Select Water Solutions (NYSE: WTTR) lifts Q2 profit and inks 128M-barrel water deal
Rhea-AI Filing Summary
Select Water Solutions, Inc. reported strong results for the quarter ended June 30, 2026. Revenue was $395.8 million, up from $366.0 million in the prior quarter and $364.2 million a year earlier. Net income rose to $22.6 million, with net income attributable to the company of $21.0 million, and diluted Class A EPS of $0.17 versus $0.08 in the first quarter of 2026.
Profitability improved across the business. Gross profit increased to $76.8 million, and total gross margin expanded to 19.4%. Gross profit before depreciation and amortization was $124.1 million, with gross margin before D&A of 31.3%. Adjusted EBITDA reached $92.7 million, up from $77.6 million in the first quarter and $72.6 million in the prior-year quarter.
All three segments contributed, with Water Infrastructure revenue of $101.6 million, Water Services revenue of $198.2 million and Chemical Technologies revenue of $96.0 million, and Water Infrastructure and Chemical Technologies achieving record segment revenue and higher margins before D&A than a year ago. Operating cash flow was $86.7 million and free cash flow was $17.0 million despite $69.7 million of net capital expenditures and $42.0 million of acquisition-related investing outflows. Liquidity totaled $277.8 million at June 30, 2026, including access to a sustainability-linked credit facility with approximately $244.4 million of available borrowing capacity.
The company also executed a seven-year minimum volume commitment agreement in the Northern Delaware Basin covering 128 million barrels of produced water, including conveyance of 14 saltwater disposal wells and a planned 19-mile pipeline project expected to cost $25–$30 million. Management guided to third-quarter 2026 Adjusted EBITDA of $90–$94 million.
Positive
- Adjusted EBITDA rose to $92.7 million, up from $77.6 million in Q1 2026 and $72.6 million in Q2 2025, reflecting stronger profitability across the portfolio.
- Cash flow from operations reached $86.7 million and free cash flow turned positive at $17.0 million in Q2 2026, supporting continued capital investment and shareholder distributions.
- New seven-year 128-million-barrel MVC agreement with asset conveyance and a 19-mile pipeline project expands Northern Delaware Basin infrastructure and underpins future Water Infrastructure growth.
Negative
- None.
Filing Explained
At June 30, 2026, Select had $33.4 million cash and $244.4 million available borrowing capacity while planning $250–$290 million of 2026 net capex.
This Form 8-K furnishes the company’s second-quarter results and strategic updates; the Northern Delaware infrastructure project is signed but not yet operational, and expected 2026 net capital expenditures are set at
The filing reports
At
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Revenue Q2 2026: $395.8 million
Net income Q2 2026: $22.6 million
Adjusted EBITDA Q2 2026: $92.7 million
+5 more
8 metrics
Revenue Q2 2026
$395.8 million
Quarter ended June 30, 2026; versus $366.0 million in Q1 2026 and $364.2 million in Q2 2025
Net income Q2 2026
$22.6 million
Quarter ended June 30, 2026; versus $9.4 million in Q1 2026 and $11.7 million in Q2 2025
Adjusted EBITDA Q2 2026
$92.7 million
Compared with $77.6 million in Q1 2026 and $72.6 million in Q2 2025
Operating cash flow Q2 2026
$86.7 million
Cash flow provided by operating activities for the quarter ended June 30, 2026
Free cash flow Q2 2026
$17.0 million
Three months ended June 30, 2026; reconciled from operating cash flow, capex and asset sale proceeds
Total liquidity
$277.8 million
Liquidity as of June 30, 2026, including cash and available borrowing capacity
Net capital expenditures Q2 2026
$69.7 million
Net capex comprised of $71.0 million of capital expenditures less $1.3 million of asset sale proceeds
Minimum volume commitment
128 million barrels
Seven-year produced water MVC supporting Northern Delaware Basin pipeline and SWD project
Key Terms
Adjusted EBITDA, free cash flow, minimum volume commitment, sustainability-linked credit facility, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA was $92.7 million in the second quarter of 2026"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
free cash flow financial
"Free cash flow in the second quarter of 2026 and the first quarter of 2026 was $17.0 million"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
minimum volume commitment financial
"supported by a sizable 128-million-barrel minimum volume commitment (“MVC”) over the seven-year contract period"
A minimum volume commitment is a promise by a buyer, underwriter or market maker to trade or buy at least a specified number of shares or securities over a set period. It matters to investors because it guarantees a baseline level of demand and liquidity—similar to a store agreeing to buy a minimum stock of a product—reducing the chance of thin trading, big price swings, or difficulty selling holdings.
sustainability-linked credit facility financial
"under the term loan component of its sustainability-linked credit facility"
A sustainability-linked credit facility is a loan arranged so the borrower’s interest rate or other loan terms improve if the company meets agreed environmental, social or governance targets, and worsen if it misses them. Like a mortgage that lowers your rate when you reach energy-efficiency goals, it financially rewards measurable sustainability progress and matters to investors because it can lower borrowing costs, signal management’s priorities and affect future cash flow and credit risk.
noncontrolling interests financial
"Less: net income attributable to noncontrolling interests"
The portion of a subsidiary’s equity and profits that belongs to outside owners rather than the parent company; when a parent reports consolidated results it includes the whole subsidiary but shows the noncontrolling slice separately. Think of a company’s subsidiary as a pie where the parent owns most slices but some are held by other investors — noncontrolling interests tell you how much of the pie and its future earnings don’t belong to the parent, which affects how much profit and net assets are truly attributable to the parent’s shareholders.
Earnings Snapshot
Revenue: $395.8 million · Guidance included
Quarter ended June 30, 2026
Revenue
$395.8 million
Up from $366.0 million in the first quarter of 2026 and $364.2 million in the second quarter of 2025
Net income
$22.6 million
Up from $9.4 million in the first quarter of 2026 and $11.7 million in the second quarter of 2025
Adjusted EBITDA
$92.7 million
Up from $77.6 million in the first quarter of 2026 and $72.6 million in the second quarter of 2025
Operating cash flow
$86.7 million
Versus $10.2 million in the first quarter of 2026 and $82.6 million in the second quarter of 2025
Guidance
Management expects Q3 2026 Adjusted EBITDA of $90–$94 million, Water Infrastructure revenue up 5%–10% with 56%–58% gross margin before D&A, steady Water Services revenue with 21%–22% margins, Chemical Technologies revenue of $85–$90 million with 20%–21% margins, and 2026 net capital expenditures of $250–$290 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Select Water Solutions (WTTR) Q2 2026 revenue and net income?
Select Water Solutions reported Q2 2026 revenue of $395.8 million and net income of $22.6 million. Revenue increased from $366.0 million in Q1 2026 and $364.2 million in Q2 2025, while net income rose from $9.4 million and $11.7 million over the same comparison periods.
How did Adjusted EBITDA for Select Water Solutions (WTTR) perform in Q2 2026?
Adjusted EBITDA was $92.7 million in Q2 2026. This compares to $77.6 million in the first quarter of 2026 and $72.6 million in the second quarter of 2025, showing improved earnings before interest, taxes, depreciation, amortization and other adjustments.
What were WTTR’s cash flow and free cash flow in Q2 2026?
Operating cash flow was $86.7 million and free cash flow was $17.0 million in Q2 2026. Free cash flow reflects $71.0 million of capital expenditures partially offset by $1.3 million of asset sale proceeds, after generating strong cash from operating activities.
What major agreement did Select Water Solutions (WTTR) sign in Q2 2026?
The company signed a seven-year 128-million-barrel minimum volume commitment agreement in the Northern Delaware Basin. It includes conveyance of 14 saltwater disposal wells and construction of 19 miles of large-diameter pipeline, with expected project costs of $25–$30 million.
What is Select Water Solutions (WTTR) liquidity and debt position as of June 30, 2026?
Total liquidity was $277.8 million as of June 30, 2026. The company held $33.4 million in cash, had $250.0 million outstanding under a term loan and $12.9 million under an agricultural loan, with no revolver borrowings and about $244.4 million of available credit facility capacity.
What guidance did Select Water Solutions (WTTR) provide for Q3 2026 and 2026 capital spending?
Management expects Q3 2026 Adjusted EBITDA of $90–$94 million. Guidance also calls for Water Infrastructure revenue up 5–10%, steady Water Services revenue, Chemical Technologies revenue of $85–$90 million, and 2026 net capital expenditures of $250–$290 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 4, 2026
(Exact Name of Registrant as Specified in its Charter)
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of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices)
(940 ) 668-1818
(Registrant’s Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 – Results of
Operations and Financial Condition.
On August 4, 2026, Select Water Solutions, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended
June 30, 2026. A copy of the Company’s press release covering such announcement and certain other matters is furnished as Exhibit 99.1 to this Current Report on Form 8‑K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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99.1
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Press Release, dated August 4, 2026.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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THE INFORMATION FURNISHED UNDER ITEM 2.02 OF THIS CURRENT REPORT, INCLUDING EXHIBIT 99.1 ATTACHED HERETO, SHALL NOT BE DEEMED “FILED” FOR THE PURPOSES
OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934, OR OTHERWISE SUBJECT TO THE LIABILITIES OF SUCH SECTION, NOR SHALL IT BE DEEMED INCORPORATED BY REFERENCE INTO ANY REGISTRATION STATEMENT OR OTHER FILING PURSUANT TO THE SECURITIES ACT OF 1933,
EXCEPT AS OTHERWISE EXPRESSLY STATED IN SUCH FILING.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 4, 2026
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SELECT WATER SOLUTIONS, INC.
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By:
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/s/ Christopher K. George
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Christopher K. George
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Executive Vice President and Chief Financial Officer
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Exhibit 99.1
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News Release
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Contacts:
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Select Water Solutions, Inc.
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Garrett Williams – VP, Corporate Finance & Investor Relations
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FOR IMMEDIATE RELEASE
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(713) 296-1010
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IR@selectwater.com
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Dennard Lascar Investor Relations
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Ken Dennard / Natalie Hairston
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WTTR@dennardlascar.com
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Select Water Solutions Announces Second Quarter 2026 Financial, Operational and Strategic Updates
Generated second quarter 2026 consolidated revenue of $396 million, an increase of $30 million or 8% sequentially, as compared to
the first quarter of 2026
Increased net income by $13 million and improved Adjusted EBITDA by $15 million sequentially during the second quarter of 2026
relative to the first quarter of 2026
Generated record Water Infrastructure revenue of $102 million, an increase of $5 million or 5% as compared to the first quarter
of 2026, and an increase of $21 million or 26% as compared to the second quarter of 2025
Generated record Chemical Technologies revenue of $96 million, an increase of $18 million or 23% sequentially, as compared to the
first quarter of 2026
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 Northern Delaware Basin
Gainesville, TX – August 4, 2026 – Select Water Solutions, Inc. (NYSE: WTTR) (“Select,” the “Company,” “we” or “us”), a leading provider of sustainable water and
chemical solutions, today announced its financial and operating results for the quarter ended June 30, 2026.
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 $23 million of net income and $93 million of Adjusted EBITDA, respectively.
“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 $102 million and gross margins before D&A of 58% for the segment in the second quarter. We
expect to see further growth in the third quarter and are well on track to meet the upper end of our full year guidance for the segment, setting the stage for solid year-over-year growth into 2027. Further supporting this growth profile is the
expansion of our multi-basin relationship and operations with a key customer through the execution of a strategic minimum volume commitment contract award, comprised of a 128-million-barrel commitment over a seven-year term. Furthermore, the
agreement includes the direct conveyance of a portfolio of underutilized, but strategic SWDs across Lea and Eddy Counties, New Mexico. We continue to find ways to collaborate with our customers to maximize the value of existing assets and to
optimize produced water management as part of their long-term development planning. We view this contract as a strong validation of the strategic value proposition of Select’s broad and expanding commercial network of integrated recycling and
disposal solutions.
“As our system continues to grow throughout the Northern Delaware Basin, Select’s backlog of potential opportunities has continued to evolve as well, and we are
acutely focused on prudent growth that prioritizes long-term contracts, strong cash flow streams, and increased utilization across our networks. In support of our latest infrastructure contract awards and opportunities, we now expect net capital
expenditures of $250 – $290 million in 2026.
“Elsewhere, our Chemical Technologies segment saw significant sequential improvement, coming in well above our expectations, with a 23% increase in revenue and 30%
increase in gross profit before D&A as compared to the first quarter of 2026. The $96 million of Chemical Technologies revenue in the second quarter was a segment record, and we continue to identify ways to deliver strong margins, despite
increases to oil-based raw material input costs, with margins of 20% in the quarter. Our in-basin manufacturing, rapid new product development pace, and steady field execution have driven market share gains while increased completions intensity and
complexity, and growing interest in surfactant technology, have supported increased demand for our higher margin product offerings.
“Our Water Services segment also outperformed our expectations during the second quarter, with revenue growth of 4% and gross profit before D&A growth of 9% as
compared to the first quarter of 2026. We have been pleased with the year-to-date performance of our last-mile water logistics and delivery business, and current macro trends remain supportive of sustained performance
over the second half of the year.
“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 $90 – $94 million. With the support of a healthy
balance sheet, we are well positioned to continue to invest in the attractive growth opportunities in front of us in order to deliver long-term value to our customers, employees, and stakeholders,” concluded Schmitz.
2
Second Quarter 2026 Consolidated Financial Information
Revenue for the second quarter of 2026 was $395.8 million as compared to $366.0 million in the first quarter of 2026 and $364.2 million in the second quarter of 2025.
Net income for the second quarter of 2026 was $22.6 million as compared to net income of $9.4 million in the first quarter of 2026 and net income of $11.7 million in the second quarter of 2025.
For the second quarter of 2026, gross profit was $76.8 million, as compared to $65.3 million in the first quarter of 2026 and $57.8 million in the second quarter of
2025. Total gross margin was 19.4% in the second quarter of 2026 as compared to 17.8% in the first quarter of 2026 and 15.9% in the second quarter of 2025. Gross profit before D&A was $124.1 million for the second quarter of 2026 as compared to
$111.0 million for the first quarter of 2026 and $98.8 million for the second quarter of 2025. Gross margin before D&A for the second quarter of 2026 was 31.3% as compared to 30.3% for the first quarter of 2026 and 27.1% for the second quarter
of 2025.
SG&A during the second quarter of 2026 was $41.2 million as compared to $40.6 million during the first quarter of 2026 and $38.9 million during the second quarter
of 2025. SG&A during the second and first quarters of 2026 was impacted by transaction costs of $0.6 million and $0.3 million, respectively, while SG&A during the second quarter of 2025 was impacted by transaction costs of $1.7 million.
Adjusted EBITDA was $92.7 million in the second quarter of 2026 as compared to $77.6 million in the first quarter of 2026 and $72.6 million in the second quarter of
2025. Adjusted EBITDA during the second quarter of 2026 was adjusted for $0.6 million of non-recurring transaction costs, $0.6 million of non-cash losses in equity investments, $0.2 million of impairments and abandonments, and $0.6 million in other
adjustments. Non-cash compensation expense accounted for an additional $8.4 million adjustment during the second quarter of 2026. Please refer to the end of this release for reconciliations of gross profit before D&A (non-GAAP measure) to gross
profit and of Adjusted EBITDA (non-GAAP measure) to net income.
Business Segment Information
The Water Infrastructure segment generated revenues of
$101.6 million in the second quarter of 2026 as compared to $96.7 million in the first quarter of 2026 and $80.9 million in the second quarter of 2025. Gross margin before D&A for Water Infrastructure was 58.3% in the second quarter of 2026 as
compared to 56.2% in the first quarter of 2026 and 55.2% in the second quarter of 2025. Water Infrastructure revenues increased 5.0% sequentially relative to the first quarter of 2026, driven by increases in total produced water volumes handled as
well as the benefit of increased skim oil volumes and pricing. Looking ahead, the Company anticipates Water Infrastructure revenues to increase 5% – 10% as compared to the second quarter of 2026 with margins in the 56%
– 58% range in the third quarter of 2026.
3
The Water Services segment generated revenues of $198.2
million in the second quarter of 2026 as compared to $191.2 million in the first quarter of 2026 and $215.7 million in the second quarter of 2025. Gross margin before D&A for Water Services was 23.0% in the second quarter of 2026 as compared to
21.8% in the first quarter of 2026 and 19.6% in the second quarter of 2025. The Water Services segment revenues increased 3.6% sequentially, partially driven by modestly improved customer activity levels. For the third quarter of 2026, the Company
expects steady revenues relative to the second quarter of 2026 with gross margins before D&A in the 21% – 22% range during the third quarter of 2026.
The Chemical Technologies segment generated revenues of
$96.0 million in the second quarter of 2026 as compared to $78.0 million in the first quarter of 2026 and $67.7 million in the second quarter of 2025. Gross margin before D&A for Chemical Technologies was 20.2% in the second quarter of 2026 as
compared to 19.1% in the first quarter of 2026 and 17.5% in the second quarter of 2025. For the third quarter of 2026, the Company anticipates revenues of $85 – $90 million and gross margins before D&A of 20% – 21% for the segment.
Cash Flow and Capital Expenditures
Cash flow provided by operating activities for the second quarter of 2026 was $86.7 million as compared to $10.2 million in the first quarter of 2026 and $82.6 million
in the second quarter of 2025. Free cash flow in the second quarter of 2026 and the first quarter of 2026 was $17.0 million and ($67.1) million, respectively and $10.8
million in the second quarter of 2025. Please refer to the end of this release for reconciliations of free cash flow (non-GAAP measure) to cash flow provided by operating activities.
Net capital expenditures for the second quarter of 2026 were $69.7 million, comprised of $71.0 million of capital expenditures partially offset by $1.3 million of cash
proceeds from asset sales. Cash flows from investing activities also included $42.0 million of acquisition-related outflows for the Black River Ranch acquisition, multiple disposal acquisitions in the Northern Delaware Basin and the buyout of
multiple strategic operating facility leases across our operations in Texas.
Cash flows provided by financing activities during the second quarter of 2026 were $2.9 million, primarily reflecting $13.0 million of net proceeds from an
agricultural loan related to the Black River Ranch acquisition, partially offset by the payment of $9.6 million of quarterly dividends and distributions.
Balance Sheet and Capital Structure
Total cash and cash equivalents were $33.4 million as of June 30, 2026, as compared to $56.0 million and $18.1 million as of March 31, 2026, and December 31, 2025,
respectively. As of June 30, 2026, the Company had $250.0 million of borrowings outstanding under the term loan component of its sustainability-linked credit facility, $12.9 million under the agricultural loan related to the Black River Ranch
acquisition and no amounts drawn on the revolving credit facility, compared to $250.0 million of outstanding borrowings under the term loan and no amounts drawn on the revolving credit facility as of March 31, 2026 and $250.0 million of outstanding
borrowings under the term loan and $70.0 million drawn on the revolving credit facility as of December 31, 2025, respectively.
4
As of June 30, 2026, the borrowing base under the Company’s sustainability-linked credit facility was $264.0 million, compared to $271.3 million and $235.1 million as
of March 31, 2026, and December 31, 2025, respectively. Available borrowing capacity under the sustainability-linked credit facility was approximately $244.4 million as of June 30, 2026, after giving effect to outstanding borrowings and letters of
credit totaling $19.6 million. As of March 31, 2026, available borrowing capacity under the credit facility was approximately $251.7 million, after accounting for outstanding borrowings and letters of credit totaling $19.6 million.
Total liquidity was $277.8 million as of June 30, 2026, as compared to $307.7 million as of March 31, 2026, and $163.6 million as of December 31, 2025. The Company had
123,146,866 weighted average shares of Class A common stock and 12,733,751 weighted average shares of Class B common stock outstanding during the second quarter of 2026. The Company had 127,073,462 Class A shares and 11,158,101 Class B shares
issued and outstanding as of June 30, 2026.
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
Northern Delaware Basin infrastructure footprint. Under the agreement, the Operator has conveyed 14 saltwater disposal well facilities and related assets to Select in Lea and Eddy Counties, New Mexico. Additionally, Select has agreed to construct
19 miles of large-diameter pipeline to tie into Select’s existing Northern Delaware Basin network to transport, recycle and/or dispose of the Operator’s produced water in the region. The agreement is supported by a sizable 128-million-barrel
minimum volume commitment (“MVC”) over the seven-year contract period. The full project is expected to cost approximately $25 – $30 million and be operational within the next twelve months.
During the second quarter of 2026, Select also completed two additional disposal facility acquisitions in the Northern Delaware Basin to support ongoing infrastructure
projects and future development opportunities. In total, during the second quarter of 2026, Select added sixteen SWDs through both direct asset conveyance and acquisition to help support our growing infrastructure development activities in the
Permian Basin.
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.
5
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.
6
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.
7
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,
|
|||||||||||||||||||
|
June 30, 2026
|
March 31, 2026
|
June 30, 2025
|
2026
|
2025
|
||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
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
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
8
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, $0.01 par value
|
1,271
|
1,218
|
1,049
|
|||||||||
|
Class B common stock, $0.01 par value
|
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
|
||||||
9
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
|
||||||||||
10
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 U.S. (“GAAP”). We define EBITDA as net income (loss), plus interest expense, income taxes and depreciation, amortization and accretion. We define Adjusted EBITDA
as EBITDA, plus any impairment and abandonment charges or asset write-offs pursuant to GAAP, plus non-cash losses on the sale of assets or subsidiaries, non-cash compensation expense, and non-recurring or unusual expenses or charges, including
severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(gains) on unconsolidated entities plus tax receivable agreements expense and
less remeasurement gain on business combination. We define gross profit before D&A as revenue less cost of revenue, excluding cost of sales D&A expense. We define gross margin before D&A as gross profit before D&A divided by
revenue. We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, plus proceeds received from sale of property and equipment. EBITDA, Adjusted EBITDA, gross profit before D&A,
gross margin before D&A and free cash flow are supplemental non-GAAP financial measures that we believe provide useful information to external users of our financial statements, such as industry analysts, investors, lenders and rating agencies
because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, amortization and
accretion) and non-recurring items outside the control of our management team. We present EBITDA, Adjusted EBITDA, gross profit before D&A, gross margin before D&A and free cash flow because we believe they provide useful information
regarding the factors and trends affecting our business in addition to measures calculated under GAAP. Our board of directors, management and investors use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to
compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, amortization and accretion) and items outside
the control of our management team.
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.
11
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
|
%
|
||||||
12