Solaris Power signed a 15-year contract, a 50% break fee, and still trades 37% below its high
Record EBITDA, raised guidance, a $16B backlog — and a stock the market is pricing as a Texas permitting headline
SEI · Earnings Call · 2026-11-05
Two numbers moving in opposite directions
Solaris delivered the best operating quarter in its history and the market answered with a shrug and a shove. Revenue hit a record $341 million, up 55% sequentially; adjusted EBITDA of $136 million rose 26% sequentially; and management raised fourth-quarter guidance to $165–185 million from $145–180 million and first-quarter 2027 to $220–260 million from $200–240 million. “Our quarterly adjusted EBITDA has more than doubled over the last year, and we expect 2027 to be more than double 2026” — Bill Zartler, Chairman and Co-CEO · 2026-11-05, Bill Zartler said. Contracted backlog now exceeds $16 billion with a weighted average term of 11 years, and CFO Steve Tompsett pegged the eventual run-rate at “over $1.6 billion of annual run rate adjusted EBITDA once all equipment is deployed under contract” — Steve Tompsett, CFO · 2026-11-05. Meanwhile the stock sits 37% below its October 6 high of $79.70 — a drawdown that began before the print, not after it. So the report isn't the story. The story is that Solaris' central sales pitch — that interconnection queues, ratepayer politics and data-center backlash are Power Solutions tailwinds — got its first real market stress test, and the tape voted no.The tenor is the tell
The quarter's genuine novelty is duration. Solaris signed a 900 MW, 15-year agreement with an existing investment-grade industrial-technology customer, extendable another 15 years, its longest tenor to date and its largest power contract. “The agreement has an initial 15-year term with an option to extend for an additional 15 years, making it the longest tenor contract we have signed to date” — Amanda Brock, Co-CEO and Director · 2026-11-05, Amanda Brock said. That pushed weighted-average contract life to roughly 11 years and pulled backlog past $16 billion. Two details matter more than the headline. First, the equipment is not site-specific — it can be redeployed, which is the entire rebuttal to the permitting panic. Second, the contracts carry termination-for-convenience clauses that are unusually punitive to the customer: “Basically, 50% of the undiscounted future revenue. They do not get to keep the equipment” — Amanda Brock, Co-CEO and Director · 2026-11-05. That is a structural answer to the "can the hyperscalers walk?" question hanging over this entire cohort since February. Worth flagging what quietly left the vocabulary: balance of plant was the number-one keyword two quarters ago and has slid off the company's own top-30 list, absorbed into the broader Power Solutions scope. The upsell is now assumed rather than narrated — fine, but it means the old "20% to 50% per-megawatt uplift" framing is no longer the pitch.Texas, Title V, and the tailwind that blew back
The Q&A opened with the only question that mattered. David Anderson of Barclays noted the prior day's political shifts in Texas and that the market "didn't seem to discern one company from another." Zartler's answer was part geography, part frustration:Here is the tension. For three straight calls, management sold regulatory friction as pure upside. Brock in August: “Moratoriums, the issues associated with the interconnection and the queues... these are all tailwinds.” — Amanda Brock, Co-CEO and Director · 2026-08-06 In February she called the quad k permitting extension a “regulatory tailwind” — Amanda Brock, Co-CEO and Director · 2026-02-25, and Bill in April described buying queue slots from speculators as “cleaning out, if you will, of the queue” — William Zartler, Chairman and Co-CEO · 2026-04-28. All true — and all irrelevant to a market now pricing political risk as a single-factor trade across the group. Where Solaris does have an edge is the Title V air permit regime, which is federal and site-agnostic, plus fleet mobility. The forward pitch has also shifted: grids that start as bespoke grid islands eventually become bidirectional — what Zartler called a power pod that can sell back into the wider system. He was explicit that it needs only “additional switchgear... that's a power pod that can go multidirectional with its power” — Bill Zartler, Chairman and Co-CEO · 2026-11-05. That is a 2030s story, and priced as one.we have very little power working in Texas and have planned small, but most of our power is outside of Texas... we really have been hitting on all cylinders with respect to the business, except maybe educating certain shareholders on what our business is and what it isn't.