Stabilis targets 75% contract coverage for Galveston LNG facility as marine, aerospace, and power revenues surge

Earnings Call Insights: Stabilis Solutions, Inc. (SLNG) Q3 2025

MANAGEMENT VIEW

* Interim President, CEO & Executive Chairman J. Crenshaw highlighted that "third quarter volume increased by more than 20% year-over-year, driven by strong demand across our growing base of marine, aerospace and power generation customers." Crenshaw announced the signing of "the largest customer contract in the company's history, a 10-year marine bunkering contract for LNG, produced at our proposed 350,000 gallon per day LNG facility in Galveston, Texas." He added that Stabilis expects to break ground on the Galveston facility in Q1 2026, targeting production to start in late 2027, and is also planning to construct a Jones Act compliant LNG bunkering vessel to serve the Houston region. Crenshaw further indicated, "we expect to have approximately 75% of the total capacity sold under long-term customer contracts by the time we reach final investment in early -- final investment decision in early 2026."
* CFO Andrew Puhala reported, "third quarter revenue increased 15% year-over-year, driven by a 21% increase in LNG gallons sold and higher average commodity prices, partially offset by less favorable customer mix and lower rental and service revenues." He noted, "aerospace revenues increasing by more than 88% compared to the same quarter last year, and power generation and marine revenues increasing by 31% and 32%, respectively." Puhala also stated, "liquidity at quarter end was $15.5 million, consisting of $10.3 million of cash and approximately $5.2 million of availability under our credit facilities. We ended the quarter with $9.5 million of total debt and lease obligations, resulting in a net positive cash position."

OUTLOOK

* Crenshaw outlined that Stabilis is "on track for the final investment decision in early 2026" regarding the Galveston facility. He said, "we expect investment to accelerate over the coming quarters as we progress toward construction and a final investment decision in early 2026. Once project FID is made, we expect all project funding requirements to be met through project-level financing."
* The company is targeting "approximately 75% of the total capacity sold under long-term customer contracts by the time we reach final investment...in early 2026." Stabilis is prioritizing a joint-venture structure, supported by project-level debt and equity from third-party investors, while retaining operational control.

FINANCIAL RESULTS

* Puhala reported "adjusted EBITDA was $2.9 million during the quarter compared to $2.6 million last year. Adjusted EBITDA margin was 14.3%, down from 14.6% in the third quarter of last year." He also stated, "cash from operations totaled $2.4 million for the quarter," and capital expenditures totaled $3.9 million, "primarily related to early engineering and design work for the Galveston LNG facility and related bunkering vessel."
* Approximately 73% of total revenue was derived from aerospace, marine and power generation customers, up from 60% in the prior year quarter.

Q&A

* Martin Malloy, Johnson Rice: Asked about key permits for the Galveston project. Crenshaw responded, "We already have the export license...all the normal permits are being worked, and they're already being in process and being worked in our project today." Puhala added, "The main one is probably our Texas Railroad Commission for the facility and then the Coast Guard for the bunkering operation."
* Malloy followed up on end market demand and potential capacity expansion. Crenshaw explained, "Our demand there is expected to be up. We expect it to be up for 2026 from what we've seen in the past...We're basically waiting to see what the most customer-centric locations for that additional train is and just waiting on that demand to firm on who's going to contract it."
* William Dezellem, Tieton Capital: Inquired about late-stage discussions for an additional marine contract and customer mix. Crenshaw confirmed ongoing negotiations, noting the next customer is a cruise client, and the remaining capacity may go to cruise, container ship, or third-party trader customers. He emphasized, "we hope to have an even higher utilization at that time, but that's our goal by the first quarter to go FID."
* Dezellem also asked if growth in the marine, space, and power markets was due to new contracts. Crenshaw clarified, "in the space, we did pick up another strong aerospace client, which increased volumes and opportunity in the third quarter...We expect it to be a long-term additional new client."
* Spencer Lehman, private investor: Asked about potential for a secondary offering to raise project capital. Crenshaw responded, "we believe we can do this project without a large dilution or any adjustment to the current shareholder base in the parent company, Stabilis."

SENTIMENT ANALYSIS

* Analysts' tone was positive, highlighting progress on the Galveston project and strong growth in key end markets. Malloy and Dezellem asked detailed questions about contract pipeline and expansion, showing optimism and interest in future growth drivers.
* Management maintained a confident, upbeat tone, with Crenshaw stating, "I'm super long, super believer in it...these projects and growth and customers will drive that value over time." During Q&A, responses were direct and transparent, particularly regarding permits, contracts, and strategic financing.
* Compared to the previous quarter, sentiment has shifted from cautious optimism about contract pipeline to greater confidence and excitement following the signing of the company's largest contract and rapid growth in target markets.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language became more specific, with clear targets—such as selling 75% of Galveston capacity before FID and a construction timeline for the new facility—compared to general optimism in Q2.
* Strategic focus shifted from ongoing contract discussions to concrete project milestones and execution, including the announcement of the largest customer contract and detailed financing plans.
* Analysts in Q3 focused more on execution risk, permitting, and end-market demand, while Q2 questions centered on the status and timing of contract negotiations.
* Key metrics improved: year-over-year revenue and volume up sharply, adjusted EBITDA and margin up compared to last year, and greater revenue concentration in high-growth sectors. Management's tone was more confident and detailed in Q3 following tangible progress.

RISKS AND CONCERNS

* Crenshaw and Puhala acknowledged the complexity of permitting for the Galveston project but indicated no expected timeline changes, with all major permits "being progressed."
* The company faces execution risk around finalizing contracts for the remaining Galveston capacity, as well as timely financing and construction.
* Analysts raised potential concerns around capital structure, expansion timing, and liquidity, but management reiterated that project-level financing would prevent significant dilution and that liquidity remains strong.

FINAL TAKEAWAY

Stabilis Solutions reported robust volume and revenue growth in the third quarter, highlighted by a record 10-year marine contract and accelerating momentum in marine, aerospace, and power generation markets. Management is targeting 75% of Galveston LNG facility capacity under long-term contracts before final investment decision in early 2026, with construction expected to begin in the first quarter of that year. Execution on permits, customer contracts, and project financing remains a central focus, with management expressing strong confidence in both near-term milestones and long-term value creation for shareholders.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/slng/earnings/transcripts]

MORE ON STABILIS ENERGY

* Stabilis Solutions, Inc. (SLNG) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4840086-stabilis-solutions-inc-slng-q3-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Stabilis Energy [https://seekingalpha.com/symbol/SLNG/ratings/quant-ratings]
* Historical earnings data for Stabilis Energy [https://seekingalpha.com/symbol/SLNG/earnings]
* Financial information for Stabilis Energy [https://seekingalpha.com/symbol/SLNG/income-statement]