Select Water Solutions Announces Second Quarter 2026 Financial, Operational and Strategic Updates
Rhea-AI Summary
Select Water Solutions (NYSE: WTTR) reported second quarter 2026 revenue of $395.8 million, up 8% sequentially and 9% year-over-year, with net income of $22.6 million and Adjusted EBITDA of $92.7 million. Gross margin rose to 19.4%, with gross margin before D&A at 31.3%.
Water Infrastructure revenue reached a record $101.6 million with 58.3% gross margin before D&A, while Chemical Technologies delivered record revenue of $96.0 million, up 23% sequentially, with 20.2% margins. Water Services generated $198.2 million of revenue, growing 3.6% sequentially but declining year-over-year.
Operating cash flow was $86.7 million and free cash flow $17.0 million. Select executed a seven-year Northern Delaware Basin agreement including conveyance of 14 SWDs, construction of 19 miles of pipeline, and a 128-million-barrel MVC. Total liquidity stood at $277.8 million, with no revolver borrowings.
Positive
- Revenue $395.8m, up 8% sequentially and 9% year-over-year
- Net income $22.6m, more than doubled sequentially from $9.4m
- Adjusted EBITDA $92.7m, up from $77.6m in Q1 2026
- Water Infrastructure revenue $101.6m with 58.3% gross margin before D&A
- Chemical Technologies revenue $96.0m, up 23% sequentially with 20.2% margin
- Operating cash flow $86.7m and positive free cash flow of $17.0m in Q2 2026
- Seven-year 128-million-barrel MVC plus 14 SWDs and 19-mile pipeline project
- Total liquidity $277.8m and no borrowings on revolving credit facility
Negative
- Water Services revenue $198.2m, down from $215.7m in Q2 2025
- Net capital expenditures $69.7m in Q2 and 2026 capex outlook of $250–$290m
- Liquidity $277.8m, down from $307.7m at March 31, 2026
- New $12.9m agricultural loan added alongside $250m term loan debt
- SG&A $41.2m, up from $38.9m in Q2 2025
News Explained
The signed project adds a $25–$30 million construction commitment expected to become operational within 12 months, alongside June 30 cash of $33.4 million.
The agreement is signed, but the associated pipeline project is still a future build: Select expects the
Select now expects
As of
AI-generated analysis. How Rhea-AI works. Not financial advice.
Generated second quarter 2026 consolidated revenue of
Increased net income by
Generated record Water Infrastructure revenue of
Generated record Chemical Technologies revenue of
Executed Definitive Agreement with a large public operator for the conveyance of 14 saltwater disposal wells ("SWDs") as well as the development of a new pipeline project supported by a 128-million-barrel minimum volume commitment in the
John Schmitz, Chairman of the Board, President and CEO, stated, "The second quarter was a very strong quarter for Select across all three operating segments, with both our Water Infrastructure and Chemical Technologies segments producing record revenue and gross profit in the quarter. During the second quarter of 2026, we delivered strong consolidated revenue and gross profit growth, resulting in
"We continue to increase our produced water volumes handled in the Water Infrastructure segment, with approximately 1.5 million barrels of produced water recycled or disposed per day in the second quarter, while also seeing the benefit of increased skim oil volumes and pricing, resulting in record quarterly revenue of
"As our system continues to grow throughout the
"Elsewhere, our Chemical Technologies segment saw significant sequential improvement, coming in well above our expectations, with a
"Our Water Services segment also outperformed our expectations during the second quarter, with revenue growth of
"In summary, I am pleased with the ongoing strategic execution in our Water Infrastructure business, and our ability to grow and take market share in our Water Services and Chemical Technologies segments. Altogether we expect another strong quarter ahead, and on a consolidated basis, we anticipate Adjusted EBITDA in the third quarter to be an estimated
Second Quarter 2026 Consolidated Financial Information
Revenue for the second quarter of 2026 was
For the second quarter of 2026, gross profit was
SG&A during the second quarter of 2026 was
Adjusted EBITDA was
Business Segment Information
The Water Infrastructure segment generated revenues of
The Water Services segment generated revenues of
The Chemical Technologies segment generated revenues of
Cash Flow and Capital Expenditures
Cash flow provided by operating activities for the second quarter of 2026 was
Net capital expenditures for the second quarter of 2026 were
Cash flows provided by financing activities during the second quarter of 2026 were
Balance Sheet and Capital Structure
Total cash and cash equivalents were
As of June 30, 2026, the borrowing base under the Company's sustainability-linked credit facility was
Total liquidity was
Water Infrastructure Commercial Development and Acquisition Updates
In the second quarter of 2026, Select signed a seven-year agreement with a large public operator (the "Operator") for produced water transportation across Select's
During the second quarter of 2026, Select also completed two additional disposal facility acquisitions in the
In addition to the above outlined projects and acquisitions, Select signed multiple additional commercialization contracts during the second quarter of 2026 requiring minimal incremental capital expenditures, including several MVC agreements, acreage dedications and interruptible tie-in agreements across the Permian, Bakken, MidCon and Northeast regions as well as a new mineral extraction agreement with a key strategic partner for the development of iodine extraction across the portfolio.
Second Quarter Earnings Conference Call
In conjunction with today's release, Select has scheduled a conference call on Wednesday, August 5, 2026, at 11:00 a.m. Eastern time / 10:00 a.m. Central time. Please dial 201-389-0872 and ask for the Select Water Solutions call at least 10 minutes prior to the start time of the call, or listen to the call live over the Internet by logging on to the website at the address https://investors.selectwater.com/events-presentations/current. A telephonic replay of the conference call will be available through August 19, 2026, and may be accessed by calling 201-612-7415 using passcode 13757760#. A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days.
About Select Water Solutions, Inc.
Select is a leading provider of sustainable water and chemical solutions to the energy industry. These solutions are supported by the Company's critical water infrastructure assets, chemical manufacturing and water treatment and recycling capabilities. As a leader in sustainable water and chemical solutions, Select places the utmost importance on safe, environmentally responsible management of water throughout the lifecycle of a well. Additionally, Select believes that responsibly managing water resources throughout its operations to help conserve and protect the environment is paramount to the Company's continued success. For more information, please visit Select's website, https://www.selectwater.com.
Cautionary Statement Regarding Forward-Looking Statements
All statements in this communication other than statements of historical facts are forward-looking statements which contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast" "intend," "may," "plan," "potential," "preliminary," "project," "see," "should," "will," and other similar expressions. Examples of forward-looking statements include, but are not limited to, the expectations of plans, business strategies, objectives and growth, projected financial results and future financial and operational performance, expected capital expenditures, our share repurchase program and future dividends. Although we believe that the expectations reflected, and the assumptions or bases underlying our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause our actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements. These risks and uncertainties include the risks that the benefits contemplated from our recent acquisitions may not be realized, the ability of Select to successfully integrate the acquired businesses' operations, including employees, and realize anticipated synergies and cost savings and the potential impact of the consummation of the acquisitions on relationships, including with employees, suppliers, customers, competitors and creditors. Factors that could materially impact such forward-looking statements include, but are not limited to: global economic distress, including that resulting from the sustained Russia-Ukraine war and related economic sanctions, instability and continued hostilities in the Middle East and elsewhere, including military conflict involving Iran, instability in Venezuela, economic uncertainty as a result of changing trade policies, disruptions in global oil and gas markets and inflation and elevated interest rates, each of which may decrease demand for oil and natural gas or contribute to volatility in the prices for oil and natural gas, which may decrease demand for our services; the ability to source certain raw materials and other critical components or manufactured products globally on a timely basis from economically advantaged sources, including any delays and/or supply chain disruptions; actions taken by the members of the Organization of the Petroleum Exporting Countries ("OPEC") and Russia (together with OPEC and other allied producing countries, "OPEC+") with respect to oil production levels and announcements of potential changes in such levels, including the ability of the OPEC+ countries to agree on and comply with announced supply limitations, which may be exacerbated by military conflict in the Middle East involving Iran and the resumption of sales of previously sanctioned oil from Venezuela and Russia; the impact of central bank policy actions, such as sustained, elevated interest rates in response to, among other things, high rates of inflation, and disruptions in the bank and capital markets; the degree to which consolidation among our customers may affect spending on United States ("U.S.") drilling and completions activity, including the recent consolidation in the Permian Basin; impacts related to changing U.S. and foreign trade policies, including increased trade restrictions or tariffs; the impact of changes in diplomatic and trade relations, and the results of countermeasures and any tariff mitigation initiatives; changes in safety, health, environmental and other governmental policy and regulation; the enactment or promulgation of new laws or regulations or changes or modifications in existing laws, regulations, rules or governmental policies with respect to taxation; the level of capital spending and access to capital markets by oil and gas companies in response to changes in commodity price or reduced demand; the potential deterioration of our customers' financial condition, including defaults resulting from actual or potential insolvencies; trends and volatility in oil and gas prices, and our ability to manage through such volatility; the impact of current and future laws, rulings, governmental regulations and policies, including those related to accessing water, disposing of wastewater, transferring produced water, interstate freshwater and produced water transfer, chemicals, carbon pricing, pipeline construction, emissions, hydraulic fracturing, leasing, permitting or drilling on federal lands and various other environmental matters; regional impacts to our business, including our key infrastructure assets within the Permian Basin, the Bakken, and the Haynesville regions; capacity constraints on regional oil, natural gas and water gathering, processing and pipeline systems that result in a slowdown or delay in drilling and completion activity, and thus a decrease in the demand for our services in our core markets; the impact of regulatory and related policy actions by federal, state and/or local governments, such as the Inflation Reduction Act of 2022, which may negatively impact the future production of oil and gas in the U.S., thereby reducing demand for our services; our ability to hire and retain key management and employees, including skilled labor; our access to capital to fund expansions, acquisitions and our working capital needs and our ability to obtain debt or equity financing on satisfactory terms, or at all; our health, safety and environmental performance; the impact of competition on our operations; the degree to which our exploration and production customers may elect to operate their water-management services in-house rather than source these services from companies like us; our level of indebtedness and our ability to comply with covenants contained in our sustainability-linked credit facility or future debt instruments; delays or restrictions in obtaining permits by us or our customers; constraints in supply or availability of equipment used in our business; the impact of advances or changes in well-completion technologies or practices that result in reduced demand for our services, either on a volumetric or time basis; changes in global political or economic conditions, generally, and in the markets we serve, including the rate of inflation and potential economic recession; acts of terrorism, war or political or civil unrest in the U.S. or elsewhere, such as the Russia-Ukraine war, the instability and continued hostilities in the Middle East, including military conflict involving Iran and any potential conflict with Venezuela; information technology failures or cyberattacks; accidents, weather, natural disasters or other events affecting our business; and the other factors discussed or referenced in the "Risk Factors" section of our most recent Annual Report on Form 10-K and those set forth from time to time in our other filings with the SEC. Investors should not place undue reliance on our forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
SELECT WATER SOLUTIONS, INC CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except share and per share data) | |||||||||||||||||||||
Three months ended, | Six months ended June 30, | ||||||||||||||||||||
Revenue | June 30, 2026 | March 31, 2026 | June 30, 2025 | 2026 | 2025 | ||||||||||||||||
Water Infrastructure | $ | 101,614 | $ | 96,736 | $ | 80,855 | $ | 198,350 | $ | 153,246 | |||||||||||
Water Services | 198,153 | 191,231 | 215,660 | 389,384 | 441,308 | ||||||||||||||||
Chemical Technologies | 96,040 | 77,991 | 67,700 | 174,031 | 144,045 | ||||||||||||||||
Total revenue | 395,807 | 365,958 | 364,215 | 761,765 | 738,599 | ||||||||||||||||
Costs of revenue | |||||||||||||||||||||
Water Infrastructure | 42,419 | 42,352 | 36,211 | 84,771 | 69,704 | ||||||||||||||||
Water Services | 152,654 | 149,454 | 173,312 | 302,108 | 355,030 | ||||||||||||||||
Chemical Technologies | 76,668 | 63,130 | 55,885 | 139,798 | 120,613 | ||||||||||||||||
Depreciation, amortization and accretion | 47,225 | 45,742 | 41,054 | 92,967 | 79,729 | ||||||||||||||||
Total costs of revenue | 318,966 | 300,678 | 306,462 | 619,644 | 625,076 | ||||||||||||||||
Gross profit | 76,841 | 65,280 | 57,753 | 142,121 | 113,523 | ||||||||||||||||
Operating expenses | |||||||||||||||||||||
Selling, general and administrative | 41,178 | 40,551 | 38,935 | 81,729 | 76,367 | ||||||||||||||||
Depreciation and amortization | 1,209 | 1,121 | 1,918 | 2,330 | 2,843 | ||||||||||||||||
Impairments and abandonments | 239 | 5,708 | 1,477 | 5,947 | 2,625 | ||||||||||||||||
Lease abandonment costs | (129) | (68) | (2) | (197) | 722 | ||||||||||||||||
Total operating expenses | 42,497 | 47,312 | 42,328 | 89,809 | 82,557 | ||||||||||||||||
Income from operations | 34,344 | 17,968 | 15,425 | 52,312 | 30,966 | ||||||||||||||||
Other income (expense) | |||||||||||||||||||||
Gain on sales of property and equipment and divestitures, net | 164 | 405 | 6,503 | 569 | 7,868 | ||||||||||||||||
Interest expense, net | (5,021) | (5,907) | (5,645) | (10,928) | (10,521) | ||||||||||||||||
Other | 5 | (311) | 92 | (306) | 421 | ||||||||||||||||
Income before income tax expense and equity in losses of unconsolidated entities | 29,492 | 12,155 | 16,375 | 41,647 | 28,734 | ||||||||||||||||
Income tax expense | (6,360) | (2,433) | (4,521) | (8,793) | (7,415) | ||||||||||||||||
Equity in losses of unconsolidated entities | (570) | (290) | (183) | (860) | (88) | ||||||||||||||||
Net income | 22,562 | 9,432 | 11,671 | 31,994 | 21,231 | ||||||||||||||||
Less: net income attributable to noncontrolling interests | (1,527) | (826) | (1,024) | (2,353) | (2,345) | ||||||||||||||||
Net income attributable to Select Water Solutions, Inc | $ | 21,035 | $ | 8,606 | $ | 10,647 | $ | 29,641 | $ | 18,886 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Class A—Basic | 123,146,866 | 110,145,655 | 101,527,407 | 116,682,176 | 101,161,203 | ||||||||||||||||
Class B—Basic | 12,733,751 | 16,221,101 | 16,221,101 | 14,467,792 | 16,221,101 | ||||||||||||||||
Net income per share attributable to common stockholders: | |||||||||||||||||||||
Class A—Basic | $ | 0.17 | $ | 0.08 | $ | 0.10 | $ | 0.25 | $ | 0.19 | |||||||||||
Class B—Basic | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Class A—Diluted | 125,432,751 | 112,530,858 | 102,860,676 | 119,054,382 | 103,060,299 | ||||||||||||||||
Class B—Diluted | 12,733,751 | 16,221,101 | 16,221,101 | 14,467,792 | 16,221,101 | ||||||||||||||||
Net income per share attributable to common stockholders: | |||||||||||||||||||||
Class A—Diluted | $ | 0.17 | $ | 0.08 | $ | 0.10 | $ | 0.25 | $ | 0.18 | |||||||||||
Class B—Diluted | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
SELECT WATER SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data) | |||||||||||
June 30, 2026 | March 31, 2026 | December 31, 2025 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 33,396 | $ | 55,970 | $ | 18,084 | |||||
Accounts receivable trade, net of allowance for credit losses | 319,867 | 317,748 | 263,965 | ||||||||
Accounts receivable, related parties | 57 | 22 | 63 | ||||||||
Inventories | 47,996 | 37,313 | 34,278 | ||||||||
Prepaid expenses and other current assets | 34,821 | 33,357 | 37,996 | ||||||||
Total current assets | 436,137 | 444,410 | 354,386 | ||||||||
Property and equipment | 1,796,566 | 1,672,966 | 1,629,406 | ||||||||
Accumulated depreciation | (770,358) | (736,935) | (717,223) | ||||||||
Total property and equipment, net | 1,026,208 | 936,031 | 912,183 | ||||||||
Right-of-use assets, net | 28,812 | 32,195 | 28,708 | ||||||||
Goodwill | 48,485 | 48,485 | 48,485 | ||||||||
Other intangible assets, net | 108,038 | 101,999 | 106,204 | ||||||||
Deferred tax assets, net | 45,849 | 48,337 | 48,881 | ||||||||
Investments in unconsolidated entities | 77,140 | 77,709 | 78,234 | ||||||||
Other long-term assets | 17,072 | 17,709 | 18,531 | ||||||||
Total assets | $ | 1,787,741 | $ | 1,706,875 | $ | 1,595,612 | |||||
Liabilities and Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 63,304 | $ | 55,065 | $ | 49,682 | |||||
Accrued accounts payable | 49,309 | 36,846 | 46,275 | ||||||||
Accounts payable and accrued expenses, related parties | 3,422 | 3,583 | 3,634 | ||||||||
Accrued salaries and benefits | 26,512 | 15,772 | 17,702 | ||||||||
Accrued insurance | 16,732 | 18,722 | 22,272 | ||||||||
Sales tax payable | 2,906 | 3,142 | 2,435 | ||||||||
Accrued expenses and other current liabilities | 39,044 | 36,573 | 37,549 | ||||||||
Current operating lease liabilities | 11,355 | 14,343 | 14,247 | ||||||||
Current portion of long-term debt | 63,150 | 46,875 | 31,250 | ||||||||
Current portion of finance lease obligations | 641 | 655 | 650 | ||||||||
Total current liabilities | 276,375 | 231,576 | 225,696 | ||||||||
Long-term tax receivable agreements liabilities | 50,095 | 43,421 | 43,421 | ||||||||
Long-term operating lease liabilities | 20,368 | 23,724 | 21,533 | ||||||||
Long-term debt, net of deferred debt issuance costs | 196,439 | 199,645 | 285,043 | ||||||||
Other long-term liabilities | 106,944 | 88,876 | 92,852 | ||||||||
Total liabilities | 650,221 | 587,242 | 668,545 | ||||||||
Commitments and contingencies | |||||||||||
Class A common stock, | 1,271 | 1,218 | 1,049 | ||||||||
Class B common stock, | 112 | 162 | 162 | ||||||||
Additional paid-in capital | 1,203,251 | 1,166,419 | 989,329 | ||||||||
Accumulated deficit | (155,283) | (176,318) | (184,924) | ||||||||
Total stockholders' equity | 1,049,351 | 991,481 | 805,616 | ||||||||
Noncontrolling interests | 88,169 | 128,152 | 121,451 | ||||||||
Total equity | 1,137,520 | 1,119,633 | 927,067 | ||||||||
Total liabilities and equity | $ | 1,787,741 | $ | 1,706,875 | $ | 1,595,612 | |||||
SELECT WATER SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net income | $ | 22,562 | $ | 9,432 | $ | 11,671 | $ | 31,994 | $ | 21,231 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||||
Depreciation, amortization and accretion | 48,434 | 46,863 | 42,972 | 95,297 | 82,572 | |||||||||||
Deferred tax expense | 6,412 | 2,394 | 4,472 | 8,806 | 6,958 | |||||||||||
Gain on disposal of property and equipment and divestitures | (164) | (405) | (6,503) | (569) | (7,868) | |||||||||||
Equity in losses of unconsolidated entities | 570 | 290 | 183 | 860 | 88 | |||||||||||
Credit loss (recovery) expense | (452) | 737 | 708 | 285 | 1,222 | |||||||||||
Amortization and write off of debt issuance costs | 416 | 413 | 405 | 829 | 1,403 | |||||||||||
Inventory adjustments | 39 | 98 | 60 | 137 | 20 | |||||||||||
Equity-based compensation | 8,376 | 5,825 | 3,198 | 14,201 | 6,679 | |||||||||||
Impairments and abandonments | 239 | 5,708 | 1,477 | 5,947 | 2,625 | |||||||||||
Other operating items, net | 670 | 598 | 666 | 1,268 | 1,153 | |||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable | (1,702) | (54,479) | 28,308 | (56,181) | (28,809) | |||||||||||
Prepaid expenses and other assets | (11,809) | 2,100 | 12,789 | (9,709) | 4,123 | |||||||||||
Accounts payable and accrued liabilities | 13,145 | (9,332) | (17,820) | 3,813 | (13,872) | |||||||||||
Net cash provided by operating activities | 86,736 | 10,242 | 82,586 | 96,978 | 77,525 | |||||||||||
Cash flows from investing activities | ||||||||||||||||
Purchase of property and equipment | (71,019) | (78,377) | (79,406) | (149,396) | (127,833) | |||||||||||
Equity-method and preferred stock investments | (500) | — | — | (500) | (72,059) | |||||||||||
Acquisitions, net of cash received | (41,992) | (210) | (3,225) | (42,202) | (17,205) | |||||||||||
Proceeds received from sales of property and equipment | 1,298 | 1,056 | 7,659 | 2,354 | 9,603 | |||||||||||
Net cash used in investing activities | (112,213) | (77,531) | (74,972) | (189,744) | (207,494) | |||||||||||
Cash flows from financing activities | ||||||||||||||||
Borrowings from revolving line of credit | — | 43,500 | 25,000 | 43,500 | 65,000 | |||||||||||
Payments on revolving line of credit | — | (113,500) | — | (113,500) | (125,000) | |||||||||||
Borrowings from long-term debt | 12,992 | — | — | 12,992 | 250,000 | |||||||||||
Payments on long-term debt | (54) | — | — | (54) | — | |||||||||||
Payments of finance lease obligations | (161) | (158) | (224) | (319) | (313) | |||||||||||
Payments of debt issuance costs | (101) | — | (515) | (101) | (7,867) | |||||||||||
Net proceeds from underwritten offering | (75) | 191,705 | — | 191,630 | — | |||||||||||
Dividends and distributions paid | (9,576) | (8,752) | (8,306) | (18,328) | (16,873) | |||||||||||
Payments under tax receivable agreements | — | — | — | — | (77) | |||||||||||
Contributions from noncontrolling interests | 500 | — | — | 500 | 2,875 | |||||||||||
Repurchase of common stock | (621) | (7,618) | (286) | (8,239) | (6,577) | |||||||||||
Net cash provided by financing activities | 2,904 | 105,177 | 15,669 | 108,081 | 161,168 | |||||||||||
Effect of exchange rate changes on cash | (1) | (2) | 11 | (3) | 9 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (22,574) | 37,886 | 23,294 | 15,312 | 31,208 | |||||||||||
Cash and cash equivalents, beginning of period | 55,970 | 18,084 | 27,892 | 18,084 | 19,978 | |||||||||||
Cash and cash equivalents, end of period | $ | 33,396 | $ | 55,970 | $ | 51,186 | $ | 33,396 | $ | 51,186 | ||||||
Comparison of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, gross profit before depreciation, amortization and accretion ("D&A"), gross margin before D&A and free cash flow are not financial measures presented in accordance with accounting principles generally accepted in the
Net income (loss) is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Gross profit and gross margin are the GAAP measures most directly comparable to gross profit before D&A and gross margin before D&A, respectively. Net cash provided by (used in) operating activities is the GAAP measure most directly comparable to free cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA, Adjusted EBITDA, gross profit before D&A, gross margin before D&A or free cash flow in isolation or as substitutes for an analysis of our results as reported under GAAP. Because EBITDA, Adjusted EBITDA, gross profit before D&A, gross margin before D&A and free cash flow may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
For forward-looking non-GAAP measures, the Company is unable to provide a reconciliation of the forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measure as the information necessary for a quantitative reconciliation, including potential acquisition-related transaction costs as well as the purchase price accounting allocation of the recent acquisitions and the resulting impacts to depreciation, amortization and accretion expense, among other items is not available to the Company without unreasonable efforts due to the inherent difficulty and impracticability of predicting certain amounts required by GAAP with a reasonable degree of accuracy at this time.
The following table presents a reconciliation of free cash flow to net cash provided by operating activities, which is the most directly comparable GAAP measure for the periods presented:
Three months ended | |||||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||
(unaudited) (in thousands) | |||||||||||
Net cash provided by operating activities | $ | 86,736 | $ | 10,242 | $ | 82,586 | |||||
Purchase of property and equipment | (71,019) | (78,377) | (79,406) | ||||||||
Proceeds received from sale of property and equipment | 1,298 | 1,056 | 7,659 | ||||||||
Free cash flow | $ | 17,015 | $ | (67,079) | $ | 10,839 | |||||
The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net income, which is the most directly comparable GAAP measure for the periods presented:
Three months ended, | ||||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | ||||||||
(unaudited) (in thousands) | ||||||||||
Net income | $ | 22,562 | $ | 9,432 | $ | 11,671 | ||||
Interest expense, net | 5,021 | 5,907 | 5,645 | |||||||
Income tax expense | 6,360 | 2,433 | 4,521 | |||||||
Depreciation, amortization and accretion | 48,434 | 46,863 | 42,972 | |||||||
EBITDA | 82,377 | 64,635 | 64,809 | |||||||
Impairments and abandonments | 239 | 5,708 | 1,477 | |||||||
Non-cash loss on sale of assets or subsidiaries | 76 | 42 | 264 | |||||||
Non-cash compensation expenses | 8,376 | 6,020 | 3,198 | |||||||
Transaction costs | 567 | 327 | 2,018 | |||||||
Lease abandonment costs | (129) | (68) | (2) | |||||||
Other | 671 | 670 | 667 | |||||||
Equity in losses of unconsolidated entities | 570 | 290 | 183 | |||||||
Adjusted EBITDA | $ | 92,747 | $ | 77,624 | $ | 72,614 | ||||
The following table presents a reconciliation of gross profit before D&A to total gross profit, which is the most directly comparable GAAP measure, and a calculation of gross margin before D&A for the periods presented:
Three months ended, | |||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||
(unaudited) (in thousands) | |||||||||
Gross profit by segment | |||||||||
Water Infrastructure | $ | 30,488 | $ | 26,338 | $ | 22,392 | |||
Water Services | 28,697 | 25,865 | 25,259 | ||||||
Chemical Technologies | 17,656 | 13,077 | 10,102 | ||||||
As reported gross profit | 76,841 | 65,280 | 57,753 | ||||||
Plus D&A | |||||||||
Water Infrastructure | 28,707 | 28,046 | 22,252 | ||||||
Water Services | 16,802 | 15,912 | 17,089 | ||||||
Chemical Technologies | 1,716 | 1,784 | 1,713 | ||||||
Total D&A | 47,225 | 45,742 | 41,054 | ||||||
Gross profit before D&A | $ | 124,066 | $ | 111,022 | $ | 98,807 | |||
Gross profit before D&A by segment | |||||||||
Water Infrastructure | 59,195 | 54,384 | 44,644 | ||||||
Water Services | 45,499 | 41,777 | 42,348 | ||||||
Chemical Technologies | 19,372 | 14,861 | 11,815 | ||||||
Total gross profit before D&A | $ | 124,066 | $ | 111,022 | $ | 98,807 | |||
Gross margin before D&A by segment | |||||||||
Water Infrastructure | 58.3 % | 56.2 % | 55.2 % | ||||||
Water Services | 23.0 % | 21.8 % | 19.6 % | ||||||
Chemical Technologies | 20.2 % | 19.1 % | 17.5 % | ||||||
Total gross margin before D&A | 31.3 % | 30.3 % | 27.1 % | ||||||
Contacts:
Select Water Solutions, Inc.
Garrett Williams – VP, Corporate Finance & Investor Relations
(713) 296-1010
IR@selectwater.com
Dennard Lascar Investor Relations
Ken Dennard / Natalie Hairston
(713) 529-6600
WTTR@dennardlascar.com
View original content:https://www.prnewswire.com/news-releases/select-water-solutions-announces-second-quarter-2026-financial-operational-and-strategic-updates-302842923.html
SOURCE Select Water Solutions, Inc.