Stabilis Solutions Q3 2026 Earnings: Data Center Growth and Charter Exit Restore Profitability

Stabilis Solutions (Nasdaq: SLNG) reported Q3 2026 revenue of $14.8 million, down 27% from $20.3 million a year earlier, while diluted EPS declined to $0.01 from $0.06. Sequentially, the company returned to profitability as a short-term data center contract increased revenue and the vessel charter costs recorded in Q2 did not recur.

Core Financial Results

Revenue declined year over year because large marine and power generation contracts were completed in Q4 2025, more than offsetting growth in aerospace and industrial volumes. Compared with Q2 2026, however, revenue increased 25% from $11.9 million, primarily due to the short-term data center contract.

Net income and adjusted EBITDA also remained below year-ago levels, but both improved substantially from Q2. Net income rose by $4.8 million sequentially, while adjusted EBITDA increased from $0.1 million to $1.9 million.

Adjusted EBITDA is a non-GAAP measure. Operating margins and percentage changes are calculated from the reported figures.

Business and End-Market Performance

Data-center-related revenue increased to 17% of total revenue from less than 1% in Q2. Based on reported quarterly revenue, that represents approximately $2.5 million and was the principal driver of the $2.9 million sequential revenue increase.

The previously announced multi-year contract to supply LNG for behind-the-meter power generation at a U.S. data center remains scheduled to begin in Q1 2027. Management described it as the company’s largest contract to date, making its launch an important factor in the next phase of growth.

Aerospace was another source of expansion. Revenue from aerospace customers increased 49% year over year as commercial space launch and testing activity drove LNG volumes. That growth, together with higher industrial volumes, only partly offset the loss of revenue from marine and power generation contracts completed in late 2025.

Profitability, Cash Flow, and Balance Sheet

The sequential return to profitability was driven by both higher revenue and lower costs. Stabilis incurred $2.9 million of vessel time charter expense in Q2, but the charter was terminated late in that quarter and had no financial impact in Q3. Selling, general and administrative expenses also declined by approximately $0.3 million from the prior-year quarter to $2.5 million.

Operating cash flow increased to $3.9 million from $2.4 million a year earlier, primarily because the quarter included a $5.0 million customer advance related to the contract expected to begin in early 2027. Fixed-asset purchases totaled $4.0 million, leaving free cash flow, calculated as operating cash flow less fixed-asset purchases, approximately breakeven at negative $0.1 million.

At September 30, Stabilis held $18.4 million of cash, cash equivalents, and restricted cash. This total consisted of $1.5 million of cash and cash equivalents and $16.8 million of restricted cash. Current and noncurrent deferred revenue totaled $25.0 million, up from approximately zero at the end of 2025, reflecting cash received before the associated services and deliveries are recognized as revenue.

Management Commentary

Management characterized Q1 as the low point of 2026 following the completion of several large contracts and said the business improved in each subsequent quarter. It also reported robust demand for small-scale LNG used in behind-the-meter data center power generation and said it is pursuing additional opportunities beyond contracts already secured.

Capital investment and pre-commissioning work for the upcoming data center contract remain on schedule and are supported by customer advance payments. Separately, Stabilis continues discussions with prospective customers and financing partners for the proposed Galveston LNG facility as it works toward a final investment decision.

Recent Insider Transactions

The detailed insider transaction data supplied for Stabilis lists four purchases with disclosed values, totaling $84,426. All were reported as direct holdings; these transactions do not by themselves establish insiders’ views on the company’s valuation or prospects.

The separate six-month summary in the supplied data reports zero purchases, which conflicts with the dated 2026 transactions. The detailed entries should therefore be checked against the relevant SEC Form 4 filings.

Risks Investors Should Watch

• Contract timing and concentration: The completion of two large contracts caused revenue to decline 27% and adjusted EBITDA to fall 33% year over year, showing how contract starts and completions can create material quarterly volatility.
• Execution of the 2027 data center contract: The expected growth depends on capital investment, pre-commissioning work, and the planned Q1 2027 launch remaining on schedule.
• Cash-flow dependence on customer advances: Q3 operating cash flow included a $5.0 million advance, while capital spending nearly matched total operating cash flow. Most reported cash was also restricted at quarter-end.
• Galveston LNG financing and customer commitments: The proposed facility has not reached a final investment decision and remains dependent on prospective customers and financing partners.

Summary

Stabilis’ Q3 2026 results showed a clear sequential recovery rather than a full year-over-year rebound. Data center work lifted revenue, the termination of the vessel charter removed a major Q2 cost, and aerospace demand continued to grow, but revenue and adjusted EBITDA remained below Q3 2025 levels. The next major operating test is the scheduled Q1 2027 launch of the company’s largest contract, alongside the conversion of customer-funded preparations into recurring revenue and cash flow.