SEI 10-K & 10-Q changes, risk factors and insider trading
Solaris Energy Infrastructure, Inc. · NYSE · Oil & Gas Field Machinery & Equipment · CIK 1697500 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Distributed power generation services in some applications compete with access to the grid.”
New heading “We expect to face significant competition in the future as the distributed power industry evolves.”
New heading “Reliance upon a small number of large customers may adversely affect our revenue and operating results.”
New heading “We are subject to a number of risks associated with Stateline.”
New heading “We may be subject to short selling strategies and are party to various proceedings and claims related thereto from time to time.”
New heading “We may be unable to raise the funds necessary to repurchase the 2030 Notes or 2031 Notes for cash following a fundamental change or to pay any cash amounts due upon maturity or conversion of the 2030 Notes or 2031 Notes, and our other indebtedness limits our ability to repurchase the 2030 Notes or 2031 Notes or to pay any cash amounts due upon their maturity or conversion.”
New heading “The issuance of shares of our Class A common stock upon conversion of each of the 2030 Notes and 2031 Notes will dilute the ownership interests of our stockholders and could depress the trading price of our Class A common stock.”
New heading “Provisions in the Indentures governing the 2030 Notes and 2031 Notes could delay or prevent an otherwise beneficial takeover of us.”
New heading “The conditional conversion feature of the 2030 Notes and 2031 Notes, if triggered, may adversely affect our financial condition and operating results.”
New heading “The accounting method for each of the 2030 Notes and 2031 Notes could adversely affect our reported financial condition and results.”
Removed heading “We face a variety of risks related to our entry into a new line of business following the completion of the MER Acquisition.”
Removed heading “We expect to face significant competition in the future as the mobile power industry evolves.”
Removed heading “Reliance upon a few large customers may adversely affect our revenue and operating results.”
Removed heading “Combining our business with MER’s may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the contribution, which may adversely affect the combined company’s business results and negatively affect the value of our Class A common stock.”
Removed heading “The market price for our Class A common stock following the closing the MER Acquisition may be affected by factors different from those that historically have affected or currently affect our Class A common stock.”
Largest changes
The threat of climate change continues to attract considerable attention in the United States and around the world. As a result, numerous proposals have been made and are likely to continue to be made at the international, national, regional and state levels of governmentsee in full comparisonrelatedtorestrictinglimit orphasing outphase-out the production and processing of fossil fuels,thetomonitoringrestrict,and reporting of,condition orregulation ofmonitor GHG emissions, andadvancingto advance orsubsidizingsubsidize alternative sources of energy. For example, the IRA was enacted in 2022appropriatedtosignificantadvance numerous climate-related objectives, though many of its provisions were repealed or defunded by the OBBBA in 2025. While the OBBBA will potentially affect federal efforts to address climate change, various federal agencies have, from time to time, adopted climate change considerations in their rulemaking and decision-making processes and have promulgated rules to monitor, report, or restrict GHG emissions. Certain states have also enacted or are otherwise considering a variety of climate-related disclosure requirements, GHG emissions limitation programs, mitigation funds, and other related regulations and policy initiatives. Some states, localities, and other plaintiffs have also sought to bring about further climate-related regulations or obtain compensation and/or adaption funding forrenewablealleged climate-related damages by filing lawsuits against government entities and certain fossil fuel energyinitiatives and incentives and imposed the first-ever federal fee on excess methane emissions from certain oil and gas facilities.companies. These and other actions could accelerate the transition away from fossil fuels and reduce demand for hydrocarbons,thereforethereby reducing demand for our products and services.Moreover,Additionally, climate change-related regulatory initiatives to reduce carbon-based emissions may result in fuel conservation measures, alternative fuel requirements and increasing consumer demand for alternatives to oil and natural gas, which could reduce demand for the oil and natural gas our customers produce and reduce the demand for our products and services.Certain states have also enacted or are otherwise considering a variety of climate-related disclosure requirements, GHG emissions limitation programs, mitigation funds, and other related regulations and policy initiatives. Various federal agencies have also promulgated final rules for the monitoring, reporting, or restriction of GHG emissions or have otherwise incorporated climate change considerations into their policy-setting and rulemaking procedures and decisions. Some states, localities, and other plaintiffs have sought to bring about further climate-related regulations or obtain compensation and/or adaption funding for alleged climate-related damages by filing lawsuits against government entities and certain fossil fuel energy companies.Moreover, our and our customers’ access to capital could be adversely impacted to the extent certain financial institutions or investors reduce their investments in fossil fuel-related businesses due to climate change or energy transition concerns. Whether and how theincomingTrump Administration orU.S.Congress willrevisecontinue to pursue changes to existing climate-related laws and regulations or impact climate-related financial and societal trends and initiatives is uncertain and cannot be predicted at this time. See Part I, Item 1. “Business – Environmental and Occupational Health and Safety Regulations” for more discussion on the impact of climate-related initiatives and the restriction of GHG emissions. The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory and policy initiatives that impose more stringent standards that restrict the areas in which this sector may produce oil and natural gas or generate GHG emissions could result in increased compliance costs or costs of consuming fossil fuels, which could reduce demand for our products and services and could have a material adverse effect on our business, financial condition, results of operations and cash flows and revenues.
“•(ii) the occurrence or threat of terrorist attacks in the United States or other countries, anti-terrorist efforts and other armed conflicts involving the United States or other countries, including continued hostilities around the globe, such as the war between Ukraine and Russia, the conflict between Israel and Hamas, the regional conflict in the Middle East and U.S. intervention in Venezuela.”see in full comparison
“The imposition of further tariffs by the United States on a broader range of imports, or further retaliatory trade measures taken in response to additional tariffs or uncertainty regarding such potential impacts, could increase costs in our supply chain or reduce demand of our customers’ products, either of which could adversely affect our results of operations. …”see in full comparison
“•political or civil unrest in the United States or elsewhere, including the war between Russia and Ukraine, the Israel and Hamas conflict, continued hostilities in the Middle East and U.S. intervention in Venezuela;”see in full comparison
see in full comparisonFurthermore, certain public statements with respect to ESG-related matters, such as emissions reduction goals, other environmental targets, or other commitments addressing certain social issues, are becoming increasingly subject to heightened scrutiny from public and governmental authorities, as well as other parties, related to the risk of potential “greenwashing,” (i.e., misleading information or false claims overstating potential benefits). For example, the SEC has recently taken enforcement action against companies for ESG-related misconduct, including greenwashing. Certain regulators, such as the SEC and various state agencies, as well as non-governmental organizations and other private actors have also filed lawsuits under various securities and consumer protection laws alleging that certain ESG-statements, goals or standards were misleading, false or otherwise deceptive. In addition, any alleged claims of greenwashing against us or others in our industry may lead to further negative sentiment and diversion of investments.Additionally, certain employment or business practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve. We cannot be certain of the impact of such regulatory, legal and other developments on our business. More recent political developments could mean that the Company faces increasing criticism or litigation risks from certain“anti-ESG”parties, including various governmental agencies. Such sentiment may focus on the Company’s environmental commitments (such as reducing GHG emissions) or its pursuit of certain employment practices or social initiatives that are alleged to be political or polarizing in nature or are alleged to violate laws based, in part, on changing priorities of, or interpretations by, federal agencies or state governments. Consideration ofESG-relatedsustainability-related factors in the Company’s decision-making could be subject to increasing scrutiny and objection from suchanti-ESGparties.AsWeacannotresult,bewecertainmayoffacetheincreasedimpactlitigationofrisksuchfromregulatory,private partieslegal, andgovernmentalotherauthoritiesdevelopmentsrelated toon ourESG-relatedbusiness.efforts.Accordingly,Wewe could faceincreasingincreased costs as we attempt tocomplyreview,withimplement, and manage such policies and navigate further regulatoryESG-relatedsustainability-related focus and scrutiny.
“Noteholders may, subject to a limited exception, require us to repurchase their 4.75% Convertible Senior Notes due 2030 (the “2030 Notes”) or 0.25% Convertible Senior Notes Due 2031 (the “2031 Notes”), as applicable, following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2030 Notes or 2031 Notes, as applicable, to be repurchased, plus accrued and unpaid interest, if any. …”see in full comparison
Full comparison: every changed paragraph (108)
As we expand our distributed power offering, the possibility exists that our current offering may not be able to effectively manage related power loads, resulting in potential downtimes and disruptions for our customers. Such experiences could have a material adverse effect on our business and operating results due to the damage to our reputation and the resulting dissatisfaction of customers. If we are unable to adapt our power generation technologies to meet future demand and customer needs as they evolve, or otherwise unable to meet their reliability requirements, our business and operating results may be adversely effected.
Distributed power generation services in some applications compete with access to the grid.
Distributed power generation services are an alternative for customers to consider when grid access is unavailable, costly or delayed. Our distributed power offering could be affected in the event that large-scale utility projects are completed and the associated transmission and distribution networks are established. In this case, customers may only use our offering as backup power or bridge power until line power is received.
We expect to face significant competition in the future as the distributed power industry evolves.
The landscape of the distributed power industry is evolving rapidly, driven by increased demand from numerous end-markets, including those in the data center and energy businesses. As a result, increased competition from within the distributed power industry can likely be expected to occur. Should this materialize, the portion of the total addressable market that we could capture with our Power Solutions segment will be lower than expected which could translate to lower than expected revenues.
Reliance upon a small number of large customers may adversely affect our revenue and operating results.
We derive, and may continue to derive, a significant portion of our revenue from a small number of customers, and the operations of our customers have and may continue to experience delays or disruptions and temporary suspensions of operations. During the year ended December 31, 2025, one data center customer (including its affiliated entities) accounted for approximately 47% of our consolidated revenues, and another customer accounted for approximately 13% of our consolidated revenues. Additionally, our Power Solutions segment is presently significantly dependent on this data center customer. If we were to lose any material customer, we may not be able to redeploy our equipment at similar utilization or pricing levels or within a short period of time and such loss could have a material adverse effect on our business until the equipment is redeployed at similar utilization or pricing levels. If a major customer fails to pay us, our revenue would be impacted and our operating results and financial condition could be materially harmed.
We are subject to a number of risks associated with Stateline.
On April 28, 2025, we announced the formation of Stateline, an entity involving our newly formed, wholly owned subsidiary Solaris Power Solutions and CTC Property LLC (“CTC”), an affiliate of an industry leader in the evolving artificial intelligence (“AI”) computer space. CTC subsequently assigned its interest in Stateline to MZX Tech LLC (“MZX”), an affiliate of CTC. Stateline is expected to account for approximately 900 MW (or approximately 41% of our Solaris Power Solutions’ generation assets), and as such, Stateline subjects our overall business to a number of risks, including:
•the risk that the demand for off-grid power generation related to AI does not grow in the manner in which we expect;
•the fact that we derive, and will continue to derive, a significant portion of our revenue from a relatively small number of customers, and as a result, this reliance on a few large customers may adversely affect our revenue and operating results;
•Stateline may need to seek additional debt and equity financing to support its working capital needs and there can be no assurance that such financing would be available to Stateline on favorable terms or at all;
•Stateline and the industry in which it operates is subject to complex, developing regulatory frameworks, which may increase the time and labor necessary to operate the project as the parties intend;
•we may experience difficulties in finding alternative lessors for our power generation equipment dedicated to Stateline in the event of an early termination of the related rental agreement;
•certain key members of the Company’s management will dedicate a significant amount of their time and attention to Stateline; and
•the management agreement to which our subsidiary is a party provides for the termination of its operatorship under certain circumstances and, if those circumstances were to occur, (i) our partner may have the right to purchase our equity interests in Stateline and (ii) the Company would lose its seats on the board of directors of Stateline.
To the extent one or more of these risks materializes, our Solaris Power Solutions segment and, in turn, our consolidated business and results of operations could be adversely affected.
We face a variety of risks related to our entry into a new line of business following the completion of the MER Acquisition.
Our entry into scaled distributed power solutions is expected to enhance our position as a mobile equipment and logistics solution provider to the industries we service as well as diversify our business.
Entry into a new line of business may also subject us to new laws and regulations with which we are not familiar and may lead to increased litigation and regulatory risk. Further, our management team has not directly engaged in the distributed power solutions business before, and our lack of experience may result in delays or further complications to our new business and increases our dependence upon former MER employees that have experience in the field. If we are unable to successfully implement the acquired business of MER, our revenue and profitability may not grow as we expect, our competitiveness may be materially and adversely affected, and our reputation and business may be harmed.
As we expand our distributed power offering, the possibility exists that our current offering may not be able to effectively manage related power loads, resulting in potential downtimes and disruptions for our customers. Such experiences could have a material adverse effect on our business and operating results due to the damage to our reputation and the resulting dissatisfaction of customers.
We expect to face significant competition in the future as the mobile power industry evolves.
The landscape of the mobile power industry is evolving rapidly, driven by increased demand from numerous end-markets, including those in the data center and energy businesses. As a result, increased competition from within the mobile power industry can likely be expected to occur. Should this materialize, the portion of the total addressable market that we could capture with our Power Solutions segment will be lower than expected which could translate to lower than expected revenues.
Our customers can evaluate a wide range of applications and equipment to address standby and/or prime power generation needs. As a result of the significant resources and expertise required to develop these systems, certain of these customers have historically chosen to outsource the provision of power generation to us. To a significant extent, we depend on customers continuing to outsource their power generation needs. Customers may not continue to outsource as much or any of their power generation needs in the future or may seek alternative solutions. Additionally, the development of alternative distributed power generation technologies or increased grid capacity could reduce the overarching demand for our products and services.
Inflationary pressures have resulted in and may result in additional increases to the costs of our goods, services and personnel, which would in turn cause our capital expenditures and operating costs to rise. Due to the high levels of inflation in the U.S., the Federal Reserve and other central banks increased interest rates multiple times in 2022 and 2023, and although the Federal Reserve began to lower interest rates in 2024,2024 and 2025, uncertainty remains as to when or to the extent such elevated rates may be further decreased. To the extent rates remain high, this could have the effects of raising the cost of capital and depressing economic growth, either of which – or the combination thereof – could hurt the financial and operating results of our business. To the extent elevated inflation remains, we may experience further cost increases for our operations, including services, labor costs and equipment if our drilling activity increases. Furthermore, higher crude oil and natural gas prices may cause the costs of materials and services to continue to rise. We cannot predict any future trends in the rate of inflation, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher crude oil and natural gas prices and revenues, would negatively impact our business, financial condition and results of operations.
ChangesTariffs inand U.S.other trade policy, including the imposition of tariffs and the resulting consequences,measures could adversely affect our business,results prospects,of operations, financial conditionposition and operatingcash results.flows.
The U.S. government has announced baseline tariffs of 10% on products from virtually all foreign countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits. Additionally, tariffs have been placed on the importation of certain materials. As a result of the administration’s trade policies, tariffs have increased and may increase our material input costs. Any further trade restrictions, retaliatory trade measures and additional tariffs could result in higher input costs to our products, increased costs and delays in meeting our customers’ orders. It remains unclear to what extent, upon which countries, and upon which terms, tariffs may be levied. There remains much uncertainty regarding the full scope of tariffs, if they will be increased, decreased or eliminated altogether. For example, certain legal challenges have been brought against the Trump Administration’s ability to implement such tariffs and the full impact of those decisions remains uncertain as of this time. To the extent that such trade policies impact our supply chain, we may not be able to fully mitigate the impact of these increased costs or pass price increases on to our customers.
The imposition of further tariffs by the United States on a broader range of imports, or further retaliatory trade measures taken in response to additional tariffs or uncertainty regarding such potential impacts, could increase costs in our supply chain or reduce demand of our customers’ products, either of which could adversely affect our results of operations. Additionally, changes in trade policy may have negative impacts on the global economic environment (including causing or exacerbating any potential recession) which could have a negative impact on the demand for our power generation solutions as our customers delay or cancel projects in which our business may service.
The ultimate impact of these trade measures on our business operations and financial results is uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, the amount, scope, or nature of such trade measures, the direct or indirect impacts that trade measures may have on consumer or business sentiment and the broader economy and our ability to execute strategies to mitigate any negative impacts.
There is currently significant uncertainty about the future relationship between the United States and various other countries, including changes arising as a result of the U.S. presidential transition with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations. Changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements could have an adverse effect on our business, prospects, financial condition and operating results, the extent of which cannot be predicted with certainty at this time.
Our business is subject to inherent risks some of which are beyond our controlcontrol, such as disasters and extreme or seasonal weather events.events or workforce matters. These risks may be self-insured or may not be fully covered under our insurance policies.
Reliance upon a few large customers may adversely affect our revenue and operating results.
We derive, and may continue to derive, a significant portion of our revenue from a relatively small number of customers and the operations of our customers have and may continue to experience delays or disruptions and temporary suspensions of operations. For example, our Power Solutions segment is presently significantly dependent upon a single data center client. We typically do not enter into long-term contractual agreements with our customers and if we were to lose any material customer, we may not be able to redeploy our equipment at similar utilization or pricing levels or within a short period of time and such loss could have a material adverse effect on our business until the equipment is redeployed at similar utilization or pricing levels.
•(i) epidemics or pandemics, including the effects of related public health concerns that may cause business disruptions, disrupt the oil and gas industry and global supply chains, negatively impact the global economy, reduce global demand for oil and gas and create significant volatility and disruption of financial and commodity markets; and
•(ii) the occurrence or threat of terrorist attacks in the United States or other countries, anti-terrorist efforts and other armed conflicts involving the United States or other countries, including continued hostilities around the globe, such as the war between Ukraine and Russia, the conflict between Israel and Hamas, the regional conflict in the Middle East and U.S. intervention in Venezuela.
Combining our business with MER’s may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the contribution, which may adversely affect the combined company’s business results and negatively affect the value of our Class A common stock.
The success of the contribution will depend on, among other things, the ability of the two companies to combine their businesses in a manner that facilitates growth opportunities and realizes expected cost savings. The combined company may encounter difficulties in integrating each business and realizing the anticipated benefits of the contribution. The combined company must achieve the anticipated improvement in free cash flow generation and returns and achieve the planned cost savings without adversely affecting current revenues and operations. If the combined company is not able to successfully achieve these objectives, the benefits of the contribution may not be realized fully, or at all, or may take longer to realize than expected.
The contribution involved the combination of two companies which operated, until the completion of the contribution, as independent companies. There can be no assurances that the businesses will be integrated successfully. It is possible that the integration process could result in the loss of key employees from both companies; the loss of commercial and vendor partners; the disruption of ongoing business; inconsistencies in standards, controls, procedures and policies; unexpected integration issues; higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated.
The combined company will be required to devote management attention and resources to integrating its business practices and operations. An inability to realize the full extent of the anticipated benefits of the contribution and the other transactions contemplated by the definitive agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company.
In addition, integration may result in additional and unforeseen expenses, and the benefits of the integration plan may not be realized. There are a large number of processes, policies, procedures, operations and technologies and systems that are being integrated in connection with the contribution and the integration of MER’s business. We expect the elimination of duplicative costs, strategic benefits, and additional income, as well as the realization of other efficiencies related to the integration of the business, to offset incremental transaction and contribution-related costs over time. However, any net benefit may not be achieved in the near term or at all. If we are not able to adequately address integration challenges, we may be unable to successfully integrate operations or realize the anticipated benefits of the integration of the two companies.
We may grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance. Alternatively, we may wish to grow through acquisitions but may fail to find suitable targets or execute such acquisitions which may adversely affect our performance.
We have completed and may, in the future, pursue asset acquisitions or acquisitions of businesses. We must plan and manage any acquisitions and integrations effectively to achieve revenue growth and maintain profitability in our evolving market. If we fail to manage acquisitions and integrations effectively, or fail to find suitable targets or execute such acquisitions effectively, our results of operations could be adversely affected.
We have entered into transactions with related parties. The details of certain of these transactions are set forth in Note 18.20. “"Related Party Transactions”" under Part II, Item 8. “Financial Statements and Supplementary Data.” Related party transactions create the possibility of conflicts of interest with regard to our management or directors. Such a conflict could cause an individual in our management or on our board of directorsBoard to seek to advance his or her economic interests above ours. Further, the appearance of conflicts of interest created by related party transactions could impair the confidence of our investors. Our board of directors,Board, or a committee thereof, regularly reviews these transactions. Notwithstanding this, it is possible that a conflict of interest could have a material adverse effect on our liquidity, results of operations and financial condition.
The industries we service have become increasingly dependent on digital technologies to conduct certain processing activities. For example, we depend on digital information and operational technologies to perform many of our services and to process and record financial and operating data and to collect and store sensitive data, including our proprietary business information and personally identifiable information of our employees. At the same time, cyber incidents, including deliberate attacks, have increased. The U.S. government has issued public warnings that indicate that energy assets might be specific targets of cybersecurity threats. Our technologies, systems and networks, and those of our vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches in the future that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and confidential business information, personally identifiable information and other information, or other disruption of business operations. In addition, certain cyber incidents, such as surveillance, may remain undetected for an extended period. Despite the implementation of our cybersecurity processes, our security measures cannot guarantee that a significant cyberattack will not occur. As cyber incidents continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents. Our insurance coverage may not be sufficient to cover all the losses (including potential reputational loss) or expenses we may experience as a result of such cyberattacks. Any cyberattacks that affect our facilities or systems, or those of third parties with whom we do business, could have a material adverse effect on our ability to operate our business, cause us a material financial loss and materially damage our reputation.
The manufacture and delivery of our products and performance of our services requires skilled and qualified workers with specialized skills and experience who can perform physically demanding work. As a result of the volatility of the industries we service and the demanding nature of the work, workers may choose to pursue employment in fields that offer a more desirable work environment at wage rates that are competitive. Increased competition for their services could result in a loss of available, skilled workers or at a price that is not as advantageous to our business, both of which could negatively affect our operating results. Though our historical turnover rates have been significantly lower than those of our competitors, ifIf we are unable to retain or meet growing demand for skilled technical personnel, our operating results and our ability to execute our growth strategies may be adversely affected.
Regulations related to wages and other compensation affect our business. Any appreciable change or increase in applicable employment laws and regulations, including the statutory minimum wage, exemption levels, or overtime regulations, could result in an increase in labor costs. Such cost increases, or the penalties for failing to comply with such statutory minimums, could adversely affect our business, financial condition, results of operations and cash available for distribution to our shareholders. Additionally, any changes in employment, benefit plan, tax or labor laws or regulations or new regulations proposed from time to time, could have a material adverse effect on our employment practices, our business, financial condition, results of operations and cash available for distribution to our shareholders.
Our business is directly affected by capital spending to explore for, develop and produce oil and natural gas and power in the United States. The oil and natural gas industry is cyclical and historically has experienced periodic downturns in activity. If oil and natural gas or power prices decline below current levels for an extended period of time, certain of our customers may be unable to pay their vendors and service providers, including us, as a result of the decline in commodity prices. Reduced activity in our areas of operation as a result of decreased capital spending may also have a negative long-term impact on our business, even in an environment of stronger oil and natural gas prices. Any of these conditions or events could adversely affect our operating results.
•expected economic returns to E&P companies of new well completions;
•global political and economic conditions and supply of and demand for oil and natural gas;
•the level of prices, and expectations about future prices, of oil and natural gas, including a potential increase in Venezuelan oil supply and any related impact on global oil prices and domestic oil production;
•the level of global oil and natural gas exploration and production, and inventories;
•the supply of and demand for hydraulic fracturing equipment and consumables in the United States, including the supply and demand for lower emissions hydraulic fracturing equipment;
•the supply of consumables used in hydraulic fracturing, including proppant and water;
•federal, state and local regulation of hydraulic fracturing and exploration and production activities;
•laws, regulations and taxes, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves;
•the supply and demand dynamics for crude oil and natural gas, which may be impacted by actions of global hydrocarbon producers, including members of OPEC;
•global or national health concerns including health epidemics;
•political or civil unrest in the United States or elsewhere, including the war between Russia and Ukraine, the Israel and Hamas conflict, continued hostilities in the Middle East and U.S. intervention in Venezuela;
•advances in exploration, development and production technologies or in technologies affecting energy consumption; and
•the potential acceleration of development of alternative fuels or sources of energy.
Management's Discussion & Analysis (MD&A)
New heading “Additional Borrowings under Stateline Term Loan”
New heading “Master Equipment Rental Agreement”
New heading “Interest Income”
New heading “Term Loan and Revolving Credit Facility”
New heading “Convertible Senior Notes”
New heading “Stateline Term Loan”
New heading “Capital Commitments”
Removed heading “Class A Common Stock Offering”
Largest changes
“On October 8, 2025, we issued $747.5 million aggregate principal amount of the 2031 Notes. The net proceeds from the issuance were used in part to repay and terminate the Term Loan (approximately $353.7 million including accrued interest and prepayment penalties), fund capped call transactions to hedge potential dilution, and support continued growth of our Solaris Power Solutions segment. Interest on the 2031 Notes is payable semi-annually, with estimated payments of approximately $1.8 million over the subsequent twelve months. …”see in full comparison
“On October 8, 2025, we issued $747.5 million aggregate principal amount of 0.25% Convertible Senior Notes due 2031 (the “2031 Notes”) in an underwritten public offering. We used a portion of the net proceeds to repay in full and terminate our existing senior secured term loan (the “Term Loan”), including its related accrued interest and applicable prepayment penalties. This repayment resulted in a loss on debt extinguishment of $41.5 million, which was recognized in the fourth quarter of 2025. We also entered into capped call transactions to reduce potential dilution from conversions. …”see in full comparison
“Subsequent to December 31, 2024, we entered into additional purchase commitments totaling $549.1 million, primarily related to power generation equipment for Solaris Power Solutions. We expect payments to occur over the course of two years, concluding in the fourth quarter of 2026. Each purchase order includes distinct product specifications, such as product type, quantity, delivery period, and price, as well as standard terms and conditions with respect to acceptance, delivery, transportation, inspection, assignment, taxes and performance failure. …”see in full comparison
“Total purchase commitments related to our power generation fleet growth program amounted to $788.8 million, consisting of $239.7 million outstanding as of December 31, 2024, and $549.1 million entered into in 2025. We estimate that approximately $693.8 million will be fulfilled in 2025, and approximately $95.0 million will be fulfilled in 2026. While these commitments are aligned with our growth strategy, they are cancellable, though subject to significant termination penalties ranging from 5% to 90% of the purchase price, depending on the timing of the cancellation. …”see in full comparison
Full comparison: every changed paragraph (96)
UnlessReferences to “we,” “us,” “our,” “Solaris” or the context requires otherwise, references in this Annual Report to the "Company," "Solaris," "we," "us" and "our"“Company” refer to Solaris Energy Infrastructure, Inc. ("Solariseither Inc.")individually andor together with its consolidated subsidiaries, includingas Solaristhe Energycontext Infrastructure, LLC (“Solaris LLC”requires), our operating subsidiary.. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and related notes. This section of this Annual Report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 20232024 filed with the SEC on FebruaryMarch 27,5, 2024.2025. The following discussion contains “forward-looking statements” that reflect our plans, estimates, beliefs and expected performance. Our actual results may differ materially from those anticipated as discussed in these forward-looking statements as a result of a variety of risks and uncertainties, including those described above in “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” included elsewhere in this Annual Report, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements except as otherwise required by law.
We provide mobilemodular and scalable equipment-based solutions for usepower in distributedgeneration, power generationcontrol asand welldistribution, asand the management of raw materials used in the completion of oil and natural gas wells.well completions. Headquartered in Houston, Texas, Solaris serves multiple U.S. end markets, including energy, data centers,center, energy, and other commercial and industrial sectors.
During 2025, we expanded our power solutions platform through the acquisition of HVMVLV, LLC, which enhanced our capabilities in power control and distribution and strengthened our distributed power generation offerings.
•Solaris Power Solutions: This segment delivers power generation, power control, and power distribution solutions. Our 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: This segment designs and manufactures specialized equipment that enables the efficient management of raw materials used in the completion of oil and natural gas wells. Our equipment-based logistics services include field technician support, software solutions, and may also include last mile and mobilization services.
On September 11, 2024, we acquired MER, a company providing configurable, primarily natural gas-powered mobile turbines and ancillary equipment across energy, data center, and other commercial and industrial markets. This acquisition marks our entry into the scaled distributed power solutions market, strengthening our position as a mobile equipment and logistics solution provider in the oil and gas sector while diversifying our overall business.
MERHVMVLV Acquisition
WeOn successfullyAugust completed15, 2025, we acquired HVMVLV, LLC (“HVMVLV”), a specialty provider of power control and distribution solutions. The acquisition expanded the acquisitionCompany’s ofcapabilities MERin onpower Septembercontrol 11,and 2024.distribution, enhancing its distributed power generation offerings within the Solaris Power Solutions segment. The results of MER’sHVMVLV’s operations have been included in our consolidated financial statements from the acquisition date through December 31, 2024.2025. For further details regarding the acquisition, please refer to Note 3.4. “MERBusiness AcquisitionCombinations” in the notes to our consolidated financial statements.
2031 Notes
On October 8, 2025, we issued $747.5 million aggregate principal amount of 0.25% Convertible Senior Notes due 2031 (the “2031 Notes”) in an underwritten public offering. We used a portion of the net proceeds to repay in full and terminate our existing senior secured term loan (the “Term Loan”), including its related accrued interest and applicable prepayment penalties. This repayment resulted in a loss on debt extinguishment of $41.5 million, which was recognized in the fourth quarter of 2025. We also entered into capped call transactions to reduce potential dilution from conversions. The 2031 Notes provide lower-cost, longer-term financing to support growth in our Solaris Power Solutions segment. Refer to Note 12. “Convertible Notes” in the notes to our consolidated financial statements for additional information regarding the terms of the 2031 Notes.
Additional Borrowings under Stateline Term Loan
During the fourth quarter of 2025, Stateline drew an additional $114.0 million under its term loan facility, increasing the outstanding balance to $186.0 million. The proceeds were used to fund growth-related capital expenditures. For additional information on the Stateline term loan facility, refer to Note 11. “Debt” in the notes to our consolidated financial statements.
Master Equipment Rental Agreement
On February 12, 2026, the Company entered into a Master Equipment Rental Agreement (the “Agreement”) with Hatchbo, LLC (the “Customer”) to provide over 500 megawatts of power generation equipment to support the Customer’s power demand for artificial intelligence computing needs at its data center. The Customer is an affiliate of an investment grade, global technology company and industry leader in the evolving artificial intelligence computer space. For additional information on the Agreement, refer to Note 21. “Subsequent Events” in the notes to our consolidated financial statements.
Debt Financing
On September 11, 2024, we entered into a senior secured term loan agreement (the “Term Loan Agreement”) totaling $325.0 million, primarily to fund the acquisition of MER. The remaining proceeds are restricted for capital expenditures to support our growth initiatives. The senior secured term loan bears a variable interest rate with interest payments that began in October 2024. Repayments of 1.25% of the original principal amount are due in quarterly installments beginning on September 30, 2025. The term loan matures on September 11, 2029.
Additionally, on the same day, we extinguished our prior revolving credit facility using a portion of the term loan proceeds. On October 2, 2024, we established a new revolving credit facility that allows for borrowings up to $75.0 million, with a potential increase of up to an additional $50.0 million, contingent on certain conditions. This facility also includes provisions for up to $10.0 million in letters of credit. For further details regarding our debt agreements, please refer to Note 10. “Debt” in the notes to our consolidated financial statements.
Class A Common Stock Offering
On December 11, 2024, we completed an underwritten public offering in which we sold 6,500,000 shares of our Class A common stock, par value of $0.01 per share at a price of $24.75 per share. After deducting underwriting discounts and commissions of $4.8 million, we received net proceeds of approximately $156.0 million. These net proceeds are being used, and are expected to continue to be used, to fund growth capital for additional power generation equipment.
In 2025, the Solaris Power Solutions segment experienced significant growth, reflecting returns on the capital investments the Company has made to grow its revenue and earnings contribution from providing power generation solutions. In the fourth quarter 2025, Solaris Power Solutions Revenue contributed 58% of Total Revenue and its Adjusted EBITDA contributed 70% of total segment Adjusted EBITDA. For the twelve months ended December 31, 2025, Solaris Power Solutions contributed 54% of Total Revenue and 68% of total segment Adjusted EBITDA. Capital expenditures should continue to be heavily weighted towards Solaris Power Solutions as we intend to grow our capacity and deploy more power assets with customers. We believe continued demand for our power assets will drive Solaris Power Solutions to continue to be the dominant segment in terms of Revenue and Adjusted EBITDA contribution.
Today, Solaris Power Solutions’ primary customers include a leading company in the artificial intelligence computing sector, as well as several energy companies requiring power for hydrocarbon production, processing, transportation, and refining applications.
Demand for our services varies across each of our business segments, Solaris Power Solutions and Solaris Logistics Solutions, due to differences in end market exposure.
ForDemand the Company’sfor Solaris Power Solutions segment, demand is predominantly influenced by accelerating needs for power in the U.S., juxtaposed against constrained electrical grid infrastructure,infrastructure. whichThis is due to a number of factors including, but not limited to, aging transmission and distribution networks, extreme weather, and long lead times for various electric infrastructure equipment. Solaris’sSolaris’ turbinepower offerings are configurable and can be scaled to match power demand on a “behind-the-meter” or “distributed” basis in a shorter timeline than many grid-based providers can service.
Today, the Company’s Solaris Power Solutions segment’s primary customers include a large data center and several energy companies requiring power for hydrocarbon production, processing, transportation, and refining applications. Power demand for data centers has been accelerated due to growth in generative artificial intelligence (“AI”) computing applications. Power demand for energy customers is primarily driven by hydrocarbon production and processing operations in geographies where grid infrastructure may not be available or reliable or is prone to supply disruption. Many of our customers face multi-year delays to receive grid-based power and are turning to configurable, “behind-the-meter” solutions such as ours to bridge this gap. The availability of low-cost fuel as a result of the abundant supply of natural gas domestically enhances the cost-competitiveness of our mobile natural gas-powered turbine technology as compared to conventional grid-based power.
OurIn SolarisNovember Power Solutions segment began upon2025, the consummationCompany of the MER Acquisition on September 11, 2024. As a result, our fourth quarter was the first full quarter of contribution from this segment. During the fourth quarter, Solaris Power Solutions generated revenue fromordered an average ofadditional approximately 260500 megawatts (“MW”) of generation capacity. Due to the continued market demand we forecast for behind-the-meter power generation, Solaris Power Solutions has secured deliveries for turbines and ancillary equipment that will significantly increase our operated power generation fleetequipment which it expects to approximatelybe 1,400delivered MWin bytranches thefrom firstmid-2027 halfthrough ofearly 2027.2028. The Company estimates approximatelyits twopower thirdsgeneration capacity will now reach a total of totalapproximately 2,200 MW by early 2028 based on expected delivereddeliveries. The majority of this capacity is currently committed to customers under commercial agreements that primarily range in tenor from two to sixseven years. Each of these commercial agreements include distinct product specifications, such as product type, quantity, delivery period, and price, as well as standard terms and conditions with respect to acceptance, delivery, transportation, inspection, assignment, taxes and performance failure.
In 2025, we incurred consolidated capital expenditures of $646.8 million, the majority of which supported growth in Solaris Power Solutions (including $233.8 million for Stateline). Capital expenditures of $7.0 million related to Solaris Logistics Solutions represented a minimal portion of total spending. We expect consolidated capital expenditures in 2026 to be higher than 2025 to support additional growth in Solaris Power Solutions.
We expect total company capital expenditures in 2025 of approximately $690 million. The majority of these capital expenditures are to support Solaris Power Solutions capital growth, with capital expenditures for Solaris Logistics Solutions representing approximately $10-15 million of our total expected capital expenditures over the next year. The majority of these capital expenditures are already reflected in committed purchase orders, and we are relying on our ability to secure appropriate financing to fund these commitments.
We intend to fund the majority of our current planned capital expenditures with available cash on our balance sheet as of December 31, 2024,cash, cash flows we expect to generate from operations in 2025, andoperations, available capacity fromunder our revolving credit facility, and proceeds from the Stateline term loan facility. Additionally, while no assurance can be given, we may seek to issue additional securities through opportunistic capital market transactions, depending upon market conditions, and / or enter into additional debt financing agreements. Even if we are unable to secure the financing of our planned capital expenditures, we have the ability to paycancel cancellation fees for thesethe committed purchase ordersorders, usingsubject cashto fromthe ourpayment balanceof sheet,cancellation cash flows from operations in 2025 and available capacity under our revolving credit facility.fees.
The sustainability of this favorable supply-demand dynamic in the power sector will depend on multiple factors, including continued demand growth for generative AI computing applications, cloud computing, supply chain availability for electrical equipment, potential regulatory changes, overall economic activity levels, the level and pace at which the power industry can invest in power infrastructure, and the pace of continued electrification-driven demand growth. For a discussion of future demand for our products and services, please see Part I, Item 1A. “Risk Factors—Our and our customers’ operations are subject to a number of risks arising out of the threat of climate change, energy conservation measures or initiatives that stimulate demand for alternative forms of energy that could result in increased operating and capital costs for our customers and reduced demand for the products and services we provide.”
For our Solaris Logistics Solutions segment,Solutions, demand is predominantly influenced by the level of oil and natural gas well drilling and completion activity in the U.S. During the yearfourth endedquarter 2024,of 2025, our fully utilized system count averagedincreased 91by systems,11% to 93 fully utilized systems from the third quarter of 2025, which was down 17% from the average in 2023, which was in line with the decline in Baker Hughes U.S. Land Rig count. This decline was primarily driven by lowerhigher natural gas prices. In the first halflevels of 2025,oilfield we expect our fully utilized system count to average between 90 and 100 systems, which is above 2024 average levels.activity. The level of demand over the longer term will depend on multiple factors, including commodity price levels, customer consolidation that can drive activity and procurement strategy changes and industry efficiency gains, geopolitical risk, economic activity, potential regulatory changes and potential impacts from geopolitical disruptions.
Solaris Power Solutions. Solaris Power Solutions revenue increased by $294.9 million to $333.5 million for the year ended December 31, 2025, compared to $38.6 million for the year ended December 31, 2024. The increase in revenues was due to a full period of contribution from Solaris Power Solutions following its establishment from the MER Acquisition in September 2024, along with increased MW capacity deployed. Deployed capacity increased to approximately 630 MW for the year ended December 31, 2025, compared to approximately 230 MW for the year ended December 31, 2024.
Solaris Logistics Solutions. Solaris Logistics Solutions revenue increased by $14.2 million, or 5%, to $288.7 million for the year ended December 31, 2025 compared to $274.5 million for the year ended December 31, 2024. The increase was primarily due to an $18.5 million increase in revenue from last mile and ancillary services, attributable to higher last mile tonnage year-over-year. This growth was partially offset by a $4.3 million decrease in revenue from fully utilized systems, reflecting a mix impact, despite a slight increase in the number of fully utilized systems to 93 in 2025 from 91 in 2024.
Solaris Logistics Solutions. Solaris Logistics Solutions revenue decreased $18.5 million, or 6%, to $274.5 million for the year ended December 31, 2024 compared to $292.9 million for the year ended December 31, 2023. The slight decrease was primarily due to a decrease in fully utilized systems, which decreased to 91 systems for the year ended December 31, 2024, compared to 109 systems in the year ended December 31, 2023. This decrease was partially offset by an increase in average revenue per system and an increase in average last mile tonnage during the year ended December 31, 2024 compared to the year ended December 31, 2023.
Solaris Power Solutions. Solaris Power Solutions revenue increased by $38.6 million in the year ended December 31, 2024, compared to nil for the year ended December 31, 2023. This increase was due to the assumption of MER revenues as a result of the MER Acquisition which closed on September 11, 2024.
Solaris Logistics Solutions. Solaris Logistics Solutions cost of revenue decreased $2.8 million, or 2%, to $175.0 million for the year ended December 31, 2024 compared to $177.8 million for the year ended December 31, 2023. This reduction was primarily due to a $7.1 million decrease due to lower system count and the $1.8 million reversal of accrued property taxes following settlement with Brown County Appraisal District. Refer to Note 17. “Commitments and Contingencies – Tax Matters” in the notes to our consolidated financial statements for additional information on the property tax settlement. This reduction was partially offset by a $6.1 million increase in last mile and ancillary service costs driven by an increase in last mile tonnage.
Solaris Logistics Solutions cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue was 64% and 61% for the years ended December 31, 2024 and 2023, respectively.
Solaris Power Solutions. Solaris Power Solutions cost of revenue increased by $9.9$127.0 million in the year ended December 31, 2024, compared to nil$136.9 million for the year ended December 31, 2023.2025, compared to $9.9 million for the year ended December 31, 2024. The increase was due to thea costfull period of revenuescontribution assumedfrom asSolaris aPower resultSolutions offollowing its establishment from the MER Acquisition which closed onin September 11,2024, 2024.along with higher deployed MW capacity and related activity levels.
Solaris Power Solutions cost of revenue as a percentage of revenue (exclusive of depreciation and amortization) was 41% for the year ended December 31, 2025, compared to 26% for the year ended December 31, 2024.
Solaris Logistics Solutions. Solaris Logistics Solutions cost of revenue increased by $24.9 million, or 14%, to $199.9 million for the year ended December 31, 2025 compared to $175.0 million for the year ended December 31, 2024. The increase was primarily driven by a $26.0 million increase in last mile and ancillary service costs, associated with higher last mile tonnage year-over-year, and a $1.8 million increase in systems costs due to the absence in 2025 of the favorable reversal of previously accrued property taxes following a settlement with the Texas Brown County Appraisal District in 2024, discussed below in “Gain on Reversal of Property Tax Contingency”. This increase was partially offset by a $2.8 million reduction in system costs from ongoing managerial cost-saving initiatives.
Solaris Logistics Solutions cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue was 69% for the year ended December 31, 2025, compared to 64% for the year ended December 31, 2024.
Non-leasing depreciation and amortization increased by $5.0$8.7 million, or 14%,21%, to $49.9 million for the year ended December 31, 2025 compared to $41.2 million for the year ended December 31, 20242024. compared to $36.2 million for the year ended December 31, 2023. ThisThe increase was primarily due to the additionamortization of depreciable intangible assets resultingacquired fromin capitalconnection expenditureswith the MER Acquisition in September 2024, which established the Solaris Power Solutions segment and resulted in a full year of amortization expense in 2025, compared to developa andpartial-year upgradeimpact systemsin fleets for our Solaris Logistics Solutions segment.2024.
Solaris Power Solutions. Depreciation of leasing equipment increased by $28.3 million to $34.4 million for the year ended December 31, 2025, compared to $6.0 million for the year ended December 31, 2024,2024. compared to nil for the year ended December 31, 2023. ThisThe increase was dueprimarily todriven by the assumptionaddition of MER’sdepreciable equipmentassets placed in service during 2025 as a resultpart of the completionSolaris Power Solutions growth program, following the establishment of the segment in connection with the MER Acquisition which closed onin September 11, 2024.
In the fourth quarter of 2024, we sold our rights to the 300-acre transload facility located in Kingfisher, Oklahoma, along with all associated assets, for total proceeds of $5.0 million. In connection with the sale, we terminated the lease associated with the facility, resulting in the extinguishment of the remaining lease liability of $2.5 million at the time of sale. All associated assets had zero net carrying value at the time of sale afterfollowing a previous impairment recognized as of December 31, 2020. As a result of the sale and lease termination, we recognized a total gain of $7.5 million.
On June 14, 2024, we reached a settlement agreement with the Brown County Appraisal District in Texas, following a favorable ruling by the Eastland Court of Appeals on April 18, 2024. As a result, in the year ended December 31, 2024, we reversed $4.3 million of property tax expenses previously recorded through 2023 in connection with this case. Of this amount, $2.5 million was presentedrecognized as gain on reversal of property tax contingency and $1.8 million reducedwas therecorded as a reduction to cost of revenue in ourthe consolidated statement of operations. There was no comparable reversal or impact in 2025.
Selling, general and administrative expenses increased $8.7by $26.0 million, or 32%,73%, to $61.7 million for the year ended December 31, 2025 compared to $35.6 million for the year ended December 31, 2024 compared to $27.0 million for the year ended December 31, 2023.2024. The increase iswas primarily due to increases in corporate headcount, professional fees and office rental expenses.
Other Operating Expense,Expenses, Net
Other operating expenseexpense, net, increased $1.8by million,$1.6 million to $4.1 million for the year ended December 31, 2025, compared to $2.5 million for the year ended December 31, 20242024. comparedThe toincrease $0.6 million for the year ended December 31, 2023. Other operating expense for the year ended December 31, 2024was primarily relatedriven toby transaction and acquisition-related costs, partially offset by gain from changechanges in payables related to the Tax Receivable Agreement liability, and sublease income on an office lease. Other operating expense for the year ended December 31, 2023 primarily relate to credit losses and loss on disposal of assets,losses, partially offset by salesgains taxon rebates.asset disposals and office space sublease income. In the prior year, other operating expenses, net primarily reflected acquisition-related costs and changes in the Tax Receivable Agreement liability.
Interest Expense, NetExpense
Interest expense increased $8.5by $14.3 million, or 257%,108%, to $11.8$27.6 million for the year ended December 31, 20242025 compared to $3.3$13.3 million for the year ended December 31, 2023.2024. The increase was primarily due to interest expense on ourthe higher-rate Term Loan Agreemententered (as defined below) executed on September 11, 2024into in connection with the closingMER Acquisition in September 2024. The Term Loan was outstanding for most of 2025 and was fully repaid and extinguished in early October 2025 using proceeds from the MERissuance Acquisition.of 0.25% Convertible Senior Notes due 2031. As a result, interest expense for 2025 reflects approximately nine months of interest at a significantly higher rate.
Interest Income
Interest income increased by $5.3 million to $6.7 million for the year ended December 31, 2025, compared to $1.5 million for the year ended December 31, 2024. This increase was primarily due to higher interest income earned on increased cash balances resulting from the issuance of convertible notes.
Loss on debt extinguishment increased by $37.4 million to $41.5 million for the year ended December 31, 2025, compared to $4.1 million for the year ended December 31, 20242024. comparedThe to nilloss for the year ended December 31, 2023.2025 was related to the prepayment penalty and the write-off of unamortized debt issuance costs associated with the extinguishment of the Term Loan. The loss onfor debtthe extinguishmentyear ended December 31, 2024 related to the extinguishment of the senior secured bridge term loan facility and the prior revolving credit facility.
DuringFor the year ended December 31, 2024,2025, we recognized a combined United States federal and state expense for income taxes of $8.0$14.7 million, an increase of $0.2$6.7 million compared to the $7.8 million income tax expense weof recognized$8.0 duringmillion for the year ended December 31, 2023.2024. The effective combined United States federal and state income tax rates were 21.7%20.1% and 16.8%21.7% for the years ended December 31, 20242025 and 2023,2024, respectively. The effective tax rate differed from the statutory rate primarily due to Solaristhe LLC’simpact treatmentof asthe anoncontrolling partnership for United States federal income tax purposes.interest.
Our primary sources of liquidity include:
•Cash flows from operations;
•Borrowing availability under our revolving credit facility and Stateline’s term loan facility;
•Net proceeds from the issuance of the 2031 Notes, with certain funds remaining as of December 31, 2025.
Our primary sources of liquidity consist of cash flows from operations, borrowings under our debt financing agreements, available capacity from our revolving credit facility, and proceeds from opportunistic capital market offerings. Additionally, we may explore various financing options to support our recent capital investments, particularly within our Solaris Power Solutions segment, which is crucial to our growth strategy. We believe that these sources will providebe sufficient liquidity to meet our financial obligations, including both our short-term and long-term financial obligations, including existing purchase commitments relatedand to growthbudgeted capital expenditures. Additionally, whileWhile no assurance can be given, we may seek to issueraise additional securitiescapital through opportunistic capital marketmarkets transactions, depending uponon market conditions,conditions and / or the availability of fleet growth opportunities, and / or enter into additional debt financing agreements.
Term Loan and Revolving Credit Facility
On October 8, 2025, we repaid the remaining principal balance of $320.9 million outstanding under the Term Loan, plus accrued interest and applicable prepayment premiums, using proceeds from the issuance of the 2031 Notes. As a result, the Term Loan and related interest obligations were terminated. This refinancing replaced higher-rate secured debt with lower-cost convertible notes, enhancing our interest expense profile and liquidity flexibility. Refer to Note 11. “Debt” in the notes to our consolidated financial statements for additional details.
What changed in the latest 10-Q
Risk Factors
Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A common stock are described under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 27, 2026. As of the date of this filing, there have been no material updates to the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Full comparison: every changed paragraph (1)
Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A common stock are described under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 27, 2026. As of the date of this filing, there have been no material updates to the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 except as described herein.2025.
Management's Discussion & Analysis (MD&A)
New heading “Contract Conversion and Balance of Plant Expansion to February 2026 Hatchbo Contract”
New heading “Master Equipment Rental Agreement and Balance of Plant, Energy Storage and Services Scope Expansion”
New heading “Contract Tenor and Capacity Extension”
New heading “Investment in Deployable Energy Limited”
New heading “6.375% Senior Notes due 2031”
New heading “Revolving Credit Facility”
New heading “Debt Extinguishment”
New heading “Debt Extinguishment”
Removed heading “Master Equipment Rental Agreements”
Removed heading “NovaLT16 Turbine Acquisition”
Removed heading “Bridge Term Loan”
Removed heading “Bridge Term Loan”
Removed heading “Subsequent Commitments”
Largest changes
“Master Equipment Rental Agreement and Balance of Plant, Energy Storage and Services Scope Expansion”see in full comparison
“Contract Conversion and Balance of Plant Expansion to February 2026 Hatchbo Contract”see in full comparison
“On May 12, 2026, concurrently with the issuance of the Senior Notes and entry into the new Credit Agreement, we used a portion of the net proceeds to repay in full and terminate the Bridge Term Loan, Stonebriar Term Loan, and Caterpillar Term Loans, which had an aggregate outstanding principal balance of $463.9 million. …”see in full comparison
Full comparison: every changed paragraph (88)
We providedeliver modularcomprehensive power infrastructure solutions including generation, distribution, installation and scalablecommissioning, equipment-basedaftermarket solutions for power generation, power controlsupport, and distribution,operations and the management of raw materials in oil and natural gas well completions.maintenance. Headquartered in Houston, Texas, Solaris serves multiple U.S. end markets, including data center, energy, and other commercial and industrial sectors.
Master Equipment Rental Agreements
On February 12, 2026, we entered into a Master Equipment Rental Agreement (the “Hatchbo Agreement”) with Hatchbo, LLC (“Hatchbo”) to provide over 500 megawatts (“MW”) of power generation equipment to support Hatchbo’s power demand for artificial intelligence computing needs at its data center. Hatchbo is an affiliate of an investment grade, global technology company and industry leader in the evolving artificial intelligence space. The Hatchbo Agreement has an initial term of 10 years, with an option to extend an additional 5 years, beginning in the first quarter of 2027.
In connection with the Hatchbo Agreement, the Company received a $45.4 million advance rental payment covering the final four months of the initial ten-year term. This prepayment has been recorded as deferred revenue as of March 31, 2026. See Deferred Revenue under Note 5. “Summary of Significant Accounting Policies” for additional information.
On April 24, 2026, we entered into an agreement with a new customer to provide over 600 MW of power capacity, including balance of plant equipment beyond emissions control, to support the customer’s power demand for artificial intelligence computing needs at its data center. The new customer is an affiliate of an investment grade, global technology company in the evolving artificial intelligence space. For additional information on the agreement, refer to Note 19.“Subsequent Events” in the notes to our consolidated financial statements.
GencoGESA Acquisition
On July 1, 2026, we 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.
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.
GESA’s skilled team is expected to enhance Solaris’ project execution as well as introduce later-cycle growth through after market services. GESA also brings in-house the capability to service a broad range of generation technology. For further details, refer to Note 20. “Subsequent Events” in the notes to our condensed consolidated financial statements.
Contract Conversion and Balance of Plant Expansion to February 2026 Hatchbo Contract
In July 2026, we signed an amendment converting the original power capacity agreement into a final operating agreement, delivering a full turnkey power plant of approximately 660 megawatts (“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). We expect the increased capacity and expanded scope to result in a substantial increase in contracted revenue and earnings from the contract over the term of the agreement relative to the original February 2026 agreement, as well as increased capital expenditures to fund the expanded scope. Revenue recognition and deployments are expected to commence in the first quarter of 2027 and scale through 2028.
Master Equipment Rental Agreement and Balance of Plant, Energy Storage and Services Scope Expansion
On April 24, 2026, we entered into an agreement with a new customer to provide approximately 640 MW of power capacity, including balance of plant equipment beyond emissions control, to support the customer’s power demand for artificial intelligence computing needs at its data center. In July 2026, we 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. The new customer is an affiliate of an investment grade, global technology company in the evolving artificial intelligence space. The agreement provides for an initial rental term of ten years, with an option to extend for an additional five years. Deployments are scheduled to commence in late 2026 and scale through 2028.
Contract Tenor and Capacity Extension
In July 2026, a large energy customer expanded its contracted capacity to approximately 80 MW from 60 MW and extended the contract tenor from four years to six years.
Investment in Deployable Energy Limited
In June 2026, we made a $5.0 million investment in a simple agreement for future equity (“SAFE”) issued by Deployable Energy Limited (“Deployable”), a Delaware corporation developing small modular reactor (“SMR”) nuclear technology. This investment provides Solaris early exposure to next-generation nuclear generation and a longer-tail growth opportunity that complements its behind-the-meter gas generation platform as the technology commercializes. See Note 9. “Investments” in the notes to our condensed consolidated financial statements.
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. The offering resulted in net proceeds of approximately $1.28 billion. The Company used a portion of the net proceeds 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 Note 11. “Debt” in the notes to our condensed consolidated financial statements.
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 senior secured revolving credit facility of up to $650.0 million (the “Revolving Credit Facility”). As of June 30, 2026, there were no borrowings outstanding under the Revolving Credit Facility, and $575.0 million of capacity remained available after $75.0 million of outstanding letters of credit. See Note 11. “Debt” in the notes to our condensed consolidated financial statements.
Debt Extinguishment
On May 12, 2026, substantially concurrently with the offering of the Senior Notes and the entry into the new Credit Agreement, as described above, the Company terminated its debt obligations incurred in connection with the acquisition of Focus Genco Cayman Ltd. (the “Genco Acquisition”), including the senior secured term loan agreement (the “Bridge Term Loan”) with Goldman Sachs Bank USA, dated as of March 16, 2026 (and as amended on April 8, 2026), the Loan and Security Agreement (the “Stonebriar Term Loan”) with Eldridge Asset Finance LLC, and two term loans under the Master Loan Agreement, dated as of September 26, 2024, with Caterpillar Financial Services Corp. (collectively, the “Caterpillar Term Loans”). See Note 4. “Genco Acquisition” and Note 11. “Debt” in the notes to our condensed consolidated financial statements.
On March 16, 2026, the Company, through our 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 expands the Company’s capabilities in power distribution solutions within the Solaris Power Solutions segment and is expected to add 400 MW of incremental power generation capacity to Solaris between March 2026 and July 2028, inclusive of approximately 100 MW of currently operated and contracted capacity. For further details, refer to Note 4. “Genco Acquisition” in the notes to our condensed consolidated financial statements.
NovaLT16 Turbine Acquisition
On March 13, 2026, we acquired all contractual rights to receive 30 NovaLT16 gas turbine generator units (the “NovaLT16 Turbine Acquisition”) from Baker Hughes Energy Services LLC under an existing turbine supply contract. The units are scheduled to be delivered between September 2026 and September 2029, providing approximately 500 MW of incremental power generation capacity between early 2027 and 2029. See Note 17. “Commitments and Contingencies” in the notes to our condensed consolidated financial statements.
Bridge Term Loan
On March 16, 2026, we entered into a secured term loan agreement (the “Bridge Term Loan”) that provided us with term loans in an aggregate principal amount of $300.0 million. The Term Loan is a one-time draw facility, and we used net proceeds of $295.0 million to fund the Genco Acquisition, the NovaLT16 Turbine Acquisition, and for working capital and general corporate purposes. On April 8, 2026, we entered into an amendment to the Bridge Term Loan, which allows for additional borrowings of $200.0 million. Refer to Note 10. “Debt”, Note 17. “Commitments and Contingencies”, and Note 19. “Subsequent Events” in the notes to our condensed consolidated financial statements.
Term Loans
On March 16, 2026, in connection with the Genco Acquisition, we assumed term loans with Caterpillar Financial Services Corporation with an aggregate outstanding principal balance of $15.3 million. Refer to Note 4. “Genco Acquisition” and Note 10. “Debt” in the notes to our condensed consolidated financial statements.
On March 16, 2026, also in connection with the Genco Acquisition, we entered into a new term loan with Eldridge Asset Finance, LLC, as administrative agent, and Stonebriar, as initial lender, with a principal amount of $148.6 million (the “Stonebriar Term Loan”). The Stonebriar Term Loan was incurred in connection with the Genco Acquisition, with $123.2 million representing a component related to the extinguishment of pre-existing Genco obligations, $24.7 million representing cash proceeds received at closing, and $0.7 million representing debt financing costs rolled into the principal at inception. See Note 4. “Genco Acquisition” and Note 10. “Debt” in the notes to our condensed consolidated financial statements.
OnIn April 28,July 2026, Stateline drew an additional $64.0$21.0 million under the Stateline term loan facility, increasing the outstanding balance to $324.4$360.7 million. The proceeds were used to fund growth-related capital expenditures. Refer to Note 11. “Debt” and Note 20.“Subsequent Events” in the notes to our condensed consolidated financial statements.
Refer to Note 10. “Debt” and Note 19.“Subsequent Events” in the notes to our condensed consolidated financial statements.
In the firstsecond quarter,quarter ourof 2026, Solaris Power Solutions segment continued to grow significantly, reflecting returns ondrive the capitalCompany’s investmentsgrowth, thecontributing Company72% hasof made to grow itstotal revenue and earnings80% contributionof fromtotal providingsegment powerAdjusted generation solutions.EBITDA. For the threesix months ended MarchJune 31,30, 2026, Solaris Power Solutions revenue contributed 65%69% of total revenue and its Adjusted EBITDA contributed 76%78% of total segment Adjusted EBITDA. Capital expenditures should continue to beremain heavily weighted towards Solaris Power Solutions as we intend to grow our capacity and deploy more power assets with customers. We believe continued demand for our power assets will drive Solaris Power Solutions to continue to beremain the dominant segment incontributor terms ofto revenue and Adjusted EBITDA contribution.EBITDA.
Demand for Solaris Power Solutions is predominantly influenced by accelerating needs for power in the U.S., juxtaposed against constrained electrical grid infrastructure. This is due to a number of factors including, but not limited to, aging transmission and distribution networks, extreme weather, and long lead times for various electric infrastructure equipment. Solaris’ power offerings are configurable and can be scaled to match power demand on a “behind-the-meter” or “distributed” basis in a shorter timeline than many grid-based providersalternatives, and can service.stay on site longer term to provide integrated primary and backup power as a complement to the grid or other co-located power solutions.
In the second quarter of 2026, we amended our initial 530 MW agreement with Hatchbo to add incremental generation capacity, as well as increasing the scope of this agreement to include balance of plant equipment, including batteries. In July 2026, we converted this agreement to its final operating agreement, providing a full turnkey power plant of approximately 660 MW with an expanded scope of balance of plant, batteries and energy management systems and operations support designed to manage artificial intelligence workloads. In July 2026, we also amended our April 2026 contract to expand the scope to include additional balance of plant and energy storage investment, as well as procurement and management of natural gas access on a cost-plus basis.
In the first quarter of 2026, we entered into an agreement for over 500 MW of power generation to support power demand for artificial intelligence computing needs at data centers with a global technology leader. Subsequently, in April 2026, we entered into an agreement with an additional global technology leader for over 600 MW of power generation at its data center locations.
The Company’s power generation capacity willis now expected to reach a total of approximately 3,1003,200 MW by the end of 2029 based on expected deliveries under our contracted orders. The majority of this capacity is currently committed to customers under commercial agreements that primarily range in tenor from two to ten years, with theextension majority under contracts with a tenor of seven to ten years including an option to extend.options. Each of these commercial agreements include distinct product specifications, such as product type, quantity, delivery period, and price, as well as standard terms and conditions with respect to acceptance, delivery, transportation, inspection, assignment, taxes and performance failure.
We expect remaining total company capital expenditures remaining in 2026 of approximately $1,263$1 millionbillion on a consolidated basis, of which approximately $232$97 million should be incurred by Stateline. The majority of these capital expenditures are to support additional growth in Solaris Power Solutions. Capital expenditures for Solaris Logistics Solutions represent less than $20$10 million of our total expected annual capital expenditures.
We intend to fund the majority of our current planned capital expenditures with available cash, cash flows from operations, availableremaining borrowingsnet proceeds from the Senior Notes offering and borrowing availability under our TermRevolving Loan,Credit Facility, and proceeds from delayed draw term loans under the Stateline termTerm loanLoan facility. In addition to these sources, subject to market conditions and the availability of fleet growth opportunities, we may meet our cash requirements through the issuance of additional securities and/or the entry into additional debt financing agreements. Even if we are unable to secure the financing of our planned capital expenditures, we have the ability to cancel the committed purchase orders, subject to the payment of cancellation fees.
The sustainabilitySustainability of this favorable supply-demand dynamic in the power sector will dependdepends on multiple factors, including continued demand growth for generative AIartificial computingintelligence applications,computing, supply chain availability for electrical equipment, potential regulatory changes, overall economic activity levels, the level and pace at which the power industry can invest in powerand deploy infrastructure, and the pace of continued electrification-driven demand growth.
For Solaris Logistics Solutions, demand is predominantly influenced by the level of oil and natural gas well drilling and completion activity in the U.S. During the first quarter of 2026, our fully utilized system count increased by 12% to 104 fully utilized systems from the fourth quarter of 2025, which was driven by higher levels of oilfield activity. The level of demand over the longer term will depend on multiple factors, including commodity price levels, customer consolidation that can drive activity and procurement strategy changes and industry efficiency gains, geopolitical risk, economic activity, potential regulatory changes and potential impacts from geopolitical disruptions.
Three and Six Months Ended MarchJune 31,30, 2026 Compared to Three and Six Months Ended MarchJune 31,30, 2025
Solaris Power Solutions. Solaris Power Solutions revenues increasedwere by $79.2 million, or 160%, to $128.5$158.3 million forand $286.8 million in the three and six months ended MarchJune 31,30, 2026, comparedrespectively. toSolaris $49.4Power Solutions revenues were $75.6 million forand $125.0 million in the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase in revenues in the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was primarily due to increased MW capacity deployed. Deployed capacity increased to weighted averages of approximately 910950 MW and 930 MW, respectively, in the three and six months ended MarchJune 31,30, 2026, compared to weighted averages of approximately 390600 MW and 500 MW, respectively, in the samethree periodand ofsix months ended June 30, 2025.
Solaris Logistics Solutions. Solaris Logistics Solutions revenues decreased by $9.3$12.6 million, or 12%,17%, to $67.7$61.1 million for the three months ended MarchJune 31,30, 2026, compared to $77.0$73.7 million for the three months ended MarchJune 31,30, 2025. This decrease was primarily due to lower last-mile transportation activity, despite an increase in the weighted average number of fully utilized systems to 104106 in the three months ended MarchJune 31,30, 2026 from 9894 in the samethree periodmonths ofended June 30, 2025.
Solaris Logistics Solutions revenues decreased by $21.9 million, or 15%, to $128.8 million for the six months ended June 30, 2026, compared to $150.7 million for the six months ended June 30, 2025. This decrease was primarily due to lower last-mile transportation activity, despite an increase in the weighted average number of fully utilized systems to 105 in the six months ended June 30, 2026 from 97 in the six months ended June 30, 2025.
Solaris Power Solutions. Solaris Power Solutions cost of revenue increasedwas by $37.2$56.3 million toand $53.7$110.1 million forin the three and six months ended MarchJune 31,30, 2026, comparedrespectively. toSolaris $16.5Power Solutions cost of revenue was $28.3 million forand $44.8 million in the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase in both 2026 periods was due to higher deployed MW capacity and related activity levels.
Solaris Power Solutions cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue was 42%36% and 38% for the three and six months ended MarchJune 31,30, 2026, respectively, compared to 33%37% and 36% for the three and six months ended MarchJune 31,30, 2025.2025, respectively.
Solaris Logistics Solutions. Solaris Logistics Solutions cost of revenue decreased by $6.2$14.2 million to $45.0$36.8 million for the three months ended MarchJune 31,30, 2026, compared to $51.2$51.0 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by lower last-mile transportation activity, partially offset by higher labor costs and repair and maintenance expenses to support an increase in fully utilized system counts during the three months ended MarchJune 31,30, 2026. Solaris Logistics Solutions cost of revenue decreased by $20.4 million to $81.8 million for the six months ended June 30, 2026, compared to $102.2 million for the six months ended June 30, 2025. The decrease was primarily driven by lower last-mile transportation activity, partially offset by higher labor costs to support an increase in fully utilized system counts during the six months ended June 30, 2026.
Solaris Logistics Solutions cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue was 67%60% and 64% for the eachthree ofand six months ended June 30, 2026, respectively, compared to 69% and 68% for the three and six months ended MarchJune 31,30, 20262025, and 2025.respectively.
Depreciation and amortization increased by $4.7$21.1 million, or 23%,115%, to $24.8$39.5 million in the three months ended MarchJune 31,30, 2026, compared to $20.1$18.4 million in the same period of 2025. Depreciation and amortization increased by $25.8 million, or 67%, to $64.3 million in the six months ended June 30, 2026, compared to $38.4 million in the same period of 2025. This increase was primarily driven by the addition of depreciable assets associated with the Solaris Power Solutions segment placed in service during the second half of 2025 and first half of 2026, including the threeaddition monthsof endeddepreciable assets from the Genco Acquisition completed in March 31, 2026.
Selling, general and administrative expenses increased by $5.6$15.1 million, or 37%,101%, to $20.9$30.0 million in the three months ended MarchJune 31,30, 2026, compared to $15.3$14.9 million in the same period of 2025. The increase was primarily driven by an $11.3 million increase in salaries, wages and benefits resulting from an increase in average headcount, as well as higher employee and office costs associated with supporting a larger workforce and higher legal expenses as our Solaris Power Solutions segment has expanded. Selling, general and administrative expenses increased by $20.7 million, or 69%, to $50.9 million in the six months ended June 30, 2026, compared to $30.2 million in the same period of 2025. The increase was primarily driven by a $2.4$13.4 million increase in salaries, wages and benefits resulting from an increase in average headcount, a $1.0 million increase in legal expenses, as well as higher employee and office costs associated with supporting a larger workforce and higher legal expenses as our Solaris Power Solutions segment has expanded.
Other operating expenses, net decreased by $1.0 million to $0.2 million in the three months ended June 30, 2026, compared to $1.2 million in the same period of 2025. Other operating expenses, net decreased by $1.0 million to $1.5 million in the six months ended June 30, 2026, compared to $2.5 million in the same period of 2025. The decrease was primarily related to credit allowance recoveries collected during the second quarter of 2026.
Other operating expenses, net remained relatively flat at $1.3 million in the three months ended March 31, 2026, compared to $1.2 million in the same period of 2025.
Interest expense decreasedwas by $1.4$16.9 million toand $4.8$21.7 million in the three and six months ended MarchJune 31,30, 2026, respectively, compared to $6.2$7.0 million and $13.2 million in the samethree periodand ofsix months ended June 30, 2025, respectively. The increase was primarily due to thehigher higher-rateaverage term loan that wasdebt outstanding foras mosta result of 2025the andissuance wasof fullythe repaidSenior and extinguishedNotes in earlythe Octobersecond 2025.quarter of 2026.
Interest income increasedwas by $1.7$5.5 million toand $2.8$8.2 million in the three and six months ended MarchJune 31,30, 2026, respectively, compared to $1.0$1.5 million and $2.6 million in the samethree periodand ofsix months ended June 30, 2025, respectively. The increase was primarily due to higher interest income earned on higher cash balances primarily resulting from the issuance of convertiblethe notes.2031 Notes in October 2025 and the Senior Notes in May 2026.
Loss on debt extinguishment was $1.3$14.8 million and $16.1 million for the three and six months ended MarchJune 31,30, 2026, respectively, related primarily to the write-off of unamortized debt issuancefinancing costs associated with the extinguishment of the revolvingBridge creditTerm facility.Loan, the Stonebriar Term Loan and Caterpillar Term Loans in the three months ended June 30, 2026, as well as the BofA Revolving Facility in the first quarter of 2026. See Note 11. “Debt” in the notes to our condensed consolidated financial statements. There was no loss on debt extinguishment for the three and six months ended MarchJune 31,30, 2025.
During the three months ended MarchJune 31,30, 2026, we recognized a combined United States federal and state expense for income taxes of $15.2$5.0 million, ana increasedecrease of $11.3$1.0 million as compared to the $3.9$6.0 million income tax expense we recognized during the the three months ended MarchJune 31,30, 2025. During the six months ended June 30, 2026, we recognized a combined United States federal and state expense for income taxes of $20.2 million, an increase of $10.3 million as compared to the $9.9 million income tax expense we recognized during the six months ended June 30, 2025. This change was attributable to changes in operating gains and mix of states where we operate. The effective combined United States federal and state income tax rates were 32.2%16.5% and 23.2%19.8% for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. ForThe effective combined United States federal and state income tax rates were 26.1% and 21.0% for the threesix months ended MarchJune 31,30, 2026 our effective tax rate differed from the statutory rate primarily due to the impact of the noncontrolling interest and theJune executive compensation deduction limitation. Our effective tax rate differed from the statutory rate for the three months ended March 31,30, 2025, primarily due to the impact of the noncontrolling interest.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 mix of states where we operate.
Our primary sources of liquidity consist of cash flows from operations, remaining net proceeds from the Senior Notes offering and borrowing availability under our Revolving Credit Facility and the Stateline Term Loan.
SEI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (1 insider, 2 trade dates, 13,975 shares, about $951.6K) and open-market sales in 6 filings (6 insiders, 6 trade dates, 4,099,593 shares, about $297.8M). Net open-market shares: -4,085,618 (purchases minus sales); net value about -$296.8M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-08 | Teague Aj |
Open-market purchase | 3,900 | $64.21 | $250.4K |
| 2026-09-08 | Teague Aj |
Open-market purchase | 3,900 | $64.25 | $250.6K |
| 2026-08-23 | Giesinger Edgar R. Jr. |
Grant/award | 3,246 | — | — |
| 2026-08-23 | Keenan W Howard Jr |
Grant/award | 2,989 | — | — |
| 2026-08-23 | Argo Laurie H |
Grant/award | 3,331 | — | — |
| 2026-08-23 | Teague Aj |
Grant/award | 3,075 | — | — |
| 2026-08-23 | Burke James R |
Grant/award | 3,075 | — | — |
| 2026-08-23 | Yzaguirre Mario Max |
Grant/award | 3,160 | — | — |
| 2026-08-23 | Walker Ray N Jr |
Grant/award | 3,075 | — | — |
| 2026-06-01 | Wirtz Christopher P. |
Shares withheld for tax | 1,303 | $69.54 | $90.6K |
| 2026-05-13 | Wirtz Christopher P. |
Open-market sale | 700 | $77.22 | $54.1K |
| 2026-05-12 | Argo Laurie H |
Open-market sale | 5,200 | $72.88 | $379.0K |
| 2026-05-11 | Powell Christopher M |
Open-market sale | 2,181 | $75.33 | $164.3K |
| 2026-05-11 | Powell Christopher M |
Open-market sale | 25,492 | $74.84 | $1.9M |
| 2026-05-11 | Powell Christopher M |
Open-market sale | 9,179 | $73.90 | $678.3K |
| 2026-05-08 | Teague Aj |
Open-market purchase | 2,750 | $72.98 | $200.7K |
| 2026-05-08 | Teague Aj |
Open-market purchase | 3,425 | $72.98 | $250.0K |
| 2026-05-08 | Walker Ray N Jr |
Open-market sale | 56,841 | $72.11 | $4.1M |
| 2026-05-06 | Keenan W Howard Jr |
Other | 2,000,000 | — | — |
| 2026-05-06 | Keenan W Howard Jr |
Open-market sale | 2,000,000 | $74.50 | $149.0M |
| 2026-05-06 | Keenan W Howard Jr |
Conversion | 2,000,000 | — | — |
| 2026-04-30 | Ktr Management Company, Llc |
Conversion | 2,000,000 | — | — |
| 2026-04-30 | Ktr Management Company, Llc |
Other | 2,000,000 | — | — |
| 2026-04-30 | Ktr Management Company, Llc |
Open-market sale | 2,000,000 | $70.75 | $141.5M |
Well-known investors holding SEI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 1,979,861 | $159.3M | 0.12% | Added 2% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 289,247 | $23.3M | 0.04% | Reduced 12% |
| Renaissance Technologies | 2026-06-30 | 273,400 | $22.0M | 0.03% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 267,725 | $21.5M | 0.01% | Reduced 88% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 196,383 | $15.8M | 0.01% | Reduced 60% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 97,399 | $7.8M | 0.0% | No change |
| Millennium Management (Israel Englander) | 2026-06-30 | 0 | $7.5M | 0.01% | No change |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 0 | $6.8M | 0.0% | New position |
| Polen Capital Management | 2026-06-30 | 80,324 | $6.5M | 0.06% | Reduced 4% |
| Two Sigma Investments | 2026-06-30 | 0 | $2.4M | — | Sold out |
| Millennium Management (Israel Englander) | 2026-06-30 | 0 | $431.7K | 0.0% | No change |