管理層發言
Welcome to the Stabilis Solutions Second Quarter 2026 Earnings Call. Operator provided instructions. I would now like to turn our call over to Andy Puhala, Chief Financial Officer. Mr. Puhala, please go ahead.
Good morning, and welcome to Stabilis Solutions Second Quarter 2026 Results Conference Call. I'm Andy Puhala, Senior Vice President and CFO of Stabilis. And joining me today is our Executive Chairman and Interim President and CEO, Casey Crenshaw. We issued a press release after the market closed yesterday detailing our second quarter operational and financial results. This release is publicly available in the Investor Relations section of our corporate website at stabilis-solutions.com. Before we begin, I'd like to remind everyone that today's conference call will contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on the company's expectations and beliefs as of today, August 12, 2026. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. The company undertakes no obligation to provide updates or revisions to the forward-looking statements made in today's call. Additional information concerning factors that could cause those differences is contained in our filings with the SEC and in the press release announcing our results. Investors are cautioned not to place undue reliance on any forward-looking statements. Further, please note that we may refer to certain non-GAAP financial information on today's call. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. Today's call is being recorded and will be available for replay. With that, I'll hand the call over to Casey Crenshaw for his remarks.
Thank you, Andy, and good morning to everyone joining us today. Our second quarter results reflect the building momentum we are seeing across the business. As we discussed on our first quarter call, the first quarter was the low point for the year coming immediately after two of our largest multiyear contracts concluded at the end of 2025. Since then, activity has strengthened meaningfully. Aerospace was particularly strong with LNG volumes sold up 79% year-over-year and 87% sequentially. And our non-power generation-related industrial business volumes grew more than 67% year-over-year as well. Turning to the balance of the year, we expect results to build steadily from here. As newly awarded contracts come online and we backfill the demand left by those completed agreements, we anticipate incremental improvements in both the third and fourth quarters. A key contributor is a contract we secured during the quarter to supply behind-the-meter LNG to generate power for the commissioning of an additional U.S. data center. Service is expected to begin in the third quarter. And while we currently estimate a six-month term, it could well extend beyond that. Contracts like this underpin our confidence in a stronger second half with revenue and profitability building through the third and fourth quarters and second half revenues expected to increase by more than 50% compared to the first half of 2026. As of the end of Q2, we have been awarded contracts in two different phases of data center development. First, data center commissioning; and second, providing bridge power during data center operations. Each type of opportunity brings a different profile in terms of length of project and volumes of LNG. We believe there will be significant additional opportunities to participate in these phases as well as opportunities to provide LNG during construction and for use in long-term backup power generation once these data centers are running and connected to a grid or gas pipeline. As important as the second half of the year is, our sites are increasingly set on 2027. Early next year, we expect to begin deliveries under what will be the largest contract our company has ever secured, a behind-the-meter power generation project to provide bridge power for a U.S. data center that extends into early 2029 and is expected to generate approximately $100 million of revenue annually over its two-year term. Preparations are well advanced. As of the end of Q2, we have received $20 million in customer prepayments to fund equipment, mobilization and readiness. The project remains on schedule, and our team is actively investing in equipment and securing LNG supply to ensure a successful launch. Our commercial team also continues to bid on additional data center opportunities beyond this award. Driven primarily by this contract, we expect company revenues in 2027 to exceed $100 million. Taken together with the balance of our contracted portfolio, we expect 2027 to be a record year for Stabilis in both revenue and profitability. Let me spend a moment on how we are able to take on projects of this scale. Currently, our power generation contracts are being served largely with third-party provided LNG, which speaks to the core strength of our model. Rather than being constrained by the output of our own liquefaction plant, we can combine our own production, purchased supply, logistics, mobile equipment and our engineering and field service expertise to meet the demand almost anywhere in the country. That flexibility allows us to pursue the largest opportunities without building capacity ahead of them, and it reinforces our position as a leading small-scale LNG provider in the U.S. at a time when data center growth is reshaping domestic energy demand. Our aerospace business is another area where the momentum is unmistakable. Launch activity among our commercial space customers continues to climb and with it, their demand for LNG, which is driving the volume growth I referenced a moment ago. This is a market where our ability to deliver high-purity product reliability and to engineer solutions around each customer's specific technical requirements truly differentiates us. We continue to view aerospace as one of the most durable long-term growth avenues in our portfolio. So far in 2026, we've provided LNG to three leading rocket launch customers and are in discussions to add a fourth later this year. Stepping back, let me be direct about where our growth is coming from. Power generation for data centers and aerospace are the two end markets driving the business today. That is where demand is the strongest and where we are winning new business and where we expect the majority of our growth over the next several years. Our asset-light model and flexible balance sheet allow us to scale into demand without overextending ourselves financially. Let me turn briefly to our Galveston LNG project. We believe our proposed Galveston project is the most shovel-ready, fastest to market, lowest capital cost per gallon small-scale LNG bunkering project anywhere on the Gulf Coast. As we discussed last quarter, the project's timeline has been extended, and I want to be candid: we are not yet in a position to provide a firm date for a final investment decision. The path forward depends on securing the right commercial offtake and financing structure, and that work remains ongoing. That said, we continue to make meaningful operational progress. In July, the U.S. Coast Guard issued a letter of recommendation on the waterway suitability assessment covering our facility and its associated barge transit routes. This is a meaningful regulatory milestone that validates the safety and navigability of our proposed operations and strengthens our standing as the preferred LNG bunkering option in the Port of Galveston along the Gulf Coast. In parallel, we continue to engage prospective customers and financing partners as we work toward a final investment decision. Marine bunkering remains an important part of our long-term story, particularly for servicing durable multiyear marine demand in the Port of Galveston and the broader Gulf Coast. At the same time, it is only one part of our much larger growth story, and I would not want its timeline to overshadow the momentum building elsewhere. Our existing platform is already delivering meaningful organic growth across power generation for data centers, aerospace and other industrial business, and that is where the bulk of our near-term value creation is coming from. In summary, we view 2026 as a pivotal year, one in which the business troughed early, recovers through the second half and sets the stage for what we expect to be a record 2027. We are staying disciplined with our capital, focused on execution and squarely committed to converting today's demand into durable profitable growth for our shareholders. We look forward to keeping you updated in the quarters ahead. With that, I'll turn the call over to Andy for a detailed review of our financial performance.
Thank you, Casey. I'll begin with a discussion of our second quarter performance, followed by an update on our balance sheet, cash flow, liquidity and capital spending. Second quarter revenue was $11.9 million, a decrease of approximately 31% compared to the second quarter of 2025. As we mentioned in last quarter's call, the year-over-year decline was driven primarily by the completion of large marine and power generation contracts in the fourth quarter of 2025. This was partially offset by continued growth in our aerospace market, where revenue increased 71% compared to the second quarter of 2025, along with continued growth in our other industrial revenues. Adjusted EBITDA was $0.1 million in the second quarter compared to $1.5 million in the prior year period. I would also note that our adjusted EBITDA for the second quarter excludes approximately $2.9 million of vessel charter costs incurred during the period. These costs relate to the lease of an LNG bunkering vessel that we entered into in the fourth quarter of 2025 in anticipation of supporting the logistics requirements of a marine bunkering customer. This charter was terminated late in the second quarter, and we have excluded these costs from adjusted EBITDA as an extraordinary item as this cost is not reflective of the earnings of the underlying go-forward business. With the charter now terminated, we do not expect any further P&L impact from this vessel beyond what we've reported in the second quarter. Turning to cash flow and liquidity, cash flow from operations was $7.1 million for the quarter. This included $5 million of advanced payments for our behind-the-meter data center contract scheduled to begin in Q1 of '27. These payments are restricted to support equipment purchases and other preparations for that project. At quarter end, total liquidity was $18.9 million, including unrestricted cash of $4.5 million and $5 million of borrowing capacity under our revolving credit agreement. Capital expenditures totaled $2.3 million during the quarter. These expenditures were primarily related to equipment and infrastructure purchases associated with the upcoming data center contract as well as engineering and design work for the proposed Galveston LNG facility. Looking ahead, we expect to continue investing capital to secure equipment and guaranteed supply for our data center projects. We expect these investments to be funded through the advanced payments received from customers. Before we close, let me offer some context on the earnings profile that accompanies the 2027 revenue picture Casey described. We're not providing 2027 guidance today as you think about the business at that scale. First, our corporate infrastructure and fixed cost base are largely in place, and we do not expect them to grow proportionately with revenue as these contracts come online. Second, our asset-light approach allows us to serve this growth largely with third-party LNG, which limits the incremental capital required to support it. Third, our contracts are designed to pass through commodity price risk. Taken together, we would expect a materially larger revenue base in 2027 to translate into meaningful growth in adjusted EBITDA dollars and expansion in our adjusted EBITDA margin to the high teens as project execution accelerates. That concludes our prepared remarks. Operator, please open the line for the Q&A session.
分析師問答
Operator provided instructions. Our first question is from Martin Malloy, Johnson Rice.
Congratulations on another data center contract. My first question, I wanted to ask about the data center contracts. Could you maybe talk about the revenue and profitability profile and any differences between the contracts for different phases with the data center, whether it be commissioning, bridge and then backup? And I guess, specifically on backup, how would a potential backup contract be structured? Would it be a recurring type revenue stream for making equipment and capacity available? Any commentary you have there would be helpful.
Yes, Marty, thank you for joining today and for your question. Let me start with how we view the data center projects. We really see construction as one type of revenue profile, then commissioning, bridge, and finally long-term backup that you asked about. We have booked activities in construction, commissioning and bridge. Each of those three — construction, commissioning and bridge — have very different revenue profiles and durations. Construction projects often can be 24 months in duration. They are much lower in total and use equipment similar to what we would use on smaller behind-the-meter power applications. Commissioning is normally 50 to 75 megawatts. Commissioning is normally a six-month phase where they're commissioning operations before they either get their pipeline connection or their grid connection. So normally six months, but they may have different blocks after that they need commissioning on. Bridge power is when they want to be first mover in a market and could be anywhere from a year to four or five years, depending on what they're connecting to. The bridge power project we're working on is a two-year committed project. Long-term backup is where they would provide equipment and infrastructure and a supply contract to provide something almost like a peaker plant, where you would provide LNG on site if there were issues related to pipeline outages or grid outages; it would turn on like diesel backup. We do not have a long-term backup contract to date. We are having discussions around how to do that and how to work with different operators, but we do not have one yet to explain the exact economics of how that would work. The other three categories we are active on.
Great. And for a follow-up question, I just wanted to ask about the aerospace. Obviously, very strong growth there and great to hear you're going to get a fourth customer. We haven't really seen any longer-term contracts in that area. Could you maybe talk about the opportunities, if there are any, to perhaps go after or sign some longer-term contracts with the activity picking up like it is?
Yes, it's a great question, and we're really excited about this end market. One of our larger customers has a long-term strategy where they prefer to do many things themselves. They've stated that. But the need and the demand is large and the timing to build their own capacity is years out. So we're really excited: the different rocket customers are at different stages of development. Some are much further behind the leader, but all of them are making progress and all intend to use LNG. It's a strong end market where we feel like we're a leader. We're hopeful over the next year or so to get more duration, term and visibility. We've been working consistently to develop fit-for-purpose facilities and infrastructure. We haven't been able to secure long-term commitments yet, but we have close relationships with the clients and visibility for the next 18 months of demand, though not a whole lot beyond about 18 months.
Marty, let me add a little to what Casey said. We have long-term relationships with multiple rocket launch companies. Historically, there has been a tendency for them not to commit to long-term fixed volumes, and that's probably a function of ample supply in the small-scale domestic LNG market. But as these data centers come online and existing supply tightens, we may see a change in behavior where they are more willing to make longer-term commitments to guarantee access to supply.
To further add, the launch cadence has been inconsistent because there's still a lot of engineering and R&D happening in the space launch business. You don't yet see a consistent launch cadence among the space operators using LNG methane rockets, but that is improving each month. Over time, they should know their launch cadence and be more thoughtful about locking in supply.
Operator provided instructions. Our next question comes from Matt Dhane, Tieton Capital.
I did want to ask the six-month LNG commissioning agreement for the data center customer that's beginning here. Has that already begun here in the third quarter? Or would you expect it to begin — when would you expect that to begin?
Yes. So we've executed the contract, as we discussed, and the equipment is being readied and deployed right now with anticipated liquids being delivered next month, August. So it's happening now.
Okay. Perfect. Great. Good to know. And then the behind-the-meter data center contract that's going to be starting here next year, will you be receiving further cash in advance of that? Or are those cash advances done at this point in time?
Yes, Matt. We had received $20 million of cash payments through the end of Q2, and we received an additional $5 million early in Q3, and that's the full amount under that contract. So we won't be receiving any additional payments from today forward.
Okay. Good to know. And then finally, I did want to spend some time talking about the data center opportunity pipeline. I know that it was great to hear you lay out the bridge, commissioning and construction as the three different areas they fall into. I was curious, when you look at the pipeline as it exists today, where would you say a lot of those opportunities are falling? Just give us a little bit more color around the pipeline of opportunities that you're seeing, how significant it is, and any more color you can give us would be great.
Let me start. We are very excited about all the areas we discussed; they just have different profiles and intensities. Commissioning is very interesting right now because many customers need those facilities to get commissioned and have a lot waiting on that to happen. We really like commissioning and the power side. Those two — construction and commissioning — are where we've had more recent touchpoints on many jobs. Bridge jobs are really big; there's a lot of planning and the operator has to choose to pay a higher price initially to be a first mover while they wait for pipeline or grid connections. That's a strategic decision for the clients. We also believe long-term backup is an exciting space that the market hasn't fully appreciated yet. Over the next one to three years, I think you'll hear more about customers putting in facilities and infrastructure to make reliability consistent. It's often easy to assume pipelines and electrical hookups happen quickly, but these things take time. Our business supports customers through those timing challenges. When we look five to ten years out, we'll still be doing construction and commissioning, but long-term backup could be a substantial long-term business for us where we put in infrastructure and support clients around it. So all of them are exciting. I'd say the biggest number of jobs are construction and commissioning. The biggest revenue opportunities in our commercial funnel are the bridge power opportunities.
Great. Appreciate those insights, Casey. And when you talk about the long-term backup, and that could be a very substantial opportunity with time, just curious, do you currently do any of that? There's obviously a lot of data centers already on the grid out there. Do you currently have any long-term backup of data centers that you do? Or is this really a developing opportunity for you folks?
It's a developing opportunity. Most data centers have their backup with diesel power generation today.
Yes, Matt, just to add to that, although we don't have any long-term backup for data centers today, that business is very similar to the winter peaking business that we do in the Northeast, where we provide a lot of rental equipment during the winter months and are on standby to provide LNG. So although we're not doing that for data centers yet, it's very similar to a business we've done for many years for utilities in the Northeast. Northeast winter peaking and pipeline outage projects are similar to data center backup.
And going forward, since it's historically been diesel generators used for backup power, what is leading to the data centers converting or changing going forward to using LNG? Is that a preference going forward? Do they seem to be agnostic? What's going to really facilitate that change to where LNG may be more widely used and emphasized going forward?
A lot of hyperscalers are starting to use natural gas as either prime power or secondary power so they can toggle depending on grid connectivity and grid pricing. What's happened is natural gas infrastructure to create power is being loaded into facilities. We're providing the bridge fueling solution when that's an issue. In the past, most data centers were connected to the grid and added diesel backup. Now we're seeing them either connected to the grid or primarily self-generating power off natural gas. You can't practically generate prime power with diesel at the scale hyperscalers need; the cost would be too high. But you can generate behind-the-meter with natural gas effectively and compete with grid power.
This concludes the Q&A portion of today's call. I would now like to turn the floor over to Andy Puhala for closing remarks.
Well, thank you all for joining us today, and we appreciate the continued interest in Stabilis and look forward to keeping you updated as we progress through the quarters ahead. Thank you.
Thank you. This concludes today's Stabilis Solutions Second Quarter 2026 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.