Good morning, and welcome to the Solaris Second Quarter 2026 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. To ask your question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note that this event is being recorded. I would now like to turn the conference over to Yvonne Fletcher, Senior Vice President of Finance and Investor Relations. Please go ahead, ma'am.

Thank you, Operator. Good morning and welcome to the Solaris Second Quarter 2026 Earnings Conference Call. Joining us today are Chairman and Co-CEO Bill Dartler, our Co-CEO and Director Amanda Brocks, our President Kyle Ramachandran, and our CFO Steve Thompson. Before we begin, I'd like to remind you that some of the statements we will make today are forward-looking and reflect 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 Permissions that outline those risks. I would like to point out that our earnings release and today's conference call will contain discussion of non-GAAP financial measures. The presentation of this additional information should not be considered in isolation or as 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. Additionally, we encourage you to refer to our earnings supplement slide deck, which was published last night on the investor relations section of our website under events and presentations. I'll now turn the call over to our chairman and co-CEO, Bill Darler.

Thank you, Yvonne, and thank you, everyone, for joining us this morning. The second quarter was a record-setting quarter for Solaris and a further step along the significant growth path that is ahead of us. We are executing our strategy at all levels, including operationally, commercially, and strategically. We continue to provide dedicated power at scale to two data centers consistently achieving higher reliability, and we are under construction at two other data centers locations, one of which will energize in September. This track record of performance has resulted in the execution of long-term contracts with three leading investment-grade technology companies. Two of those contracts were executed in the last six months, and this quarter we've already expanded the scope of both, in addition to a third expansion of a contract with one of our large energy customers. These additions and increased contract scope translate directly into improved earnings and cash flow visibility, which is why we believe there is a significant disconnect between current public market valuations and the fundamentals, performance, and positive outlook for our company. We expect the cash flow generator from our current contracts well exceeds our enterprise value today before including any additional cash flow from assets on order that are not yet contracted. We have transformed Solaris into a unique and sustainable power and infrastructure solutions company built for the long term. We are collaborating with our customers to identify and work through bottlenecks in the market. We are also pursuing M&A partnerships that strengthen our ability to deliver on these goals. Our most recent acquisition, Global Energy Services Alliance, extends our capabilities to full cycle power services, which follows our early investment in a selective catalytic reduction or SCR manufacturer and the acquisition of the electrical distribution business that is now Solaris Power Distribution Services. All of these acquisitions enhance our execution capabilities and also create additional earning streams on top of our existing long-term power projects. Looking into the future, we've recently made an equity investment in Deployable Energy, an early-stage nuclear small modular reactor company, or SMR. We are excited to highlight that since we've made this investment, Deployable Energy has now achieved criticality working under a program with the Department of Energy. Reaching criticality, the point at which a reactor first achieves a controlled self-sustaining fission reaction, is a foundational milestone that validates the core design and marks a step change from development toward commercial readiness. It also meaningfully de-risks the technology. We will be working with Deployable to help commercialize their technology, which we believe can one day complement our existing power generation capabilities. Within the power infrastructure and solutions market, the demand for islanded behind-the-meter power in conjunction with some level of grid connectivity continues to be exceptionally strong. Today, we are in active negotiations for multiple gigawatts of additional demand with multiple hyperscalers and AI compute companies. The tailwinds we've described over the past several quarters, grid interconnection delays, the market's focus on speed to compute, and enhanced regulatory focus on protecting consumer prices all continue to reinforce the significant demand for the bring-your-own-power solutions that Solaris delivers. Our Solaris logistics segment also continues to perform well, consistently producing over $20 million per quarter of free cash flow that we are investing in our power and infrastructure services business at attractive rates of return. We are effectively sold out of our top-fill equipment, and we see robust fundamentals for the business. We are excited about the large and growing opportunities for Solaris. Our execution history, culture, and team, combined with the integration of additional services and capabilities, will continue to enable our success today and in the future. With our premier customer base, some of the best contracts in the industry, and a demonstrated ability to deliver, we are well positioned to continue to execute on the growth opportunities ahead of us. With that, I'll turn it over to Amanda.

Thank you, Bill, and good morning, everyone. As Bill noted, the most compelling evidence of our strategy success is that our existing customers are choosing to grow with us and expand relationships and our contracts. In July, we finalized an amendment to our Hatchboro Agreement to convert the original power capacity agreement into a comprehensive capacity and operating agreement, which includes additional balance of plant and batteries, as well as full operation and maintenance services for the turnkey 660-megawatt power plant. In addition, we've extended the term from up to 15 years to up to 18 years, a 10-year base term with an eight-year extension option. This extension aligns the power contract with other agreements our customer has on this site. We are making rapid progress under this contract. We commence civil construction in July, and we have more than 70% of the equipment required to service this contract already available to deploy on time. We will begin earning revenue in January 2027. Our second contract expansion with our third investment-grade global technology customer relates to the contract we executed in April of this year. We've already expanded the scope from the original 640 megawatts of generation to include incremental balance of plant and energy storage, as well as the procurement, delivery, and management of natural gas on a cost-plus basis with no commodity price risk. The first deployment under this contract is on time under construction with energization expected next month. Power shortages, grid infrastructure, and regulatory-related delays continue to be widespread. In July, we expanded and extended our contract with one of our large energy customers who has been informed that the grid interconnect time is now seven to eight years away. They increased power capacity from 60 megawatts to approximately 80 megawatts and extended the term of the contract from four to six years. These delays are indicative of what medium to large load businesses are experiencing nationwide. We have a diverse and high-quality customer base. Our proven performance to date gives us confidence that these relationships will continue to strengthen and grow. Our long-term customers have come back to expand their contracts, seeking more capacity and scope and longer tenor. While our commercial team develops deep relationships resulting in the initial execution of our contracts, it is also our operational performance, engineering, and service capabilities that we believe result in the expansions of our contracts, as well as opportunities to evaluate new sites. Looking forward, we have approximately 800 megawatts of open capacity with attractive nearer-term delivery timelines and a line-of-sight to additional capacity, both through the traditional OEM channels as well as the secondary market. We continue to make positive progress and are in advanced detailed discussions with numerous customers related to the deployment of this equipment under long-term contracts. In summary, as a result of the credibility we have earned through two years of at-scale operations, the recent additions to our team who have decades of power and infrastructure experience, and the strategic acquisitions we have made, we continue to perform as a leader in the distributed power sector. We are well positioned and pleased with our performance to date, our positive momentum in the market, and our overall growth. I'll now turn it over to Kyle to discuss our M&A and vertical integration strategy.

Thank you, Amanda, and good morning, everyone. At Solaris, we are building a diversified, integrated power and infrastructure service company organically and through our acquisitions so that we can deliver the solutions our customers are looking for. Today, we deliver infrastructure and services across the full power asset lifecycle of design, deployment, operations, and maintenance for our own generation and for generation owned by others. We're targeting growth initiatives that, one, de-risk our ability to deliver for customers, two, add recurring revenue, and three, create a competitive edge. We focus on opportunities that bring us capabilities or scarce resource that enhances our ability to execute for our customers. Skilled labor, engineering depth, access to equipment, which enhances the value proposition for our customers and widens the moat, both around the contracts we already have and the new ones we are working on. To date, every acquisition we have made has been founder-led, with entrepreneurs taking mostly stock rather than cash, which creates alignment, culturally and financially, to keep building the business after closing. Global Energy Services Alliance, or GISA, is the latest and largest example. In early July, we acquired GISA, which was formed from the combination of Baseline Power, a U.S. provider of generation, aftermarket, installation, and commissioning services, and ProPer Energy Services, a global installation and operations and maintenance provider with project experience in more than 30 countries. GISA supports a wide range of customers, including utilities and IPPs, governments, and OEMs, and services a wide range of generation technologies, including large gas turbines. GISA also brings in-house insulation and commissioning, long-term operations and maintenance, repair, refurbishment, and 24-7 emergency response across aeroderivative, heavy-duty industrial, hydroelectric, and steam turbine classes. Following the acquisition of GISA, we now have a team of over 600 skilled and experienced colleagues installing, commissioning, operating, and maintaining power infrastructure. This workforce provides several key strategic benefits for us, including de-risking our own execution at a time when the market for experienced and skilled labor is exceptionally tight. As a global install base of turbines matures, GISA is also well positioned to benefit from significant aftermarket opportunities. Additionally, GISA provides boots on the ground to identify equipment available for refurbishment, which we can add to our own capacity or market. Finally, it strengthens how we earn new business. Providing turnkey installation, commissioning, and long-term operations under one roof enhances our execution capabilities and eliminate multi-contractor handoff risks. That gives customers greater schedule and performance certainty. We are excited about additional opportunities that we're actively evaluating that we believe will strengthen Solaris over the long run. I'll now hand it over to Steve.

Good morning, everyone. In the second quarter, we generated revenue of approximately $219 million of 12% sequentially in the first quarter and adjusted EBITDA of approximately $108 million of 30% sequentially. Adjusted E-Visa attributable to Solaris, excluding the impact of the non-controlling interest in our state land joint venture, was approximately $111 million. Net income was $25 million, and adjusted pro-forma net income was $37 million, or 39 cents, for a fully diluted share. In Power Solutions, we averaged approximately 950 megawatts of capacity earning revenue during the quarter, up 4% from approximately 910 megawatts in the first quarter. Segment revenue of approximately $158 million was up 23% sequentially, and segment-adjusted EBITDA of approximately $96 million increased to 34%, driven primarily by increased ancillary service revenue. In logistics, segment revenue of $61 million was down 10% on lower last mile transportation activity, while segment adjusted EBITDA of $25 million increased to 7% on higher activity and a more favorable project mix. We have increased our third quarter adjusted EBITDA guidance to $90 to $105 million, reflecting the contributions of GISA acquisition, as well as our expectations for continued execution. We are also establishing initial fourth quarter adjusted EBITDA guidance of $100 to $120 million, reflecting the ramp of energization at our state-line joint venture, as well as the first location for our third hyperscaler customer. I'd also note that our guidance excludes any potential benefits from additional ancillary services. These services, which include third-party engineering studies, startup, commissioning or decommissioning costs, option payments, and now with GISA, third-party equipment sales can be both short-cycle and difficult to precisely predict, but the earnings and cash impact could be meaningful. During the second quarter, we transformed our capital structure by successfully issuing $1.3 billion of senior unsecured notes and securing a new $650 million five-year revolving credit facility. In connection with these financings, we were assigned corporate credit readings of BB- from S&P, DA3 from Moody's, and BBB from Fitch. We ended the quarter with over $800 million in cash and a fully-on-run revolver. This approximately $1.4 billion of liquidity, combined with our operating cash flow, supports our current projected growth. We also remain committed to our dividend program, and on August 4th, our board approved a third quarter dividend of 12 cents per share, which once paid will represent our 32nd consecutive In summary, the Solaris team delivered another great quarter, and following a successful financing, our balance sheet is in great shape and our growth plan is on track. With that, we'd be happy to take your questions.

Thank you, and we will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. And at this time, we'll pause momentarily for the first question. And our first question today will come from David Acaro with Morgan Stanley. Please go ahead.

Hi, thanks so much. Good morning, Dave. You know, you've added a lot of new capabilities recently. I'm looking at slide four, which now has quite a long list, I guess, of upside strategies here. I was wondering if you could maybe help just elaborate or frame the magnitude of the upside potential as you look at your, you know, deployed and contracted fleet over time and what that upside could look like on that run rate EBITDA.

Well, I think what we've laid out here is a view of this on a conservative basis. I think what's embedded in this is not a lot of option value to the growth of the GISA platform as well. So I think there's significant upside to that. This does include some level, probably less than we're actually seeing, of balance of plant associated with the additional capacity, but there's more to come on that on top of GISA. So, GISA's footprint is global and massive, and we see lots of opportunities out there with that business. They're seeing equipment that has uses both in the U.S. and outside the U.S. with the ability to refurbish and do some work there. So we're seeing a little bit of an aftermarket activity there where we actually can see significant opportunities to generate additional cash out of business as we grow it over the next year or two.

Okay, great. Thanks. And I was wondering if we could also get your latest thoughts on other technologies outside of the turbines that you've been securing. Does the geese acquisition make you look maybe more seriously at things like combined cycle plants or larger frame turbines in the market and just any evolution in your thinking around that or like reciprocating engines, et cetera?

Yeah, I mean, we're, as we said all along, agnostic to the source of power. We do understand the limitations and the strengths of the turbines that we're selecting. We are evaluating some technologies on some smaller scale steam generation that could go along with the waste heap that they produce and the capabilities there with the steam generation history that GISA has on top of the ability to look at frames. And I think as we see this market evolve, I think that the NIMBYism is clearly real. Everyone reads about it every day. What it will dictate is once there's more than likely a friendly local environment where the local citizens realize the benefits of these manufacturing facilities, if you will, in their towns, and that the benefits may be, you know, been overblown, I mean, the negatives have been overblown, there will be opportunities to continue to grow those facilities. And so, where we see opportunities is evolving these, you know, 500 to 1 gigawatt power plants using, you know, small, medium-scale turbines and enhancing that with larger equipment and larger units. And so, we're actively, you know, in the design phase and in the discussions on how you design those facilities to see the continued growth in specific locations because I think that it will be easier to grow locations that have been accepted and it will be kind of starting new ones.

Okay, got it. Appreciate it. And our next question will come from Michael Sullivan with Wolf Research. Please go ahead.

Hey, good morning. I wanted to just ask on thoughts around financing, potential future growth. You know, we've obviously seen what Williams has done recently with a partner in Blackstone and just your appetite for something like that and what could potentially catalyze it.

Yeah, great question. I'll let Stephen address that.

Yeah, as we said in the prepared remarks, you know, we're sitting on significant liquidity today for, you know, the projects that we have in front of us, and we actually think there's probably some incremental, you know, debt capacity for small additions to our portfolio of projects. But, you know, as you may have gathered from our comments, there's quite a few commercial opportunities we're looking at. Some of those may lend themselves to more of a project finance or a structure in which we bring in a partner. So, we're in discussions with a wide variety of market participants. We feel there's quite a few attractive options out there if some of these projects come to fruition. We're going to be flexible around those structures, taking into account, of course, cost of capital and flexibility of the business.

Great. Very helpful. Thanks.

And then just in terms of maybe you could just give us a little color on what you're seeing in the secondary market for turbines that could maybe hit in the next year or two. you know there is active market for you know the oems continue to make it there's things around the world obviously you know the u.s is still u.s and canada are still sitting on very favorable natural gas prices the rest of the world is not today and so the cost of the use of some incremental generation around the world may not be as attractive for the gas-fired equipment as it would be moving in here so the gisa guys with their footprint and activity are on top of all that, and I think that we will see, you know, some ability to free up. We've been active in picking up additional equipment. And when folks have walked or the OEMs, you know, produced one or two more than they thought they had, and we've been able to get kind of a first call on that or at least a second But the market is active, and I think GISA and the ability to repair, maintain, move, deliver, do all the stuff that is the hard part there that really gives us advantage on finding the equipment and getting it in the shape it needs to be in the U.S. market or in the opportunistic place where we may find it internationally and keep it international and just sell it to somebody else. So I think that it opens a lot of doors for us in the power generation market.

Appreciate all the color. Thank you very much.

And our next question will come from David Anderson with Barclays. Please go ahead.

Thank you. Good morning. So balance of plan is really starting to show up in the numbers and it's clearly a big part of your execution platform. Can you talk a bit about how much of your deployed capacity by the end of 27 will have a contracted balance of plan element, maybe kind of longer term, kind of like what percentage are you sort of thinking in terms of that part of your business?

Obviously, the more the better if we get the right returns on it. So I think it's really addressing the specific customer situation and how we're fitting into their behind-the-meter power solution. But, you know, we've kind of flashed numbers out there kind of arranging the cost and the return to an incremental dollar per megawatt basis. And it ranges clearly as we add balance of plan to that. So I think one of the evolutions of the company is as we grow this, as we grow the other platforms, it is this X number of megawatts times Y number equals this equals our stock price. I think that math is going to be less and less meaningful as we continue to grow the business in the ancillary parts of it as well. So it's not a hard and fast rule. Obviously, we believe that running the entire plant as the operator and owner of it, it's better to control all that equipment and operate it as one specific unit. So I think our goal is to continue to do more of that as we grow and put the fleet to work.

I think the other thing that is happening, it's not only that we believe it is more efficient and cost effective, but our existing customers and the customers that we are talking to believe that sort of one-stop turnkey where we deliver, you know, all of the generation, gas access, and also the distribution side, that turnkey approach is something that they want.

That makes a lot of sense. And so it leads to my next question. It's more of a kind of broader strategic question. So you're obviously moving away from just deploying megawatts. You're talking about balance of plant. There's an SMR you're talking about the GEES acquisition. Can you talk a little bit about how your strategy has evolved to date and any insight into how you see the strategy expanding further over the next few years? Clearly, you look in many different areas. If any insight on that would be great.

Yeah, I think the strategy is not – the strategy is showing up now more than changing. I think we've always believed and understood that adding the balance of plant scope was something that we were looking at. The acquisition strategy to broaden our capabilities is really our view of the market needs and how do we provide those turnkey solutions to the customers and how are we able to grow, you know, as a couple of the critical paths here are both having equipment and then having the team and the skill set to put it all together and run it and the ability to maintain it over the lifecycle of the equipment.

So I think it is, you know, the strategy isn't necessarily changed. what's happening now is it's actually showing up thank you very much and our next question will come from derek whitfield with texas capital please go ahead thanks uh good morning and congrats on your quarter and update i wanted to start on your project pipeline um what impact if any have data center moratoriums had on your project pipeline it would seem to me that your offering would inherently be more valuable given the tightness and computing power yeah maybe i'll

just jump in i mean i think clearly what we're seeing is the demand for compute is outpacing the incremental supply of compute getting put online broadly and to the point on moratoriums in different jurisdictions i think where we fit really neatly into that story is the flexibility of our solution if you've got access to gas we can really kind of go anywhere and so i think Rather than, you know, having a certain location where we put in a bunch of infrastructure that's kind of stuck there, I think what really helps us be nimble is the flexibility around the solution that we have, the team that we have that can go out and build projects kind of anywhere. So I think it's kind of all playing into our hand. You know, Bill alluded to it. There's significant job creation here. There's significant stimulus that comes from these localities, and we are seeing areas where there's local influence that is meaningfully pushing towards development. So, there are significant pockets available, but certainly, you know, where we sit relative to a fixed geographic position is a really advantageous position in the portfolio.

Great. And then maybe with respect to Jessa, while the impact it will have on your offering is clear, how are you thinking about its impact on the industries you can serve from a distributed power perspective and your ability to grow third-party business within their existing offering?

Well, I think that's – we see that as clear. You know, the data center market is a giant and massively growing market, but there's still utilities. There's still growth in that sector. There's still electrification of lots of things in this country. There's still reshoring the manufacturing. So the ability for us to provide those solutions and the GISA platform really helping us get there is significant. They're providing utility power internationally in several countries today running those assets, and so we can see that continue and grow, and we can see playing a role in partial ownership of assets. We have the joint venture today where we own it with our customer, but we operate it, and so that can be a model as things evolve as well.

GISA's largest customer segment at this point is delivering services, both refurb, O&M, to utilities. So that is just one example of where we are opening up additional business, and the third-party opportunities are significant. We're very excited about what GISA brings to the table.

Thanks. And our next question will come from Scott Gruber with Citigroup. Please go ahead.

Yes, good morning. I guess just to stay on GISA, Bill, you mentioned the upside in the next year or two. It sounds like a kind of bullish kind of outlook for commercial synergies. You know, any targets that you could provide for us? And, you know, as you think about it, is it kind of ramping within, you know, the kind of core utility market, or is it really ramping with the behind-the-meter solutions and, you know, helping with the install and commissioning, you know, and that side of things?

I'll give you the perfect answer. The answer is yes. The markets are big. They're broad. The traditional utility market has been at the pace that it's grown. You haven't seen a lot of growth in the U.S. in that last few years. internationally power demands are growing the world is getting more electrified and the needs for that you know are continuous and steady the fuel choices is different around the world so you kind of have a different use case there but the target markets and the opportunities we see both with geese and its core and its ability to find locate refurbish used equipment that we can either put internationally or back domestically i think is going to be a a mixed on whether it's going to be a fit for short-term U.S. needs or whether these are long-term assets that stay outside the U.S.

But it's big and broad, and we don't have any specific targets necessarily other than I think importantly, we're in the middle of the flywheel here, and it's continuing to accelerate. You know, we're two-plus years into this journey, and the opportunity set, I think, is continuing to grow. We have found ourselves in a position where all the M&A we've done to date has really been proprietarily sourced. We brought in tremendous entrepreneurs. Gisa is the latest example of that, where people see the value of the track record that we've established in actually powering the fastest-growing piece of the power segment. And jumping onto the platform, which is not necessarily a word we love to use, is providing an expansion of opportunities not only for us but for the businesses that we're bringing in as well. And so tremendous synergies commercially that we are just at the tip of the spear here on this evolution happening around the world, and we'll just continue to find ways to add more to the flywheel.

And at a time that you see labor and skilled labor, a shortage, and in many cases potentially a bottleneck, we've just added 600 people who have deep domain knowledge, and that just gives us a lot of opportunity looking forward.

Yeah, and developing the training programs, you know, it gives us the critical mass to do a lot of those important things. We've got an internal training program that we've combined up with Geese's talent. They've got a relationship with the Maine Maritime Academy on their engine training figures where they bring interns into the facility and work on generators. So I think the real notion here is how do we see the next, you know, five and ten years falling out and what kind of skills and assets do we want to have ready to take advantage of the market need?

Yeah, it's a good segue into my follow-up, which is on the cost energy side because, you know, it seems like there could be some ability to, you know, help on the cost of installation, cost of commissioning, and obviously the maintenance of your turbines, you know, over their life. So any color that you can provide on, you know, how GISA can help on the cost side of things, and is there, you know, a cost angle here, too, that can aid your margins?

There's cost angle, there's spare parts angle, and there's time to do turnarounds and time to do things that are all, as we have it in-house, as Kyle alerts it, we have control of it. We're doing it for third parties, so the bigger you are, the quicker you can do all the work you need to do in an emergency response or in a planned maintenance cycle. So, you know, we've got to look at both parts of that, and you recognize that these are a lot of equipment here, whether it's our, you know, our turbines out on a site or third-party turbines or even a third-party, you know, recips out there with generators that have maintenance needs. So it is just a tremendous and big opportunity that we see ahead.

And when we look at our own projects, I mean, certainly when we think about the capitalization of some of these long-term projects, we see some synergy there on bringing costs down by having it in-house. But most critical is the theme of time to compute and hitting timelines and having the in-house execution capabilities where, as we alluded to in the call, the preparator marks, we provide that level of certainty now to customers saying, We are going out and putting together 20 different vendors to make this project happen. We are continuing to build the in-house capabilities to provide certainty to quality as well as execution timeline.

All right. I appreciate the color. Thank you.

And our next question will come from Sean Milligan with Needham. Please go ahead.

Good morning. Thanks for taking the question. On the July slide deck, you had $100 million-plus in EBITDA potential on scope from customer BNC. First, I just want to make sure I'm thinking about it correctly, that that's all been signed up. And, you know, now I guess the updated slide deck is showing scope on open capacity. Is that the correct way to think about that first?

Yeah, I'd say first on the additional EBITDA, yeah, that is for the balance of plant and the incremental CapEx, which is in line with what we've been communicating the last several quarters. And there is still significant upside for the uncontracted capacity that we've already committed to. So all that stays intact relative to what we communicated before.

And then some customers are dual sourcing equipment, or is there a potential for you to bring that equipment under your managed services, like via some type of agreement?

And, you know, is that contemplated at all, you know, in that slide four guidance? no that's not contemplated in the forward numbers that is a possibility though and this bill is to the jv yeah i mean we are doing that today in a smaller way but yes it can grow it can grow especially with the added capabilities we bring house i mean part of part of this is us maintaining that we keep we've had our labor force you know and and struggling not struggling but just really trying to maintain our capital deployment and our people there and it's been a big task hiring This accelerates that and really does, to some extent, pull that off of our critical path when we're making decisions on how to continue to grow.

And our ability to service the power market is not limited to our balance sheet to that point. We're working for groups with obviously very large balance sheets, and to the extent they've taken a position in some equipment and they want to partner with us, and some mix of their own equipment, our equipment, and having us in the position of making it all happen is somewhere we can play.

And our next question will come from Derek Podheiser with Piper Sandler. Please go ahead.

Hey, good morning, everyone. I wanted to go back to the Jessa conversations. What else should we be thinking about as you look to continue to deepen your moat as a turnkey behind-the-meter power supplier? You know, what else from an integrated services perspective? Ancillary services, obviously, there's a big impact on your financials this quarter. And as you integrate, Jess, I look forward to seeing that, you know, go back to HVMDLV. You know, what else is out there? How can you educate us as far as the different areas that you can pursue to really deepen the moat around the turnkey power supply you're building out here?

Yeah, that's a great question. As Kyle alluded to, all of these opportunities we've internally sourced, you know, through our networks and through working with several of them on different sites. So the last thing I want to do is tell an investment bank on where we're going to go find opportunities to go buy. But, you know, I think there are lots of them out there that are, you know, entrepreneur-owned. I mean, the folks that we're tucking in underneath have seen the opportunity. They see, frankly, they see taking our stock as it being undervalued in the whole package. So that's part of the point is they're coming in as our partners and helping us to grow this business. And I think we will – there are more of those out there, and we're going to continue to try to deliver them at the right, you know, right relative valuation with the right skill sets and focus.

Yeah, no, that all makes sense. So, the announcement on the equity investment in the SMR nuclear company was clearly interesting. So maybe just kind of your high-level thoughts, Bill, as far as how you see the future energy mix for your solution and how you see this advancing, you know, over time as that looks to scale up and kind of be part of maybe a future solution of yours.

Well, I think the nuclear industry is going through a bit of a renaissance here as we retrace from, you know, the big plants and the engineering battles and the regulatory permitting battles to the SMR market where you've got a few select companies that are really making progress on reactor small designs that actually work and are safe. And so I think us, you know, picking deployable and understanding where they were in the process for getting critical is really important. The technologies are, you know, they're going to work. It's a matter of how do we piece them together and how do we get the demonstration of that power up and running as part of this tool. You know, the economics are still to be determined. So, you know, it does save a lot of gas and it's environmentally friendly to the most extent. But how is this going to fit into the mix of power generation in this country? And we think it will. We think it will have a role. And it's a matter of how quick. I think the timelines of some of these, especially with support of the federal government, can be quicker than expected. And I think that's what's exciting to us here.

Great. I appreciate all the color. I'll turn it back.

Our next question will come from Stephen Gangaro with Stifel.

Please go ahead. uh thanks good morning everybody um two two for me the first is and and maybe this acquisition you announced today helps but we we've heard more and more about sort of the the wear and tear on on turbines in the field working for data centers i'm just curious kind of your take on that and what you've seen yeah i read the bloomberg article this morning and there's a lot of experts in this world you know we've been doing this uh all of our turbines work we have turbines that as we've said are going to be that have been temporary that are moving off to another site and and we have checked them all over and we've looked at them and they're all in great shape so you know there is a lot of noise around it they are difficult loads you know pairing it up with with some sort of buffer solution be it a battery or a fuel cell um it is a good way of managing that. And we've seen the dynamics. I think we've got designs and experience on how to manage that without ruining equipment, so to speak, or accelerating the life cycle. I mean, the benefits of some of the equipment we use is this can run on multi-fuels. It has run on multi-fuels. And running clean natural gas from a utility through them is far less impactful than trying to run diesel fuel through them or somewhere else, some other fuel around the world. So from our perspective, I mean, we see the dynamic. We think we've engineered and designed in a way that actually eliminates that risk on the equipment.

Great. Thank you. And my second question is, and, you know, you always lay things out really well in the deck, so thanks. And I think when we think about, you know, Solaris in 2030, do you think it'll be materially different? You think there'll be M&A in the in the in the business on the power gen side like how do you think the company evolves from here I mean obviously there's more contracts assigned etc but you think the world changes much or do you think we kind of have you know more of the same um I think it's going to look dramatically different I mean I think you know we we have a stair step through here as in terms of what we can see today and what we can talk about but I think if we look at what opportunity set lies out there, what we think is happening.

I think that the company will be materially different than it is today. You know, our goals are far beyond what we have in this deck in terms of the growth of this company. And a capital-intensive industry getting ourselves to the size at which we're investment grade is a big step. And I think that we will see things heading that direction by 2030. You know, we'll look back. If you go back to 2020, you know, first quarter of 2024, looking at where we were, looking at where we are today, I think that the step change will be about as radical as the last two years have been.

Great.

Thank you.

And our next question comes from Bobby Brooks with Northland Capital Markets. Please go ahead.

Hey, good morning, guys. Something that really stuck out to me in the prepared remarks was the line of sight commentary on additional cap capacity. And I'm less interested in trying to size that or time that because I think you've constantly shown the market, you can and will execute on that. What I do want to ask is with the JSA acquisition and the expertise they brought in-house across a broader range of turbines, OEMs, makes, models, does that inherit, did that directly tie to that improved line of sight on capacity positions and maybe just expand on that?

I think you hit the nail on the head. I mean, we have established very good relations with the OEMs and we're able to pick up a little bit of kind of used equipment and slots from the OEMs that may have come up or slots they may have been conservative in their rollout and had a few extra turbines that we've been able to buy up. But GISA changes that dramatically from out there, the used or lightly used or highly used equipment where we can actually in-house determine and do the diligence quickly on what might need to be done to that equipment and get it moved. And so the level of involvement, knowledge, and skill, that's applied to that scanning the world, if you will, looking for opportunistic power generation, I think, is giant with their addition. And we had hired them before to do diligence for us on a set of assets. So we knew their capabilities and are really excited to have them as part of the team.

GISA's footprint is in over – they've operated in over 30 countries. So they have a lot of visibility into what is happening in these countries, where the power plants are that might be decommissioned, and where there is good equipment.

And it's determined there's a lot of equipment that isn't going to be suitable. So I think very quickly, you know, understanding what's a wild goose chase and what's a real effort we apply, you know, time and energy to is an important thing that they bring to the table.

Very helpful. And it seems, and also on Jessa, it seems like this gives you a notable second and separate shot on that with the entire PowerGen build-out because of their aftermarket service and maintenance across various different turbines. So I just wanted to ask, one, do you plan, and I think kind of answered this early, but just to confirm, it seems like you do plan on having GISA continue to pursue an expanding set of maintenance and servicing jobs where it might not necessarily be your assets on site. And then secondly, on your own projects or future ones, does adding the GISA team further expand potential scope?

Yes and yes. I think we do anticipate and want them to continue to grow their third-party work from an O&M perspective and from a generator maintenance perspective and rewinding and all the really important stuff that they can do for third parties as well as us and continue to grow their shop. On top of that, they do give us a greater level of expertise on certain elements of what we do, especially as we're developing our preventative maintenance programs, and we're developing all of the protocols around that, and we're applying some really cool AI tools to manage and anticipate issues to get ahead of any maintenance to make sure that it's planned versus unplanned. So I think that the team there and integration into what we're developing is very important to how we run our business and how we are as reliable as possible for our customers.

Thank you, Matt, very much.

And our next question will come from Michael Dudas with Vertical Research Partners. Please go ahead. Good morning, everyone.

Good morning.

Oh, yeah, thanks, Matt. But, Bill, maybe this is a very supportive commentary this morning. What are some of the things we should look for that maybe there's any headwinds on timing, customer commitment, supply chain, integration, anything that we should be thinking about? Not that there's any news flow in the marketplace, but to gain continued confidence in the execution moving forward in the next few quarters.

Well, the good news about this market today, it's pretty good at pointing out what it thinks is going to go wrong. You know, these are complicated businesses, and us putting the team forward, understanding execution, understanding build-out risk, understanding permitting challenges, understanding all the aspects to make all this happen, I think is really a key driver and a key risk mitigation strategy that we think about every project, every location we're building, every subset of what's happening, maintaining that we've got the team, we've got the ability to put what we need, we've got friendly local relationships with the community where we operate and understanding how to think about that and how to manage that is all part of ensuring that we can execute equipment over the short term. There is more demand for compute than there is compute and power to compute right now from what we see. And so I think getting things up and running at the speed at which the industry wants it is important. And, you know, we're going to do what we can do. We're going to do it safely, but we're going to do it as fast as possible.

We're also going to be very focused on signing the right contracts at the right time with the right people.

Yeah, duly noted. Thank you, Bill.

And our next question will come from Jerry Redvich with Wells Fargo. Please go ahead.

This is Kevin on for Jerry. Congrats on the quarter. Could you help us walk through the economics of the expanded scope? Where is the incremental $100 million plus of annual EBITDA coming from balance of plant, infrastructure support, et cetera? Where are you getting the most interest in terms of scope from existing or prospective clients? and how are the returns trending on that scope compared to the rest of the business?

Yeah, and good morning. I'll take a piece of that. You know, as we've talked about consistently, when we look at these projects, the generation as well as the balance of plant, we look at it on a return of capital basis when we price the contract. So we look for similar rates of return. So the incremental capital is going to be earning rates of return very similar to what we've already deployed for the turbines. So, it's all consistent from a pricing strategy standpoint.

Yeah, and from an offering standpoint, Bill used the word evolution earlier today, and that's a word we've been using quite frequently recently. And if we look at just the evolution of the offering and the scope that we've put in place here across the three major data center contracts that we have, the scope continues to expand at each contract. And so I think, to Amanda's point, people are looking for a turnkey trusted provider, and we're doing it organically and inorganically in terms of being able to articulate that value proposition. So we think the earnings potential here is very compelling as we sort of land and expand here.

Every time we've signed a contract, we have expanded the scope under that contract.

Got it. Thank you. I'll pass it along.

And our next question will come from Blake McLean with Daniel Energy. Please go ahead.

Hey, thanks for taking the time this morning. A lot of great insights already. So maybe I've got just one broader question here. I'm curious to get your take on insights from customers and potential customers from a mindset evolution perspective. You guys had a great interconnection delay data point in your materials. How are those types of anecdotes and other grid headwinds that we keep hearing about changing commercial conversations? So, like, clearly it's broadening interest levels. But how is it shaping, like, when they want to engage with you all, how they think about site selection, size of capacity commitments, that sort of stuff?

Well, I think I alluded to it a little bit earlier. It does. I think the momentum toward expanding sites that are already there, if you've got strong local relationships, continues to be a little bit easier than a greenfield project. That said, there are still many large greenfield projects with eyes to larger-sized campuses, and it's really about the evolution of if I want to build a 4-, 5-, 10-gigawatt campus, the sky's the limit, how do I start that? And so what does that look like, you know, starting that and rolling up the power supply into a facility like that over the next, you know, two to five years as they build it out? And so I think that's the ongoing conversation is what does the design look like for that? How does it all fit together? How does it look, you know, what does the generation stack look like for five gigawatt, you know, islanded power project three years from now or five years from now? So I think all of those conversations are very ongoing. I think that our dialogues are, you know, consultative with our customers and trying to figure out how that we fit a solution into there and how you partner up with others to execute on the scale at which it's needed to execute on.

The moratoriums, the issues associated with the interconnection and the queues, look at the Abbott letter that there's been a lot of conversations about. I mean, these are all tailwinds. one of the primary solutions to meaningfully alleviate the strain on public infrastructure and eliminate or at least mitigate the potential of increased costs on the rate payer really pushes you back to behind the meter. And so these are tailwinds. And as Bill said, we are in discussions as to how to make it happen and how to make it happen and where to make it happen. So the conversations are very consultive.

Yeah, and I think their view of the time value of compute time between now and energizing, you know, in early 27 versus 29 or 30 is significant value to the customer. So they see that and they recognize the need to get this going quickly, but then have a long-term plan about what it looks like. I think there's always been a bit of a perception that some more efficient large combined cycle unit is going to be a much more lower-cost solution. But in today's environment, with the cost of the EPC contracts, the location, the siting of all that, the needs for high-voltage transformers and needs for high-voltage transmission and on-site backup power, the costs are beginning to converge in a way that we think is really much pushing the behind-the-meter solution to really become, you know, the next generation of power and that at some point it can turn around and supply back into the grid as resiliency as needed. And I'm sure you have one more question, Blake, about the logistics segment.

Anything you want to share on that, we'd love to hear it. Thank you guys very much for the color.

Thank you, Blake. That business continues to perform extremely well. We do see, you know, customers focused on it, that the trucking, you know, bottlenecks with the data center market has taken a lot of the pneumatic truck and used it for cement service. So the evolution of kind of what's happening there with the growth of the need, and I think John's letter of Sunday night highlighted that you're going to need more frack spreads next year to complete the wells that are being drilled as the rig count grows a little bit. So all of that points to continued growth in that business for us, and we've got strong reliability. We've really spent a lot of effort in that business, continuing to focus on equipment reliability and getting it working. And I think that we're hitting on all cylinders in that business as well.

Good stuff. Thanks, y'all.

And this will conclude our question and answer session. I'd like to turn the conference back over to Bill Zartler for any closing remarks.

Thanks, Cole.

Thank you all for joining us today. This quarter's progress showed once again that our strategy is working. Our team is executing and the company is growing quickly. Our customers keep choosing to grow with us. We keep integrating more of the power value chain and all that combination is producing durable results. About our 2.3 gigawatts that are currently under long-term contract and have a clear path to significant pre-cash flow from those contracts and other parts of our business over the next decade. A sincere thank you to our employees, customers, and partners. your dedication and trust are the foundation of everything we're building and they're why we are more excited about the future than at any point in our history we look forward to sharing our continued progress and thanks again have a great day the conference is now concluded thank you for attending today's presentation you may now disconnect your lines this time