Solaris Energy Infrastructure, Inc.
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
SEI$57.77+14.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001697500-24-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001697500-25-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 72 current paragraphs.
24 unchanged; 19 reworded; 28 added; 25 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Formation of Stateline Joint Venture
Current report
On April 28, 2025, we announced the formation of Stateline Power, LLC (“Stateline”), a joint venture between our newly formed, wholly owned subsidiary Solaris Power Solutions Stateline, LLC and CTC Property LLC (“CTC”), an affiliate of an industry leader in the evolving artificial intelligence computing space. Stateline was established to provide off-grid power infrastructure for CTC’s newest data center campus. We contributed non-cash assets and pre-funded expenses valued at approximately $86.4 million in exchange for a 50.1% equity interest, and CTC will contribute approximately $86.0 million in cash for a 49.9% interest. We expect to consolidate Stateline in our financial statements beginning in the second quarter of 2025. The Stateline joint venture aligns with our broader growth strategy in the power solutions market.
Current report
Issuance of Convertible Senior Notes
Current report
On May 2, 2025, we completed a public offering of $155.0 million aggregate principal amount of 4.75% Convertible Senior Notes due 2030 (the “Notes”). The Notes are senior, unsecured obligations and bear interest at a rate of 4.75% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2025. The Notes will mature on May 1, 2030, unless earlier repurchased, redeemed, or converted. Prior to February 1, 2030, noteholders may convert their Notes only upon the occurrence of certain specified events. On or after February 1, 2030, the Notes may be converted at the election of the holders at any time until the second scheduled trading day immediately preceding maturity. Upon conversion, we may settle in cash, Class A common stock, or a combination of both, at our election. Of the $155.0 million in gross proceeds, $100.0 million is restricted for capital expenditures to support the growth of our Solaris Power Solutions segment, with the remaining balance expected to be used for additional capital expenditures and other general corporate purposes.
Current report
The Company estimates approximately 70% of the total 1,700 MW expected delivered capacity is currently committed to customers under commercial agreements that range in tenor from two to seven years. Each of these commercial agreements include distinct product specifications, such as product type, quantity, delivery period, and price, as well as standard terms and conditions with respect to acceptance, delivery, transportation, inspection, assignment, taxes and performance failure.
Current report
We intend to fund the majority of our current planned capital expenditures with available cash, cash flows from operations, available capacity under our revolving credit facility, proceeds from our Convertible Senior Notes offering, capital infusions into the Stateline joint venture by our joint venture partner and proceeds from debt capital in the Stateline joint venture. Additionally, while no assurance can be given, we may seek to issue additional securities through opportunistic capital market transactions, depending upon market conditions, and / or enter into additional debt financing agreements. Even if we are unable to secure the financing of our planned capital expenditures, we have the ability to pay cancellation fees for these committed purchase orders.
Current report
Solaris Logistics Solutions. Revenues from Solaris Logistics Solutions increased by $9.1 million, or 13%, to $77.0 million in the first quarter of 2025, compared to $67.9 million in the same period of 2024. The increase was primarily driven by a $11.7 million increase in revenue from last mile and ancillary services, attributable to higher last mile tonnage year-over-year. This growth was partially offset by a $2.7 million revenue decrease from fully utilized systems, which declined to 98 systems in the first quarter of 2025, compared to 102 systems in the same period of 2024.
Current report
Solaris Power Solutions. Revenues from Solaris Power Solutions increased by $49.4 million in the first quarter of 2025, compared to the same period of 2024. The Solaris Power Solutions segment was established in the third quarter of 2024 and did not contribute to revenue in the first quarter of 2024.
Current report
Solaris Power Solutions. Cost of revenue for Solaris Power Solutions increased by $16.5 million in the first quarter of 2025, compared to the same period of 2024. The Solaris Power Solutions segment was established in the third quarter of 2024 and did not contribute to cost of revenue in the first quarter of 2024.
Current report
Depreciation and amortization increased by $10.1 million, or 102%, to $20.1 million in the first quarter of 2025 compared to $9.9 million in the same period of 2024. This increase was primarily driven by $10.8 million of depreciation expense associated with the Solaris Power Solutions segment, which did not contribute to depreciation in the first quarter of 2024.
Current report
Selling, general and administrative expenses increased by $7.3 million, or 91%, to $15.3 million in the first quarter of 2025 compared to $8.0 million in the same period of 2024. The increase was primarily driven by a $3.1 million increase in stock-based compensation expense related to the cash settlement of employee stock awards as well as higher salaries, wages and benefits resulting from an increase in average headcount.
Current report
Other operating expense increased by $1.1 million to $1.2 million in the first quarter of 2025 compared to $0.1 million in the same period of 2024. The increase was primarily due to higher credit losses and transaction costs incurred during the first quarter of 2025.
Current report
Interest Expense, net
Current report
Interest expense increased by $4.4 million to $5.2 million in the first quarter of 2025 compared to $0.8 million in the same period of 2024. The increase was primarily due to higher borrowings outstanding along with higher effective interest rates.
Current report
Our primary sources of liquidity consist of cash flows from operations and availability under our revolving credit facility. In addition to these sources, recent developments, including the formation of the Stateline Power joint venture and the issuance of $155.0 million in convertible senior notes, are expected to provide enhanced liquidity and further advance our strategic growth initiatives.
Current report
We believe that these sources will provide sufficient liquidity to meet our financial obligations, including both our short-term and long-term purchase commitments related to growth capital expenditures. Additionally, while no assurance can be given, we may seek to issue additional securities through opportunistic capital markets transactions, depending upon market conditions, and / or enter into additional debt financing agreements.
Current report
Debt and Credit Facilities
Current report
Our revolving credit facility provides for borrowings up to the lesser of $75.0 million or a borrowing base determined by a percentage of eligible accounts receivable and inventory, subject to customary reserves and adjustments. At our option, and provided certain conditions are met, the facility may be increased by up to an additional $50.0 million, and up to $10.0 million is available for the issuance of letters of credit. As of March 31, 2025, no borrowings were outstanding, and availability under the borrowing base calculation was approximately $52.7 million. We intend to use any future borrowings for working capital and general corporate purposes.
Current report
Additionally, on April 28, 2025, we entered into an amendment to our senior secured term loan agreement and an amendment to our revolving credit facility. The amendments permit, among other things, the entry of Stateline Power Solutions into the Stateline joint venture and the issuance of certain third-party financings.
Current report
Convertible Senior Notes
Current report
On May 2, 2025, we completed a public offering of $155.0 million aggregate principal amount of 4.75% Convertible Senior Notes due 2030 (the “Notes”). Of the $155.0 million in gross proceeds, $100.0 million is restricted for capital expenditures to support the growth of our Solaris Power Solutions segment. The remaining balance is expected to be used for additional capital expenditures and other general corporate purposes. The Notes bear interest at an annual rate of 4.75%, payable semi-annually on May 1 and November 1 of each year, beginning on November 1, 2025. We estimate our interest payments for the next 12 months will total approximately $7.4 million based on the full principal of the Notes. These payments will be made in two installments, with the first installment due on November 1, 2025.
Current report
Capital Commitments
Current report
We have entered into purchase commitments for power generation equipment that are critical to our long-term strategic initiatives. Short-term purchase commitments due within 12 months total $153.0 million, while long-term purchase commitments that extend beyond one year total $774.5 million, of which $324.1 million is scheduled to be fulfilled in 2025, with the remaining $450.4 million due in 2026.
Current report
These commitments are cancellable but subject to significant termination penalties, ranging from 5% to 90% of the purchase price, depending on the timing of the cancellation.
Current report
Liquidity Position
Current report
As of March 31, 2025, cash and cash equivalents totaled $16.7 million. We believe that our cash reserves, projected operating cash flows, borrowing capacity under the revolving credit facility, and the proceeds from the recent Convertible Senior Notes offering will provide adequate liquidity to meet our operational needs for the next 12 months and beyond. These needs include debt service obligations, potential dividend payments, and purchase commitments.
Current report
The net proceeds from the Convertible Senior Notes offering were approximately $148.3 million, after deducting the underwriting discounts and commissions.
Current report
Operating Activities. Net cash provided by operating activities increased to $25.7 million for the three months ended March 31, 2025, compared to $16.9 million in the same period of 2024, representing an increase of $8.8 million. This increase was primarily driven by higher revenue, largely attributable to continued growth in business activity within our Solaris Power Solutions segment, which was established in the third quarter of 2024, and has rapidly expanded its contribution to our operating performance. Consequently, our net income, adjusted for non-cash items, increased to $45.5 million for the three months ended March 31, 2025, up from $21.8 million in the same period of 2024. This increase was partially offset by a $3.7 million cash settlement related to stock-based compensation and increased working capital requirements associated with supporting higher sales volumes and expanded operations.
Removed paragraphs (25)
Previous report
On September 11, 2024, we acquired MER, a company providing configurable, primarily natural gas-powered mobile turbines and ancillary equipment across energy, data center, and other commercial and industrial markets. This acquisition marks our entry into the scaled distributed power solutions market, strengthening our position as a mobile equipment and logistics solution provider in the oil and gas sector while diversifying our overall business.
Previous report
MER Acquisition
Previous report
We successfully completed the acquisition of MER on September 11, 2024. The results of MER’s operations have been included in our condensed consolidated financial statements from the acquisition date through September 30, 2024. For further details regarding the acquisition, please refer to Note 2. “MER Acquisition” in the notes to our condensed consolidated financial statements.
Previous report
Debt Financing
Previous report
On September 11, 2024, we entered into a senior secured term loan agreement totaling $325.0 million, primarily to fund the acquisition of MER. The remaining proceeds are restricted for capital expenditures to support our growth initiatives. The term loan bears a variable interest rate with interest payments due beginning in October 2024. Repayments of 1.25% of the original principal amount are due in quarterly installments beginning on September 30, 2025. The term loan matures on September 11, 2029.
Previous report
Additionally, on the same day, we extinguished our prior revolving credit facility using a portion of the term loan proceeds. Subsequently, on October 2, 2024, we established a new revolving credit facility that allows for borrowings up
Previous report
to $75.0 million, with a potential increase of up to an additional $50.0 million, contingent on certain conditions. This facility also includes provisions for up to $10.0 million in letters of credit. For further details regarding our debt agreements, please refer to Note 10. “Debt” in the notes to our condensed consolidated financial statements.
Previous report
Solaris Logistics Solutions. Solaris Logistics Solutions revenue remained relatively flat in the third quarter of 2024, increasing by $0.6 million, or 1%, to $70.3 million compared to $69.7 million in the same period of 2023. This modest growth was primarily due to an increase in last mile tonnage during the quarter. However, this was partially offset by a decrease in fully utilized systems, which decreased to 91 in the third quarter of 2024, down from 108 in the same period of 2023.
Previous report
Solaris Logistics Solutions revenue decreased by $17.5 million, or 8%, to $212.1 million in the first nine months of 2024 compared to $229.6 million in the same period of 2023. This decline was primarily due to a decrease in fully utilized systems, which dropped to 95 for the first nine months of 2024 from 112 in the same period of 2023.
Previous report
Solaris Power Solutions. Solaris Power Solutions revenue increased by $4.7 million in the three and nine months ended September 30, 2024, compared to the same periods of 2023. This increase was due to the MER Acquisition completed on September 11, 2024.
Previous report
Solaris Logistics Solutions cost of revenue decreased by $9.3 million, or 7%, to $131.7 million in the first nine months of 2024 compared to $141.0 million in the same period of 2023. This reduction was primarily due to lower system count, lower last mile trucking costs for ancillary services and the reversal of accrued property taxes following settlement with Brown County Appraisal District. Refer to Note 14. “Commitments and Contingencies –Tax Matters,” in the notes to our condensed consolidated financial statements for additional information on the property tax settlement.
Previous report
Solaris Power Solutions. Solaris Power Solutions cost of revenue increased by $1.3 million in the three and nine months ended September 30, 2024, compared to the same period of 2023. The increase was due to the MER Acquisition completed on September 11, 2024.
Previous report
Depreciation and amortization increased by $1.8 million, or 20%, to $11.0 million in the third quarter of 2024 compared to $9.2 million in the same period of 2023. This increase was primarily due to depreciation of $1.4 million from assets acquired in the MER Acquisition.
Previous report
Depreciation and amortization increased by $3.8 million, or 14%, to $30.5 million in the first nine months of 2024, compared to $26.7 million in the same period of 2023. This increase was driven by depreciation from the MER Acquisition and additional depreciable assets resulting from capital expenditures to develop and upgrade systems fleet for our Solaris Logistics Solutions segment.
Previous report
Gain on Reversal of Property Tax Contingency
Previous report
On June 14, 2024, we reached a settlement agreement with Brown County Appraisal District in Texas, following a favorable ruling by the Eastland Court of Appeals on April 18, 2024. As a result, in the nine months ended September 30, 2024, we reversed $4.3 million of property tax expenses previously recorded through 2023 in connection with this case. Of this amount, $2.5 million was presented as gain on reversal of property tax contingency and $1.8 million reduced the costs of services in our condensed consolidated statements of operations.
Previous report
Selling, general and administrative expenses increased by $2.4 million, or 38%, to $8.8 million in the third quarter of 2024 compared to $6.4 million in the same period of 2023. Selling, general and administrative expenses increased by $5.3 million, or 27%, to $25.0 million in the first nine months of 2024 compared to $19.7 million in the same period of 2023. The increase in these periods was primarily due to an increase in salaries, benefits and wages driven by an increase in average headcount, as well as increased professional fees and office rent.
Previous report
Other operating expense increased by $2.4 million to $3.0 million in the third quarter of 2024 compared to $0.6 million in the same period of 2023. Other operating expense increased by $3.6 million, to $3.7 million in the first nine months of 2024 compared to $0.1 million in the same period of 2023. Other operating expense for the three and nine months ended September 30, 2024 primarily relate to acquisition-related costs and credit losses. Other operating expense for the three and nine months ended September 30, 2023 primarily relate to loss on sale of assets and credit losses, partially offset with sales tax rebates.
Previous report
Our primary sources of liquidity are cash flows from operations, borrowings under our debt financing agreements and available capacity from our revolving credit facility. We utilize this liquidity to support ongoing operations, fund capital expenditures for growth, such as new turbines and related ancillary equipment for our power solutions segment and pay dividends. Additionally, while no assurance can be given, we may seek to issue additional securities through opportunistic capital markets transactions, depending upon market conditions and other relevant factors.
Previous report
We believe that our current cash reserves, operating cash flow, available capacity under our new revolving credit facility and the potential to issue additional equity, if needed, will provide adequate liquidity to meet our future operational needs, including repayment of debt service obligations and dividend payments.
Previous report
Dividends
Previous report
On October 30, 2024, the Company’s board of directors approved a quarterly cash dividend of $0.12 per share of Class A common stock, payable on December 16, 2024, to holders of record as of December 6, 2024. Additionally, a distribution of $0.12 per unit will be made to Solaris LLC unitholders, with the same payment and record dates.
Previous report
Operating Activities. Net cash provided by operating activities decreased to $46.3 million for the nine months ended September 30, 2024, compared to $64.7 million for the same period in 2023. This $18.4 million decline is primarily attributed to reduced business activity, reflected in the decrease in our fully utilized systems. Consequently, our net income, adjusted for non-cash items, was $61.9 million for the nine months ended September 30, 2024, compared to $72.5 million in the same period in 2023. Additionally, changes in working capital led to a $15.7 million decrease in cash for the nine months ended September 30, 2024, compared to a $7.8 million decrease in cash in the same period in 2023.
Previous report
Fair Value Measurements in Business Combinations
Previous report
When accounting for a business acquisition, we allocate the purchase consideration to the various acquired assets and assumed liabilities based on their fair values. Our measurement of fair value involved significant estimates and assumptions and we have up to one year post-acquisition to finalize these measurements if necessary. For tangible and identifiable intangible assets acquired, we employ various valuation methodologies, including discounted cash flow analyses. These analyses rely on assumptions regarding the timing and amount of future revenues and expenses. Key assumptions include discount rates, future revenues, operating costs, and projections of capital expenditures, aligned with those used by principal market participants. Given the complexity of these calculations, we engage third-party specialists to assist in evaluating our assumptions and appropriately measuring the fair value of the assets acquired and liabilities assumed.
Reworded paragraphs (19)
Previous wording
Demand for our services varies across each of our business segments, Solaris Logistics Solutions and Solaris Power Solutions, due to differences in end market exposure.
Current wording
Demand for our services varies across each of our business segments, Solaris Power Solutions and Solaris Logistics Solutions, due to differences in end market exposure.
Previous wording
For Solaris Power Solutions, demand is predominantly influenced by accelerating needs for power in the U.S., juxtaposed against constrained electrical grid infrastructure, which is due to a number of factors including, but not limited to, aging transmission and distribution networks, extreme weather, and long lead times for various electric infrastructure equipment. Solaris’ turbine offerings are configurable and can be scaled to match power demand on a “behind-the-meter” basis in a shorter timeline than many grid-based providers can service.
Current wording
For the Company’s Solaris Power Solutions segment, demand is predominantly influenced by accelerating needs for power in the U.S., juxtaposed against constrained electrical grid infrastructure, which is due to a number of factors including, but not limited to, aging transmission and distribution networks, extreme weather, and long lead times for various electric infrastructure equipment. Solaris’ turbine offerings are configurable and can be scaled to match power demand on a “behind-the-meter” or “distributed” basis in a shorter timeline than many grid-based providers can service.
Previous wording
Today, Solaris Power Solutions’ primary customers include a large data center and several energy companies requiring power for hydrocarbon production, processing, transportation, and refining applications. Power demand for data centers is primarily driven by rapid demand growth for generative artificial intelligence (“AI”) computing applications. Power demand for energy customers is primarily driven by hydrocarbon production and processing operations in geographies where grid infrastructure may not be available or reliable or is prone to supply disruption. Many of our customers face multi-year delays to receive grid-based power and are turning to configurable, “behind-the-meter” solutions such as ours to bridge this gap. The availability of low-cost fuel as a result of the abundant supply of natural gas domestically enhances the cost-competitiveness of our mobile natural gas-powered turbine technology as compared to conventional grid-based power.
Current wording
Today, Solaris Power Solutions’ primary customers include a leading company in the artificial intelligence computing sector, as well as several energy companies requiring power for hydrocarbon production, processing, transportation, and refining applications. Power demand for data centers is primarily driven by rapid demand growth for generative artificial intelligence (“AI”) computing applications. Power demand for energy customers is primarily driven by hydrocarbon production and processing operations in geographies where grid infrastructure may not be available or reliable or is prone to supply disruption. Many of our customers face multi-year delays to receive grid-based power and are turning to configurable, distributed generation solutions such as ours to bridge this gap. The availability of low-cost fuel as a result of the abundant supply of natural gas domestically enhances the cost-competitiveness of our mobile natural gas-powered turbine technology as compared to conventional grid-based power. Longer-term cost competitiveness of our distributed power solutions could drive demand for our equipment even after our customers receive grid interconnection due to the diversification benefits gained by running our equipment as a hybrid solution of prime power with built-in backup in conjunction with grid-based power.
Previous wording
During the third quarter, Solaris Power Solutions generated revenue from an average of approximately 156 megawatts (“MW”) of generation capacity. Due to the continued market demand we forecast for behind-the-meter power generation, Solaris Power Solutions has secured deliveries for turbines and ancillary equipment that will significantly increase our power generation fleet to approximately 535 MW by the third quarter of 2025. The Company estimates approximately 450 MW, or 84% of total expected delivered capacity, is currently committed to customers under commercial agreements that range in tenor from two to four years.
Current wording
During the first quarter of 2025, Solaris Power Solutions generated revenue from an average of approximately 390 megawatts (“MW”) of generation capacity. Due to the continued market demand we forecast for distributed power generation, Solaris Power Solutions has secured orders for turbines and ancillary equipment that will significantly increase our operated power generation fleet to approximately 1,700 MW by the first half of 2027. Approximately 900 MW of the Company’s pro forma operated capacity is owned by Stateline, whose ownership is split 50.1% and 49.9% between the Company and CTC, respectively. On a net basis, the Company should own approximately 1,250 MW of total expected delivered capacity either directly or indirectly through its proportional ownership in Stateline.
Previous wording
We expect total company capital expenditures over the next four quarters of approximately $295 million, of which $130 million is expected in the fourth quarter of 2024. The majority of these capital expenditures are to support Solaris Power Solutions capital growth. Capital expenditures for Solaris Logistics Solutions represents approximately $10-15 million of our total expected capital expenditures over the next four quarters. We intend to fund our current planned capital expenditures with proceeds from our recent debt financing and cash flow from operations.
Current wording
We expect total company capital expenditures remaining in 2025 of approximately $490 million on a consolidated basis, of which approximately $295 million should be provided by the Stateline joint venture. Net of the Company’s non-owned portion of Stateline, the Company’s remaining net capital expenditures in 2025 should be approximately $195 million. The majority of these capital expenditures are to support Solaris Power Solutions capital growth. Capital expenditures for Solaris Logistics Solutions represents approximately $10-15 million of our total expected annual capital expenditures.
Previous wording
The sustainability of this favorable supply-demand dynamic in the power sector will depend on multiple factors, including continued demand growth for generative AI computing applications, supply chain availability for electrical equipment, potential regulatory changes, overall economic activity levels, the level and pace at which the power industry can invest in power infrastructure, and the pace of continued electrification-driven demand growth.
Current wording
The sustainability of this favorable supply-demand dynamic in the power sector will depend on multiple factors, including continued demand growth for generative AI computing applications, supply chain availability for electrical
Previous wording
For Solaris Logistics Solutions, demand is predominantly influenced by the level of oil and natural gas well drilling and completion activity in the U.S. During the third quarter of 2024, our fully utilized system count remained relatively flat, which was in line with a relatively stable Baker Hughes U.S. Land Rig count. For the fourth quarter of 2024, we expect our fully utilized system count to decline roughly 10% primarily due to seasonality, which includes the impact of weather, holidays and customer budget completion. The level of demand over the longer term will depend on multiple factors, including commodity price levels, customer consolidation that can drive activity and procurement strategy changes and industry efficiency gains, geopolitical risk, economic activity, potential regulatory changes and potential impacts from geopolitical disruptions.
Current wording
For Solaris Logistics Solutions, demand is predominantly influenced by the level of oil and natural gas well drilling and completion activity in the U.S. During the first quarter of 2025, our fully utilized system count increased over 25% to 98 fully utilized systems from the fourth quarter of 2024, which was driven by a seasonal increase in completions activity as well as new customer wins. West Texas Intermediate (WTI) crude oil prices recently declined to less than $60 per barrel compared to an average of approximately $70 per barrel in the fourth quarter of 2024 and first quarter of 2025. We expect this commodity price softness could have some impact on activity levels for the remainder of the year. The level of demand over the longer term will depend on multiple factors, including commodity price levels, customer consolidation that can drive activity and procurement strategy changes and industry efficiency gains, geopolitical risk, economic activity, potential regulatory changes and potential impacts from geopolitical disruptions.
Previous wording
Three and Nine Months Ended September 30, 2024 Compared to Three and Nine Months Ended September 30, 2023
Current wording
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
Previous wording
Solaris Logistics Solutions. Solaris Logistics Solutions cost of revenue increased by $3.5 million, or 8%, to $45.6 million in the third quarter of 2024 compared to $42.1 million in the same period of 2023, primarily due to a $7.4 million increase in last mile and ancillary service costs associated with an increase in last mile tonnage. This increase was partially offset by a $3.8 million reduction in system costs due to lower fully utilized system count and reversal of $1.8 million accrued property taxes following a settlement agreement with Brown County Appraisal District. Refer to Note 14. “Commitments and Contingencies –Tax Matters” in the notes to our condensed consolidated financial statements for additional information.
Current wording
Solaris Logistics Solutions. Cost of revenue for Solaris Logistics Solutions increased by $11.3 million, or 28%, to $51.2 million in the first quarter of 2025, compared to $39.9 million in the same period of 2024. The increase was primarily driven by a $13.8 million increase in last mile and ancillary service costs, associated with higher last mile tonnage. This increase was partially offset by a $2.4 million reduction in system costs due to lower fully utilized system count.
Previous wording
Solaris Logistics Solutions cost of revenue as a percentage of revenue was 65% and 62% for the three and nine months ended September 30, 2024, respectively, compared to 60% and 61% for the same periods ended September 30, 2023.
Current wording
Cost of revenue as a percentage of revenue for Solaris Logistics Solutions was 67% and 59% for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Solaris Power Solutions cost of revenue as a percentage of revenue was 27% for the three and nine months ended September 30, 2024.
Current wording
Cost of revenue as a percentage of revenue for Solaris Power Solutions was 33% for the three months ended March 31, 2025.
Previous wording
During the third quarter of 2024, we recognized a combined United States federal and state expense for income taxes of $0.5 million, a decrease of $0.8 million as compared to the $1.3 million income tax expense we recognized during the same period in 2023. During the first nine months of 2024, we recognized a combined United States federal and state expense for income taxes of $3.7 million, a decrease of $2.8 million as compared to the $6.5 million income tax expense we recognized during the same period in 2023. This change was attributable to changes in operating gains. The effective combined United States federal and state income tax rates were -26.3% and 14.6% for the third quarter of 2024 and 2023, respectively. The effective combined United States federal and state income tax rates were 19.7% and
Current wording
During the first quarter of 2025, we recognized a combined United States federal and state expense for income taxes of $3.9 million, an increase of $2.0 million as compared to the $1.9 million income tax expense we recognized during the same period in 2024. This change was attributable to changes in operating gains. The effective combined United States federal and state income tax rates were 23.2% and 20.3% for the first quarter of 2025 and 2024, respectively. The effective tax rate differed from the statutory rate primarily due to Solaris LLC’s treatment as a partnership for United States federal income tax purposes.
Previous wording
As of September 30, 2024, we had outstanding borrowings of $325.0 million under our senior secured term loan agreement, with $4.1 million in principal payments due within the next twelve months. The interest rate on the term loan was 11.1% as of that date and is subject to periodic repricing. Assuming this rate remains constant, we estimate our interest payments for the next twelve months will total approximately $36.6 million. Additionally, we had outstanding purchase commitments of $219.2 million related to growth capital expenditures, payable within the next twelve months.
Current wording
We are party to a senior secured term loan agreement with an outstanding principal balance of $325.0 million, of which $12.2 million is due within the next twelve months. The loan bears interest at a rate of 10.3% as of March 31, 2025 and is subject to periodic repricing. Assuming this rate remains constant, we estimate our interest payments for the next 12 months will total approximately $33.6 million.
Previous wording
The Company’s board of directors authorized a share repurchase program on March 1, 2023, with an approved limit of $50.0 million and no set term limits. During the three months ended September 30, 2024, we did not repurchase nor retire any shares of Class A common stock under the share repurchase program. During the nine months ended September 30, 2024, we purchased and retired 1,108,349 shares of Class A common stock at an aggregate cost of $8.1 million, or $7.30 per share, under the share repurchase program. As of September 30, 2024, we have collectively repurchased and retired 4,272,127 shares of Class A common stock for $34.6 million, or $8.09 per share, resulting in $15.4 million remaining under the authorized share repurchase program.
Current wording
The Company’s board of directors authorized a share repurchase program on March 1, 2023, with an approved limit of $50.0 million and no set term limits. During the three months ended March 31, 2025, we did not repurchase nor retire any shares of Class A common stock under the share repurchase program. As of March 31, 2025, we have collectively repurchased and retired 4,272,127 shares of Class A common stock for $34.6 million, or $8.09 per share, resulting in $15.4 million remaining under the authorized share repurchase program.
Previous wording
Investing Activities. Net cash used in investing activities was $189.9 million for the nine months ended September 30, 2024, an increase from $54.8 million during the same period in 2023. The $135.1 million increase is mainly attributed to $122.1 million used in the business acquisition of MER and $55.2 million paid for turbine progress payments. This increase was partially offset by the absence of capital expenditures from our previous growth capital program in 2023.
Current wording
Investing Activities. Net cash used in investing activities was $144.3 million for the three months ended March 31, 2025, an increase from $3.3 million during the same period in 2024. The $141.0 million increase is mainly attributed to $142.0 million paid for turbines and ancillary equipment to support the growth and operations of Solaris Power Solutions.
Previous wording
Financing Activities. For the nine months ended September 30, 2024, net cash provided by financing activities totaled $254.4 million. This amount primarily reflects net debt financing proceeds of $295.0 million, partially offset by payments of $14.5 million on debt financing and debt extinguishment costs, $10.9 million in quarterly dividends to Class A common stock shareholders, $8.1 million on share repurchases, and $4.9 million in distributions to Solaris LLC unitholders. In comparison, net cash used in financing activities was $15.2 million for the nine months ended September 30, 2023. This was largely due to $25.8 million spent on share repurchases, $10.4 million in quarterly dividends to Class A common stock shareholders and $5.0 million in distributions to Solaris LLC unitholders, partially offset by $29.0 million in net borrowings under our senior secured credit facility.
Current wording
Financing Activities. For the three months ended March 31, 2025, net cash used in financing activities totaled $24.5 million. This amount primarily reflects $10.1 million paid for cancelled shares withheld for taxes from vesting of restricted stock, $4.7 million in quarterly dividends to Class A common stock shareholders, $4.6 million in distributions to Solaris LLC unitholders and $3.6 million in Tax Receivable Agreement payments. In comparison, net cash used in financing activities was $15.9 million for the three months ended March 31, 2024. This was primarily related to the repurchase of shares for $8.1 million, quarterly dividends of $3.6 million to Class A common stock shareholders, and distributions to Solaris LLC unitholders of $1.6 million.
Previous wording
Our material cash commitments consist primarily of obligations under our debt financing, purchase commitments as part of the power generation fleet growth program, Tax Receivable Agreement, insurance premium financing, obligations under our finance and operating leases, dividend payments, and purchase obligations as part of normal operations.
Current wording
Our material cash commitments consist primarily of obligations under our debt financing arrangements, including interest and principal payments under the Term Loan and Convertible Senior Notes, purchase commitments as part of the power generation fleet growth program, obligations under the Tax Receivable Agreement, payments under finance and operating lease agreements, potential dividend payments, and other purchase obligations as part of normal operations.
Previous wording
Refer to Note 14. “Commitments and Contingencies” –Purchase Obligations included in the notes to our condensed consolidated financial statements contained herein for a discussion of our off-balance sheet arrangements.
Current wording
Refer to Note 14. “Commitments and Contingencies” –Purchase Commitments included in the notes to our condensed consolidated financial statements contained herein for a discussion of our off-balance sheet arrangements.
Previous wording
For detailed information, please refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no changes to our critical accounting policies since December 31, 2023, except for the following additional critical accounting estimate.
Current wording
For detailed information, please refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to our critical accounting policies since December 31, 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
equipment, potential regulatory changes, overall economic activity levels, the level and pace at which the power industry can invest in power infrastructure, and the pace of continued electrification-driven demand growth.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
16.9% for the first nine months of 2024 and 2023, respectively. The effective tax rate differed from the statutory rate primarily due to Solaris LLC’s treatment as a partnership for United States federal income tax purposes.