Notes to the Unaudited Condensed Consolidated Financial Statements
(Dollars in millions, except share and per share amounts)
1. Business and Basis of Presentation
Business
Solaris Energy Infrastructure, Inc. (referred to as the “Company,” “we,” “us,” “our” and “Solaris” either individually or together with its consolidated subsidiaries, as the context requires) and its consolidated subsidiaries deliver comprehensive power infrastructure solutions including generation, distribution, installation and commissioning, aftermarket support, and operations and maintenance, as well as logistics equipment and services. Headquartered in Houston, Texas, the Company serves multiple U.S. end markets, including data centers, energy, and other commercial and industrial sectors. The Company operates through two reportable business segments: Solaris Power Solutions and Solaris Logistics Solutions.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 27, 2026.
These condensed consolidated financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results that may be expected for the full year or for any interim period.
2. Variable Interest Entities
Stateline
The Company holds a 50.1% equity interest in Stateline Power, LLC (“Stateline”), a variable interest entity (“VIE”) formed on April 28, 2025. Stateline was formed to provide off-grid power generation pursuant to a long-term equipment lease arrangement with MZX Tech LLC (“MZX”). The remaining 49.9% equity interest in Stateline is held by MZX and is presented as a non-controlling interest.
The Company continues to consolidate Stateline in its condensed consolidated financial statements within the Solaris Power Solutions segment, as the Company remains the primary beneficiary. No reconsideration events occurred during the three and six months ended June 30, 2026 that would alter this conclusion. There have been no material changes to the nature, structure, or purpose of Stateline as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Each lease with MZX commences on the date the underlying equipment is made available for use by MZX. As of June 30, 2026, no leases had commenced, and therefore no lease revenue was recognized during the three and six months ended June 30, 2026.
On May 23, 2025, Stateline entered into a delayed draw term loan facility to finance the power generation equipment to be leased to MZX. Refer to Note 11. “Debt – Stateline Term Loan” for additional information regarding Stateline’s delayed draw term loan facility.
The Company did not provide any financial support to Stateline during the three and six months ended June 30, 2026 that it was not contractually required to provide, and it has no current intention to provide such support beyond its existing obligations. As of June 30, 2026, the Company’s maximum exposure to loss from its involvement with Stateline is limited to its equity investment of $86.4 million. The assets of Stateline may be used only to settle its obligations, and creditors of Stateline do not have recourse to the general credit of the Company.
Refer to Note 14. “Equity and Non-controlling Interest” for a breakdown of non-controlling interest by entity, including MZX’s 49.9% equity interest in Stateline.
The following table summarizes Stateline’s assets and liabilities included in the Company’s condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025.
| | | | | | | | |
| June 30,
2026 | December 31,
2025 |
| Assets | | |
| Current assets: | | |
| Cash and cash equivalents | $ | 12.7 | | $ | 27.9 | |
| Accounts receivable | 28.0 | | 0.6 | |
| Prepaid expenses and other current assets | 0.3 | | — | |
| Total current assets | 41.0 | | 28.5 | |
| Equipment held for lease, net | 523.1 | | 354.9 | |
| Other assets | 2.0 | | 3.7 | |
| Total assets | $ | 566.1 | | $ | 387.1 | |
| Liabilities | | |
| Current liabilities: | | |
| Accounts payable | $ | 16.5 | | $ | 1.4 | |
| | |
| Accrued liabilities | — | | 31.7 | |
| Deferred revenue, current portion | 2.1 | | — | |
| Long-term debt, current portion | 11.4 | | 4.0 | |
| Total current liabilities | 30.0 | | 37.1 | |
| Deferred revenue, net of current portion | 15.6 | | — | |
| Long-term debt, net of current portion | 324.8 | | 180.0 | |
| Total liabilities | $ | 370.4 | | $ | 217.1 | |
Investment in SISU SPV, LLC
The Company has an investment in SISU SPV, LLC, a Delaware limited liability company formed to invest in an Oklahoma-based company that provides emissions-reduction solutions, including selective catalytic reduction catalyst systems.
SISU is a VIE because its equity holders, as a group, lack the power to direct the activities that most significantly impact its economic performance. The terms of SISU’s operating agreement vest substantive control over all significant decisions in the managing member. As a result, the Company is not the primary beneficiary of SISU and does not consolidate it. The Company’s maximum exposure to loss as a result of its involvement with SISU is limited to the carrying value of its investment, and the Company has no obligation to provide additional financial support to SISU.
Additional information about this investment, including the carrying value and accounting treatment, is included in Note 9. “Investments.”
3. Business Segments
We report two distinct business segments. These segments differ by their revenue-generating activities and align with how our Co-Chief Executive Officers, who are our chief operating decision makers (“CODMs”), assess operating performance and allocate resources.
Our reporting segments are:
•Solaris Power Solutions – delivers power generation, power control, and power distribution solutions. The segment’s offerings support data center, energy, and other commercial and industrial sector customers by providing flexible, on-demand power infrastructure, including power control and distribution capabilities.
•Solaris Logistics Solutions – designs and manufactures specialized equipment that enables the efficient management of raw materials used in the completion of oil and natural gas wells. Solaris’ equipment-based
logistics services include field technician support, software solutions, and may also include last mile and mobilization services.
Our CODMs evaluate the performance of our business segments and allocate resources based on Adjusted EBITDA. We define EBITDA as net income plus depreciation and amortization expense, interest expense (income), and income tax expense. We define Adjusted EBITDA as EBITDA plus stock-based compensation, certain non-cash items and any extraordinary, unusual or non-recurring gains, losses or expenses.
In making resource allocation decisions, our CODMs primarily consider budget-to-actual variances in Adjusted EBITDA on a monthly basis.
Summarized financial information by business segment is shown below.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Revenue | | | | | | | |
| Solaris Power Solutions | $ | 158.3 | | | $ | 75.6 | | | $ | 286.8 | | | $ | 125.0 | |
| Solaris Logistics Solutions | 61.1 | | | 73.7 | | | 128.8 | | | 150.7 | |
| Total revenues | $ | 219.4 | | | $ | 149.3 | | | $ | 415.6 | | | $ | 275.7 | |
| | | | | | | |
| Adjusted EBITDA | | | | | | | |
| Solaris Power Solutions | $ | 96.4 | | | $ | 45.7 | | | $ | 168.3 | | | $ | 77.6 | |
| Solaris Logistics Solutions | 24.8 | | | 22.7 | | | 48.0 | | | 48.7 | |
| Total segment Adjusted EBITDA | $ | 121.2 | | | $ | 68.4 | | | $ | 216.3 | | | $ | 126.3 | |
| | | | | | | |
| Capital expenditures | | | | | | | |
| Solaris Power Solutions | $ | 488.2 | | | $ | 183.5 | | | $ | 831.5 | | | $ | 325.6 | |
| Solaris Logistics Solutions | 3.3 | | | 1.5 | | | 3.4 | | | 3.7 | |
| Total segment capital expenditures | $ | 491.5 | | | $ | 185.0 | | | $ | 834.9 | | | $ | 329.3 | |
| Corporate and other capital expenditures | 0.3 | | | 0.1 | | | 0.3 | | | 0.2 | |
| Consolidated capital expenditures | $ | 491.8 | | | $ | 185.1 | | | $ | 835.2 | | | $ | 329.5 | |
The following table presents a reconciliation of total segment Adjusted EBITDA to income before income tax expense.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Total segment Adjusted EBITDA | $ | 121.2 | | | $ | 68.4 | | | $ | 216.3 | | | $ | 126.3 | |
| Depreciation and amortization | (39.5) | | | (18.4) | | | (64.3) | | | (38.4) | |
| Interest expense | (16.9) | | | (7.0) | | | (21.7) | | | (13.2) | |
| Interest income | 5.5 | | | 1.5 | | | 8.2 | | | 2.6 | |
| Loss on debt extinguishment | (14.8) | | | — | | | (16.1) | | | — | |
Corporate expenses (1) | (12.9) | | | (7.8) | | | (24.4) | | | (18.8) | |
| Stock-based compensation expense | (11.8) | | | (5.2) | | | (18.5) | | | (8.5) | |
| Transaction and acquisition-related costs | (1.6) | | | (1.3) | | | (2.0) | | | (1.8) | |
| | | | | | | |
Other (2) | 1.0 | | | (0.1) | | | — | | | (1.1) | |
| Income before income tax expense | $ | 30.2 | | | $ | 30.1 | | | $ | 77.5 | | | $ | 47.0 | |
(1)Corporate employee salaries and expenses, headquarters office rental, and legal and professional fees.
(2)Credit losses or recoveries, the net effect of loss/gain on disposal of assets and lease terminations and inventory write-offs.
Segment assets are presented below.
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Segment assets: | | | |
| Solaris Power Solutions | $ | 2,867.9 | | | $ | 1,341.7 | |
| Solaris Logistics Solutions | 334.6 | | | 349.6 | |
Total segment assets (1) | $ | 3,202.5 | | | $ | 1,691.3 | |
Corporate and other assets (2) | 1,009.8 | | | 451.8 | |
| Consolidated assets | $ | 4,212.3 | | | $ | 2,143.1 | |
(1)Segment assets consist of accounts receivable, prepaid expenses, inventories, goodwill and long-lived assets.
(2)Corporate and other assets consist of cash and cash equivalents, restricted cash, prepaid expenses, deferred tax assets and other assets.
Significant segment expenses and other segment items, representing the difference between segment revenue and Adjusted EBITDA, are comprised of the following:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, 2026 | | Six Months Ended
June 30, 2026 |
| Solaris Power Solutions | | Solaris Logistics Solutions | | Solaris Power Solutions | | Solaris Logistics Solutions |
| Labor cost | $ | 13.5 | | | $ | 16.1 | | | $ | 23.3 | | | $ | 30.4 | |
| Repairs and maintenance | 6.0 | | | 2.1 | | | 11.4 | | | 6.3 | |
Equipment rental (1) | 21.3 | | | — | | | 52.4 | | | — | |
Trucking and mobilizations (2) | 15.9 | | | 13.8 | | | 21.9 | | | 38.2 | |
Other segment items (3) | 5.2 | | | 4.3 | | | 9.5 | | | 5.9 | |
| Total segment expenses | $ | 61.9 | | | $ | 36.3 | | | $ | 118.5 | | | $ | 80.8 | |
| | | | | | | |
| | | |
| Three Months Ended
June 30, 2025 | | Six Months Ended
June 30, 2025 |
| Solaris Power Solutions | | Solaris Logistics Solutions | | Solaris Power Solutions | | Solaris Logistics Solutions |
| Labor cost | $ | 4.7 | | | $ | 11.6 | | | $ | 7.3 | | | $ | 23.3 | |
| Repairs and maintenance | 4.1 | | | 3.5 | | | 7.8 | | | 6.0 | |
Equipment rental (1) | 17.5 | | | — | | | 26.2 | | | — | |
Trucking and mobilizations (2) | 2.6 | | | 32.9 | | | 3.3 | | | 67.5 | |
Other segment items (3) | 1.0 | | | 3.0 | | | 2.8 | | | 5.2 | |
| Total segment expenses | $ | 29.9 | | | $ | 51.0 | | | $ | 47.4 | | | $ | 102.0 | |
(1)Equipment rental is considered a significant expense in the Solaris Power Solutions segment.
(2)Trucking and mobilizations are considered a significant expense in the Solaris Logistics Solutions segment. Beginning in the first quarter of 2026, trucking and mobilizations are considered a significant expense in the Solaris Power Solutions segment and were previously disclosed in other segment items. We are now including the related 2025 expenses in trucking and mobilizations for comparative purposes.
(3)Other segment items for Solaris Power Solutions include facilities rental, transportation and freight, professional fees, insurance and other costs, while those for Solaris Logistics Solutions include facilities and equipment rental, fuel, professional fees, insurance and other costs.
4. Genco Acquisition
On March 16, 2026, the Company, through its subsidiary Project G Buyer, LLC, completed the acquisition of 100% of the outstanding equity interests in Focus Genco Cayman Ltd. (“Genco”), the parent company of Genco Power Solutions, a distributed power generation company, pursuant to a securities purchase agreement (the “Genco Acquisition”). The acquired assets consist primarily of gas turbine generators held for lease under passive dry-lease arrangements. The Genco
Acquisition was accounted for as an asset acquisition in accordance with ASC 805-50, as the acquired assets did not meet the definition of a business.
The total acquisition cost of $483.2 million consisted of cash consideration, net of $1.1 million recovered from escrow pursuant to the purchase price adjustment provisions of the securities purchase agreement; 4,182,772 shares of Class A common stock issued to the sellers; liabilities incurred in connection with the acquisition; net amounts related to settlement of pre-existing relationships between the Company and Genco; and capitalized transaction costs. The total acquisition cost was allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values at the acquisition date. The allocation resulted in a stepped-up cost basis in the acquired gas turbine generators and the recognition of a customer relationship intangible asset at fair value. See Note 6. “Equipment Held for Lease” and Note 8. “Intangible Assets” for more information. No goodwill was recognized.
In connection with the Genco Acquisition, the Company assumed certain debt obligations of Genco and incurred new debt obligations to facilitate the closing of the acquisition, all of which were fully repaid and terminated during the three months ended June 30, 2026. See Note 11. “Debt,” including “Debt Extinguishment” for more information.
5. Summary of Significant Accounting Policies
(a) Recently Issued Accounting Standards
Recently Adopted
In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05, Financial Instruments - Credit Losses: Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU simplifies the Current Expected Credit Losses model, including a practical expedient that allows entities to assume current economic conditions as of the balance sheet date will remain stable over the life of the short-term accounts receivable and contract assets arising from revenue contracts under ASC 606, without the need to forecast future economic conditions. This standard is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods. The Company adopted ASU 2025-05 effective January 1, 2026 on a prospective basis, as permitted by the ASU. The Company elected to apply the practical expedient for its current accounts receivable and current contract assets arising from revenue transactions under ASC 606, Revenues from Contracts with Customers. The adoption of ASU 2025-05 and the election of the practical expedient did not have a material impact on the Company’s condensed consolidated financial statements. The Company’s significant accounting policy for allowances for credit losses has been updated to reflect the election of this practical expedient.
In November 2024, the FASB issued ASU 2024-04, Debt — Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The amendments in this ASU primarily clarify the requirements for determining whether the settlement of a convertible debt instrument should be accounted for as an induced conversion. This standard is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2025. The Company adopted ASU 2024-04 effective January 1, 2026 on a prospective basis, as permitted by the standard. The adoption of ASU 2024-04 did not have a material impact on the Company’s condensed consolidated financial statements.
Not Yet Adopted
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU addresses thirty-three items, representing codification changes that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the effects of this ASU, but does not expect a material impact on its condensed consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. This standard is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effects of this ASU, but does not expect a material impact on its condensed consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU updates the rules on capitalizing costs related to developing software for internal purposes, eliminating the use of specific project phases and introducing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This standard applies to annual periods starting after December 15, 2027, including interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the potential effects of this ASU on its condensed consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This update requires entities to disclose specified information about certain costs and expenses, including the amounts related to (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depletion expense, disaggregated within relevant expense captions on the statements of operations. It also requires qualitative descriptions for amounts not separately disaggregated and the total amount of selling expenses, along with the entity’s definition of selling expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: Clarifying the Effective Date. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of this ASU on its disclosures.
(b) Consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company has a controlling financial interest. All material intercompany balances and transactions have been eliminated in consolidation.
The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a VIE under US GAAP.
Voting Interest Entities. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance its activities independently and the equity holders have the characteristics of a controlling financial interest, including the power to direct the activities of the entity that most significantly impact its economic performance through voting or similar rights. Voting interest entities are consolidated in accordance with ASC 810, Consolidation, if the Company owns a majority of the voting interests, unless control does not rest with the majority owner (for example, because of veto rights or other substantive participating rights held by non-controlling interest holders).
Variable Interest Entities. VIEs are entities that lack one or more of the characteristics of a voting interest entity, such as sufficient equity at risk to finance their activities without additional subordinated financial support or where the equity holders, as a group, lack the power to direct the activities that most significantly impact the entity’s economic performance. The Company consolidates a VIE in accordance with ASC 810 if it is the primary beneficiary, which occurs when the Company has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.
The Company reassesses its initial evaluation of whether an entity is a VIE upon the occurrence of certain reconsideration events as defined in ASC 810. The Company also reassesses its determination of whether it is the primary beneficiary of a VIE upon changes in facts and circumstances that could potentially alter its conclusion.
Non-controlling interests represent the portion of profit or loss and net assets attributable to equity interests in consolidated subsidiaries that are not owned by the Company. Non-controlling interests are presented as a separate component of equity in the condensed consolidated balance sheets and as a separate line item in the condensed consolidated statements of operations.
For additional information on the Company’s involvement with VIEs, refer to Note 2. “Variable Interest Entities.”
(c) Business Combinations and Asset Acquisitions
The Company accounts for acquisitions of businesses using the acquisition method under ASC 805. The assets acquired, liabilities assumed, and any non-controlling interest in the acquiree are recognized at their fair values on the
acquisition date. Acquisition-related costs are expensed as incurred. Goodwill is recognized as the excess of the consideration transferred over the fair value of the net assets acquired.
Acquisitions of assets or groups of assets that do not meet the definition of a business under ASC 805 are accounted for as asset acquisitions. In an asset acquisition, the total cost of the acquisition, including transaction costs which are capitalized as part of the acquisition cost, is allocated to the individual assets acquired and liabilities assumed based on their relative fair values at the acquisition date. No goodwill is recognized in asset acquisitions.
(d) Use of Estimates
The preparation of these condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(e) Restricted Cash
Restricted cash consists of amounts held in a money market account at a financial institution that serve as collateral for outstanding standby letters of credit. The Company does not have the right to access or withdraw these funds while the related letters of credit remain outstanding. Interest earned on the account it not subject to these restrictions.
Restricted cash that is expected to be available for use within one year of the balance sheet date is classified as a current asset. Restricted cash that is not expected to be available for use within one year from the balance sheet date is classified as a non-current asset.
As of June 30, 2026, the Company had restricted cash of $70.7 million held as collateral for outstanding standby letters of credit (see Note 18. “Commitments and Contingencies”).
Restricted cash is included with cash and cash equivalents in the accompanying condensed consolidated statements of cash flows. The following table presents a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows.
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Cash and cash equivalents | $ | 824.1 | | | $ | 353.3 | |
| Restricted cash (non-current) | 70.7 | | | — | |
| Cash, cash equivalents and restricted cash | $ | 894.8 | | | $ | 353.3 | |
(f) Accounts Receivable and Related Allowances
Accounts receivable, which consist of trade receivables, unbilled revenue, and operating lease receivables, are stated at the net amount expected to be collected. We record accounts receivable at the invoiced amount, and unbilled receivables represent revenues recognized but not yet invoiced. Accounts receivable are presented net of allowances for credit losses and uncollectible accounts, as applicable.
Trade Receivables
Trade receivables are evaluated for impairment under ASC 326, Financial Instruments – Credit Losses, using the current expected credit losses (“CECL”) methodology. For trade receivables arising from transactions accounted for under ASC 606, the Company has elected the practical expedient provided by ASU 2025-05. Under this expedient, the Company assumes that current conditions as of the balance sheet date remain unchanged for the remaining life of these assets when developing reasonable and supportable forecasts.
In determining the allowance for credit losses, we pool trade receivables with similar risk characteristics and apply an expected loss percentage derived from historical loss data. Our assessment of current conditions, including the length of time trade accounts receivable are past due, previous loss history and the condition of the general economy and the industry as a whole, is reflected as of the balance sheet date consistent with the practical expedient elected. The expected credit loss
percentage is determined using historical loss data adjusted for current conditions. Along with the expected credit loss percentage approach, we apply a case-by-case review on individual trade receivables when deemed appropriate.
The expense associated with the provision for credit losses on trade receivables is recognized in other operating expenses, net in our condensed consolidated statements of operations. Accounts deemed uncollectible are written off against the allowance when our customers’ financial condition deteriorates, impairing their ability to make payments, such as upon customer bankruptcies. Subsequent recoveries, if any, are credited to the allowance.
Operating Lease Receivables
Operating lease receivables represent amounts owed by lessees for lease payments under the Company’s operating leases under ASC 842, Leases. Collectability of lease payments is assessed at lease commencement and reassessed throughout the lease term. At lease commencement, we may collect one or more month’s rent in advance, which serve as collateral to mitigate credit risk. If collectability of substantially all lease payments is probable at lease commencement, leasing revenue is recognized on a straight-line basis over the lease term. For leases meeting this recognition threshold, the Company records an allowance for uncollectible operating lease receivables, as necessary, in accordance with ASC 450, Contingencies. The allowance is based on historical loss experience, current customer-specific conditions, and relevant economic factors without incorporating forward-looking expected losses under CECL. If collectability of substantially all lease payments is not probable, we recognize leasing revenue on a cash basis.
The following table presents activity related to our allowance for credit losses and uncollectible operating lease receivables.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Balance at beginning of period | $ | 2.6 | | | $ | 2.1 | | | $ | 1.7 | | | $ | 1.3 | |
| Provision for (recovery of) credit losses, net | (1.1) | | | (0.2) | | | (0.4) | | | 0.6 | |
| Provision for uncollectible operating lease receivables | — | | | — | | | 0.2 | | | — | |
| Write-offs | (0.8) | | | (0.8) | | | (0.8) | | | (0.8) | |
| Balance at end of period | $ | 0.7 | | | $ | 1.1 | | | $ | 0.7 | | | $ | 1.1 | |
(g) Equipment Held for Lease and Property, Plant and Equipment
Equipment held for lease and property, plant and equipment are stated at cost, net of accumulated depreciation.
Depreciation is calculated using the straight-line method over the estimated useful lives of the assets except for turbine engine cores. Turbine engine cores represent a significant component of our turbines and are depreciated using the units of production method based on an expected life of 30,000 fired hours. To reflect this distinct depreciation method and usage-based nature of these assets, turbine engine cores are presented as a separate line item in the table below, Power Generation – Turbine engine core.
We capitalize interest on borrowings to the extent they are incurred during the construction or acquisition period of qualifying assets in accordance with ASC 835-20, Interest – Capitalization of Interest. Qualifying assets are assets which require a substantial period of time to get ready for their intended use, such as certain power generation equipment. The amount capitalized is based on the weighted-average expenditures incurred and applicable interest rates on specific or general borrowings. Capitalized interest is included in the cost basis of the related asset and is depreciated over the asset’s estimated useful life once the asset is substantially complete and ready for its intended use. Capitalization of interest ceases when the qualifying asset is substantially complete.
| | | | | |
| Useful Life |
| Equipment held for lease | |
| Power Generation - Turbine | 25 years |
| Power Generation - Turbine engine core | 30,000 fired hours |
| Power Generation - Ancillary equipment | 3 - 20 years |
| Power control and distribution equipment | 15 years |
| |
| Property, plant and equipment | |
| Oil and gas logistics equipment | 5 - 15 years |
| Machinery and equipment | 3 - 12 years |
| Furniture and fixtures | 5 years |
| Computer hardware and software | 3 - 10 years |
| Vehicles | 5 years |
| Buildings and leasehold improvements | 15 years |
Maintenance and repair costs are expensed as incurred. Expenditures that materially enhance the value or extend the useful life of the assets are capitalized. Upon sale or disposal, the asset’s cost and accumulated depreciation are removed from the balance sheet, with any resulting gain or loss recognized in operations.
Equipment held for lease and property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the asset’s fair value.
(h) Investments
Investments in equity securities are accounted for in accordance with ASC 321, Investments-Equity Securities. Equity securities with a readily determinable fair value are measured at fair value with changes in fair value recognized in earnings. For equity securities without a readily determinable fair value, the Company elects the measurement alternative, under which investments are recorded at cost, less impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.
The Company evaluates such investments each reporting period to determine whether impairment indicators are present. If an investment is determined to be impaired, the carrying amount is written down to its fair value, and the resulting loss is recognized in earnings.
(i) Convertible Notes
Our convertible notes are classified as convertible debt instruments recorded as liabilities in accordance with ASC 470-20 and are initially recognized at their principal amount, net of issuance costs and any discounts. Issuance costs and discounts are amortized to interest expense over the term of the instrument using the effective interest method. We evaluate each instrument to determine its classification as debt or equity and assess whether embedded features, such as conversion options, require bifurcation and separate accounting as derivatives under ASC 815-15. Bifurcation is required if these features are not clearly and closely related to the host contract and do not meet the scope exception criteria under ASC 815-40. Upon conversion, the carrying amount of the debt is reduced, and the settlement is accounted for based on the terms of the instrument, which may include issuance of common stock, cash payment, or a combination thereof. Interest expense includes the contractual coupon rate and amortization of issuance costs and discounts.
(j) Revenue
Service Revenue
We recognize service revenue upon the transfer of control of promised services (or distinct goods) to customers in an amount that reflects the consideration expected to be received. We evaluate collectibility based on historical payment
experience and customer financial condition. Customers are generally billed on a weekly or monthly basis, and contracts typically include payment terms of 30 to 60 days.
For contracts with multiple performance obligations, the transaction price is allocated based on relative stand-alone selling prices, or estimates of such prices, and revenue is recognized as each performance obligation is satisfied. Revenue from our mobile proppant and fluid management systems, last mile logistics, and ancillary equipment is primarily recognized over time as customers simultaneously receive and consume the benefits.
Certain contracts include the grant of exclusive rights to reserve specified equipment for a stated period. These reservation rights represent a stand-ready performance obligation satisfied over time on a straight-line basis as the Company stands ready to make the equipment available exclusively to the customer.
Receivables and Contract Assets
The following table presents the balances of receivables and contract assets arising from contracts with customers. Receivables represent amounts due from customers for goods and services that have been billed. Contract assets represent amounts earned from performance under a contract but not yet billed to the customer (unbilled receivables).
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Receivables | $ | 96.3 | | | $ | 64.3 | |
| Contract assets (unbilled revenues) | 10.0 | | | 11.7 | |
Variable consideration may include discounts, price concessions and incentives. We estimate variable consideration based on the expected amount to be received and updates our estimate as facts and circumstances change.
Leasing Revenue
Leasing revenue is recognized on a straight-line basis over the lease term, reflecting the consumption of benefits derived from the leased assets. Lease payments are fixed throughout the lease term. Leasing arrangements may be renewed, subject to price negotiations with customers.
Future minimum lease payments to be received under our long-term lessor arrangements as of June 30, 2026, including payments from leases that have already commenced and leases that will commence in the future based on estimated commencement dates, were as follows:
| | | | | |
| Year Ending December 31, | Future Lease Payments to be Received |
| 2026 (remainder of) | $ | 210.8 | |
| 2027 | 660.1 | |
| 2028 | 743.3 | |
| 2029 | 731.6 | |
| 2030 | 721.1 | |
| Thereafter | 3,035.7 | |
| Total | $ | 6,102.6 | |
Disaggregation of Revenue
We categorize revenue from contracts with customers by revenue-generating activity, in alignment with our two reportable segments. This includes service revenue recognized under ASC 606 and leasing revenue recognized under ASC 842. The table below presents information on our disaggregated revenue.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Solaris Power Solutions | | | | | | | |
| Leasing revenue | $ | 105.7 | | | $ | 61.9 | | | $ | 211.0 | | | $ | 101.0 | |
| Service revenue | 52.6 | | | 13.7 | | | 75.8 | | | 24.0 | |
| Solaris Logistics Solutions | | | | | | | |
| Service revenue | 61.1 | | | 73.7 | | | 128.8 | | | 150.7 | |
| Total revenue | $ | 219.4 | | | $ | 149.3 | | | $ | 415.6 | | | $ | 275.7 | |
Sublease income totaled $27.9 million and $28.6 million for the three months ended June 30, 2026 and 2025, respectively, and $72.5 million and $36.2 million for the six months ended June 30, 2026 and 2025, respectively. Sublease income is included in leasing revenue in the condensed consolidated statements of operations.
Deferred Revenue
Deferred revenue consists of customer payments received in advance of earning revenue. It includes amounts related to advance lease payments (ASC 842) and other upfront fees (ASC 606).
As of June 30, 2026 and December 31, 2025, deferred revenue consisted of the following:
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| ASC 842 | $ | 185.2 | | | $ | 5.8 | |
| ASC 606 | 7.2 | | | — | |
| Total deferred revenue | $ | 192.4 | | | $ | 5.8 | |
Deferred revenue is classified as current or non-current based on when the related revenue is expected to be recognized. As of June 30, 2026, $18.0 million is classified as current and $174.4 million as non-current. As of December 31, 2025, $5.8 million was classified as current and no amounts were classified as non-current.
6. Equipment Held for Lease
Equipment held for lease, used in the Company’s capacity as lessor, consists of the following:
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Power Generation - Turbine | $ | 909.6 | | | $ | 376.3 | |
| Power Generation - Turbine engine core | 380.2 | | | 140.5 | |
| Power Generation - Ancillary equipment | 91.8 | | | 68.3 | |
| Power control and distribution equipment | 48.0 | | | 47.4 | |
| Construction in progress | 1,138.8 | | | 481.3 | |
| Equipment held for lease, gross | $ | 2,568.4 | | | $ | 1,113.8 | |
| Less: accumulated depreciation | (78.6) | | | (39.7) | |
| Equipment held for lease, net | $ | 2,489.8 | | | $ | 1,074.1 | |
Construction in progress includes deposits, progress payments, and accrued billings for turbines and other equipment that have not yet been delivered. Depreciation commences once the assets are placed in service or ready for their intended use, which occurs upon delivery and commissioning of the applicable equipment.
During the six months ended June 30, 2026, construction in progress increased significantly primarily due to turbine equipment acquired in connection with the Genco Acquisition and the NovaLT16 Turbine Acquisition. See Note 4. “Genco Acquisition” and Note 18. “Commitments and Contingencies” for additional information.
For the three months ended June 30, 2026 and 2025, we incurred total interest cost of $28.7 million and $10.3 million, of which $11.6 million and $4.1 million was recognized as capitalized interest, respectively. For the six months ended June 30, 2026 and 2025, we incurred total interest cost of $39.1 million and $18.8 million, of which $17.4 million and $6.9 million was recognized as capitalized interest, respectively.
Depreciation expense on equipment held for lease was $26.4 million and $6.1 million for the three months ended June 30, 2026 and 2025, respectively, and $39.0 million and $13.4 million for the six months ended June 30, 2026 and 2025, respectively.
7. Property, Plant and Equipment
Property, plant and equipment consists of the following:
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Oil and gas logistics equipment | $ | 455.9 | | | $ | 455.9 | |
| Logistics equipment in process | 12.3 | | | 10.5 | |
| Vehicles | 15.8 | | | 13.1 | |
| Machinery and equipment | 8.2 | | | 8.7 | |
| Buildings | 5.5 | | | 4.9 | |
| Computer hardware and software | 5.6 | | | 5.0 | |
| Land | 0.7 | | | 0.6 | |
| Furniture and fixtures | 2.0 | | | 1.4 | |
| Property, plant and equipment, gross | $ | 506.0 | | | $ | 500.1 | |
| Less: accumulated depreciation | (246.5) | | | (228.9) | |
| Property, plant and equipment, net | $ | 259.5 | | | $ | 271.2 | |
Depreciation expense on property, plant, and equipment was $9.7 million and $9.3 million for the three months ended June 30, 2026 and 2025, respectively, and $19.0 million and $18.7 million for the six months ended June 30, 2026 and 2025, respectively.
8. Intangible Assets
Identifiable intangible assets consist of the following.
| | | | | | | | | | | | | | | | | |
| Gross | | Accumulated
Amortization | | Net Book
Value |
| As of June 30, 2026: | | | | | |
| Customer relationships | $ | 81.7 | | | $ | (18.0) | | | $ | 63.7 | |
| Trademarks | 8.0 | | | (2.9) | | | 5.1 | |
| Covenant not to compete | 0.5 | | | (0.1) | | | 0.4 | |
| Software & patents | 0.1 | | | (0.1) | | | — | |
| Total identifiable intangibles | $ | 90.3 | | | $ | (21.1) | | | $ | 69.2 | |
| | | | | |
| As of December 31, 2025: | | | | | |
| Customer relationships | $ | 66.0 | | | $ | (12.5) | | | $ | 53.5 | |
| Trademarks | 8.0 | | | (2.1) | | | 5.9 | |
| Covenant not to compete | 0.5 | | | (0.1) | | | 0.4 | |
| Software & patents | 0.1 | | | (0.1) | | | — | |
| Total identifiable intangibles | $ | 74.6 | | | $ | (14.8) | | | $ | 59.8 | |
In connection with the Genco Acquisition, the Company recognized a customer relationship intangible asset of $15.7 million at fair value. This intangible is amortized over an estimated useful life of five years based on the expected pattern of future cash flows associated with the asset. See Note 4. “Genco Acquisition” for additional information.
Amortization expense on intangible assets was $3.5 million and $2.9 million for the three months ended June 30, 2026 and 2025, respectively, and $6.3 million for each of the six months ended June 30, 2026 and 2025.
As of June 30, 2026, estimated annual amortization expense is as follows:
| | | | | |
| Year Ending December 31, | Estimated Amortization Expense |
| 2026 (remainder of) | $ | 7.1 | |
| 2027 | 15.4 | |
| 2028 | 15.0 | |
| 2029 | 9.3 | |
| 2030 | 6.3 | |
| Thereafter | 16.1 | |
| Total estimated amortization expense | $ | 69.2 | |
9. Investments
The Company holds the following investments that do not have readily determinable fair values and are accounted for under the measurement alternative in ASC 321:
| | | | | | | |
| Investment | June 30,
2026 | | |
| SISU SPV, LLC | $ | 12.8 | | | |
| Deployable Energy Limited SAFE | 5.0 | | | |
| Total | $ | 17.8 | | | |
These investments are classified as other assets (non-current) in the condensed consolidated balance sheets.
SISU SPV, LLC
On December 31, 2025, the Company paid a $10.0 million deposit toward an investment in SISU SPV, LLC (“SISU”), a Delaware limited liability company formed to invest in SISU Ultimate Holdings, LLC, which owns SISU Energy & Environmental, LLC, an Oklahoma-based company that provides emissions-reduction solutions, including selective catalytic reduction catalyst systems. During the first quarter of 2026, the Company paid the remaining $2.8 million, completing its total investment of $12.8 million, representing a 29.7% membership interest in SISU.
SISU is a VIE for which the Company is not the primary beneficiary, and therefore the Company does not consolidate SISU (see Note 2. “Variable Interest Entities”) .
Deployable Energy Limited
In June 2026, the Company invested $5.0 million in a simple agreement for future equity (“SAFE”) issued by Deployable Energy Limited (“Deployable”), a Delaware corporation developing small modular reactor (“SMR”) nuclear technology, subject to a $150.0 million post-money valuation cap. The investment gives the Company early exposure to next-generation nuclear generation and the ability to incorporate SMR technology into its full-scope power offering over time, complementing its existing behind-the-meter gas generation platform. The SAFE entitles the Company to shares of Deployable’s capital stock upon the occurrence of specified future equity financing, liquidity, or dissolution events. The SAFE does not carry voting rights and is not redeemable at the Company’s option. The Company does not control or have significant influence over Deployable and does not consolidate it.
10. Accrued Liabilities
Accrued liabilities consist of the following.
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Equipment held for lease | $ | 8.1 | | | $ | 36.0 | |
| Employee related expenses | 17.1 | | | 17.0 | |
| Selling, general and administrative | 5.2 | | | 1.6 | |
| Operational cost accruals | 9.9 | | | 10.0 | |
| Taxes payable | 3.2 | | | 1.3 | |
| Interest payable | 12.7 | | | 1.7 | |
| Total accrued liabilities | $ | 56.2 | | | $ | 67.6 | |
11. Debt
Below is an overview of our outstanding debt.
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| 6.375% Senior Notes due 2031 | $ | 1,300.0 | | | $ | — | |
| Stateline Term Loan | 339.7 | | | 186.0 | |
| Less: unamortized debt financing costs | (30.7) | | | (2.0) | |
| Total debt, net of debt financing costs | $ | 1,609.0 | | | $ | 184.0 | |
| Less: current portion of debt | (11.4) | | | (4.0) | |
| Long-term debt | $ | 1,597.6 | | | $ | 180.0 | |
6.375% Senior Notes due 2031
On May 12, 2026, Solaris Energy Infrastructure, LLC (“Solaris LLC”), a consolidated subsidiary of the Company, issued $1.3 billion aggregate principal amount of 6.375% Senior Notes due 2031 (the “Senior Notes”) at par in a private placement pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The offering resulted in net proceeds of $1.28 billion after deducting the initial purchasers’ discount of $19.5 million and other offering expenses of $3.3 million. Interest accrues at a rate of 6.375% per annum and is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2026. The Senior Notes mature on May 15, 2031.
The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company and certain subsidiaries of Solaris LLC. The Senior Notes and related guarantees rank senior in right of payment to the Company’s 4.75% Convertible Senior Notes due 2030 and 0.25% Convertible Senior Notes due 2031 (collectively, the “Convertible Notes,” see Note 12. “Convertible Notes”) and the corresponding subordinated intercompany convertible notes (the
“Intercompany Convertible Notes”) issued by Solaris LLC to the Company in aggregate principal amounts equal to the
outstanding amounts under the Convertible Notes. Prior to May 15, 2028, Solaris LLC may redeem up to 40% of the aggregate principal amount of the Senior Notes with the net proceeds from certain equity offerings at a redemption price equal to 106.375% of the principal amount, plus accrued and unpaid interest, subject to certain conditions. Solaris LLC may also redeem all or a portion of the Senior Notes prior to May 15, 2028 at a redemption price equal to 100% of the principal amount plus a make-whole premium and accrued and unpaid interest. On or after May 15, 2028, the Senior Notes are redeemable at specified prices plus accrued and unpaid interest.
Upon the occurrence of a change of control triggering event, Solaris LLC is required to offer to repurchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest. If Solaris LLC
receives certain contract termination payments and does not use the proceeds for certain specified purposes, Solaris LLC is
required to offer to use certain net proceeds therefrom to repurchase the Senior Notes at a purchase price equal to 100% of
the principal amount, plus accrued and unpaid interest. The indenture governing the Senior Notes contains customary affirmative and negative covenants, including limitations on the ability of Solaris LLC and its restricted subsidiaries to incur additional indebtedness, make restricted payments, sell assets, make investments, create liens, enter into affiliate transactions, and engage in mergers or transfers of substantially all assets. The indenture also contains customary events of default.
The net proceeds from the offering were used to repay in full certain outstanding borrowings that were terminated concurrently with the closing of the offering and to pay related fees and expenses. The remaining proceeds are available for general corporate purposes, including growth capital expenditures. See “Debt Extinguishment” below for additional information regarding debt extinguishment.
In connection with the issuance of the Senior Notes, the Company incurred total debt financing costs of $27.9 million, consisting of the initial purchasers’ discount of $19.5 million, other offering expenses of $3.3 million, and $5.1 million of third-party costs that were paid separately and not deducted from the offering proceeds. These costs are recorded as a direct deduction from the carrying amount of the Senior Notes and are amortized to interest expense using the effective interest method over the term of the Senior Notes. The effective interest rate on the Senior Notes is 6.9%.
Interest incurred on the Senior Notes was $11.1 million for the three and six months ended June 30, 2026, of which $1.9 million was capitalized as part of the cost of qualifying assets under ASC 835-20. The remaining $9.2 million was recognized as interest expense in the condensed consolidated statements of operations.
As of June 30, 2026, the carrying amount of the Senior Notes was $1.27 billion, consisting of $1.3 billion aggregate principal amount less $27.2 million of unamortized debt financing costs. The carrying amount approximated fair value as of June 30, 2026, due to the recent issuance of the Senior Notes at a fixed interest rate reflective of prevailing market conditions. The fair value measurement is classified as Level 2 within the fair value hierarchy under ASC 820.
Revolving Credit Facility
On May 12, 2026, Solaris LLC, as borrower, and the Company, as parent, entered into a credit agreement (the “Credit Agreement”) with MUFG Bank, Ltd., as administrative agent, CSC Delaware Trust Company, as collateral agent, and the lenders party thereto. The Credit Agreement provides for a $650.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), with a $150.0 million letter of credit sublimit. The Revolving Credit Facility permits Solaris LLC to increase the total commitments by up to $200.0 million, subject to certain conditions.
Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at our option, either (i) Term SOFR plus an applicable margin ranging from 2.5% to 3.5% or (ii) the Base Rate plus an applicable margin ranging from 1.5% to 2.5%, in each case based on Solaris LLC’s total net leverage ratio. The applicable margin is subject to adjustment on a quarterly basis. Solaris LLC is also required to pay a commitment fee of 0.50% per annum on the average daily unused portion of the Revolving Credit Facility, as well as letter of credit fees equal to the applicable SOFR margin.
The Revolving Credit Facility matures on May 12, 2031, subject to certain springing maturity provisions. Obligations under the Revolving Credit Facility are guaranteed by the Company and its existing and future restricted subsidiaries, other than certain excluded subsidiaries, and are secured by a first-priority security interest in substantially all assets of Solaris LLC and the guarantors, subject to customary exceptions, and by a pledge by the Company of its equity interests in Solaris LLC. The obligations rank effectively senior to the Company’s and its subsidiaries’ unsecured senior indebtedness to the extent of the value of the collateral and senior in right of payment to the Convertible Notes and the Intercompany Convertible Notes.
The Credit Agreement contains certain customary affirmative and negative covenants, including limitations on the incurrence of additional indebtedness, liens, dispositions, investments and restricted payments. Commencing with the fiscal quarter ending September 30, 2026, the Credit Agreement requires Solaris LLC and its restricted subsidiaries to maintain, in each case tested as of the last day of each fiscal quarter based on the four most recently ended fiscal quarters:
•a ratio of consolidated net indebtedness to consolidated EBITDA of no greater than 5.25 to 1.00 (increased to 5.50 to 1.00 for the four fiscal quarters following certain material acquisitions),
•a ratio of consolidated secured net indebtedness to consolidated EBITDA of no greater than 3.50 to 1.00, and
•a ratio of consolidated EBITDA to consolidated cash interest expense of no less than 3.00 to 1.00.
The Credit Agreement also contains a mandatory prepayment requirement and a limitation on the availability of borrowings thereunder that could become effective upon the early termination or suspension of certain Material Contracts (as defined in the Credit Agreement). To the extent that Solaris LLC and its restricted subsidiaries would not be in pro forma compliance with the financial covenants described above (i) after giving effect to such early termination or suspension, (ii) assuming for purposes of such calculation that all commitments under the Revolving Credit Facility have been fully drawn and (iii) after deducting certain cash payments received on account of such termination or cancellation from net leverage (without duplication of other amounts netted in the calculation of consolidated net indebtedness), Solaris LLC will be required to repay outstanding loans and cash collateralize letters of credit in an amount equal to the lesser of the amount of cash payments received on account of such termination or cancellation and the total amount outstanding under the Revolving Credit Facility. The amount available to be borrowed under the Revolving Credit Facility will be temporarily reduced to the amount that may be borrowed while still maintaining compliance with the financial covenants described above (i) after giving effect to such early termination or suspension, (ii) assuming for purposes of such calculation that all commitments under the Revolving Credit Facility have been fully drawn and (iii) after deducting certain cash payments received on account of such termination or cancellation from net leverage (other than amounts prepaid as described in the preceding sentence, and without duplication of other amounts netted in the calculation of consolidated net indebtedness).
The Credit Agreement also contains customary events of default, including cross-default to other material indebtedness. Upon the occurrence and continuance of an event of default, the administrative agent and lenders may accelerate the outstanding obligations and exercise other remedies available under the Credit Agreement and related security documents.
In connection with entering into the Credit Agreement, the Company incurred debt financing costs of $9.9 million, which are presented as a non-current asset and are being amortized to interest expense on a straight-line basis over the term of the Revolving Credit Facility. As of June 30, 2026, the related unamortized debt financing costs were $9.6 million.
As of June 30, 2026, there were no borrowings outstanding under the Revolving Credit Facility. Standby letters of credit with an aggregate face amount of $75.0 million had been issued under the letter of credit sublimit, resulting in $575.0 million of availability under the Revolving Credit Facility. These letters of credit are secured under the collateral package for the Revolving Credit Facility and are not separately cash-collateralized. The Company also maintains a separate cash-collateralized standby letter of credit arrangement with MUFG Bank, Ltd. which is not part of the Revolving Credit Facility (see Note 18. “Commitments and Contingencies”).
Stateline Term Loan
On May 23, 2025, Stateline entered into a Loan and Security Agreement (the “Stateline Term Loan”) with Stonebriar Commercial Finance LLC, providing for a delayed draw term loan facility with a maximum principal amount equal to the lesser of $550.0 million or 80% of the total cost of the equipment collateral, with advances permitted through March 31, 2027. The Company consolidates Stateline, which is a variable interest entity, because the Company is the primary beneficiary. See Note 2. “Variable Interest Entities” for additional information. The terms of the Stateline Term Loan are described more fully in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Advances initially bear interest at a variable rate equal to 5.94% plus the greater of SOFR or 4.31%, resetting monthly. At the conversion date applicable to each advance (the date on which a variable-rate advance converts into a fixed-rate term loan), the advance bears interest at a fixed rate of 9.85% per annum, subject to a one-time adjustment based on market rates at that date, and is repaid over a 72-month term, with 80% amortized in equal monthly installments and the remaining 20% due as a balloon payment at maturity. The Stateline Term Loan is secured solely by Stateline’s equipment collateral and related contracts and is non-recourse to the Company.
The Stateline Term Loan includes customary covenants and, beginning in the quarter ending March 31, 2027, requires Stateline to maintain a fixed charge coverage ratio of at least 1.35 to 1.00, a leverage ratio not exceeding 3.5 to 1.00, and minimum liquidity of $5.0 million through December 31, 2026 and $10.0 million thereafter.
As of June 30, 2026, outstanding advances totaled $339.7 million, of which $11.4 million was classified as current. Debt financing costs of $5.8 million were incurred at inception. Of this amount, $3.8 million was allocated to advances drawn as of June 30, 2026, recorded as a direct deduction from the carrying amount of the loan and amortized over the respective loan terms using the effective interest method. The remaining $2.0 million was deferred as of June 30, 2026 and recognized as a non-current asset pending allocation to future advances.
Interest cost of $8.0 million and $13.1 million, respectively, was incurred for the three and six months ended June 30, 2026, of which $6.9 million and $12.0 million, respectively, was capitalized as part of the cost of qualifying assets under ASC 835-20. The remaining $1.1 million for each of the three and six months ended June 30, 2026, was recognized as interest expense in the condensed consolidated statements of operations. The carrying amount of the Stateline Term Loan approximated its fair value as of June 30, 2026, which was classified within Level 2 of the fair value hierarchy under ASC 820.
Debt Extinguishment
On March 16, 2026, in connection with the closing of the Genco Acquisition, (i) we entered into a Senior Secured Term Loan Agreement (as amended on April 8, 2026, the “Bridge Term Loan”) with Goldman Sachs Bank USA as administrative agent and collateral agent that provided us with term loans in an aggregate principal amount of $300.0 million, (ii) we terminated that certain Loan, Security and Guaranty Agreement, dated October 2, 2024 (as amended or otherwise modified from time to time, the “BofA Revolving Facility”), which provided $75.0 million of revolving commitments, subject to a borrowing base, and (iii) Project G Buyer, LLC, a wholly-owned subsidiary of the Company, assumed the obligations of Focus Genco LLC under (x) the Loan and Security Agreement, dated as of March 16, 2026 (the “Stonebriar Term Loan”), with Eldridge Asset Finance LLC, in an aggregate principal amount of $148.6 million, and (y) two term loans under the Master Loan Agreement, dated as of September 26, 2024, with Caterpillar Financial Services Corp. (collectively, the “Caterpillar Term Loans”), in an aggregate principal amount of $15.3 million. There were no outstanding borrowings under the BofA Revolving Facility as of the date of termination, and all liens securing the BofA Revolving Facility were released. The termination resulted in a $1.3 million loss on debt extinguishment, primarily consisting of the write-off of unamortized debt financing costs.
On May 12, 2026, concurrently with the issuance of the Senior Notes, the Company used a portion of the net proceeds of the Senior Notes to repay in full and terminate the Bridge Term Loan, the Stonebriar Term Loan, and the Caterpillar Term Loans (collectively, the “Prior Term Loans”), which had an aggregate outstanding principal balance of $463.9 million. All liens and security interests securing the Prior Term Loans were released upon termination. These repayments resulted in a $14.8 million loss on debt extinguishment, primarily consisting of prepayment and termination fees and the write-off of unamortized debt financing costs.
The Company recognized losses on debt extinguishment of $14.8 million and $16.1 million during the three and six months ended June 30, 2026, respectively, presented as loss on debt extinguishment in the condensed consolidated statements of operations.
Payments of Debt Obligations Due by Period
The following table presents the scheduled future principal maturities of long-term debt as of June 30, 2026, consisting of the Senior Notes, Stateline Term Loan, and Convertible Notes:
| | | | | | | | | | | |
| Year Ending December 31, | Principal Repayments of Long-term Debt | | Principal Repayments of Convertible Notes |
| 2026 (remainder of) | $ | — | | | $ | — | |
| 2027 | 32.5 | | | — | |
| 2028 | 45.3 | | | — | |
| 2029 | 45.3 | | | — | |
| 2030 | 45.3 | | | 155.0 | |
| Thereafter | 1,471.3 | | | 747.5 | |
| Total future principal debt payments | $ | 1,639.7 | | | $ | 902.5 | |
The expected future principal maturities of the Stateline Term Loan are based solely on the outstanding principal balance of $339.7 million as of June 30, 2026, and assumed conversion dates in 2026 and 2027. Actual maturities may vary based on timing of conversions and any prepayments.
12. Convertible Notes
On May 2, 2025 and October 8, 2025, the Company issued convertible senior notes due 2030 (the “2030 Notes”) and 2031 (the “2031 Notes”), respectively (collectively, the “Convertible Notes”). The following table summarizes the material terms of the Convertible Notes:
| | | | | | | | | | | | | | |
| Term | | 2030 Notes | | 2031 Notes |
| Aggregate principal amount | | $155.0 million | | $747.5 million |
| Interest rate | | 4.75% per annum | | 0.25% per annum |
| Interest payment dates | | May 1 and November 1 | | April 1 and October 1 |
| Initial conversion rate | | 37.8896 shares of Class A common stock per $1,000 principal | | 17.4825 shares of Class A common stock per $1,000 principal |
| Initial conversion price | | Approximately $26.39 per share | | Approximately $57.20 per share |
| Maturity date | | May 1, 2030 | | October 1, 2031 |
During each of the three months ended December 31, 2025 and March 31, 2026, the last reported sale price of the Company’s Class A common stock exceeded 130% of the $26.39 conversion price for the 2030 Notes for at least 20 trading days in the relevant observation period. As a result, the conversion condition was met, and the 2030 Notes were convertible at the holders’ option during the six months ended June 30, 2026. The Company did not receive any conversion requests from holders during the six months ended June 30, 2026, and no conversions of the 2030 Notes occurred or were settled during the period. Upon conversion, the Company may elect to settle the 2030 Notes in cash, shares of Class A common stock, or a combination of both, subject to the terms of the respective supplemental indentures.
In 2025, concurrently with the pricing of the 2031 Notes, the Company entered into privately negotiated capped call transactions with certain financial institutions. The capped calls have a strike price of $57.20 and a cap price of $88.00 per
share and cover, subject to customary anti-dilution adjustments, the same number of shares of Class A common stock initially underlying the 2031 Notes. The capped call transactions are designed to reduce potential dilution to Class A common stock and/or offset cash payments the Company may make upon conversion of the 2031 Notes.
The effective interest rate is 5.6% for the 2030 Notes and 0.7% for the 2031 Notes. A summary of the interest expense, discount amortization, deferred debt financing costs amortization, and capitalized interest related to the Convertible Notes for the three and six months ended June 30, 2026 is as follows:
| | | | | | | | | | | |
| Three Months Ended
June 30, 2026 | | Six Months Ended
June 30, 2026 |
| Interest expense | $ | 2.3 | | | $ | 4.6 | |
| Debt financing costs amortization | 1.2 | | | 2.3 | |
| Less: capitalized interest | (2.6) | | | (3.2) | |
| Convertible Notes interest expense, net | $ | 0.9 | | | $ | 3.7 | |
The net carrying amount of the 2030 Notes and 2031 Notes were as follows:
| | | | | | | | |
| June 30,
2026 | December 31,
2025 |
| 2030 Notes: | | |
| Principal (par value) | $ | 155.0 | | $ | 155.0 | |
| Unamortized debt financing costs | (4.7) | | (5.2) | |
| Net carrying amount | $ | 150.3 | | $ | 149.8 | |
| | |
| 2031 Notes: | | |
| Principal (par value) | $ | 747.5 | | $ | 747.5 | |
| Unamortized debt financing costs | (15.1) | | (16.9) | |
| Net carrying amount | $ | 732.4 | | $ | 730.6 | |
The Company estimates the fair value of the Convertible Notes using Level 1 inputs based on quoted market prices of the notes in active markets. As of June 30, 2026, the fair value of the 2030 Notes and 2031 Notes was $495.5 million and $1.2 billion, respectively.
13. Fair Value Measurements and Financial Instruments
The Company’s financial assets and liabilities, as well as certain nonrecurring fair value measurements such as goodwill impairment and long-lived assets impairment, are measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows:
•Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
•Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3—Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing assets or liabilities based on the best information available.
Recurring Fair Value Measurements
As of June 30, 2026, the Company held money market funds of $70.9 million, of which $0.2 million is included in cash and cash equivalents and $70.7 million is included in restricted cash (non-current) in the condensed consolidated balance sheets. Money market funds are valued using quoted prices in active markets and are classified as Level 1 within the fair value hierarchy.
The Company had no other financial assets or liabilities measured at fair value on a recurring basis as of June 30, 2026, and no financial assets or liabilities measured a fair value on a recurring basis as of December 31, 2025.
Nonrecurring Fair Value Measurements
The Company’s nonrecurring fair value measurements primarily relate to assets acquired and liabilities assumed in connection with business combinations. In 2025, the Company completed a business combination in which the acquired assets and assumed liabilities were recorded at their estimated fair values as of the acquisition date.
The Genco Acquisition completed on March 16, 2026 was accounted for as an asset acquisition under ASC 805-50, and accordingly the acquired assets and assumed liabilities were recorded at allocated acquisition cost. The customer relationship intangible asset recognized in connection with the Genco Acquisition was recorded at its standalone fair value of $15.7 million, determined using the income approach. See Note 4. “Genco Acquisition” and Note 8. “Intangible Assets” for additional information.
The fair value measurements were determined using valuation techniques appropriate for the nature of the assets and liabilities and involved significant unobservable inputs. Accordingly, these measurements are classified within Level 3 of the fair value hierarchy.
Financial Instruments Not Measured at Fair Value on a Recurring Basis
The carrying amounts of certain financial instruments not measured at fair value approximate their fair values due to their short-term nature or other characteristics, as follows:
•Cash, accounts receivable, accounts payable, accrued liabilities, and other current liabilities (including insurance premium financing) - The carrying amounts approximate fair value primarily because of their short maturities.
•Restricted cash (non-current asset) - The carrying amount approximates fair value as it consists of cash held in a deposit account.
•Finance and operating lease obligations - The carrying amounts approximate fair value as the incremental borrowing rates used to measure the liabilities approximate current market rates for similar obligations.
The Stateline Term Loan, Senior Notes, and the Convertible Notes are carried at amortized cost. The carrying amount of the Stateline Term Loan approximates fair value because the effective interest rate resets periodically to reflect current market rates. The carrying amount of the Senior Notes approximated fair value as of June 30, 2026, because the notes were issued in May 2026 at par at a fixed interest rate reflective of prevailing market conditions. See Note 11. “Debt” and Note 12. “Convertible Notes” for the carrying amounts and fair values of these instruments, including the related fair value hierarchy classifications.
Credit Risk
The financial instruments that are subject to concentrations of credit risk mainly include cash and cash equivalents and trade receivables.
The Company maintains its cash, cash equivalents and restricted cash with high-quality financial institutions. These balances often exceed the FDIC-insured limits. The Company monitors the creditworthiness of institutions with which it deposits funds.
The majority of our trade receivables have payment terms of 60 days or less. As of June 30, 2026, one customer accounted for 68% of our total trade receivables. The concentration of customers operating within the oil and natural gas industry may increase our overall exposure to credit risk, as these customers may be similarly affected by shifts in economic, regulatory or other external factors. If a customer defaults, our gross profit and cash flows may be adversely affected. To manage this credit risk, we conduct credit evaluations, monitor customer payment behavior, and, when necessary, pursue legal remedies, such as filing of liens.
14. Equity and Non-controlling Interest
Dividends
To enable the Company to pay quarterly cash dividends to holders of its Class A common stock, Solaris LLC made cash distributions to its unitholders totaling $8.8 million and $8.1 million during the three months ended June 30, 2026 and 2025, respectively. Of these amounts, $7.5 million and $4.9 million, respectively, were distributed to the Company and were used entirely to pay quarterly cash dividends to holders of its Class A common stock. During the six months ended June 30, 2026 and 2025, Solaris LLC made cash distributions to its unitholders totaling $17.6 million and $16.3 million respectively. Of these amounts, $14.5 million and $9.6 million, respectively, were distributed to the Company and were used entirely to pay quarterly cash dividends to holders of its Class A common stock. In addition, during the six months ended June 30, 2026 and 2025, Solaris LLC made pro-rata distributions of $0.4 million and $1.2 million, respectively, to certain unitholders to enable the Company to satisfy its obligations under the Tax Receivable Agreement (as defined below). See Note 16. “Income Taxes” for further details on the Tax Receivable Agreement.
Non-controlling Interest
Non-controlling interests in the condensed consolidated balance sheets represent the portion of equity in consolidated subsidiaries not attributable to the Company. As of June 30, 2026 and December 31, 2025, non-controlling interest consisted of the following:
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| Entity: | | | |
| Solaris LLC | $ | 172.6 | | | $ | 176.4 | |
| Stateline | 86.0 | | | 86.5 | |
| Total | $ | 258.6 | | | $ | 262.9 | |
Exchange of Solaris LLC Units
During the six months ended June 30, 2026, a total of 4,650,753 Solaris LLC units were exchanged for an equal number of shares of Class A common stock, and a corresponding number of shares of Class B common stock were cancelled, resulting in an increase in the Company’s ownership interest in Solaris LLC.
Stock-Based Compensation
As more fully described in Note 16. “Stock-Based Compensation” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the Company grants equity awards, including performance-based restricted stock units (“PSUs”), under its Long Term Incentive Plan (the “LTIP”).
During the three months ended June 30, 2026, the Company granted 458,000 PSUs to certain key employees under the LTIP. These PSUs are weighted 90% absolute total shareholder return (TSR) and 10% relative TSR versus a predetermined peer group. The number of shares that may vest and be settled ranges from 0% to 200% of the target award, depending on the level of performance achieved. These PSUs are subject to a service condition requiring continuous employment over a four-year performance and vesting period, and may be settled in shares of Class A common stock or in cash, at the Company’s election. Dividends accrue on the PSUs and are generally paid upon vesting.
The aggregate grant-date fair value of these PSUs was $58.4 million, determined using a Monte Carlo simulation method. Compensation cost is recognized on a straight-line basis over the requisite service period.
As of June 30, 2026, there was $132.6 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements.
15. Earnings Per Share
Basic earnings per share of Class A common stock is computed by dividing net income attributable to Class A shareholders by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share is computed giving effect to all potentially dilutive shares.
The following table sets forth the calculation of basic and diluted earnings per share, or EPS, for the three and six months ended June 30, 2026 and 2025:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2026 | | 2025 | | 2026 | | 2025 |
| Numerator (in millions) | | | | | | | | |
| Net income attributable to Solaris Energy Infrastructure, Inc. | | $ | 20.5 | | | $ | 12.0 | | | $ | 41.9 | | | $ | 17.3 | |
Less: income attributable to participating securities (1) | | (0.6) | | | (0.6) | | | (1.4) | | | (0.8) | |
| Net income attributable to Class A shareholders - basic | | $ | 19.9 | | | $ | 11.4 | | | $ | 40.5 | | | $ | 16.5 | |
| Convertible notes interest charge, net of tax | | 0.6 | | | — | | | 2.8 | | | — | |
| | | | | | | | |
| Net income attributable to common stockholders - diluted | | $ | 20.5 | | | $ | 11.4 | | | $ | 43.3 | | | $ | 16.5 | |
| | | | | | | | |
| Denominator | | | | | | | | |
| Basic weighted average shares of Class A common stock outstanding | | 59,205,708 | | 37,818,102 | | 55,707,920 | | 37,001,762 |
| Effect of dilutive securities: | | | | | | | | |
| Dilutive convertible notes | | 18,941,057 | | — | | 18,941,057 | | — |
| Performance-based restricted stock units | | 832,490 | | — | | 672,878 | | — |
| | | | | | | | |
| Diluted weighted average shares of Class A common stock outstanding | | 78,979,255 | | 37,818,102 | | 75,321,855 | | 37,001,762 |
| | | | | | | | |
| Earnings per share of Class A common stock - basic | | $ | 0.34 | | | $ | 0.30 | | | $ | 0.73 | | | $ | 0.44 | |
| Earnings per share of Class A common stock - diluted | | $ | 0.26 | | | $ | 0.30 | | | $ | 0.57 | | | $ | 0.44 | |
(1)The Company’s unvested restricted stock awards are participating securities because they entitle the holders to non-forfeitable rights to dividends until the awards vest or are forfeited.
The following weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Class B common stock | 12,416,718 | | 27,873,211 | | 13,874,121 | | 28,486,572 |
| Convertible notes | — | | 3,807,697 | | — | | 1,914,367 |
| Restricted stock awards | 1,908,238 | | 1,857,801 | | 1,914,544 | | 1,917,680 |
| Performance-based restricted stock units | 463,033 | | 644,532 | | 232,796 | | 642,511 |
| Stock options | — | | 4,922 | | — | | 4,977 |
| Total | 14,787,989 | | 34,188,163 | | 16,021,461 | | 32,966,107 |
16. Income Taxes
Income Taxes
The Company is a corporation and, as a result, is subject to United States federal, state and local income taxes. Solaris LLC is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the Solaris LLC unitholders, including the Company, are liable for United States federal income tax on their respective shares of Solaris LLC’s taxable income reported on the unitholders’ United States federal income tax returns. Solaris LLC is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes.
For the three months ended June 30, 2026 and 2025, we recognized a combined United States federal and state expense for income taxes of $5.0 million and $6.0 million, respectively. For the six months ended June 30, 2026 and 2025, we recognized a combined United States federal and state expense for income taxes of $20.2 million and $9.9 million, respectively. The effective combined United States federal and state income tax rates were 16.5% and 19.8% for the three months ended June 30, 2026 and 2025, respectively, and 26.1% and 21.0% for the six months ended June 30, 2026 and 2025, respectively. For the three months ended June 30, 2026, our effective tax rate differed from the statutory rate primarily due to the impact of the non-controlling interest and mix of states where we operate. Our effective tax rate differed from the statutory rate for the six months ended June 30, 2026, primarily due to the impact of the non-controlling interest, the executive compensation deduction limitation and the mix of states where we operate.
The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. The largest components of the Company’s deferred tax position relate to the Company’s investment in Solaris LLC and net operating loss carryovers. The Company recorded a deferred tax asset and additional paid-in capital for the difference between the book value and the tax basis of the Company’s investment in Solaris LLC. This difference originates from the equity offerings of Class A common stock, exchanges of Solaris LLC units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock, and issuances of Class A common stock, and corresponding Solaris LLC units, in connection with stock-based compensation.
Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize our deferred tax assets in the future. As the Company reassesses this position in the future, changes in cumulative earnings history, excluding non-recurring charges, or changes to forecasted taxable income may alter this expectation and may result in an increase to the valuation allowance and an increase in the effective tax rate.
Section 382 of the Internal Revenue Code of 1986, contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss and tax credit carryovers and certain built-in losses recognized in years after the “ownership change.” An “ownership change” is generally defined as any change in ownership of more than 50% of a corporation’s stock over a rolling three-year period by stockholders that own (directly or indirectly) 5% or more of the stock of a corporation, or arising from a new issuance of stock by a corporation. If an ownership change occurs, Section 382 generally imposes an annual limitation on the use of pre-ownership change net operating loss carryovers to offset taxable income earned after the ownership change. We do not believe the Section 382 annual limitation related to historical ownership changes impacts our ability to utilize our net operating losses; however, if we were to experience a future ownership change, our ability to use net operating losses may be impacted.
Payables Related to the Tax Receivable Agreement
On May 17, 2017, in connection with its initial public offering (“IPO”), the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with the other then-existing members of Solaris LLC. The Tax Receivable Agreement was later amended on June 27, 2023. As of June 30, 2026, our liability under the Tax Receivable Agreement was $109.2 million, representing 85% of the net cash savings in United States federal, state and local income tax or franchise tax that the Company anticipates realizing in future years from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of the Company’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC units in connection with our IPO or pursuant to previous exercises of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and additional tax basis arising from any payments the Company makes under the Tax Receivable Agreement.
The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact our liability under the Tax Receivable Agreement. Therefore, in accordance with ASC 450, Contingencies, we have recorded a liability under the Tax Receivable Agreement related to the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of the Company’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC units in connection with the IPO or pursuant to previous exercises of the Redemption Right or the Call Right (each as defined in Solaris LLC’s limited liability company agreement) and additional tax basis arising from any payments the Company makes under the Tax Receivable Agreement. Solaris LLC may make cash distributions to the Company in order for the Company to satisfy its obligations under the Tax Receivable Agreement and will be required to distribute cash pro rata to each of the other members of Solaris LLC, in accordance with the number of Solaris LLC units owned by each member at that time.
During the six months ended June 30, 2026, the Company made payments totaling $1.7 million under the Tax Receivable Agreement. Solaris LLC made a cash distribution to the Company of $1.7 million to satisfy these obligations and concurrently made a cash distribution on a pro rata basis to certain Solaris LLC unitholders amounting to $0.4 million.
17. Concentrations
Customer Concentrations
For the three months ended June 30, 2026, one customer accounted for 63% of the Company’s revenues. For the three months ended June 30, 2025, two customers accounted for 45% and 12% of the Company’s revenues. For the six months ended June 30, 2026, one customer accounted for 58% of the Company’s revenues. For the six months ended June 30, 2025, two customers accounted for 41% and 13% of the Company’s revenues.
As of June 30, 2026, one customer accounted for 68% of the Company’s accounts receivable. As of December 31, 2025, two customers accounted for 38% and 18% of the Company’s accounts receivable.
Supplier Concentrations
For the three months ended June 30, 2026, two suppliers accounted for 24% and 16% of the Company’s total purchases. For the three months ended June 30, 2025, one supplier accounted for 42% of the Company’s total purchases. For the six months ended June 30, 2026, two suppliers accounted for 27% and 13% of the Company’s total purchases. For the six months ended June 30, 2025, one supplier accounted for 52% of the Company’s total purchases.
As of June 30, 2026, three suppliers accounted for 28%, 19% and 16% of the Company’s accounts payable. As of December 31, 2025, one supplier accounted for 71% of the Company’s accounts payable.
18. Commitments and Contingencies
Litigation and Claims
In the normal course of business, the Company is subject to various claims, legal actions, contract negotiations and disputes. The Company accrues for losses when probable and can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying condensed consolidated financial statements, other than the following.
Masaba Lawsuit
On January 26, 2026, the Patent Trial and Appeal Board (the “PTAB”) of the United States Patent and Trademark Office (the “USPTO”) issued a final written decision holding all claims of Masaba Inc.’s (“Masaba”) U.S. Patent No. 11,780,689 (the “‘689 Patent”) unpatentable. On May 12, 2026, the USPTO Director denied Masaba’s request for Director review of that decision, and Masaba did not appeal to the U.S. Court of Appeals for the Federal Circuit by the July 14, 2026 deadline. As a result, the PTAB’s decision invalidating all claims of the ‘689 Patent is final and no longer subject to appeal.
The ‘689 Patent is the subject of a lawsuit filed by Masaba against the Company on December 14, 2023 in the United States District Court for the District of Wyoming (the “District Court Action”), alleging infringement of the ‘689 Patent. On July 19, 2024, two of the Company’s subsidiaries named as defendants in the District Court Action filed the petition for inter partes review (“IPR”) that resulted in the PTAB decision described above, and the District Court Action was stayed pending resolution of the IPR. In light of the PTAB’s now-final decision, the parties expect that the patent infringement claims will be dismissed with prejudice.
NovaLT16 Turbine Acquisition
On March 13, 2026, the Company executed an Assignment, Assumption, Novation and Amendment Agreement (the “Assignment Agreement”) pursuant to which it acquired from Colusa Power Infrastructure Partners, LLC (“Colusa”) all contractual rights to receive 30 NovaLT16 gas turbine generator units (the “NovaLT16 Turbine Acquisition”) from Baker Hughes Energy Services LLC (“Baker Hughes”) under an existing turbine supply contract (the “Turbine Supply Contract”). The Assignment Agreement constitutes a complete novation of the Turbine Supply Contract, with the Company substituted as purchaser in place of Colusa. At closing, the Company paid Colusa $66.9 million as consideration for the assignment of its contractual delivery rights and paid Baker Hughes $64.3 million in satisfaction of overdue milestone
invoices and suspension-related costs that had accrued prior to the assignment, for aggregate closing payments of $131.2 million recorded as construction in progress. The closing payments were funded with proceeds from the Company’s Bridge Term Loan, which was repaid in full and terminated in May 2026 (See Note 11. “Debt,” including “Debt Extinguishment”). The units are scheduled to be delivered between September 2026 and September 2029.
Purchase Commitments
As of June 30, 2026, the Company has entered into material purchase commitments for power equipment to support the growth of its Solaris Power Solutions segment.
Other supplier commitments. The Company has entered into purchase commitments with various suppliers for power generation equipment. These commitments are cancellable by the Company but are subject to significant termination penalties, ranging from 5% to 90% of the remaining purchase price, depending on timing of cancellation.
Baker Hughes Turbine Supply Contract. In connection with the NovaLT16 Turbine Acquisition, the Company has a non-cancellable purchase obligation of $364.9 million payable to Baker Hughes as manufacturing and delivery milestones are achieved. The contract price is fixed and not subject to escalation, except under limited force majeure and change in law provisions. The Company’s termination rights under the Turbine Supply Contract arise only upon specified supplier default events, including Baker Hughes’ failure to deliver a unit after accrual of maximum delay liquidated damages. Amounts allocated by year in the table below reflect contractual scheduled delivery dates and are subject to change based on actual delivery timing.
As of June 30, 2026, the Company had the following purchase commitments for power equipment, based on expected payment timing assuming commitments are fulfilled:
| | | | | |
| June 30,
2026 |
| Payments due by period | |
| 2026 (remainder of) | $ | 743.2 | |
| 2027 | 478.7 | |
| 2028 | 202.4 | |
| 2029 | 52.9 | |
| |
| Total purchase commitments | $ | 1,477.2 | |
Purchase commitments include $168.8 million related to Stateline, which are expected to be funded using a combination of proceeds from the Stateline Term Loan and Stateline’s cash flows, with no recourse to the Company.
In addition to the purchase obligations in the table above, the Company is obligated to pay Colusa up to $130.2 million in the aggregate as additional consideration for the assignment of turbine delivery rights under the NovaLT16 Turbine Acquisition, payable on a per-unit basis within 30 days of the Company’s acceptance of each unit. These obligations are contingent upon Baker Hughes’ delivery and the Company’s acceptance of each unit, and no amount becomes due with respect to any unit that is not delivered. These amounts are excluded from the table above as they are contingent obligations, not fixed purchase commitments.
Other Commitments
The Company has executed a guarantee of lease agreement with Solaris Energy Management, LLC, a related party, in connection with the rental of office space. As of June 30, 2026, the total future obligation under this guarantee is $1.4 million. Refer to Note 19. “Related Party Transactions” below for additional information regarding related party transactions recognized.
Standby Letters of Credit
On May 29, 2026, Solaris LLC entered into a continuing letter of credit agreement with MUFG Bank, Ltd. providing for the issuance of standby letters of credit in favor of a customer to support the Company’s performance obligations under a long-term contract. Letters of credit issued under this agreement are secured by cash collateral in an amount equal to at least 101% of the aggregate face amount of the letters of credit outstanding, which is classified as restricted cash (see Note 5. “Summary of Significant Accounting Policies”).
As of June 30, 2026, standby letters of credit with an aggregate face amount of $70.0 million were outstanding under this agreement, and no amounts had been drawn. These letters of credit are separate from, and are not issued under, the Revolving Credit Facility. Separately, standby letters of credit with an aggregate face amount of $75.0 million were outstanding under the letter of credit sublimit of the Revolving Credit Facility as of June 30, 2026 (see Note 11. “Debt” ). Including both arrangements, the Company had standby letters of credit with an aggregate face amount of $145.0 million outstanding as of June 30, 2026.
19. Related Party Transactions
Solaris Energy Management
The Company incurs costs for services provided by Solaris Energy Management, LLC, a company owned by William A. Zartler, the Co-Chief Executive Officer and Chairman of the Board. These services primarily include rental of office space, travel services and other administrative support. The related costs are included in selling, general and administrative costs and other operating expenses, net in the condensed consolidated statements of operations. For the three months ended June 30, 2026 and 2025, Solaris LLC paid $0.3 million and $0.2 million, respectively, for these services. For the six months ended June 30, 2026 and 2025, Solaris LLC paid $0.5 million and $0.4 million, respectively, for these services.
In addition, as of June 30, 2026 and December 31, 2025, the Company had the following balances related to these related party transactions reflected on the condensed consolidated balance sheets:
| | | | | | | | | | | |
| June 30,
2026 | | December 31,
2025 |
| | | |
| Accrued liabilities | $ | 0.2 | | | $ | 0.1 | |
KTR Management Company, LLC
The Company previously acquired an operating lease agreement for commercial real estate with KTR Management Company, LLC, a previous related party. As of May 1, 2026, KTR Management Company, LLC is no longer a related party. The information disclosed herein reflects transactions that occurred while KTR Management Company, LLC was considered a related party.
The operating lease right-of-use asset and operating lease liability associated with this related party lease were each $0.1 million on the condensed consolidated balance sheets as of December 31, 2025. KTR Management Company, LLC was no longer a related party at June 30, 2026.
During the three and six months ended June 30, 2026 and 2025, the Company incurred the following related party expenses from KTR Management Company, LLC:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Cost of services | | | | | | | |
| Commercial real estate lease | $ | — | | | $ | 0.1 | | | $ | 0.1 | | | $ | 0.1 | |
| Cost of leasing revenue | | | | | | | |
| Short-term equipment rental | — | | | — | | | — | | | 0.3 | |
| Fuel, utility and travel expenses | — | | | — | | | — | | | 0.1 | |
| Total costs from KTR Management Company, LLC | $ | — | | | $ | 0.1 | | | $ | 0.1 | | | $ | 0.5 | |
During the six months ended June 30, 2025, the Company also purchased certain equipment from KTR Management Company, LLC for $2.0 million, included as property, plant and equipment, net on the condensed consolidated balance sheets. The equipment was purchased at cost with no mark up, representing the same price the Company would have paid in an arm’s-length transaction with an unrelated party.
BlackRock
In connection with the issuance of the 2030 Notes, BlackRock Portfolio Management LLC (“BlackRock”), which held more than 5% of the Company’s total outstanding shares of common stock at the time of note issuance, purchased an aggregate principal amount of $55.0 million of the 2030 Notes at the public offering price. The Company’s audit committee approved BlackRock’s participation in the 2030 Notes offering on April 30, 2025.
In connection with the issuance of the 2031 Notes, BlackRock purchased an aggregate principal amount of $120.0 million of the 2031 Notes at the price to the public. The Company’s audit committee approved BlackRock’s participation in the 2031 Notes offering on October 6, 2025.
20. Subsequent Events
GESA Acquisition
On July 1, 2026, the Company completed the acquisition of Global Energy Services Alliance, Inc. (“GESA”), a full cycle power generation service provider. The acquisition will be accounted for as a business combination in accordance with ASC 805, Business Combinations.
The preliminary estimated purchase consideration was approximately $263.9 million, consisting of approximately $52.4 million of cash consideration (subject to post-closing net working capital adjustments), and equity consideration consisting of 2,880,682 shares of the Company’s Class A common stock with an acquisition-date fair value of $211.5 million.
The estimated purchase consideration is preliminary and remains subject to finalization, including customary post-closing adjustments. In addition, the allocation of the purchase consideration to the assets acquired and liabilities assumed has not yet been completed. Accordingly, the preliminary purchase price allocation, including the determination of the fair values of the assets acquired and liabilities assumed, may change as additional information becomes available during the measurement period.
Contract Conversion and Balance of Plant Expansion to February 2026 Hatchbo Contract
In July 2026, the Company signed an amendment converting its original power capacity agreement into a final operating agreement. The final agreement includes expanded services to deliver and fully operate a turnkey power plant of approximately 660 MW with balance of plant, batteries and energy management systems designed to manage artificial intelligence workloads. The contract tenor was extended to up to 18 years (10-year base plus an 8-year extension option) from up to 15 years (10-year base plus a 5-year extension option).
Balance of Plant, Energy Storage and Services Scope Expansion to April 2026 Contract
In July 2026, the Company signed additional agreements which expand the scope of the original contract to now include additional balance of plant and energy storage assets as well as management of natural gas on a cost-plus basis.
Additional Borrowings under Existing Stateline Term Loan
In July 2026, Stateline drew an additional $21.0 million under the Stateline Term Loan. The proceeds were used to fund growth-related capital expenditures.
Dividends
On August 4, 2026, the Company’s board of directors approved a quarterly cash dividend of $0.12 per share of Class A common stock, payable on September 25, 2026, to holders of record as of September 15, 2026. Additionally, a distribution of $0.12 per unit will be made to Solaris LLC unitholders, with the same payment and record dates.