Select Water Solutions Q3 2026 net income hits $22.9M
WTTR anticipates fourth-quarter Water Infrastructure revenue of $150 million to $160 million, including a partial-quarter Pilot Water contribution.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Select Water Solutions, Inc. (WTTR) reported third-quarter 2026 revenue of $412.2 million, up 28% year over year, net income of $22.9 million versus $2.3 million, and Adjusted EBITDA of $93.5 million, up 57%. Water Infrastructure revenue was $110 million, up 40%, and produced-water volumes handled reached 1.7 million barrels per day. Operating cash flow was $84.4 million; free cash flow was negative $3.6 million.
On September 23, 2026, the company sold an indirect 55% interest in Peak Rentals for approximately $76.8 million of consideration, subject to customary purchase price adjustments, including $41.5 million cash and a $35.3 million seller note; it retained an indirect 45% interest. After quarter-end, Select closed the Pilot Water acquisition, issued $900 million of 7.625% Senior Notes due November 1, 2034, repaid and terminated its prior facility, and entered a new $500 million revolving credit facility. It forecasts fourth-quarter Adjusted EBITDA of $95 million to $100 million and 2026 net capital expenditures of approximately $300 million to $310 million.
5 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue increased 28% year over year to $412.2 million.
- Moderate pointNet income reached $22.9 million, versus $2.3 million a year earlier.
- Moderate pointAdjusted EBITDA rose 57% to $93.5 million year over year.
- Moderate pointOperating cash flow was $84.4 million, compared with $71.7 million a year earlier.
- Minor pointWater Infrastructure revenue increased 40% to $110 million.
Negative
- None.
Filing Explained
Select's retained Peak stake will be reported through equity-method earnings, and Peak's own financing means no ongoing Select capital investment is expected.
As of
Following Peak Rentals' deconsolidation, future results from Select's retained
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, or exhibit attachments filed with this report.
Key Figures
Revenue: $412.2 million
Net income: $22.9 million
Adjusted EBITDA: $93.5 million
+5 more
8 metrics
Revenue
$412.2 million
Third quarter 2026; increased 28% year over year
Net income
$22.9 million
Third quarter 2026; compared with $2.3 million in third quarter 2025
Adjusted EBITDA
$93.5 million
Third quarter 2026; increased 57% year over year
Operating cash flow
$84.4 million
Third quarter 2026; compared with $71.7 million in third quarter 2025
Free cash flow
($3.6 million)
Third quarter 2026
Water Infrastructure revenue
$110 million
Third quarter 2026; increased 40% year over year
Senior Notes
$900 million aggregate principal amount; 7.625%
Issued subsequent to quarter-end; due November 1, 2034
Revolving credit facility
$500 million
New five-year facility; undrawn as of November 9, 2026
Key Terms
Adjusted EBITDA, gross margin before D&A, free cash flow, equity method investment, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA was $93.5 million"
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.
gross margin before D&A financial
"gross margin before D&A as gross profit before D&A divided by revenue"
free cash flow financial
"Free cash flow in the third quarter of 2026"
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.
equity method investment financial
"reflected on the balance sheet as an equity method investment"
An equity method investment is an accounting way to report ownership in another company when an investor has significant influence (commonly around 20–50% of voting rights). Instead of listing the other company’s full assets and debts, the investor records its share of that company’s profits or losses on its own income statement—like keeping track of your share of a neighborhood bakery’s monthly earnings. Investors care because those shared profits, losses and changes in the investee’s value directly affect the investor’s reported earnings and balance sheet, so this method can materially change a company’s financial picture and valuation.
seller note financial
"$35.3 million seller note"
A seller note is a type of loan or financial promise made by the person selling a business or asset to the buyer, often used to help bridge a gap in funding. It acts like the seller lending money to the buyer, with the agreement that the buyer will pay it back over time. For investors, seller notes can influence the overall risk and potential returns of a deal, as they represent an additional layer of financial commitment and potential repayment.
Earnings Snapshot
Revenue: $412.2 million · Guidance included
Third quarter of 2026
Revenue
$412.2 million
Increased 28% year over year
Net income
$22.9 million
Compared with $2.3 million in the third quarter of 2025
Adjusted EBITDA
$93.5 million
Increased 57% year over year
Guidance
Fourth-quarter 2026 Adjusted EBITDA of $95 million to $100 million; 2026 net capital expenditures of approximately $300 million to $310 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue and net income did WTTR report for the third quarter of 2026?
WTTR reported third-quarter 2026 revenue of $412.2 million and net income of $22.9 million. Revenue was $322.2 million and net income was $2.3 million in the third quarter of 2025.
What is WTTR's fourth-quarter 2026 Water Infrastructure outlook?
Select anticipates fourth-quarter 2026 Water Infrastructure revenue of $150 million to $160 million, with gross margins before D&A of 52% to 56%. The revenue outlook includes a partial-quarter contribution from Pilot Water.
What credit facility did WTTR enter after closing the Pilot Water acquisition?
Select entered a new five-year, $500 million senior secured cash flow revolving credit facility in connection with the acquisition. It was undrawn as of November 9, 2026, with approximately $483.4 million of available borrowing capacity after outstanding letters of credit.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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): November 9, 2026
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(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction
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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Ticker symbol(s)
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Name of each exchange on which
registered
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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.
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On November 9, 2026, Select Water Solutions, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter
ended September 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.
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Financial Statements and Exhibits.
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(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 November 9, 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.
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Dated: November 9, 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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3
Exhibit 99.1
FOR IMMEDIATE RELEASE
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News Release
Contacts:
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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
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Select Water Solutions Announces Third Quarter 2026 Financial, Operational and Strategic Updates
Generated third quarter 2026 consolidated revenue of $412 million, an increase of $90 million or 28% year-over-year, as compared
to the third quarter of 2025
Produced net income of $23 million during the third quarter of 2026, an increase of $21 million as compared to the third quarter
of 2025
Generated Adjusted EBITDA of $93 million during the third quarter of 2026, an increase of $34 million or 57% year-over-year, as
compared to the third quarter of 2025
Achieved record Water Infrastructure revenue of $110 million, an increase of $31 million or 40% year-over-year, as compared to
the third quarter of 2025
Completed recapitalization and sale of a majority interest in Peak Rentals in the third quarter of 2026
Subsequent to quarter end, closed the acquisition of Pilot Water Solutions, expanding Select’s leading water midstream position
across the Delaware Basin
Gainesville, TX – November 9, 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 September 30, 2026.
John Schmitz, Chairman of the Board, President and CEO, stated, “During the third quarter of 2026, we delivered consolidated revenue and
gross profit growth, resulting in $23 million of net income and $93 million of Adjusted EBITDA. The third quarter was a strong quarter for Select across all three operating segments, with our Water Infrastructure segment producing another quarter
of record revenue and gross profit in the period. Importantly, we have also made significant progress on advancing our key strategic objectives through the completed divestment of a majority interest in Peak Rentals and the subsequent acquisition
of Pilot Water Solutions.
“During the third quarter of 2026, we increased total produced water volumes handled to 1.7 million barrels per day, an increase of more than 30% relative to the third
quarter of 2025. These volume gains drove accretive financial contributions, resulting in Water Infrastructure segment revenues growing by 40% on a year-over-year basis to a record level of $110 million for the third quarter of 2026. We anticipate
continued strength in our Water Infrastructure segment, with incremental revenue growth expected in the fourth quarter for the base business before including any partial fourth quarter contributions from the recently closed acquisition of Pilot
Water.
“We are increasingly excited about the addition of Pilot Water and the additional opportunities it enables, and we expect strong growth in our Water Infrastructure
segment as we look ahead. We continue to win new contracted organic growth projects that underwrite scaled network expansion and we believe our combined infrastructure asset base will provide for incremental, critically needed solutions to help our
customers solve the complex water dynamics in the Delaware basin.
“Elsewhere, our Water Services and Chemical Technologies segments also generated strong performance relative to guided expectations for the third quarter. In the
Chemical Technologies segment, we generated revenue of $90 million, at the high end of our $85 to $90 million guided range, while the Water Services segment increased revenues 7% sequentially, outpacing macro activity and our guided expectation of
a flat sequential quarter. Additionally in the Water Services segment, we completed the recapitalization and divestment of a 55% majority interest in our Peak Rentals business late in the third quarter and we are pleased to retain long-term
exposure to Peak Rentals’ future growth through a minority ownership position in the business.
“Taking into consideration the divestment and deconsolidation of Peak Rentals and a partial quarter contribution from Pilot Water, we anticipate Adjusted EBITDA in the
fourth quarter growing to an estimated $95 - $100 million. Additionally, as we begin integrating the combined asset base and finish out Pilot Water’s ongoing capital projects during the fourth quarter, we now anticipate net capital expenditures for
2026 of approximately $300 – $310 million. Select is well positioned to fund the continued growth opportunities ahead with growing earnings, a strong balance sheet and one of the leading credit ratings and leverage profiles amongst our water
midstream peer group. Subsequent to the end of the third quarter, Select closed on an upsized $900 million inaugural senior notes offering to fund the Pilot Water acquisition and repayment of our existing term loan. Furthermore, in conjunction with
the closing of the Pilot Water acquisition, we also enhanced our liquidity position with our entry into a new $500 million revolving credit facility, more than doubling our available liquidity compared to our prior facility.
“In summary, I am proud of the 2026 performance to date for Select and am increasingly excited about the Company’s future. We have significantly enhanced our Water
Infrastructure business with the acquisition of Pilot Water and continue to add organic project wins that drive more contracted produced water volumes on our system. Our recent growth initiatives and Water Services streamlining efforts, combined
with our strong balance sheet and resilient contracted earnings profile, position Select well to deliver ongoing value creation for our shareholders,” concluded Schmitz.
2
Third Quarter 2026 Consolidated Financial Information
Revenue for the third quarter of 2026 was $412 million as compared to $396 million in the second quarter of 2026 and $322 million in the third quarter of 2025. Net
income for the third quarter of 2026 was $22.9 million as compared to net income of $22.6 million in the second quarter of 2026 and net income of $2.3 million in the third quarter of 2025.
For the third quarter of 2026, gross profit was $81.4 million, as compared to $76.8 million in the second quarter of 2026 and $43.6 million in the third quarter of
2025. Total gross margin was 19.7% in the third quarter of 2026 as compared to 19.4% in the second quarter of 2026 and 13.5% in the third quarter of 2025. Gross profit before D&A was $129.4 million for the third quarter of 2026 as compared to
$124.1 million for the second quarter of 2026 and $87.1 million for the third quarter of 2025. Gross margin before D&A for the third quarter of 2026 was 31.4% as compared to 31.3% for the second quarter of 2026 and 27.0% for the third quarter
of 2025.
SG&A during the third quarter of 2026 was $53.6 million as compared to $41.2 million during the second quarter of 2026 and $41.7 million during the third quarter
of 2025. SG&A during the third and second quarters of 2026 was impacted by transaction costs of $7.4 million and $0.6 million, respectively, while SG&A during the third quarter of 2025 was impacted by non-recurring severance and transaction
costs of $2.2 million.
Adjusted EBITDA was $93.5 million in the third quarter of 2026 as compared to $92.7 million in the second quarter of 2026 and $59.5 million in the third quarter of
2025. Adjusted EBITDA during the third quarter of 2026 was adjusted for $7.4 million of non-recurring transaction costs, $4.2 million related to a gain on the deconsolidation of Peak Rentals, $0.4 million of non-cash losses in equity investments,
and $4.8 million in other adjustments primarily consisting of non-recurring gains related to a historical insurance claim. Non-cash compensation expense accounted for an additional $8.3 million adjustment during the third 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 $110 million in the
third quarter of 2026 as compared to $102 million in the second quarter of 2026 and $79 million in the third quarter of 2025. Gross margin before D&A for Water Infrastructure was 57.2% in the third quarter of 2026 as compared to 58.3% in the
second quarter of 2026 and 53.1% in the third quarter of 2025. Water Infrastructure revenues increased 8.4% sequentially relative to the second quarter of 2026, driven primarily by increases in total produced water volumes handled to 1.7 million
barrels per day during the third quarter of 2026 from 1.5 million barrels per day during the second quarter of 2026. Looking ahead, the Company anticipates Water Infrastructure revenues of $150 - $160 million in the
fourth quarter of 2026, driven by a partial quarter contribution from Pilot Water, with gross margins before D&A in the 52% – 56% range in the fourth quarter of 2026.
3
The Water Services segment generated revenues of $212 million in the third
quarter of 2026 as compared to $198 million in the second quarter of 2026 and $167 million in the third quarter of 2025. Gross margin before D&A for Water Services was 23.8% in the third quarter of 2026 as compared to 23.0% in the second
quarter of 2026 and 18.0% in the third quarter of 2025. Water Services segment revenues increased 7.1% sequentially, driven primarily by revenue gains in the Permian Basin region. Normalizing for the divestment of Peak Rentals, which contributed
approximately 21% of the segment’s revenues year-to-date, the Company anticipates typical fourth quarter seasonality for the segment resulting in mid single-digit percent declines sequentially for the remaining segment. This is expected to result
in fourth quarter 2026 revenues of $150 - $160 million, with gross margins before D&A in the 21% – 24% range during the fourth quarter.
The Chemical Technologies segment generated revenues of $90 million in the
third quarter of 2026 as compared to $96 million in the second quarter of 2026 and $77 million in the third quarter of 2025. Gross margin before D&A for Chemical Technologies was 17.8% in the third quarter of 2026 as compared to 20.2% in the
second quarter of 2026 and 19.9% in the third quarter of 2025. For the fourth quarter of 2026, the Company anticipates revenues of $75 – $80 million, driven by the timing of key customer activity levels and fourth quarter seasonality, with gross
margins before D&A remaining steady in the 17% – 18% range for the segment.
Cash Flow and Capital Expenditures
Cash flow provided by operating activities for the third quarter of 2026 was $84 million as compared to $87 million in the second quarter of 2026 and $72 million in
the third quarter of 2025. Free cash flow in the third quarter of 2026 and the second quarter of 2026 was ($3.6) million and $17.0 million, respectively and ($19.4) million in the
third 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 third quarter of 2026 were $88.1 million, comprised of $89.5 million of capital expenditures partially offset by $1.5 million of cash
proceeds from asset sales. Cash flows from investing activities also included $2.3 million of outflows primarily due to two bolt-on asset acquisitions in the Northeast region related to multiple water disposal and solids management facilities.
Cash flows provided by financing activities during the third quarter of 2026 were $12.0 million, primarily reflecting $39.4 million of net proceeds related to the
deconsolidation of Peak Rentals partially offset by the payment of $9.5 million of quarterly dividends and distributions and $15.8 million of debt payments primarily related to the term loan component of our sustainability-linked credit facility.
4
Balance Sheet and Capital Structure
Total cash and cash equivalents were $34.1 million as of September 30, 2026, as compared to $33.4 million and $56.0 million as of June 30, 2026, and March 31, 2026,
respectively. As of September 30, 2026, the Company had $234.4 million of borrowings outstanding under the term loan component of its sustainability-linked credit facility, $12.8 million of other borrowings and no amounts drawn on the revolving
credit facility, compared to $250.0 million of outstanding borrowings under the term loan, $12.9 million of other borrowings, and no amounts drawn on the revolving credit facility as of June 30, 2026 and $250.0 million of outstanding borrowings
under the term loan and no other borrowings and no amounts drawn on the revolving credit facility as of March 31, 2026.
As of September 30, 2026, the borrowing base under the Company’s sustainability-linked credit facility was $256.2 million, compared to $264.0 million and $271.3
million as of June 30, 2026, and March 31, 2026, respectively. Available borrowing capacity under the sustainability-linked credit facility was approximately $237.5 million as of September 30, 2026, after giving effect to outstanding borrowings and
letters of credit totaling $18.7 million. As of June 30, 2026, available borrowing capacity under the credit facility was approximately $244.4 million, after accounting for outstanding borrowings and letters of credit totaling $19.6 million.
Total liquidity was $271.6 million as of September 30, 2026, as compared to $277.8 million as of June 30, 2026, and $307.7 million as of March 31, 2026. The Company
had 127,774,689 weighted average shares of Class A common stock and 8,190,743 weighted average shares of Class B common stock outstanding during the third quarter of 2026. The Company had 131,352,190 Class A shares and 7,107,701 Class B shares
issued and outstanding as of September 30, 2026.
Subsequent to quarter end, Select issued $900 million aggregate principal amount of 7.625% Senior Notes due November 1, 2034 (the “Notes”) in a private placement. The
majority of the net proceeds were used to fund the cash consideration of the Pilot Water Acquisition and repay the outstanding obligations under Select’s sustainability-linked credit facility. In connection with the closing of the Pilot Water
acquisition, Select fully repaid and terminated the sustainability-linked credit facility and entered into a new five-year $500 million senior secured cash flow revolving credit facility. The revolving credit facility remains undrawn as of today,
November 9, 2026, with approximately $483.4 million of available borrowing capacity after giving effect to outstanding letters of credit.
5
Peak Rentals Recapitalization and Divestment
On September 23, 2026, certain subsidiaries of Select sold an indirect 55% interest in Peak Rentals HoldCo, LLC (“Peak”), pursuant to a securities purchase agreement
and related transaction documents (“Peak Transaction”). Select received approximately $76.8 million of consideration including approximately $41.5 million in cash proceeds, subject to customary purchase price adjustments, and a $35.3 million seller
note. Concurrently with the Peak Transaction, Peak entered into its own standalone financing agreements, such that Peak is not expected to require ongoing capital investment from Select. Following the Peak Transaction, Select retained a 45%
indirect interest in Peak, to be reflected on the balance sheet as an equity method investment, and any future results of the Peak business arising from Select’s 45% interest will be reflected in equity in earnings (losses) of unconsolidated
entities on a go forward basis.
Third Quarter Earnings Conference Call
In conjunction with today’s release, Select has scheduled a conference call on Monday, November 9, 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 November 23, 2026, and may be accessed by calling 201-612-7415 using passcode 13757763#. 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 of the Company, expected synergies from the Pilot Water acquisition, expected financial results, the anticipated impacts of the Peak Rentals transaction and our retained minority interest, 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 risk that the benefits contemplated from the Pilot Water acquisition may not be realized, the ability of Select to successfully integrate Pilot Water’s
operations, including employees, and realize anticipated synergies and cost savings and the potential impact of the Pilot Water acquisition on relationships, including with employees, suppliers, customers, competitors and creditors, the risk that
Pilot Water’s projected financial and operational results may not be achieved, and the risk that the anticipated benefits of the Peak Rentals transaction, including the value of our retained minority interest, may not be realized. 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 revolving credit facility, the indenture governing our senior notes 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 instability in
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 U.S. Securities and Exchange Commission. 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,
|
Nine months ended Sept 30,
|
|||||||||||||||||||
|
Sept 30, 2026
|
June 30, 2026
|
Sept 30, 2025
|
2026
|
2025
|
||||||||||||||||
|
Revenue
|
||||||||||||||||||||
|
Water Infrastructure
|
$
|
110,119
|
$
|
101,614
|
$
|
78,805
|
$
|
308,469
|
$
|
232,051
|
||||||||||
|
Water Services
|
212,264
|
198,153
|
166,877
|
601,648
|
608,185
|
|||||||||||||||
|
Chemical Technologies
|
89,806
|
96,040
|
76,561
|
263,837
|
220,606
|
|||||||||||||||
|
Total revenue
|
412,189
|
395,807
|
322,243
|
1,173,954
|
1,060,842
|
|||||||||||||||
|
Costs of revenue
|
||||||||||||||||||||
|
Water Infrastructure
|
47,170
|
42,419
|
36,964
|
131,941
|
106,668
|
|||||||||||||||
|
Water Services
|
161,774
|
152,654
|
136,795
|
463,882
|
491,825
|
|||||||||||||||
|
Chemical Technologies
|
73,833
|
76,668
|
61,352
|
213,631
|
181,965
|
|||||||||||||||
|
Depreciation, amortization and accretion
|
48,020
|
47,225
|
43,578
|
140,987
|
123,307
|
|||||||||||||||
|
Total costs of revenue
|
330,797
|
318,966
|
278,689
|
950,441
|
903,765
|
|||||||||||||||
|
Gross profit
|
81,392
|
76,841
|
43,554
|
223,513
|
157,077
|
|||||||||||||||
|
Operating expenses
|
||||||||||||||||||||
|
Selling, general and administrative
|
53,610
|
41,178
|
41,674
|
135,339
|
118,041
|
|||||||||||||||
|
Depreciation and amortization
|
963
|
1,209
|
1,310
|
3,293
|
4,153
|
|||||||||||||||
|
Impairments and abandonments
|
—
|
239
|
2,279
|
5,947
|
4,904
|
|||||||||||||||
|
Lease abandonment costs
|
(67
|
)
|
(129
|
)
|
63
|
(264
|
)
|
785
|
||||||||||||
|
Total operating expenses
|
54,506
|
42,497
|
45,326
|
144,315
|
127,883
|
|||||||||||||||
|
Income (loss) from operations
|
26,886
|
34,344
|
(1,772
|
)
|
79,198
|
29,194
|
||||||||||||||
|
Other income (expense)
|
||||||||||||||||||||
|
Gain on sales of property and equipment and divestitures, net
|
1,134
|
164
|
2,600
|
1,703
|
10,468
|
|||||||||||||||
|
Interest expense, net
|
(5,354
|
)
|
(5,021
|
)
|
(5,963
|
)
|
(16,282
|
)
|
(16,484
|
)
|
||||||||||
|
Gain on deconsolidation of subsidiary
|
4,175
|
—
|
—
|
4,175
|
—
|
|||||||||||||||
|
Remeasurement gain on business combination
|
—
|
—
|
14,924
|
—
|
14,924
|
|||||||||||||||
|
Other
|
5,578
|
5
|
(2,277
|
)
|
5,272
|
(1,856
|
)
|
|||||||||||||
|
Income before income tax expense and equity in losses of unconsolidated entities
|
32,419
|
29,492
|
7,512
|
74,066
|
36,246
|
|||||||||||||||
|
Income tax expense
|
(9,043
|
)
|
(6,360
|
)
|
(434
|
)
|
(17,836
|
)
|
(7,849
|
)
|
||||||||||
|
Equity in losses of unconsolidated entities
|
(449
|
)
|
(570
|
)
|
(4,784
|
)
|
(1,309
|
)
|
(4,872
|
)
|
||||||||||
|
Net income
|
22,927
|
22,562
|
2,294
|
54,921
|
23,525
|
|||||||||||||||
|
Less: net (income) loss attributable to noncontrolling interests
|
(2,318
|
)
|
(1,527
|
)
|
389
|
(4,671
|
)
|
(1,956
|
)
|
|||||||||||
|
Net income attributable to Select Water Solutions, Inc.
|
$
|
20,609
|
$
|
21,035
|
$
|
2,683
|
$
|
50,250
|
$
|
21,569
|
||||||||||
|
Weighted average shares outstanding:
|
||||||||||||||||||||
|
Class A—Basic
|
127,774,689
|
123,146,866
|
102,512,351
|
120,219,206
|
101,616,535
|
|||||||||||||||
|
Class B—Basic
|
8,190,743
|
12,733,751
|
16,221,101
|
12,352,450
|
16,221,101
|
|||||||||||||||
|
Net income per share attributable to common stockholders:
|
||||||||||||||||||||
|
Class A—Basic
|
$
|
0.16
|
$
|
0.17
|
$
|
0.03
|
$
|
0.42
|
$
|
0.21
|
||||||||||
|
Class B—Basic
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
|
Weighted average shares outstanding:
|
||||||||||||||||||||
|
Class A—Diluted
|
131,203,538
|
125,432,751
|
104,236,739
|
122,985,500
|
103,351,926
|
|||||||||||||||
|
Class B—Diluted
|
8,190,743
|
12,733,751
|
16,221,101
|
12,352,450
|
16,221,101
|
|||||||||||||||
|
Net income per share attributable to common stockholders:
|
||||||||||||||||||||
|
Class A—Diluted
|
$
|
0.16
|
$
|
0.17
|
$
|
0.03
|
$
|
0.41
|
$
|
0.21
|
||||||||||
|
Class B—Diluted
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
8
SELECT WATER SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share data)
|
Sept 30, 2026
|
June 30, 2026
|
March 31, 2026
|
Dec 31, 2025
|
|||||||||||||
|
Assets
|
||||||||||||||||
|
Current assets
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
34,074
|
$
|
33,396
|
$
|
55,970
|
$
|
18,084
|
||||||||
|
Accounts receivable trade, net of allowance for credit losses
|
280,210
|
319,867
|
317,748
|
263,965
|
||||||||||||
|
Accounts receivable, related parties
|
61
|
57
|
22
|
63
|
||||||||||||
|
Inventories
|
48,204
|
47,996
|
37,313
|
34,278
|
||||||||||||
|
Prepaid expenses and other current assets
|
41,402
|
34,821
|
33,357
|
37,996
|
||||||||||||
|
Total current assets
|
403,951
|
436,137
|
444,410
|
354,386
|
||||||||||||
|
Property and equipment
|
1,706,686
|
1,796,566
|
1,672,966
|
1,629,406
|
||||||||||||
|
Accumulated depreciation
|
(670,999
|
)
|
(770,358
|
)
|
(736,935
|
)
|
(717,223
|
)
|
||||||||
|
Total property and equipment, net
|
1,035,687
|
1,026,208
|
936,031
|
912,183
|
||||||||||||
|
Right-of-use assets, net
|
26,579
|
28,812
|
32,195
|
28,708
|
||||||||||||
|
Goodwill
|
48,485
|
48,485
|
48,485
|
48,485
|
||||||||||||
|
Other intangible assets, net
|
102,517
|
108,038
|
101,999
|
106,204
|
||||||||||||
|
Deferred tax assets, net
|
41,273
|
45,849
|
48,337
|
48,881
|
||||||||||||
|
Investments in unconsolidated entities
|
106,673
|
77,140
|
77,709
|
78,234
|
||||||||||||
|
Note receivable
|
35,300
|
—
|
—
|
—
|
||||||||||||
|
Other long-term assets
|
17,781
|
17,072
|
17,709
|
18,531
|
||||||||||||
|
Total assets
|
$
|
1,818,246
|
$
|
1,787,741
|
$
|
1,706,875
|
$
|
1,595,612
|
||||||||
|
Liabilities and Equity
|
||||||||||||||||
|
Current liabilities
|
||||||||||||||||
|
Accounts payable
|
$
|
71,334
|
$
|
63,304
|
$
|
55,065
|
$
|
49,682
|
||||||||
|
Accrued accounts payable
|
60,606
|
49,309
|
36,846
|
46,275
|
||||||||||||
|
Accounts payable and accrued expenses, related parties
|
5,272
|
3,422
|
3,583
|
3,634
|
||||||||||||
|
Accrued salaries and benefits
|
27,852
|
26,512
|
15,772
|
17,702
|
||||||||||||
|
Accrued insurance
|
19,167
|
16,732
|
18,722
|
22,272
|
||||||||||||
|
Sales tax payable
|
2,567
|
2,906
|
3,142
|
2,435
|
||||||||||||
|
Accrued expenses and other current liabilities
|
37,329
|
39,044
|
36,573
|
37,549
|
||||||||||||
|
Current operating lease liabilities
|
9,787
|
11,355
|
14,343
|
14,247
|
||||||||||||
|
Current portion of long-term debt
|
16,275
|
63,150
|
46,875
|
31,250
|
||||||||||||
|
Current portion of finance lease obligations
|
600
|
641
|
655
|
650
|
||||||||||||
|
Total current liabilities
|
250,789
|
276,375
|
231,576
|
225,696
|
||||||||||||
|
Long-term tax receivable agreements liabilities
|
60,566
|
50,095
|
43,421
|
43,421
|
||||||||||||
|
Long-term operating lease liabilities
|
19,134
|
20,368
|
23,724
|
21,533
|
||||||||||||
|
Long-term debt
|
227,759
|
196,439
|
199,645
|
285,043
|
||||||||||||
|
Other long-term liabilities
|
107,683
|
106,944
|
88,876
|
92,852
|
||||||||||||
|
Total liabilities
|
665,931
|
650,221
|
587,242
|
668,545
|
||||||||||||
|
Commitments and contingencies
|
||||||||||||||||
|
Class A common stock, $0.01 par value
|
1,314
|
1,271
|
1,218
|
1,049
|
||||||||||||
|
Class B common stock, $0.01 par value
|
71
|
112
|
162
|
162
|
||||||||||||
|
Additional paid-in capital
|
1,229,469
|
1,203,251
|
1,166,419
|
989,329
|
||||||||||||
|
Accumulated deficit
|
(134,674
|
)
|
(155,283
|
)
|
(176,318
|
)
|
(184,924
|
)
|
||||||||
|
Total stockholders’ equity
|
1,096,180
|
1,049,351
|
991,481
|
805,616
|
||||||||||||
|
Noncontrolling interests
|
56,135
|
88,169
|
128,152
|
121,451
|
||||||||||||
|
Total equity
|
1,152,315
|
1,137,520
|
1,119,633
|
927,067
|
||||||||||||
|
Total liabilities and equity
|
$
|
1,818,246
|
$
|
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
|
Nine months ended
|
|||||||||||||||||||
|
Sept 30, 2026
|
June 30, 2026
|
Sept 30, 2025
|
Sept 30, 2026
|
Sept 30, 2025
|
||||||||||||||||
|
Cash flows from operating activities
|
||||||||||||||||||||
|
Net income
|
$
|
22,927
|
$
|
22,562
|
$
|
2,294
|
$
|
54,921
|
$
|
23,525
|
||||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||||||||||||||
|
Depreciation, amortization and accretion
|
48,983
|
48,434
|
44,888
|
144,280
|
127,460
|
|||||||||||||||
|
Deferred tax expense
|
8,849
|
6,412
|
608
|
17,655
|
7,566
|
|||||||||||||||
|
Gain on disposal of property and equipment and divestitures
|
(1,134
|
)
|
(164
|
)
|
(2,600
|
)
|
(1,703
|
)
|
(10,468
|
)
|
||||||||||
|
Equity in losses of unconsolidated entities
|
449
|
570
|
4,784
|
1,309
|
4,872
|
|||||||||||||||
|
Credit loss (recovery) expense
|
331
|
(452
|
)
|
(98
|
)
|
616
|
1,124
|
|||||||||||||
|
Amortization and write off of debt issuance costs
|
418
|
416
|
412
|
1,247
|
1,815
|
|||||||||||||||
|
Inventory adjustments
|
84
|
39
|
32
|
221
|
52
|
|||||||||||||||
|
Equity-based compensation
|
8,336
|
8,376
|
7,398
|
22,537
|
14,077
|
|||||||||||||||
|
Impairments and abandonments
|
—
|
239
|
2,279
|
5,947
|
4,904
|
|||||||||||||||
|
Remeasurement gain on business combination
|
—
|
—
|
(14,924
|
)
|
—
|
(14,924
|
)
|
|||||||||||||
|
Gain on deconsolidation of subsidiary
|
(4,175
|
)
|
—
|
—
|
(4,175
|
)
|
—
|
|||||||||||||
|
Non-cash revenue
|
(20
|
)
|
—
|
—
|
(20
|
)
|
—
|
|||||||||||||
|
Other operating items, net
|
1,893
|
670
|
625
|
3,161
|
1,778
|
|||||||||||||||
|
Changes in operating assets and liabilities
|
||||||||||||||||||||
|
Accounts receivable
|
(9,731
|
)
|
(1,702
|
)
|
31,824
|
(65,912
|
)
|
3,015
|
||||||||||||
|
Prepaid expenses and other assets
|
(13,780
|
)
|
(11,809
|
)
|
(5,874
|
)
|
(23,489
|
)
|
(1,751
|
)
|
||||||||||
|
Accounts payable and accrued liabilities
|
21,014
|
13,145
|
48
|
24,827
|
(13,824
|
)
|
||||||||||||||
|
Net cash provided by operating activities
|
84,444
|
86,736
|
71,696
|
181,422
|
149,221
|
|||||||||||||||
|
Cash flows from investing activities
|
||||||||||||||||||||
|
Net cash disposed in deconsolidation of subsidiary
|
(5,495
|
)
|
—
|
—
|
(5,495
|
)
|
—
|
|||||||||||||
|
Purchase of property and equipment
|
(89,546
|
)
|
(71,019
|
)
|
(95,230
|
)
|
(238,942
|
)
|
(223,063
|
)
|
||||||||||
|
Equity-method and preferred stock investments
|
—
|
(500
|
)
|
—
|
(500
|
)
|
(72,059
|
)
|
||||||||||||
|
Acquisitions, net of cash received
|
(2,250
|
)
|
(41,992
|
)
|
(35,136
|
)
|
(44,452
|
)
|
(52,341
|
)
|
||||||||||
|
Proceeds received from sales of property and equipment
|
1,493
|
1,298
|
4,154
|
3,847
|
13,757
|
|||||||||||||||
|
Net cash used in investing activities
|
(95,798
|
)
|
(112,213
|
)
|
(126,212
|
)
|
(285,542
|
)
|
(333,706
|
)
|
||||||||||
|
Cash flows from financing activities
|
||||||||||||||||||||
|
Borrowings from revolving line of credit
|
40,000
|
—
|
40,000
|
83,500
|
105,000
|
|||||||||||||||
|
Payments on revolving line of credit
|
(40,000
|
)
|
—
|
(10,000
|
)
|
(153,500
|
)
|
(135,000
|
)
|
|||||||||||
|
Borrowings from long-term debt
|
39,375
|
12,992
|
—
|
52,367
|
250,000
|
|||||||||||||||
|
Payments on long-term debt
|
(15,788
|
)
|
(54
|
)
|
—
|
(15,842
|
)
|
—
|
||||||||||||
|
Payments of finance lease obligations
|
(162
|
)
|
(161
|
)
|
(129
|
)
|
(481
|
)
|
(442
|
)
|
||||||||||
|
Payments of debt issuance costs
|
(1,801
|
)
|
(101
|
)
|
—
|
(1,902
|
)
|
(7,867
|
)
|
|||||||||||
|
Net proceeds from underwritten offering
|
—
|
(75
|
)
|
—
|
191,630
|
—
|
||||||||||||||
|
Dividends and distributions paid
|
(9,522
|
)
|
(9,576
|
)
|
(8,377
|
)
|
(27,850
|
)
|
(25,250
|
)
|
||||||||||
|
Payments under tax receivable agreements
|
—
|
—
|
—
|
—
|
(77
|
)
|
||||||||||||||
|
Contributions from noncontrolling interests
|
—
|
500
|
—
|
500
|
2,875
|
|||||||||||||||
|
Repurchase of common stock
|
(70
|
)
|
(621
|
)
|
(332
|
)
|
(8,309
|
)
|
(6,909
|
)
|
||||||||||
|
Net cash provided by financing activities
|
12,032
|
2,904
|
21,162
|
120,113
|
182,330
|
|||||||||||||||
|
Effect of exchange rate changes on cash
|
—
|
(1
|
)
|
(4
|
)
|
(3
|
)
|
5
|
||||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
678
|
(22,574
|
)
|
(33,358
|
)
|
15,990
|
(2,150
|
)
|
||||||||||||
|
Cash and cash equivalents, beginning of period
|
33,396
|
55,970
|
51,186
|
18,084
|
19,978
|
|||||||||||||||
|
Cash and cash equivalents, end of period
|
$
|
34,074
|
$
|
33,396
|
$
|
17,828
|
$
|
34,074
|
$
|
17,828
|
||||||||||
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 and gain on deconsolidation of subsidiary. 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
|
|
Three months ended
|
|||||||||||
|
|
Sept 30, 2026
|
June 30, 2026
|
Sept 30, 2025
|
|||||||||
|
|
(unaudited) (in thousands)
|
|||||||||||
|
Net cash provided by operating activities
|
$
|
84,444
|
$
|
86,736
|
$
|
71,696
|
||||||
|
Purchase of property and equipment
|
(89,546
|
)
|
(71,019
|
)
|
(95,230
|
)
|
||||||
|
Proceeds received from sale of property and equipment
|
1,493
|
1,298
|
4,154
|
|||||||||
|
Free cash flow
|
$
|
(3,609
|
)
|
$
|
17,015
|
$
|
(19,380
|
)
|
||||
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,
|
|||||||||||
|
|
Sept 30, 2026
|
June 30, 2026
|
Sept 30, 2025
|
|||||||||
|
|
(unaudited) (in thousands)
|
|||||||||||
|
Net income
|
$
|
22,927
|
$
|
22,562
|
$
|
2,294
|
||||||
|
Interest expense, net
|
5,354
|
5,021
|
5,963
|
|||||||||
|
Income tax expense
|
9,043
|
6,360
|
434
|
|||||||||
|
Depreciation, amortization and accretion
|
48,983
|
48,434
|
44,888
|
|||||||||
|
EBITDA
|
86,307
|
82,377
|
53,579
|
|||||||||
|
Impairments and abandonments
|
—
|
239
|
2,279
|
|||||||||
|
Remeasurement gain on business combination
|
—
|
—
|
(14,924
|
)
|
||||||||
|
Non-cash loss on sale of assets or subsidiaries
|
3
|
76
|
875
|
|||||||||
|
Non-recurring severance expenses
|
—
|
—
|
1,467
|
|||||||||
|
Non-cash compensation expenses
|
8,336
|
8,376
|
7,398
|
|||||||||
|
Transaction costs
|
7,449
|
567
|
3,289
|
|||||||||
|
Lease abandonment costs
|
(67
|
)
|
(129
|
)
|
63
|
|||||||
|
Other non-recurring (credits) charges
|
(4,829
|
)
|
671
|
671
|
||||||||
|
Gain on deconsolidation of subsidiary
|
(4,175
|
)
|
—
|
—
|
||||||||
|
Equity in losses of unconsolidated entities
|
449
|
570
|
4,784
|
|||||||||
|
Adjusted EBITDA
|
$
|
93,473
|
$
|
92,747
|
$
|
59,481
|
||||||
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,
|
||||||||||||
|
Sept 30, 2026
|
June 30, 2026
|
Sept 30, 2025
|
||||||||||
|
(unaudited) (in thousands)
|
||||||||||||
|
Gross profit by segment
|
||||||||||||
|
Water Infrastructure
|
$
|
32,714
|
$
|
30,488
|
$
|
16,776
|
||||||
|
Water Services
|
34,411
|
28,697
|
13,244
|
|||||||||
|
Chemical Technologies
|
14,267
|
17,656
|
13,534
|
|||||||||
|
As reported gross profit
|
81,392
|
76,841
|
43,554
|
|||||||||
|
Plus D&A
|
||||||||||||
|
Water Infrastructure
|
30,235
|
28,707
|
25,065
|
|||||||||
|
Water Services
|
16,079
|
16,802
|
16,838
|
|||||||||
|
Chemical Technologies
|
1,706
|
1,716
|
1,675
|
|||||||||
|
Total D&A
|
48,020
|
47,225
|
43,578
|
|||||||||
|
Gross profit before D&A
|
$
|
129,412
|
$
|
124,066
|
$
|
87,132
|
||||||
|
Gross profit before D&A by segment
|
||||||||||||
|
Water Infrastructure
|
62,949
|
59,195
|
41,841
|
|||||||||
|
Water Services
|
50,490
|
45,499
|
30,082
|
|||||||||
|
Chemical Technologies
|
15,973
|
19,372
|
15,209
|
|||||||||
|
Total gross profit before D&A
|
$
|
129,412
|
$
|
124,066
|
$
|
87,132
|
||||||
|
Gross margin before D&A by segment
|
||||||||||||
|
Water Infrastructure
|
57.2
|
%
|
58.3
|
%
|
53.1
|
%
|
||||||
|
Water Services
|
23.8
|
%
|
23.0
|
%
|
18.0
|
%
|
||||||
|
Chemical Technologies
|
17.8
|
%
|
20.2
|
%
|
19.9
|
%
|
||||||
|
Total gross margin before D&A
|
31.4
|
%
|
31.3
|
%
|
27.0
|
%
|
||||||
12