Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Consolidated Water (CWCO), and emphasizes the importance of validating these recommendations with other indicators like the Zacks Rank [1][5][10]. Brokerage Recommendations - Consolidated Water has an average brokerage recommendation (ABR) of 1.67, indicating a consensus between Strong Buy and Buy, with 66.7% of the recommendations being Strong Buy from three brokerage firms [2][5]. - Despite the positive ABR, reliance solely on brokerage recommendations for investment decisions is cautioned against, as studies show limited success in guiding investors to stocks with the best price increase potential [5][10]. Analyst Bias - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, issuing five "Strong Buy" recommendations for every "Strong Sell" [6][10]. - This misalignment of interests can misguide investors, making it essential to use brokerage recommendations as a validation tool rather than a primary decision-making factor [7][10]. Zacks Rank - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is presented as a more reliable indicator of near-term price performance compared to ABR, as it is based on earnings estimate revisions [8][9]. - The Zacks Rank is timely and reflects changes in earnings estimates quickly, unlike the ABR, which may not always be up-to-date [13]. Earnings Estimates for CWCO - The Zacks Consensus Estimate for Consolidated Water has increased by 16.6% over the past month to $1.05, indicating growing optimism among analysts regarding the company's earnings prospects [14]. - This increase in consensus estimates, along with other factors, has resulted in a Zacks Rank of 2 (Buy) for Consolidated Water, suggesting a positive outlook for the stock [15].

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling even higher [1] - The Zacks Momentum Style Score helps investors identify stocks with strong momentum by focusing on price changes and earnings estimate revisions [2][3] Group 2: Consolidated Water (CWCO) Performance - Consolidated Water currently holds a Momentum Style Score of A and a Zacks Rank of 2 (Buy) [4][12] - CWCO shares have increased by 3.02% over the past week, outperforming the Zacks Utility - Water Supply industry, which rose by 1.61% [6] - Over the past month, CWCO's price change is 11.74%, significantly higher than the industry's 0.47% [6] - In the last three months, CWCO shares have risen by 23.56%, and by 21.76% over the past year, compared to the S&P 500's increases of 10.12% and 19.99%, respectively [7] Group 3: Trading Volume and Earnings Outlook - CWCO's average 20-day trading volume is 112,263 shares, indicating a bullish sign when combined with rising stock prices [8] - In the past two months, two earnings estimates for CWCO have increased, raising the consensus estimate from $0.90 to $1.05 [10] - For the next fiscal year, one estimate has moved upwards with no downward revisions, indicating positive earnings outlook [10]

Group 1 - The article emphasizes the importance of identifying sustainable trends in short-term investing to maximize profits [1][2] - A unique short-term trading strategy called "Recent Price Strength" helps investors shortlist stocks with strong fundamentals that can maintain upward momentum [3] - Consolidated Water (CWCO) is highlighted as a strong candidate for trend investors, having increased by 24.1% over the past 12 weeks [4] Group 2 - CWCO has also shown a 12% price increase over the last four weeks, indicating that the upward trend is still intact [5] - The stock is currently trading at 89.8% of its 52-week high-low range, suggesting a potential breakout [6] - CWCO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6][7] Group 3 - The brokerage community is optimistic about CWCO, reflected in its Average Broker Recommendation of 1 (Strong Buy) [7] - The article suggests that the price trend for CWCO is likely to remain positive in the near term [8] - Investors are encouraged to explore other stocks that meet the criteria of the "Recent Price Strength" screen for potential investment opportunities [8]

Key Takeaways - Consolidated Water Co. Ltd. (CWCO) reported second-quarter 2025 earnings per share (EPS) of 32 cents, exceeding the Zacks Consensus Estimate of 20 cents by 60% and showing a 23.1% increase from the previous year's earnings of 26 cents [1][7] Total Revenues of CWCO - The total revenues for CWCO in the second quarter of 2025 were $33.6 million, surpassing the Zacks Consensus Estimate of $33 million by 2.76% and reflecting a year-over-year increase of 6.3% due to improved contributions from Retail and Manufacturing segments [2] CWCO's Q2 Segmental Details - Retail revenues increased by 6% to $8.6 million driven by higher sales volumes - Bulk revenues decreased by 2% to $8.3 million - Manufacturing revenues saw a significant decline of 33% to $5.2 million - Services revenues declined by 4% to $11.4 million, attributed to a $1.2 million decrease in construction revenues and a $0.5 million decrease in design and consulting revenues [3] Highlights of CWCO's Q2 Earnings Release - Retail water sales from the Grand Cayman utility rose by 7%, primarily due to reduced rainfall compared to the second quarter of 2024, along with population growth and increased business activity in the service area - Gross profit for the second quarter of 2025 was $12.83 million, up from $11.6 million in the same quarter of 2024 - Total general and administrative expenses increased nearly 14.7% to $7.6 million [4] CWCO's Financial Highlights - Cash and cash equivalents totaled $112.3 million as of June 30, 2025, compared to $99.4 million as of December 31, 2024 - Working capital amounted to $137.4 million as of June 30, 2025 - Total long-term debt was $0.05 million as of June 30, 2025, down from $0.07 million at the end of 2024 - Cash flow from operating activities during the first half of 2025 totaled $10.4 million, compared to $11.2 million in the year-ago period [5]

Financial Data and Key Metrics Changes - Total revenues increased by 3% to $33.6 million compared to the same quarter last year [7] - Fully diluted earnings per share from continuing operations increased by 23% [3] - Net income from continuing operations attributable to stockholders was $5.2 million or $0.32 per diluted share, compared to $4.2 million or $0.26 per diluted share in the previous year [10] - Gross profit increased to $12.8 million, representing 38% of total revenue, up from 36% in the previous year [10] Business Line Data and Key Metrics Changes - Retail segment revenue increased by 633%, driven by higher water sales due to reduced rainfall [3] - Manufacturing segment revenue rose by 33% to $5.2 million due to increased production and higher margin products [9] - Bulk water segment revenue slightly declined to $8.3 million due to lower fuel pass-through charges, but profitability improved due to better plant efficiencies [4] - Services segment revenue decreased by $474,000, primarily due to the completion of the pilot plant testing phase of the Hawaii project [8] Market Data and Key Metrics Changes - Retail water sales in Grand Cayman increased due to lower rainfall [3] - The Caribbean-based bulk water segment faced slight revenue decline but improved profitability [4] - The services segment saw a decrease in revenue due to the completion of pilot testing in Hawaii, offset by higher recurring maintenance contracts in California and Colorado [5] Company Strategy and Development Direction - The company plans to construct additional water storage and production facilities in Grand Cayman to meet growing demand [13] - Investments in new desalination plants in The Bahamas are expected to support future revenue growth [14] - The manufacturing business is diversifying and stabilizing, with a focus on higher-margin projects and opportunities in the nuclear power sector [15][31] - The company is exploring public-private partnership projects in the U.S. to address water shortages [60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth in the Caribbean and U.S. markets, particularly in wastewater treatment [22][25] - The company is addressing permitting issues for the Hawaii project and expects to begin construction early next year [6][54] - There is a positive outlook for cash generation and potential M&A opportunities to enhance shareholder value [59][60] Other Important Information - The company declared a quarterly cash dividend of $0.14 per share, a 27% increase from the previous dividend [12] - Cash and cash equivalents grew to approximately $112.2 million as of June 30 [11] Q&A Session Summary Question: Market opportunities in the Caribbean and U.S. - Management noted continued interest in wastewater projects in the U.S. and highlighted growth opportunities in the Phoenix area [22][25] Question: Pipeline development in Colorado - The company sees potential for more projects in Colorado following a recent design win [24] Question: Opportunities in The Bahamas - Management confirmed ongoing projects in The Bahamas and expressed excitement about future water supply needs [27] Question: Manufacturing expansion impact - The expansion of the manufacturing facility is expected to increase capacity and allow for larger projects [28][30] Question: Nuclear business opportunities - The nuclear sector remains a focus, with domestic clients and potential for international work through partnerships [35][36] Question: Future CapEx needs - Most capital expenditures will be directed towards growth in the Cayman utility and ongoing projects like Cat Island [41] Question: Payment issues in The Bahamas - Management reported progress in receiving payments from the Bahamian government [43][56] Question: Cash generation and M&A plans - The company is actively looking at M&A targets and exploring opportunities for public-private partnerships [59][60]

Executive Summary [Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) Consolidated Water Co. Ltd. reported a 3% increase in total revenue to $33.6 million for Q2 2025, with net income from continuing operations attributable to stockholders rising 23% to $5.2 million, or $0.32 per diluted share | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | | Total Revenue | $33.6 million | $32.5 million | 3% | | Net Income (Continuing Ops) Attributable to Stockholders | $5.2 million | $4.2 million | 23.8% | | Diluted EPS (Continuing Ops) | $0.32 | $0.26 | 23.1% | | Net Income (Including Discontinued Ops) Attributable to Stockholders | $5.1 million | $15.9 million | -67.9% | | Diluted EPS (Including Discontinued Ops) | $0.32 | $0.99 | -67.7% | - Cash and cash equivalents increased to **$112.2 million** and working capital increased to **$137.4 million** as of June 30, 2025[5](index=5&type=chunk) - Retail water sold in Grand Cayman increased **7%** due to less rainfall, population growth, and increased business activity[5](index=5&type=chunk) - The company's client approved pilot test reports and recommendations for the **$204 million** Hawaii desalination project, a significant milestone paving the way for construction[5](index=5&type=chunk)[6](index=6&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Rick McTaggart highlighted strong performance across all four business segments, particularly retail (6% revenue growth) and manufacturing (33% revenue growth), noting the diversified business model's effectiveness and the Hawaii desalination plant project's continued advancement - Retail segment revenue grew **6%** and manufacturing segment revenue grew **33%** year-over-year[7](index=7&type=chunk) - Services segment O&M revenue increased **17%**, partially offsetting decreases in construction and design/consulting revenue[7](index=7&type=chunk) - Bulk profitability increased in dollar terms and gross profit percentage despite a slight revenue decrease due to lower fuel passthrough charges[7](index=7&type=chunk) - Manufacturing segment's gross margin improved by **six percentage points**, partly driven by water purification equipment for the nuclear power industry, where the company holds NQA-1 certification[9](index=9&type=chunk) - The Hawaii desalination plant project achieved a critical milestone with client approval of pilot test reports and recommendations, with construction expected to commence early next year pending permits[10](index=10&type=chunk) Second Quarter 2025 Financial Results [Consolidated Performance](index=2&type=section&id=Consolidated%20Performance_Q2) Consolidated revenue for Q2 2025 increased 3% to $33.6 million, driven by growth in retail and manufacturing segments, partially offset by declines in bulk and services, with gross profit improving to $12.8 million (38.2% of revenue) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | :--------- | | Total Revenue | $33.6 million | $32.5 million | $1.1 million | 3% | | Gross Profit | $12.8 million | $11.6 million | $1.2 million | 10.3% | | Gross Profit Margin | 38.2% | 35.8% | 2.4 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $5.2 million | $4.2 million | $1.0 million | 23.8% | | Diluted EPS (Continuing Ops) | $0.32 | $0.26 | $0.06 | 23.1% | - Net income including discontinued operations decreased significantly from **$15.9 million** in Q2 2024 to **$5.1 million** in Q2 2025, primarily due to a **$12.1 million** gain on sale of a discontinued project in Mexico recognized in the prior year[18](index=18&type=chunk) - The company increased its quarterly cash dividend to **$0.14 per share** for Q3 2025, a **27.3%** increase from the Q2 2025 dividend of **$0.11 per share**[12](index=12&type=chunk) [Segment Performance](index=4&type=section&id=Segment%20Performance_Q2) Segment-wise, retail revenue increased 6% due to higher volumes, and manufacturing revenue surged 33%, while services revenue decreased 4% primarily from lower construction and design/consulting revenue, though O&M revenue grew 17% | Segment | Q2 2025 Revenue ($) | Q2 2024 Revenue ($) | Change ($) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | :--------- | | Retail | $8,638,026 | $8,181,884 | $456,142 | 5.6% | | Bulk | $8,274,816 | $8,447,958 | -$173,142 | -2.0% | | Services | $11,448,202 | $11,922,469 | -$474,267 | -4.0% | | Manufacturing | $5,230,035 | $3,926,847 | $1,303,188 | 33.2% | - Retail revenue increase was driven by a **7%** increase in water sold volume[5](index=5&type=chunk)[13](index=13&type=chunk) - Services segment construction revenue decreased from **$4.0 million** in Q2 2024 to **$2.8 million** in Q2 2025, mainly due to the completion of the pilot plant testing phase for the Hawaii project[5](index=5&type=chunk)[14](index=14&type=chunk)[34](index=34&type=chunk) - Operations and maintenance (O&M) revenue within the services segment increased **17%** to **$8.3 million**[5](index=5&type=chunk)[15](index=15&type=chunk)[34](index=34&type=chunk) [Gross Profit and Net Income](index=4&type=section&id=Gross%20Profit%20and%20Net%20Income_Q2) Gross profit for Q2 2025 increased to $12.8 million (38.2% of total revenue) from $11.6 million (35.8%) in Q2 2024, primarily due to higher retail and manufacturing revenues and decreased bulk segment cost of revenue, with net income from continuing operations attributable to stockholders rising to $5.2 million, or $0.32 per diluted share | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Gross Profit | $12,831,985 | $11,620,214 | $1,211,771 | 10.4% | | Gross Profit Margin | 38.2% | 35.8% | 2.4 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $5,178,761 | $4,242,411 | $936,350 | 22.1% | | Diluted EPS (Continuing Ops) | $0.32 | $0.26 | $0.06 | 23.1% | - The increase in gross profit was partially offset by a decrease in gross profit for the services segment[16](index=16&type=chunk) - Net income including discontinued operations decreased significantly due to a **$12.1 million** gain on sale of a discontinued project in Mexico recognized in Q2 2024[18](index=18&type=chunk) First Half 2025 Financial Results [Consolidated Performance](index=4&type=section&id=Consolidated%20Performance_H1) For the first half of 2025, total revenue decreased 7% to $67.3 million, primarily due to a significant decline in the services segment, with gross profit slightly decreasing to $25.1 million (37.3% of revenue) from $25.5 million (35.3%) in H1 2024 | Metric | H1 2025 ($) | H1 2024 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Total Revenue | $67.3 million | $72.2 million | -$4.9 million | -6.8% | | Gross Profit | $25.1 million | $25.5 million | -$0.4 million | -1.6% | | Gross Profit Margin | 37.3% | 35.3% | 2.0 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $10.1 million | $11.2 million | -$1.1 million | -9.8% | | Diluted EPS (Continuing Ops) | $0.63 | $0.70 | -$0.07 | -10.0% | - Net income including discontinued operations decreased from **$22.3 million** in H1 2024 to **$9.9 million** in H1 2025, primarily due to a **$12.1 million** gain on sale of a discontinued project in Mexico recognized in the prior year[27](index=27&type=chunk) [Segment Performance](index=6&type=section&id=Segment%20Performance_H1) First half segment performance showed retail revenue increasing 7% and manufacturing revenue growing 20%, while services revenue significantly decreased by 26.7% due to the completion of two construction projects in H1 2024 and a decline in Hawaii project construction revenue | Segment | H1 2025 Revenue ($) | H1 2024 Revenue ($) | Change ($) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | :--------- | | Retail | $18,049,368 | $16,806,822 | $1,242,546 | 7.4% | | Bulk | $16,686,532 | $16,790,052 | -$103,520 | -0.6% | | Services | $21,526,470 | $29,340,080 | -$7,813,610 | -26.6% | | Manufacturing | $11,044,094 | $9,231,594 | $1,812,500 | 19.6% | - Retail revenue increased due to a **10%** increase in the volume of water sold[21](index=21&type=chunk) - Services segment construction revenue decreased from **$13.4 million** in H1 2024 to **$5.0 million** in H1 2025, primarily due to the completion of two projects in H1 2024 and a **$2.1 million** decline in Hawaii contract revenue[23](index=23&type=chunk)[34](index=34&type=chunk) - Operations and maintenance (O&M) revenue within the services segment increased **13%** to **$16.0 million**[24](index=24&type=chunk)[34](index=34&type=chunk) [Gross Profit and Net Income](index=6&type=section&id=Gross%20Profit%20and%20Net%20Income_H1) Gross profit for the first half of 2025 was $25.1 million (37.3% of total revenue), a slight decrease from $25.5 million (35.3%) in H1 2024, mainly due to a $2.8 million decline in services segment gross profit, partially offset by increases in retail, bulk, and manufacturing segments | Metric | H1 2025 ($) | H1 2024 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Gross Profit | $25,138,272 | $25,498,237 | -$359,965 | -1.4% | | Gross Profit Margin | 37.3% | 35.3% | 2.0 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $10,102,871 | $11,183,825 | -$1,080,954 | -9.7% | | Diluted EPS (Continuing Ops) | $0.63 | $0.70 | -$0.07 | -10.0% | - The decrease in gross profit was primarily due to a **$2.8 million** decrease in services segment gross profit, resulting from lower construction revenue[25](index=25&type=chunk) - Net income including discontinued operations was significantly impacted by a **$12.1 million** gain on sale of a discontinued project in Mexico in the prior year[27](index=27&type=chunk) Financial Position and Supplemental Data [Balance Sheet Highlights](index=4&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, Consolidated Water reported a strong financial position with cash and cash equivalents increasing to $112.2 million and working capital at $137.4 million, while total assets grew to $257.5 million and total liabilities increased to $35.3 million, resulting in stockholders' equity of $216.6 million | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :-------------- | :---------------- | :--------- | :--------- | | Cash and Cash Equivalents | $112,246,599 | $99,350,121 | $12,896,478 | 13.0% | | Working Capital | $137,417,539 | $132,849,656 | $4,567,883 | 3.4% | | Total Assets | $257,503,568 | $243,313,181 | $14,190,387 | 5.8% | | Total Liabilities | $35,296,128 | $28,003,534 | $7,292,594 | 26.0% | | Total Stockholders' Equity | $216,563,683 | $209,960,695 | $6,602,988 | 3.1% | [Revenue Disaggregation by Source](index=10&type=section&id=Revenue%20Disaggregation) The company's revenue is disaggregated into Retail, Bulk, Services, and Manufacturing segments, with Services remaining the largest segment by revenue for Q2 2025, and Manufacturing showing the highest growth rate, while H1 2025 Services revenue saw a significant decline | Revenue Source | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--------------- | :---------- | :---------- | :---------- | :---------- | | Retail revenue | $8,638,026 | $8,181,884 | $18,049,368 | $16,806,822 | | Bulk revenue | $8,274,816 | $8,447,958 | $16,686,532 | $16,790,052 | | Services revenue | $11,448,202 | $11,922,469 | $21,526,470 | $29,340,080 | | Manufacturing revenue | $5,230,035 | $3,926,847 | $11,044,094 | $9,231,594 | | Total revenue | $33,591,079 | $32,479,158 | $67,306,464 | $72,168,548 | [Services Revenue Details](index=11&type=section&id=Services%20Revenue%20Details) Services revenue is further broken down into Construction, Operations and Maintenance (O&M), and Design and Consulting, with Q2 2025 O&M revenue increasing significantly, partially offsetting declines in construction and design/consulting revenue, and H1 2025 construction revenue seeing a substantial decrease | Services Revenue Component | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :------------------------- | :---------- | :---------- | :---------- | :---------- | | Construction revenue | $2,825,935 | $4,004,072 | $5,044,167 | $13,381,536 | | Operations and maintenance revenue | $8,255,408 | $7,068,922 | $15,980,704 | $14,168,275 | | Design and consulting revenue | $366,859 | $849,475 | $501,599 | $1,790,269 | | Total services revenue | $11,448,202 | $11,922,469 | $21,526,470 | $29,340,080 | [Condensed Consolidated Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the full condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, and the condensed consolidated statements of income for the three and six months ended June 30, 2025, and 2024, offering a comprehensive view of the company's financial health and performance [Condensed Consolidated Balance Sheets](index=13&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | ASSETS | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $112,246,599 | $99,350,121 | | Total current assets | $169,834,888 | $157,788,165 | | Property, plant and equipment, net | $53,746,797 | $52,432,282 | | Total assets | $257,503,568 | $243,313,181 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $32,417,349 | $24,938,509 | | Total liabilities | $35,296,128 | $28,003,534 | | Total Consolidated Water Co. Ltd. stockholders' equity | $216,563,683 | $209,960,695 | | Total equity | $222,207,440 | $215,309,647 | | Total liabilities and equity | $257,503,568 | $243,313,181 | [Condensed Consolidated Statements of Income](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :------------------------------------------------ | :---------- | :---------- | :---------- | :---------- | | Revenue | $33,591,079 | $32,479,158 | $67,306,464 | $72,168,548 | | Gross profit | $12,831,985 | $11,620,214 | $25,138,272 | $25,498,237 | | Income from operations | $5,283,764 | $5,010,790 | $9,894,527 | $12,324,784 | | Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | $5,178,761 | $4,242,411 | $10,102,871 | $11,183,825 | | Net income (loss) from discontinued operations | -$82,556 | $11,607,846 | -$215,637 | $11,140,780 | | Net income attributable to Consolidated Water Co. Ltd. stockholders | $5,096,205 | $15,850,257 | $9,887,234 | $22,324,605 | | Diluted earnings per share (Continuing operations) | $0.32 | $0.26 | $0.63 | $0.70 | | Diluted earnings per share (Total) | $0.32 | $0.99 | $0.62 | $1.40 | | Dividends declared per common and redeemable preferred shares | $0.14 | $0.095 | $0.25 | $0.19 | Corporate Information and Disclosures [About Consolidated Water Co. Ltd.](index=11&type=section&id=About%20Consolidated%20Water%20Co.%20Ltd.) Consolidated Water Co. Ltd. specializes in developing and operating advanced water supply and treatment plants and distribution systems, including seawater desalination facilities in the Cayman Islands, The Bahamas, and the British Virgin Islands, and water treatment/reuse facilities in the U.S., such as a $204 million project in Hawaii - The company develops and operates advanced water supply and treatment plants and water distribution systems[36](index=36&type=chunk) - Operations include seawater desalination in the Cayman Islands, The Bahamas, and the British Virgin Islands, and water treatment/reuse facilities in the United States[36](index=36&type=chunk) - Currently undertaking a **$204 million** design-build-operate project for a seawater desalination plant in Hawaii[36](index=36&type=chunk) - Manufactures and services a range of products and provides design, engineering, management, operating, and other services for commercial and municipal water production, supply, treatment, and industrial water/wastewater treatment[37](index=37&type=chunk) [Conference Call Information](index=11&type=section&id=Conference%20Call%20Information) Consolidated Water management will host a conference call on Tuesday, August 12, 2025, at 11:00 a.m. Eastern time to discuss the Q2 2025 results, with dial-in and replay information provided for interested parties - Conference call scheduled for Tuesday, August 12, 2025, at **11:00 a.m. Eastern time**[35](index=35&type=chunk) - Toll-free dial-in: **1-844-875-6913**, International dial-in: **1-412-317-6709**, Conference ID: **9065693**[35](index=35&type=chunk) - A replay will be available from **1:00 p.m. Eastern time** on the same day through August 19, 2025, via phone (Toll-free: **1-877-344-7529**, International: **1-412-317-0088**, Replay ID: **9065693**) and the company website[36](index=36&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=12&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises that the press release contains forward-looking statements, which inherently involve risks and uncertainties that could cause actual results to differ materially, including factors like market acceptance of products/services, government relationships, and new license agreement negotiations - Statements containing words like "believe", "estimate", "project", "intend", "expect", "should", "will" are forward-looking[39](index=39&type=chunk) - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially[39](index=39&type=chunk) - Factors include continued acceptance of products/services, changes in government relationships, outcome of Cayman government retail license negotiations, collection of Bahamas accounts receivable, and other economic/operational risks[39](index=39&type=chunk) - More information on risks is available in the company's SEC filings (Form 10-K, 10-Q)[39](index=39&type=chunk) [Contact Information](index=12&type=section&id=Contact%20Information) Contact details are provided for both company inquiries, directed to David W. Sasnett (Executive Vice President and CFO), and investor relations, handled by Ron Both or Grant Stude at Encore Investor Relations - Company Contact: David W. Sasnett, Executive Vice President and CFO, Tel **(954) 509-8200**[40](index=40&type=chunk) - Investor Relations Contact: Ron Both or Grant Stude, Encore Investor Relations, Tel **(949) 432-7557**[40](index=40&type=chunk)

Core Insights - Consolidated Water reported revenue of $33.59 million for the quarter ended June 2025, reflecting a 3.4% increase year-over-year and exceeding the Zacks Consensus Estimate of $32.69 million by 2.76% [1] - The company's EPS for the quarter was $0.32, up from $0.26 in the same quarter last year, representing a 60% surprise compared to the consensus estimate of $0.20 [1] Revenue Breakdown - Manufacturing revenue was reported at $5.23 million, surpassing the average estimate of $4.23 million by analysts, marking a significant year-over-year increase of 33.2% [4] - Services revenue totaled $11.45 million, slightly above the average estimate of $10.39 million, but showed a year-over-year decline of 4% [4] - Retail revenue reached $8.64 million, which was below the average estimate of $9.4 million, yet indicated a year-over-year growth of 5.6% [4] - Bulk revenue was reported at $8.28 million, slightly below the average estimate of $8.53 million, reflecting a year-over-year decrease of 2.1% [4] Stock Performance - Over the past month, shares of Consolidated Water have returned -2.3%, contrasting with the Zacks S&P 500 composite's increase of 2.7% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Insights - Consolidated Water Co. Ltd. reported a 3% increase in total revenue for Q2 2025, reaching $33.6 million compared to $32.5 million in Q2 2024, driven by growth in retail and manufacturing segments [9][5][6] - The company achieved a 23% increase in fully diluted earnings per share from continuing operations, rising to $0.32 per share from $0.26 per share in the same quarter last year [5][14] - The manufacturing segment saw a significant revenue increase of 33%, contributing to the overall positive performance of the company [4][12] Financial Summary - Total revenue for Q2 2025 was $33.6 million, up from $32.5 million in Q2 2024, with retail revenue increasing by 6% to $8.6 million and manufacturing revenue increasing by 33% to $5.2 million [9][6] - Net income from continuing operations attributable to stockholders was $5.2 million, or $0.32 per diluted share, compared to $4.2 million, or $0.26 per diluted share in Q2 2024 [14][15] - Cash and cash equivalents increased to $112.2 million, with working capital rising to $137.4 million as of June 30, 2025 [16] Operational Highlights - The retail segment experienced a 7% increase in water sold, attributed to lower rainfall and population growth in Grand Cayman [6][9] - The services segment revenue from operations and maintenance (O&M) contracts increased by 17% to $8.3 million, partially offsetting declines in construction and design consulting revenues [4][12] - The company completed the expansion of its West Bay seawater desalination plant, adding 1 million gallons per day of production capacity to meet growing demand [6][8] Project Developments - The company is advancing its $204 million seawater desalination plant project in Kalaeloa, Hawaii, with critical milestones achieved, including client approval of pilot test reports [6][8] - The manufacturing segment's performance has stabilized, with expectations for continued growth driven by increased interest in nuclear power solutions in the U.S. [7]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased as of June 30, 2025, driven by higher cash and contract liabilities, leading to a rise in total equity Balance Sheet Summary (as of June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$257,503,568** | **$243,313,181** | | Cash and cash equivalents | $112,246,599 | $99,350,121 | | Accounts receivable, net | $41,952,382 | $39,580,982 | | **Total Liabilities** | **$35,296,128** | **$28,003,534** | | Contract liabilities | $12,898,666 | $9,126,654 | | **Total Equity** | **$222,207,440** | **$215,309,647** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 revenue and net income increased, whereas H1 2025 revenue decreased with a corresponding decline in net income from continuing operations Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $33,591,079 | $32,479,158 | | Gross Profit | $12,831,985 | $11,620,214 | | Net Income from Continuing Operations (to Stockholders) | $5,178,761 | $4,242,411 | | Diluted EPS from Continuing Operations | $0.32 | $0.26 | H1 2025 vs H1 2024 Performance | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | $67,306,464 | $72,168,548 | | Gross Profit | $25,138,272 | $25,498,237 | | Net Income from Continuing Operations (to Stockholders) | $10,102,871 | $11,183,825 | | Diluted EPS from Continuing Operations | $0.63 | $0.70 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, with cash used in investing and financing activities, resulting in an overall increase in cash and cash equivalents Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $20,523,005 | $26,905,891 | | Net Cash from Investing Activities | ($4,177,011) | $31,539,511 | | Net Cash from Financing Activities | ($3,566,383) | ($3,133,273) | | **Net Increase in Cash** | **$12,779,611** | **$55,312,129** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail business activities, accounting policies, segment performance, the Mexico project, and significant contingencies like license renegotiation and accounts receivable - The company's principal activity is supplying potable water, treating wastewater, and providing water-related products and services in the Cayman Islands, The Bahamas, the United States, and the British Virgin Islands[19](index=19&type=chunk) Revenue by Source (Six Months Ended June 30) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Retail | $18,049,368 | $16,806,822 | | Bulk | $16,686,532 | $16,790,052 | | Services | $21,526,470 | $29,340,080 | | Manufacturing | $11,044,094 | $9,231,594 | | **Total Revenue** | **$67,306,464** | **$72,168,548** | - The company settled its dispute regarding the terminated Mexico project in May 2024, receiving **US$31.96 million** for the sale of land and project documentation, resulting in a significant gain from discontinued operations in Q2 2024[76](index=76&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - Significant contingencies include the ongoing renegotiation of the Cayman Water retail license with OfReg, which could materially impact future operating income, and delinquent accounts receivable from the Water and Sewerage Corporation of The Bahamas (WSC) totaling **$29.3 million** as of June 30, 2025[94](index=94&type=chunk)[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, liquidity, and capital resources, analyzing consolidated and segment results, and highlighting key risks [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 2025 saw consolidated revenue and gross profit increases, while H1 2025 revenue decreased due to lower services, with an improved gross profit margin - Q2 2025 revenue increased to **$33.6 million** from **$32.5 million** in Q2 2024, with gross profit rising to **$12.8 million** (**38% margin**) from **$11.6 million** (**36% margin**)[138](index=138&type=chunk) - H1 2025 revenue decreased to **$67.3 million** from **$72.2 million** in H1 2024, mainly due to a **$7.8 million** decline in services revenue. Gross profit was stable at approximately **$25 million**[159](index=159&type=chunk) - Retail revenue grew **7%** in Q2 and **10%** in H1 2025 due to increased water sales volume, attributed to lower rainfall in Grand Cayman[141](index=141&type=chunk)[162](index=162&type=chunk) - Manufacturing revenue increased significantly in both Q2 (**33%**) and H1 (**20%**) 2025 due to higher production activity and a better product mix, boosting the segment's gross profit[150](index=150&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=34&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, but faces significant risk from delinquent accounts receivable in The Bahamas, with planned capital expenditures - As of June 30, 2025, the company had cash and cash equivalents of **$112.2 million** and working capital of **$137.4 million**[183](index=183&type=chunk) - A significant liquidity concern is the **$29.3 million** in accounts receivable due from the WSC in The Bahamas, of which approximately **81%** was delinquent as of June 30, 2025[184](index=184&type=chunk) - Projected capital expenditures for the rest of 2025 are approximately **$8.5 million**, including projects in The Bahamas and the expansion of Aerex's manufacturing facility[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes in its market risk exposure since year-end 2024 - There were no material changes in the company's market risk exposure since year-end 2024[210](index=210&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[212](index=212&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[215](index=215&type=chunk) PART II OTHER INFORMATION [Item 1A. Risk Factors](index=41&type=section&id=Item%201A%20Risk%20Factors) This section highlights significant risks, including Cayman Islands license renegotiation, Bahamas accounts receivable delays, and contract profitability estimation challenges - The renegotiation of the Cayman Islands retail license with OfReg could result in a material reduction of operating income and cash flows historically generated from these operations[218](index=218&type=chunk)[223](index=223&type=chunk) - The Bahamas subsidiary (CW-Bahamas) faces substantial delays in collecting accounts receivable from the WSC, with **$29.3 million** outstanding and **81%** delinquent as of June 30, 2025, posing a liquidity risk[224](index=224&type=chunk)[225](index=225&type=chunk) - The profitability of construction, manufacturing, and operations contracts is highly dependent on the company's ability to accurately estimate costs, as significant overruns could materially impact financial results[229](index=229&type=chunk)[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In June 2025, the company issued preferred stock to employees for services and option exercises, exempt from SEC registration - In June 2025, the company issued a total of **9,083 shares** of preferred stock to employees for services and through stock option exercises, which were exempt from SEC registration[233](index=233&type=chunk)[234](index=234&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205%20Other%20Information) No directors or officers adopted or terminated any pre-arranged stock trading plans during the second quarter of 2025 - No directors or officers adopted or terminated any pre-arranged stock trading plans during the second quarter of 2025[235](index=235&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data

Group 1: Stock Performance - Consolidated Water (CWCO) closed at $28.83, down 1.13% from the previous day, underperforming the S&P 500 which gained 0.73% [1] - The stock has decreased by 3.79% over the past month, lagging behind the Utilities sector's gain of 3.49% and the S&P 500's gain of 0.47% [1] Group 2: Upcoming Earnings - Consolidated Water is set to announce its earnings on August 11, 2025, with projected earnings per share (EPS) of $0.2, indicating a 23.08% decrease from the same quarter last year [2] - Revenue is estimated to be $32.69 million, reflecting a 0.65% increase from the prior-year quarter [2] Group 3: Full Year Estimates - For the full year, analysts expect earnings of $0.9 per share and revenue of $132.23 million, representing changes of -19.64% and -1.3% respectively from the previous year [3] Group 4: Analyst Estimates and Outlook - Changes in analyst estimates for Consolidated Water are crucial as they indicate the evolving business trends, with positive revisions suggesting a favorable outlook on business health and profitability [4] - The Zacks Rank system, which incorporates these estimate changes, currently ranks Consolidated Water at 4 (Sell) [6] Group 5: Valuation Metrics - Consolidated Water has a Forward P/E ratio of 32.28, which is a premium compared to the industry average Forward P/E of 21.02 [7] - The Utility - Water Supply industry holds a Zacks Industry Rank of 100, placing it in the top 41% of over 250 industries [7]