Stabilis Solutions (NASDAQ:SLNG) reported higher sequential revenue and returned to net profitability in the third quarter, helped by a short-term data center contract. Executives said a much larger data center agreement remains on schedule to begin in 2027, a year they expect to be a record for the company.
Third-quarter revenue was $14.8 million, up 25% from $11.9 million in the second quarter but down 27% from a year earlier. The year-over-year decline followed the completion of large marine and power generation contracts at the end of 2025, Chief Financial Officer Andy Puhala said on the company’s Nov. 5 earnings call.
Net income was $0.2 million, or $0.01 per diluted share, compared with net income of $1.1 million a year earlier and a $4.6 million loss in the second quarter. Adjusted EBITDA rose to $1.9 million from $0.1 million sequentially, but fell from $2.9 million in the prior-year quarter.
Data center contract to ramp in 2027
The sequential revenue increase was driven primarily by a short-term contract to supply liquefied natural gas, or LNG, for behind-the-meter power during the commissioning of a U.S. data center. Deliveries began in August, and data center-related revenue accounted for 17% of third-quarter sales, up from less than 1% in the second quarter.
Executive Chairman and Interim CEO Casey Crenshaw said that project will conclude in the fourth quarter. The company’s focus is shifting to a separate, multiyear agreement to supply LNG for bridge power at a U.S. data center, which management expects to be the largest contract in its history.
Puhala said the agreement is worth roughly $200 million over an initial two-year term. An extension is possible depending on when the data center receives its permanent grid connection, but he said the timing is uncertain.
The project is scheduled to begin in the middle of the first quarter of 2027 with equipment mobilization and testing. LNG deliveries will then ramp, reaching an expected full run rate by the fourth quarter, Puhala said.
Crenshaw said more than $15 million of project-specific equipment is on order, with delivery scheduled ahead of startup. The company is also finalizing LNG supply agreements and backup alternatives. Preparations are fully funded by customer advance payments, he said.
Stabilis has received the full $25 million in advance payments under the contract. At quarter-end, cash, equivalents and restricted cash totaled $18.4 million, including $16.8 million restricted for equipment purchases and other contract preparations and $1.5 million in unrestricted cash.
Puhala said the company is not providing 2027 guidance, but expects its largely established fixed-cost base to support operating leverage as revenue grows. He said management expects meaningful growth in adjusted EBITDA dollars and margin expansion into the high teens. Much of the incremental power-generation demand will be served with third-party LNG, preserving plant capacity for aerospace and other customers, he added.
Aerospace growth and Galveston project
Aerospace revenue increased 49% year over year in the third quarter as launch and testing activity increased and the company served more commercial space customers. Crenshaw said Stabilis is discussing long-term offtake agreements with multiple customers and has held talks about adding infrastructure and capacity, though he did not provide a specific investment plan.
In marine bunkering, the company continues to pursue its proposed Galveston project, but has not set a timeline for a final investment decision. Crenshaw said the approximately $350 million project requires a final financing structure and additional commercial offtake commitments.
About 25% of the facility’s planned production of 350,000 gallons per day is committed, Crenshaw said. Stabilis does not need to contract for all of the output, he said, but needs more than it currently has to support financing.
Crenshaw said the company’s pipeline of data center opportunities has grown substantially over the past quarter, particularly for long-term backup power and bridge power. He cautioned, however, that potential projects are not yet contracted revenue.
About Stabilis Solutions (NASDAQ:SLNG)
Stabilis Solutions, Inc (NASDAQ: SLNG) is an energy company focused on the production, distribution and use of liquefied natural gas (LNG). The company supplies LNG as an alternative fuel for customers that require reliable energy while seeking to reduce their reliance on diesel, fuel oil and other conventional fuels.
Stabilis provides LNG through its production and distribution infrastructure, supported by transportation, storage and fueling capabilities. Its services are designed for a range of applications, including industrial operations, power generation, marine transportation and heavy-duty vehicle fleets.
