Revenue: $96 million in Q4 2024, a 28% increase from the prior quarter.

Adjusted EBITDA: $37 million in Q4 2024, a 68% increase from the prior quarter.

Power Solutions Contribution: Over 50% of adjusted EBITDA in Q4 2024, expected to contribute nearly 80% after fleet deployment.

Dividend: $0.12 per share, 26th consecutive dividend, totaling over $8 million.

Power Fleet Growth: Order for additional 700 megawatts, doubling fleet size to 1,400 megawatts by early 2027.

Joint Venture: Partnership for 500 megawatts with a 6-year initial term, Solaris to own 50.1% of assets.

Q1 2025 Guidance: Adjusted EBITDA between $44-48 million.

Q2 2025 Guidance: Adjusted EBITDA between $50-55 million.

Average Megawatts on Revenue: Expected to increase by 20% to 360 megawatts in Q1 2025, and by 17% to 420 megawatts in Q2 2025.

Logistics Solutions Growth: Fully utilized systems expected to grow over 15% to approximately 90-95 systems in Q1 2025.

Q: What is the vision for Solaris Energy Infrastructure Inc. (NYSE:SEI) in the next 2-3 years, considering the recent growth and new partnerships? A: William Zartier, Chairman and CEO, explained that SEI is focused on executing flawlessly as they grow rapidly. They are balancing team growth and equipment supply to seize new commercial opportunities. There are still plenty of growth opportunities in the market as they look forward.

Q: Has there been any change in profitability per megawatt or the price paid per megawatt due to demand and supply chain constraints? A: William Zartier noted a step change in supply areas about a year ago, with costs creeping up slowly. Kyle Ramachandran, President and CFO, added that the transition to modular equipment, which is more cost-effective, allows SEI to be more competitive in terms of dollar per megawatt capital costs.

Q: Can you provide context on the complexity and cost of powering AI data centers with your power as a service model? A: Kyle Ramachandran stated that their solution is competitive with the grid, offering customers clear visibility into long-term costs without the inflationary pressures of grid upgrades. William Zartier added that having equipment next to the building provides effective backup, reducing the need for additional capital investment in backup systems.

Q: How is SEI addressing customer concentration risks with the data center contract, and are there discussions with other potential customers? A: William Zartier mentioned ongoing conversations with both large industrial complexes and data centers. SEI is exploring opportunities with various customers, indicating potential expansions beyond the current contract.

Q: How important are lower emission solutions to your data center customers, and how is SEI addressing emissions concerns? A: William Zartier explained that SEI is adding emissions control systems to their power plants, achieving a low emissions profile. They are comfortable with the state-of-the-art emissions technology they are using, which is competitive in the market.

Q: How is SEI handling voltage variability for customers, and how does this fit into their service model? A: William Zartier emphasized collaboration with customers to address challenges like voltage variability, using a combination of solutions. Kyle Ramachandran highlighted the importance of their power as a service model, which focuses on delivering reliable solutions with a strong service component.

Q: What is SEI’s approach to marketing the 450 megawatts of uncontracted capacity given market dynamics? A: William Zartier stated that SEI is in several active discussions and is not rushing to contract the capacity. They are focusing on securing long-term contracts and are confident in the evolving market.

Q: How is SEI assisting customers with EPA Clean Air Act permits? A: William Zartier explained that SEI works closely with customers and environmental consultants to ensure accurate and compliant permit applications, providing engineering and design support as needed.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.