Core Viewpoint - Aris Water Solutions, Inc. reported quarterly earnings of $0.17 per share, missing the Zacks Consensus Estimate of $0.27 per share, representing an earnings surprise of -37.04% [1] Financial Performance - The company posted revenues of $118.61 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.97% and showing an increase from year-ago revenues of $104.13 million [2] - Over the last four quarters, Aris Water Solutions has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Stock Performance - Aris Water Solutions shares have increased approximately 7.8% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.27 for the coming quarter and $1.25 for the current fiscal year, with revenues expected to be $110.82 million and $463.97 million respectively [7] - The estimate revisions trend for Aris Water Solutions is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Waste Removal Services industry, to which Aris Water Solutions belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting that the industry's outlook can significantly impact stock performance [8]

Financial Performance - Aris Water Solutions achieved a net income of $13.8 million for Q4 2024 and $60.2 million for the full year, representing a 39% increase year-over-year[11]. - Adjusted EBITDA for Q4 2024 was $54.5 million, up 10% year-over-year, and $211.9 million for the full year, up 21% from 2023[5]. - Total revenue for Q4 2024 reached $118.6 million, a 14% increase from $104.1 million in Q4 2023[30]. - Net income attributable to Aris Water Solutions, Inc. was $5.8 million in Q4 2024, compared to $5.4 million in Q4 2023, reflecting a 7% increase[30]. - Operating income for the year ended December 31, 2024, was $106.8 million, up from $83.9 million in 2023, representing a 27% increase[30]. - Net income for the year ended December 31, 2024, was $60.2 million, compared to $43.4 million in 2023, representing a 38.5% increase[49]. - Adjusted net income for Q4 2024 was $18.1 million, a 17.5% increase from $15.4 million in Q4 2023[49]. - Diluted adjusted net income per share for the year ended December 31, 2024, was $1.26, compared to $0.88 in 2023, marking a 43.2% increase[50]. Cash Flow and Dividends - Free cash flow for the year ended December 31, 2024, was $72.6 million, a significant recovery from a negative $29.1 million in 2023[57]. - Cash flow from operating activities for the year was $178,876,000, slightly down from $183,873,000 in 2023, reflecting a decrease of 2.2%[34]. - The company paid dividends totaling $24,559,000 for the year, compared to $21,429,000 in 2023, representing an increase of 10.0%[34]. - Aris announced a 33% increase in its quarterly dividend to $0.14 per share for Q1 2025[13]. Growth and Projections - Produced water volumes grew by 7% year-over-year, with a total of 1,548 thousand barrels per day for the full year 2024[5]. - The company set a new quarterly record for recycled water volumes, growing 16% for the year and 18% sequentially in Q4 2024[5]. - For 2025, Aris expects Adjusted EBITDA between $215 million and $235 million, with capital expenditures between $85 million and $105 million[16]. - Free cash flow is projected to be between $75 million and $95 million, an increase of approximately 17% over 2024[16]. - The company anticipates produced water handling volumes to be between 1,150 and 1,210 thousand barrels per day in 2025[21]. - The company anticipates continued growth in revenue and profitability, with guidance for 2025 reflecting positive market conditions[28]. Capital Expenditures and Assets - Capital expenditures for the full year 2024 were $101 million, down 35% from 2023[5]. - Capital expenditures for the year totaled $99,985,000, down from $169,736,000 in 2023, showing a reduction of 41.0%[34]. - Total assets grew to $1.42 billion in 2024, compared to $1.34 billion in 2023, indicating a 6% increase[32]. - Total liabilities increased to $684.8 million in 2024, compared to $652.6 million in 2023, a rise of 5%[32]. - Total stockholders' equity attributable to Aris Water Solutions, Inc. increased to $348.6 million in 2024, up from $323.9 million in 2023, a growth of 8%[32]. Operational Metrics - Produced water handling volumes for the quarter were 1,112,000 barrels per day, slightly up from 1,095,000 barrels per day in Q4 2023[46]. - Total water solutions volumes sold reached 524,000 barrels per day, an increase from 482,000 barrels per day in the same quarter last year, marking an 8.7% growth[46]. - The company reported a gross margin per barrel of $0.31 for Q4 2024, compared to $0.27 in Q4 2023, indicating a year-over-year improvement of 14.8%[46]. - The company reported a gross margin of $46.5 million for Q4 2024, up from $39.6 million in Q4 2023, indicating a 17.5% increase[48]. - Adjusted operating margin for Q4 2024 was $66.6 million, up from $59.1 million in Q4 2023, reflecting a 12.5% growth[48]. Research and Development - Research and development expenses decreased to $3.0 million for the year ended December 31, 2024, from $3.1 million in 2023[30]. Debt Management - The leverage ratio as of December 31, 2024, was calculated based on net debt divided by Adjusted EBITDA for the trailing twelve months, indicating a focus on managing debt levels[40]. - The leverage ratio as of December 31, 2024, was 1.99, calculated using net debt of $422.1 million and trailing twelve months adjusted EBITDA of $211.9 million[53].

Core Insights - Analysts project Aris Water Solutions, Inc. (ARIS) will report quarterly earnings of $0.27 per share, reflecting a year-over-year increase of 58.8% [1] - Revenue is expected to reach $110.88 million, marking a 6.5% increase from the same quarter last year [1] - The consensus EPS estimate has been revised upward by 3.1% over the past 30 days, indicating a collective reassessment by analysts [2] Revenue Estimates - Revenue from Total Water Solutions including Affiliates is estimated at $23.07 million, a decrease of 3.3% from the prior-year quarter [5] - Revenue from Total Produced Water Handling including Affiliates is projected at $85.89 million, an increase of 7.7% from the year-ago quarter [5] Volume Estimates - Total Volumes are expected to be 1,576.12 thousand barrels of water per day, slightly down from 1,577 thousand barrels per day reported in the same quarter last year [6] - Total Water Solutions Volumes are estimated at 478.13 thousand barrels per day, compared to 482 thousand barrels per day in the previous year [6] - Produced Water Handling Volumes are projected to reach 1,097.99 thousand barrels per day, slightly up from 1,095 thousand barrels per day reported in the same quarter last year [7] Market Performance - Aris Water Solutions shares have experienced a decline of 1.9% over the past month, compared to a 1.8% decline in the Zacks S&P 500 composite [8] - The company holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [8]

Company Overview - Aris Water Solutions, Inc. (NYSE: ARIS) is a small-cap environmental infrastructure company focused on water management for the oil and gas industry with a market cap of $1.5 billion [1] Investment Insights - The company has demonstrated remarkable growth potential within its niche market, indicating opportunities for long-term investment [1] Analyst Background - The analysis is provided by a professional with extensive experience in equity and real estate markets, emphasizing a strategy of identifying long-only opportunities that offer safe and growing dividends [1]

Company Overview - Aris Water Solutions, Inc. (ARIS) shares increased by 5.8% to $24.69 in the last trading session, following a 9.5% loss over the previous four weeks, indicating a significant recovery in stock performance [1] - The stock's price increase is attributed to consistent volume growth, strong margins, and efficient capital investment, which generate excess cash for reinvestment and shareholder returns [2] Earnings and Revenue Expectations - The company is projected to report quarterly earnings of $0.26 per share, reflecting a year-over-year increase of 52.9% [2] - Expected revenues for the upcoming report are $110.83 million, representing a 6.4% increase from the same quarter last year [2] Market Trends and Stock Performance - Trends in earnings estimate revisions are closely correlated with near-term stock price movements, suggesting that the stability of earnings estimates is crucial for sustained stock performance [3] - The consensus EPS estimate for Aris Water Solutions has remained unchanged over the last 30 days, indicating a lack of upward momentum in earnings revisions [4] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [4] Industry Context - Aris Water Solutions operates within the Zacks Waste Removal Services industry, where Republic Services (RSG) also competes, having closed 0.3% lower at $206.29 in the last trading session [4] - Republic Services has seen a -1.5% return over the past month, contrasting with the recent performance of Aris Water Solutions [4]

Analyst's Disclosure - The analyst has no current stock, option, or derivative positions in the mentioned companies but may initiate a beneficial Long position in ARIS through stock purchase or call options within the next 72 hours [1] - The article reflects the analyst's personal opinions and is not influenced by any compensation or business relationships with the mentioned companies [1] Seeking Alpha's Disclosure - Past performance does not guarantee future results, and no specific investment recommendations are provided [2] - The views expressed may not represent those of Seeking Alpha as a whole, and the platform is not a licensed securities dealer, broker, or investment adviser [2] - Analysts on Seeking Alpha include both professional and individual investors who may not be licensed or certified by any regulatory body [2]

Core Viewpoint - The article discusses the current bullish momentum in the stock market, particularly in biotech and crypto sectors, despite ongoing recession fears and bearish sentiments from analysts [1][4][17]. Market Sentiment - The market has shown resilience, with significant gains since the beginning of 2023, contradicting earlier bearish predictions [2][3]. - The S&P 500 index, which started at approximately 3,824 on January 2, 2023, could still be up 22% even if it were to drop by the same percentage today, highlighting the market's upward trajectory [3]. Investment Opportunities - Select biotechs and crypto-related trades are experiencing strong bullish momentum, with notable gains reported, such as Design Therapeutics at +24% and VanEck Vectors Digital Transformation ETF at +49% [6]. - The biotech sector is expected to benefit from falling interest rates, with potential for significant growth in small-cap biotechs [6]. Sector Analysis - The pharmaceutical industry faces potential risks with the upcoming Trump administration, particularly with RFK Jr. being considered for a key health position, prompting caution among investors [7][8]. - Water consumption in the tech industry is becoming a critical issue, with companies like Aris Water Solutions (ARIS) gaining attention due to their role in addressing this challenge [11][12]. Quantitative Investment Strategies - Louis Navellier employs quantitative analysis to identify strong stocks, achieving notable returns with investments in Electromed (+43.55%), Revolve Group (+28.47%), and Sezzle (+188%) [15][16]. - The article emphasizes the importance of recognizing and capitalizing on bullish momentum while remaining cautious about market valuations [16][17].

Company Overview - Aris Mining Corporation is a gold producer operating in Latin America, currently managing two mines with ongoing expansions in Colombia [3] - The company produced 226,000 ounces of gold in 2023 and aims to reach a production rate of approximately 500,000 ounces per year by the second half of 2026 [3] - Aris Mining operates the 51% owned Soto Norte joint venture, with studies for a new development plan expected to yield results in early 2025 [3] - The company is also advancing the Toroparu gold/copper project in Guyana and is focused on pursuing acquisitions and growth opportunities for value creation [3] Upcoming Financial Results - Aris Mining will publish its Q3 2024 financial results after market close on November 12, 2024 [1] - A conference call to discuss the results is scheduled for November 13, 2024, at 9:00 am ET/6:00 am PT, which will be accessible via webcast [1] Conference Call Details - Participants can expedite access to the conference call by registering at Diamond Pass Registration [2] - Call-in details for live participation include a toll-free number for North America and an international number [2] - An audio recording of the call will be available until November 20, 2024, with specific access codes provided for replay [2]

Financial Data and Key Metrics - Adjusted EBITDA for Q3 2024 was $54.3 million, up 9% sequentially and 21% year-over-year [14][24] - Operating margins improved to $0.45 per barrel, up 13% year-over-year, driven by operational efficiencies and cost reductions [13][24] - Full-year 2024 adjusted EBITDA guidance increased to $208-$212 million, reflecting strong performance and slightly increased customer activity levels [15][28] - Q3 capital expenditures were $8 million, with full-year 2024 CapEx expected to be $98-$105 million [26] - Net debt stood at $422 million, with a debt-to-adjusted EBITDA ratio of 2.0x, well below the target range of 2.5x-3.5x [30] Business Line Performance - Produced water volumes grew 2% sequentially and 6% year-over-year in Q3 2024 [11] - Recycled water volumes increased 25% sequentially and 16% year-over-year, driven by higher completion activity [12] - Skim oil recoveries improved significantly, with Q4 2024 guidance reflecting a 20% increase compared to Q3 [27] - Water Solutions business volumes are expected to average 450,000-490,000 barrels per day in Q4 2024 [28] Market and Industry Trends - The Permian Basin, particularly the Northern Delaware Basin, continues to drive growth due to low break-even costs and decades of remaining inventory [16] - Steady to moderately increasing activity levels are expected to continue into 2025, supported by strong customer forecasts [16][17] - The company anticipates mid-single-digit growth in produced water volumes in 2025, consistent with customer growth rates and overall oil production forecasts in the Delaware Basin [17][35] Strategic Direction and Competitive Landscape - The company is focused on reinvesting in growth projects while enhancing shareholder returns, supported by strong cash flow generation [8][18] - Opportunities for inorganic growth are being evaluated, with a focus on adjacent assets in core operating areas that offer strategic fit and financial accretion [9] - Efforts to improve margins include CPI-linked revenue escalation clauses, water handling cost efficiencies, and potential reductions in third-party landowner royalties [19][20] - The company is advancing beneficial reuse projects, including desalination technologies and mineral extraction (e.g., iodine, magnesium, ammonia, lithium), with commercialization expected in 2025 [21][22][23] Management Commentary on Operating Environment and Outlook - Management remains optimistic about the end of 2024 and beyond, citing strong operational execution and customer activity levels [10][32] - The company expects to maintain a similar level of capital investment in 2025 as in 2024, with continued volume growth and margin improvements driving increased cash flow [18] - Regulatory progress on beneficial reuse and surface water disposal in Texas is ongoing, with potential cost advantages over traditional underground injection [40][43] Other Key Information - The company declared a Q4 2024 dividend of $0.105 per share, with plans to revisit the dividend payout level after Q4, given strong liquidity and low leverage [31][55] - The company is exploring opportunities in industrial water treatment, leveraging its expertise in handling complex water [61] Q&A Session Summary Question: 2025 Volume Growth and EBITDA Outlook - The company anticipates mid-single-digit growth in produced water volumes (4%-7%) in 2025, aligning with customer forecasts [35] - EBITDA growth will depend on volume increases, margin improvements, and efficient capital allocation [35] Question: Disposal Royalties and Surface Acreage Acquisition - The company is evaluating opportunities to reduce third-party landowner royalties, including acquiring surface acreage or partnering with landowners [38] - A long runway of permits and diverse locations provides flexibility for future growth [38] Question: Regulatory Update on Beneficial Reuse and Surface Disposal - Progress is being made on permitting for surface discharge into the Pecos River, with potential cost advantages over underground disposal [43] - High salinity levels in Delaware Basin produced water require treatment before surface discharge [43] Question: Capital Allocation Priorities for 2025 - The company remains disciplined in evaluating accretive M&A opportunities but has not yet found suitable targets [59] - Share repurchases are being considered but are less likely due to limited float [59] - Dividend growth is expected to align with sustainable business growth, with no significant step changes anticipated [55] Question: Skim Oil Recovery Improvements - A dedicated team and operational changes have driven significant improvements in skim oil recoveries [68] - The company expects sustained recoveries, with some variability quarter-to-quarter [14][68] Question: Potential Impact of New Mexico Setback Rules - Customers have adjusted drilling schedules and permits to mitigate potential impacts, with no expected disruption to the company's operations [65]

Financial Performance - Total revenue for Q3 2024 was $112.3 million, reflecting a 13% increase from Q3 2023[109]. - Net income for Q3 2024 was $16.4 million, an increase of 34% compared to Q3 2023[109]. - Adjusted EBITDA for Q3 2024 was $54.3 million, up 21% from Q3 2023[95]. - Total revenue for the nine months ended September 30, 2024, was $316,835,000, representing a 10% increase compared to $287,993,000 in 2023[111]. - Operating income rose to $80,089,000, a 36% increase from $58,886,000 in the previous year[111]. - Net income for the nine months ended September 30, 2024, was $46,373,000, reflecting a 53% increase from $30,381,000 in 2023[111]. - Total revenue for the three months ended September 30, 2024, was $112.3 million, an increase from $99.8 million for the same period in 2023, representing a growth of approximately 12.5%[143]. - EBITDA for the three months ended September 30, 2024, was $54.3 million, compared to $44.9 million for the same period in 2023, reflecting a year-over-year increase of about 21.5%[143]. - Adjusted operating margin for the three months ended September 30, 2024, was $65.8 million, up from $55.1 million in the prior year, indicating a growth of approximately 19.5%[144]. Production and Handling - Total produced water handling volumes reached 1,118 thousand barrels of water per day, a 6% increase compared to Q3 2023[95]. - Produced Water Handling revenue increased by $29,537,000, or 21%, from $143,390,000 in 2023 to $172,927,000 in 2024[111]. - Produced water handling revenues for the three months ended September 30, 2024, increased to $88.424 million from $75.610 million for the same period in 2023, representing a growth of 16.4%[122]. - The average produced water handling fees per barrel increased to $0.75 for the three months ended September 30, 2024, compared to $0.70 for the same period in 2023, reflecting a growth of 7.1%[122]. - Produced Water Handling volumes increased by 62 thousand barrels per day (kbwpd), or 6%, from 1,056 kbwpd in 2023 to 1,118 kbwpd in 2024[113]. Costs and Expenses - General and administrative expenses increased by 29% to $17.4 million compared to Q3 2023[109]. - Total operating expenses increased by 31% from $38,992,000 in 2023 to $51,251,000 in 2024[111]. - Direct operating costs per barrel remained consistent at $0.32, unchanged from Q3 2023[95]. - Direct operating costs for the three months ended September 30, 2024, increased by $1.9 million, primarily due to higher produced water volumes handled, while remaining flat on a per barrel basis[126]. - General and administrative expenses increased by $3.9 million for the three months ended September 30, 2024, primarily due to a $1.8 million rise in stock-based compensation expenses[129]. - Research and Development expenses increased by 39% from $1,867,000 in 2023 to $2,601,000 in 2024[111]. - Research and development expenses related to the Joint Industry Project (JIP) for the three months ended September 30, 2024, were $2.0 million, compared to $1.8 million for the same period in 2023[132]. Revenue Sources - Water Solutions revenue decreased by $7,083,000, or 14%, from $49,180,000 in 2023 to $42,097,000 in 2024[111]. - Skim Oil volumes for the nine months ended September 30, 2024, increased by 492 barrels per day (bpd), or 42%, from 1,171 bpd in 2023 to 1,663 bpd in 2024[121]. - Skim oil sales revenue for the three months ended September 30, 2024, rose to $10.996 million, up from $7.731 million in the prior year, marking an increase of 42.9%[122]. - The company recorded $2.0 million in "Other Revenues" for the three months ended September 30, 2024, related to a new agreement for constructing and operating a water separation facility[125]. Future Plans and Investments - The company signed a letter of intent to construct an iodine extraction facility in the Permian Basin, expected to be operational by year-end 2025[101]. - The company is leading a Joint Industry Project with major oil companies to develop technologies for treating produced water for beneficial reuse, with Phase 1 testing expected to complete by the end of 2024[97]. - Capital expenditures are expected to be between $98.0 million and $105.0 million for 2024, based on the latest outlooks from contracted customers[155]. Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended September 30, 2024, totaled $111.2 million, down from $152.5 million for the same period in 2023, a decrease of about 27%[152]. - As of September 30, 2024, the company had a cash balance of $32.8 million and working capital of $64.3 million[147]. - The company had $400.0 million in face value of Notes outstanding and $55.0 million under its Credit Facility as of September 30, 2024[147]. - For the nine months ended September 30, 2024, net cash used in investing activities was $87.0 million, a decrease from $111.8 million in the same period of 2023[153]. - The company is subject to interest rate risk, with $55.0 million of outstanding borrowings under its Credit Facility at a weighted average interest rate of 8.017% as of September 30, 2024[161]. Dividends - The company declared a dividend of $0.105 per share for the fourth quarter of 2024, consistent with previous quarterly distributions[151].