we look into 27, it's primarily the order that we, we, we just placed, uh, 1, small additional note. We, we did pick up some capacity in the fourth quarter of this year, which will have a full impact um, beginning in the first quarter of next year. So as we look at the full stood up, Fleet, it's sort of a second. Half of 28 is sort of how I would look at it.

Got it. I appreciate the caller. Thank you.

Gotcha.

Next question is from Jeff. LeBlanc tph please. Go ahead.

Uh, good morning. Thank you for taking my question.

Morning Jeff. Uh Dylan the prepared remarks, you mentioned locations involving to multiple gigawatt sites over the next several years.

Uh, given this opportunity Set, uh, could you help frame the size of your customer pipeline is, is it safe to assume that by the end of the decade? Your operating Fleet will be larger than 2.2 gigabytes. Thank you.

Um, I think the the pipeline is enormous. Um, and that's a technical term. Um, it's just it's it's it's there's just so much activity. It's, it's frightening. I've never seen anything like it in my life. Um, it's probably fair to say that we'll be beyond what we have on order today, operating, you know, in a couple years

Thank you very much. I'll turn the call back to the operator.

Gotcha.

The next question is from Michael, duris, a vertical research. Please go ahead.

Good morning, everyone.

Good morning, Michael.

Um,

Yeah. 2 2 2.

Circumstances surrounding the second data center, um, order and, uh, that you cited in the press release and secondly, um, as you are negotiating regarding contract, tener, any further confidence thoughts on length is at a, still, a sticking point given where people are expecting. You know, grid, connections out on the

To the future or other BTM Solutions, just want to get a sense of that's still part of the of the negotiations.

We stood up during the the second quarter was, was, was known and predicted and it's rolling into our joint venture State Line, power LLC. So we we have it running on, uh, a temporary power um, with full emissions control and then it's we're constructing the uh the gigawatt P plus power plant. Um starting really in the next quarter. Rowing into next year as we ramp up the deliveries of equipment to roll into the permanent site um, for that facility. So that's that's up and running. We got it up and running very quickly oh over the course of the quarter and uh it's stable and we'll be rolling it into the permanent site, you know, really beginning first of January or so their thereafter. Um,

Tener it it's it's a clearly morphing to longer term. I think that the the the the grid delays, the announcement of grid delays, the magnitude of the power, the sb6, you know, approach from the government coming up the recognition that um these guys are going to need this power for a while is is really morphing, you know, average contact contract teners out, you know, significantly um from where the the thought was maybe a year ago about what this business needed to be. So it's it's morphing into more of a behind the meter, you know, permanent power or permanent power to a portion of it becomes back up if the grid gets there at a lower cost. But I think there's a a heightened sensitivity um within the the regulatory framework and the public about power prices going up and and the notion that um the behind the meter helps defray some of that I think is is an important element that our customers are evaluating.

I appreciate it. Just a quick follow-up when you talk about behind the meter and the all the above approach that you've talked about throughout this call, um, could you give me your rank where other approaches are in Solutions relative to what Solaris on the gas on on your on your core gas turbine side is and how that may incorporate your, you know, lead time or your ability to kind of secure these projects relative to other Solutions in the market behind me.

Well, any other Solutions are, you know, finding a, a specific grid location where there may be Excess power. Um, and pulling that down most of that, at this point, with the size of the data centers needs some element of either backup or complimentary Prime power. And so as those sites or nodes that have may have Excess power, uh, at at on the grid, they're getting filled up, um, and that is getting scarcer and scarcer. And those are now being complemented by Power Solutions like ours. I think the the others in the market that are that are doing this. You know, I think the the Williams team is, uh, you know, very professional organisation. They run up a lot of equipment and assets around the country and they're doing it similar to. I think the approach we're taking with with equipment and long-term tenor contracts, and I think the market is, is recognizing that it will be powered on the increment by natural gas. Um, whether that's actually over the next 10 years whether that's a a backup behind the meter or whether that's an additional utility based big turbine running on the grid. So it's it will all

Be fired by natural gas on the increment for the stable uh, Power that's needed to run those data centers. And I think just 1 small piece to add

when we allude to other sources of generation to complement, our turbine workhorses Bill, uh, referred to it as

Adding new power generation can kind of extend the core turbine power that you have on the balance sheet. I'm just curious, in your future contract negotiations, is that worked into the contract where it's like, "Hey, we'll provide you 400 megawatts of power," but it's not specific as to what type of asset is generating that power? Just curious on that.

So, and it also could be a combination of, um, other gas turbines that we just we haven't secured to date. So I think every opportunity we're discussing we've got a great somewhat of a starter kit for for the customer's needs, and additional capacity, can be met with additional gas turbines, reciprocating engines or other forms of generation. So we've got the optionality.

Got it. That makes a lot of sense and then I was just hoping to get a bit more insight of how you guys have been consistently able to secure more manageable Watts near-term. The last few quarters. Obviously, I can appreciate that. You want to keep this specific close to the chest, but could you maybe just walk us through at a high level? How these opportunities arise and ultimately, how you execute on them. And then the second piece is, is the right to think that the 160 megawatts sequential Step Up was the majority of that was, uh, re-rented capacity, or did you, were you able to secure any early deliveries?

Uh, so yeah, I think Kyle kind of mentioned earlier. We've got the, the me team and the, uh, HV, and the LV team has decades and Decades of experience in the market globally, and we've scoured, the market both in the US and internationally defined equipment that we could put to work. Uh, I mostly on a rental basis. Um, we've evaluated purchasing some of it and and, uh, and we might but we had not done that yet.

Um but it is it is a really about our ability to go find those pieces of the puzzle and put in. Put them to work and have the distribution equipment.

Fair enough. Appreciate the color.

Any closing remarks.

Thank you, thank you everyone for joining us today. Uh, I'm excited about the continued growth. We've achieved to date as well as the growth that's to come.

Excited to see the Solaris family continued to grow both organically and through Acquisitions. Our success is a testament to the dedication, your hard work of our employees, the trust of our customers and the strong Partnerships with our suppliers. Thank you for being part of this Solaris team. We believe we are just getting started and continuing to meet the industry's growing and Urgent needs for comprehensive Power Solutions.

We look forward to sharing our progress with you in a few months. Thank you.

Thank you. Thank you so much the conference has. Now concluded, thank you for attending today's presentation. You may now disconnect