Core Insights - Global Water Resources, Inc. recognizes Arizona's Assured Water Supply "Ag-to-Urban" program as a transformative development for water sustainability, housing, and economic growth in the state [1] Group 1: Program Overview - The Ag-to-Urban program allows landowners to convert water rights from agricultural to municipal use, facilitating new development while reducing pressure on aquifers [2] - The program is designed to support the conversion of up to 384,000 acres of agricultural land, potentially enabling the construction of over 1 million new homes [5] Group 2: Company Impact - The initiative is expected to significantly benefit Global Water's utilities, GW-Santa Cruz and GW-Palo Verde, which collectively represent over 56,000 active service connections, approximately 87% of the company's total [4] - The program aligns with the company's strategic focus on Total Water Management (TWM), enhancing its ability to serve additional potential service connections [6] Group 3: Water Management and Sustainability - Irrigation for agriculture accounts for about 74% of Arizona's water supply, highlighting the importance of the Ag-to-Urban program in addressing water scarcity [5] - Global Water has been recognized for its effective implementation of TWM, which integrates water, wastewater, and recycled water management to maximize resource use [8]

Core Viewpoint - Global Water Resources, Inc. has successfully acquired seven water systems from Tucson Water, enhancing its service area and customer base in Pima County, with an expected annual revenue of approximately $1.5 million from this acquisition [1][2]. Group 1: Acquisition Details - The acquisition was valued at approximately 1.05 times the current rate base of about $7.7 million [1]. - The newly acquired systems serve around 2,200 water service connections, increasing Global Water's total customer base in Pima County to approximately 7,200 [2]. - This acquisition is part of a broader strategy of utility consolidation and expansion in the region, with nearly 5,000 customers added from previous acquisitions over the last five years [2]. Group 2: Integration and Modernization Plans - The company plans to integrate the acquired water systems into its existing operations, leveraging their strategic location for efficient management and maintenance [3]. - Global Water will modernize the systems by installing an automated meter infrastructure (AMI), which includes upgrading to smart meters for wireless usage metering [4][5]. - The AMI deployment is expected to enhance water service quality, promote conservation, and potentially lead to customer savings [6]. Group 3: Rate Strategy - As part of the acquisition, Global Water will adopt Tucson Water's rates for the new systems, with a scheduled five percent rate increase set for July 2026 [7]. - The company is developing a broader rate case strategy for these systems, aiming to implement rate structures that encourage conservation and ensure a reasonable return on capital investments [7]. Group 4: Company Overview - Global Water Resources operates 39 systems providing water, wastewater, and recycled water services, primarily in growth corridors around metropolitan Phoenix and Tucson [8]. - The company has recycled over 1 billion gallons of water annually, totaling 18.1 billion gallons since 2004 [8]. - Global Water has been recognized for its effective Total Water Management (TWM) approach, which integrates water cycle management to maximize the beneficial use of recycled water [9].

Core Insights - Global Water Resources, Inc. supports Arizona's $11.6 billion Five-Year Transportation Facilities Construction Program, which includes over $249 million for improvements on State Route 347 [1][2] - The SR 347 projects aim to enhance regional infrastructure, improve safety, and support growth in Maricopa, accommodating over 58,000 vehicles daily [2][4] - The expansion will add one lane in each direction over a 13-mile stretch, eliminate traffic signals, and upgrade intersections and bridges, with construction expected to start in fiscal year 2026 [3][4] Company Strategy and Growth - The infrastructure investment aligns with Global Water's strategy for organic growth in water and wastewater services, driven by increased demand from residential and commercial development in Maricopa [4][5] - Maricopa's population is projected to grow nearly 90% by 2040, reaching approximately 140,000, indicating a strong growth outlook for the company [4][5] Company Overview - Global Water Resources operates 32 systems providing water, wastewater, and recycled water services, primarily in growth corridors around Phoenix and Tucson [6] - The company recycles over 1 billion gallons of water annually, totaling 18.1 billion gallons since 2004, showcasing its commitment to sustainable water management [6][7] - Recognized for its Total Water Management approach, the company integrates water cycle management to maximize recycled water use and promote conservation [7][8]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $12.5 million, an increase of $800,000 or 7.3% compared to Q1 2024, primarily due to a 4.3% increase in active service connections and increased consumption [15] - Operating expenses for Q1 2025 were $11.2 million, up from $10.3 million in Q1 2024, representing an increase of approximately $900,000 or 8.3% [15] - Net income for Q1 2025 was $600,000 or $0.02 per diluted share, compared to $700,000 or $0.03 per diluted share in Q1 2024 [18] - Adjusted EBITDA for Q1 2025 was $5.6 million, an increase of approximately $200,000 or 4.4% compared to Q1 2024 [19] Business Line Data and Key Metrics Changes - Total active service connections increased by 4.3% to 65,163 as of March 31, 2025, compared to the previous year [5] - The company invested $15.2 million into infrastructure improvements and existing utilities year-to-date [6] Market Data and Key Metrics Changes - The single-family dwelling unit market in the Phoenix area saw a 15% decrease in building permits issued in Q1 2025 compared to Q1 2024 [7] - The City of Maricopa experienced a 41.5% decrease in single-family building permits in Q1 2025 compared to Q1 2024 [7] - Despite the decrease in permits, the company believes the housing shortage in Arizona will sustain demand for housing units [9] Company Strategy and Development Direction - The company remains bullish on the future potential of its Inland Port Arizona service area, anticipating significant industrial growth [12] - The company plans to leverage organic connections, new greenfield utilities, acquisitions, and rate cases to drive growth [14] - The company aims to expand its total water management platform and apply its expertise across regional service areas [25] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a mix of tailwinds and headwinds in the economy but remains confident in the company's ability to improve utility metrics [24] - The company expects continued strong customer growth, revenue growth, and earnings growth due to its strategic initiatives and local dynamics [24] Other Important Information - The Arizona Corporation Commission approved new rates for the Farmers Water Utility, effective May 1, 2025 [20] - The company filed a rate case for Santa Cruz and Palo Verde, requesting a net revenue increase of $6.5 million [21] - A successful equity capital raise of $32 million was completed in March 2025, enhancing liquidity [19] Q&A Session Summary - No questions were asked during the Q&A session, and the call concluded without any inquiries [27]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $12.5 million, an increase of $800,000 or 7.3% compared to Q1 2024, primarily due to a 4.3% increase in active service connections and increased consumption [15] - Operating expenses for Q1 2025 were $11.2 million, up from $10.3 million in Q1 2024, representing an increase of approximately $900,000 or 8.3% [16] - Net income for Q1 2025 was $600,000 or $0.02 per diluted share, compared to $700,000 or $0.03 per diluted share in Q1 2024 [17] - Adjusted EBITDA for Q1 2025 was $5.6 million, an increase of approximately $200,000 or 4.4% compared to Q1 2024 [18] - The company raised $32 million in equity capital in March 2025 and extended its line of credit to May 2027, increasing it from $15 million to $20 million, resulting in over $50 million of liquidity [19] Business Line Data and Key Metrics Changes - Total active service connections increased by 4.3% to 65,163 as of March 31, 2025, compared to the previous year [5] - The company invested $15.2 million year-to-date into infrastructure improvements and existing utilities [6] Market Data and Key Metrics Changes - The single-family dwelling unit market in the Phoenix area saw a 15% decrease in building permits in Q1 2025 compared to Q1 2024, with 6,406 permits issued [7] - The City of Maricopa experienced a 41.5% decrease in single-family building permits in Q1 2025 compared to Q1 2024, with 190 permits issued [7] - Despite the pullback in permit data, the company believes this is temporary due to ongoing housing shortages and strong population growth in Arizona [8] Company Strategy and Development Direction - The company remains bullish on future growth potential in the Inland Port Arizona service area, with significant industrial investments expected [12] - The company plans to leverage organic connections, new greenfield utilities, acquisitions, and rate cases to drive growth [14] - The company aims to expand its total water management platform and apply its expertise across regional service areas [25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged mixed economic conditions but expressed confidence in the company's ability to improve utility metrics despite these challenges [24] - The company expects continued strong growth in customer connections, revenue, and earnings driven by strategic investments and rate increases [24] Other Important Information - The Arizona Corporation Commission approved new rates for the Farmers Water Utility, effective May 1, 2025, which will positively impact future quarters [20] - The company filed a rate case for Santa Cruz and Palo Verde, requesting a net revenue increase of $6.5 million, with hearings scheduled for December 2025 [21] Q&A Session Summary Question: What is the outlook for the housing market in Arizona? - Management noted that while there has been a decrease in single-family permits, the overall demand for housing remains strong due to population growth and job opportunities [8] Question: How does the company plan to address inflation and cost increases? - Management indicated that new rates from recent rate cases will help address cost increases and support earnings growth [14]

Group 1 - Global Water Resources, Inc. reported quarterly earnings of $0.02 per share, matching the Zacks Consensus Estimate, but down from $0.03 per share a year ago [1] - The company posted revenues of $12.46 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 3.81% and up from $11.61 million year-over-year [2] - The stock has underperformed, losing about 11% since the beginning of the year compared to the S&P 500's gain of 0.1% [3] Group 2 - The earnings outlook for Global Water Resources is uncertain, with current consensus EPS estimates at $0.06 for the coming quarter and $0.22 for the current fiscal year [7] - The Zacks Rank for the stock is currently 4 (Sell), indicating expectations of underperformance in the near future [6] - The Utility - Water Supply industry is ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2025 financials show revenue growth to $12.5 million, a net income decline, and significant asset and equity increases driven by a stock offering [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) As of March 31, 2025, total assets increased to $443.9 million and shareholders' equity to $77.2 million, driven by utility plant growth, cash, and a stock offering Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Net utility plant | $378,245 | $359,379 | | Cash and cash equivalents | $31,467 | $9,047 | | Total Assets | $443,918 | $405,137 | | **Capitalization and Liabilities** | | | | Total shareholders' equity | $77,216 | $47,604 | | Long-term debt, net | $118,876 | $118,518 | | Total Capitalization and Liabilities | $443,918 | $405,137 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) Q1 2025 total revenue rose 7.3% to $12.5 million, yet operating income slightly decreased and net income fell to $0.59 million, yielding diluted EPS of $0.02 Q1 2025 vs. Q1 2024 Operating Results (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $12,457 | $11,610 | $847 | 7.3% | | Operating Income | $1,255 | $1,267 | ($12) | (0.9)% | | Net Income | $591 | $691 | ($100) | (14.5)% | | Diluted EPS | $0.02 | $0.03 | | | | Dividends declared per share | $0.08 | $0.08 | | | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(unaudited)) Shareholders' equity grew from $47.6 million to $77.2 million by March 31, 2025, primarily from a $30.8 million common stock issuance, partially offset by $1.9 million in dividends - The company issued **3,220,000 shares** of common stock, resulting in a net increase of **$30.8 million** to equity in Q1 2025[18](index=18&type=chunk) - Dividends of **$0.08 per share** were declared, totaling approximately **$1.9 million** for the quarter[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Q1 2025 cash flows show $7.5 million from operations, $15.2 million used in investing for capital expenditures, and a strong $29.8 million inflow from financing, primarily a stock issuance Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,477 | $8,068 | | Net cash used in investing activities | ($15,216) | ($5,765) | | Net cash provided by financing activities | $29,758 | $15,806 | | **Increase in cash, cash equivalents, and restricted cash** | **$22,019** | **$18,109** | - The primary source of financing cash flow in Q1 2025 was the **$31.0 million** net proceeds from the issuance of common stock[20](index=20&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies and events, including a pending acquisition, regulatory rate case updates, a recent public stock offering, and goodwill reclassification - The company entered an agreement to acquire seven public water systems from the City of Tucson for **$8.4 million**, adding approximately **2,200 water service connections**. The acquisition is expected to close in mid-2025[27](index=27&type=chunk) - The ACC approved a **$1.1 million** annual revenue increase for the GW-Farmers utility, to be phased in starting May 1, 2025. A related **$3.0 million** acquisition premium was deferred for recovery in a future rate case[28](index=28&type=chunk)[42](index=42&type=chunk) - In March 2025, the company filed a new general rate case for its GW-Santa Cruz and GW-Palo Verde utilities[29](index=29&type=chunk) - A public offering of **3,220,000 shares** of common stock was completed on March 27, 2025, generating net proceeds of approximately **$30.8 million**[43](index=43&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting revenue growth, net income decline due to higher costs, and strategic initiatives like acquisitions, rate cases, and a successful equity raise [Overview and Business Outlook](index=20&type=section&id=Overview%20and%20Business%20Outlook) The company, a water resource management firm, maintains a positive business outlook in Arizona, driven by strong population and economic growth in the Phoenix MSA - The company's strategy is centered on "Total Water Management," a comprehensive approach involving water reuse, regional planning, and advanced technology[70](index=70&type=chunk) - The Phoenix MSA, a key market, is the **10th largest in the U.S.** and is expected to see continued population growth, reaching **5.8 million by 2030**[71](index=71&type=chunk) - Job growth in the Phoenix MSA is forecasted at **2.2% for 2025**, outpacing national gains, with major investments from companies like Taiwan Semiconductor and Intel[73](index=73&type=chunk)[74](index=74&type=chunk) [Factors Affecting our Results of Operations](index=22&type=section&id=Factors%20Affecting%20our%20Results%20of%20Operations) Company results are influenced by population growth, regulation, infrastructure investment, and costs, with active connections up 4.3% and significant investments in acquisitions and infrastructure - Active service connections increased by **4.3% organically** to **65,163** as of March 31, 2025, compared to the prior year[81](index=81&type=chunk) - A pending acquisition from the City of Tucson is expected to add approximately **2,200 water service connections**[84](index=84&type=chunk) - The EPA's new regulations on PFAS will require increased capital expenditures and operating costs, which the company generally expects to recover through rates, subject to regulatory lag[89](index=89&type=chunk) - The estimated rate base as of December 31, 2024, was **$212.5 million**, an **82% increase** from the rate base in the 2019 general rate case, reflecting significant infrastructure investment[95](index=95&type=chunk) [Rate Regulation Updates](index=28&type=section&id=Rate%20Regulation%20Updates) The company actively manages regulatory filings, with GW-Santa Cruz and GW-Palo Verde filing a rate case for a $6.5 million revenue increase and Formula Rates, following a $1.1 million increase approval for GW-Farmers - On March 5, 2025, the company filed a general rate case for its GW-Santa Cruz and GW-Palo Verde utilities, requesting a **$6.5 million** net annual revenue increase and proposing the use of Formula Rates[103](index=103&type=chunk) Recent Approved Rate Cases (in millions) | Company | Approved Incremental Annual Revenue ($) | ACC Decision | Rates Effective | | :--- | :--- | :--- | :--- | | GW-Saguaro | 0.4 | 79383 | July 01, 2024 | | GW-Farmers | 1.1 | 80695 | May 01, 2025 | [Comparison of Results of Operations for the Three Months Ended March 31, 2025 and 2024](index=29&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024) Q1 2025 total revenue increased 7.3% to $12.5 million, driven by connection growth and consumption, but operating expenses rose 8.3% to $11.2 million, leading to a 14.5% net income decrease to $0.6 million Q1 2025 vs. Q1 2024 Financial Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $12,457 | $11,610 | $847 | 7.3% | | Operating expenses | $11,202 | $10,343 | ($859) | (8.3)% | | Operating income | $1,255 | $1,267 | ($12) | (0.9)% | | Net income | $591 | $691 | ($100) | (14.5)% | - Revenue growth was driven by a **4.3% increase** in total active connections and a **24.2% increase** in water consumption, particularly from irrigation, construction, and commercial customers[110](index=110&type=chunk)[111](index=111&type=chunk) - Operating expenses increased primarily due to a **$0.24 million (30.5%)** rise in utilities, chemicals, and repairs, and a **$0.39 million (13.4%)** increase in depreciation and amortization from a larger asset base[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by operations, debt, and equity, with Q1 2025 seeing a $30.8 million stock offering and an increased $20.0 million revolving credit facility, ensuring sufficient capital for future needs - In March 2025, a public offering of common stock generated approximately **$30.8 million** in net proceeds[120](index=120&type=chunk) - The revolving credit facility with Northern Trust was amended in April 2025 to increase the borrowing capacity from **$15.0 million to $20.0 million** and extend the maturity to May 2027. No amount was outstanding as of March 31, 2025[124](index=124&type=chunk) - Cash used in investing activities increased to **$15.2 million** in Q1 2025 from **$5.8 million** in Q1 2024, reflecting an increase in capital expenditures[131](index=131&type=chunk) - The company was in compliance with all financial debt covenants as of March 31, 2025[136](index=136&type=chunk) [Item 3. Qualitative and Quantitative Disclosures About Market Risk](index=34&type=section&id=ITEM%203.%20Qualitative%20and%20Quantitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company is a smaller reporting company - Not applicable[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. There were no material changes in the company's internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[139](index=139&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2025[140](index=140&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings that are expected to have a material effect on its financial condition or operations - The company is not currently involved in any legal proceeding expected to have a material effect on the company[141](index=141&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the 2024 Form 10-K[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered securities during the first quarter of 2025. It did purchase 725 shares of its common stock, which were shares withheld from employees to satisfy tax obligations related to the vesting of restricted stock awards - No unregistered securities were sold during the three months ended March 31, 2025[143](index=143&type=chunk) - The company withheld **725 shares** from employees at an average price of **$11.35 per share** to satisfy tax obligations on vested restricted stock awards[146](index=146&type=chunk) [Item 5. Other Information](index=35&type=section&id=ITEM%205.%20Other%20Information) During the first quarter of 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[149](index=149&type=chunk) [Item 6. Exhibits](index=36&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the report, including corporate governance documents, a recent loan modification agreement, CEO/CFO certifications, and XBRL data files - Key exhibits filed include the Sixth Modification Agreement to the Northern Trust loan, CEO and CFO certifications (Rule 13a-14(a) and Section 1350), and Inline XBRL documents[150](index=150&type=chunk)

[Report Overview](index=1&type=section&id=Report%20Overview) [Q1 2025 Highlights](index=1&type=section&id=Q1%202025%20Highlights) In the first quarter of 2025, Global Water Resources saw a 7.3% increase in total revenue to $12.5 million, driven by organic growth and higher consumption, while net income declined by 14.5% to $0.6 million Q1 2025 Key Financial & Operational Metrics | Metric | Q1 2025 Value | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $12.5 million | ▲ 7.3% | | Net Income | $0.6 million | ▼ 14.5% | | Adjusted EBITDA | $5.6 million | ▲ 4.4% | | Active Service Connections | 65,163 | ▲ 4.3% | | Water Consumption | 0.84 billion gallons | ▲ 24.2% | | Cash and Cash Equivalents | $31.5 million | ▲ from $9.0M at YE 2024 | - The company invested **$15.2 million** in infrastructure projects to support existing utilities and future growth[5](index=5&type=chunk) - Filed general rate case applications for two utilities, requesting a net annual revenue increase of **$6.5 million**[5](index=5&type=chunk)[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes the 7.3% top-line growth to increased active connections and consumption, highlighting progress on rate cases and a strengthened capital position of approximately $51.5 million for growth opportunities, including the pending acquisition of seven water systems - CEO Ron Fleming credited revenue growth to organic increases in active connections and higher consumption, expressing confidence in future growth through rate increases[4](index=4&type=chunk) - The company filed rate cases for GW-Santa Cruz and GW-Palo Verde, requesting a **$6.5 million** net revenue increase, and received approval for the GW-Farmers case, which will add approximately **$1.1 million** in annual revenue once phased in[6](index=6&type=chunk)[7](index=7&type=chunk) - CFO Mike Liebman noted that a **$30.8 million** stock offering and an expanded **$20 million** credit facility have positioned the company with approximately **$51.5 million** in capital resources for growth opportunities[9](index=9&type=chunk)[10](index=10&type=chunk) - The acquisition of seven water systems from the City of Tucson is expected to close in mid-2025, adding approximately **2,200** water service connections[10](index=10&type=chunk) [Subsequent Events](index=1&type=section&id=Subsequent%20Events) Following Q1, the Arizona Corporation Commission (ACC) approved the GW-Farmers rate case, expected to increase annual revenue by about $1.1 million, and the company extended its revolving credit facility's maturity and increased borrowing capacity - On April 22, 2025, the ACC approved the GW-Farmers rate case, with new rates expected to generate an approximate **$1.1 million** increase in annual revenue, implemented in three stages starting May 1, 2025[5](index=5&type=chunk) - The company extended the maturity of its revolving credit facility to May 18, 2027, and increased the available principal from **$15 million** to **$20 million**[5](index=5&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) [Financial Summary](index=3&type=section&id=Financial%20Summary) For Q1 2025, total revenues increased 7.3% to $12.5 million, while operating expenses grew 8.3% to $11.2 million, leading to a 14.5% decrease in net income to $0.6 million, though Adjusted EBITDA showed a 4.4% increase to $5.6 million [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) Total regulated revenue for Q1 2025 increased by 7.3% to $12.5 million compared to the prior year, primarily driven by a 14.4% increase in water service revenue from organic connection growth, higher consumption, and new rates Revenue Breakdown (Three Months Ended March 31) | Revenue Source | 2025 ($ thousands) | 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Water service | 5,980 | 5,226 | ▲ 14.4% | | Wastewater and recycled water service | 6,477 | 6,384 | ▲ 1.5% | | **Total revenue** | **12,457** | **11,610** | **▲ 7.3%** | - The revenue increase was attributed to organic growth in active connections, increased water consumption (from irrigation, construction, and commercial customers), and higher rates from the GW-Saguaro general rate case effective July 2024[14](index=14&type=chunk) [Operating Expenses Analysis](index=3&type=section&id=Operating%20Expenses%20Analysis) Total operating expenses rose by 8.3% to $11.2 million, mainly due to a 12.3% rise in operations and maintenance costs from higher chemical and power usage, and a 13.4% increase in depreciation and amortization from an expanded asset base Operating Expenses Breakdown (Three Months Ended March 31) | Expense Category | 2025 ($ thousands) | 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Operations and maintenance | 3,687 | 3,284 | ▲ 12.3% | | General and administrative | 4,187 | 4,125 | ▲ 1.5% | | Depreciation and amortization | 3,328 | 2,934 | ▲ 13.4% | | **Total operating expenses** | **11,202** | **10,343** | **▲ 8.3%** | - Higher O&M costs were due to increased chemical and power purchases from higher consumption, as well as new IT and labor service contracts[16](index=16&type=chunk) - The increase in depreciation and amortization was attributable to a larger base of depreciable fixed assets and new vehicle and office leases[18](index=18&type=chunk) [Other Expense](index=4&type=section&id=Other%20Expense) Other expense increased to $0.5 million in Q1 2025 from $0.3 million in Q1 2024, primarily due to a $0.2 million reduction in income from Buckeye growth premiums because of fewer new meter connections - The increase in other expense was mainly caused by a **$0.2 million** decrease in income from Buckeye growth premiums and a **$0.1 million** increase in net interest expense[19](index=19&type=chunk) [Net Income and Adjusted EBITDA](index=4&type=section&id=Net%20Income%20and%20Adjusted%20EBITDA) Net income for Q1 2025 decreased by 14.5% to $0.6 million, or $0.02 per share, while Adjusted EBITDA, a non-GAAP measure, increased by 4.4% to $5.6 million Profitability Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income | $0.6 million | $0.7 million | ▼ 14.5% | | EPS (Diluted) | $0.02 | $0.03 | ▼ 33.3% | | Adjusted EBITDA | $5.6 million | $5.4 million | ▲ 4.4% | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position as of March 31, 2025, and its performance for the first quarter, showing a significant increase in cash and shareholders' equity due to a stock offering, alongside revenue growth offset by higher expenses [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $443.9 million, up from $405.1 million at year-end 2024, driven by a rise in cash and cash equivalents to $31.5 million following a stock offering, and growth in net utility plant, with total shareholders' equity increasing substantially to $77.2 million Selected Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $31,467 | $9,047 | | Net utility plant | $378,245 | $359,379 | | **Total Assets** | **$443,918** | **$405,137** | | Long-term debt, net | $118,876 | $118,518 | | Total shareholders' equity | $77,216 | $47,604 | | **Total Capitalization and Liabilities** | **$443,918** | **$405,137** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, the company generated $12.5 million in revenue, a 7.3% increase year-over-year, but due to an 8.3% rise in operating expenses and higher other expenses, operating income slightly decreased to $1.255 million, and net income fell to $0.591 million Statement of Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $12,457 | $11,610 | | Total operating expenses | $11,202 | $10,343 | | Operating Income | $1,255 | $1,267 | | **Net Income** | **$591** | **$691** | | Diluted EPS | $0.02 | $0.03 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities was $7.5 million, with $15.2 million used in investing activities, and a positive $29.8 million from financing activities, largely due to a common stock issuance, resulting in a significant increase in total cash to $33.2 million Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,477 | $8,068 | | Net cash used in investing activities | ($15,216) | ($5,765) | | Net cash provided by financing activities | $29,758 | $15,806 | | **Increase in cash, cash equivalents, and restricted cash** | **$22,019** | **$18,109** | - Financing activities were primarily driven by the issuance of common stock, which provided net proceeds of **$31,041 thousand**[44](index=44&type=chunk) [Business Strategy and Outlook](index=4&type=section&id=Business%20Strategy%20and%20Outlook) [Business Strategy](index=4&type=section&id=Business%20Strategy) The company's near-term growth strategy focuses on increasing service connections, enhancing operational efficiencies, and securing rate increases from the ACC, with a core component being the continued aggregation of water and wastewater utilities through acquisitions to implement its regional "Total Water Management" approach - The company's strategy involves three main pillars: - Increasing service connections - Improving operating efficiencies - Increasing utility rates as approved by the ACC[23](index=23&type=chunk) - A key strategic focus is the acquisition and consolidation of water and wastewater utilities to realize benefits of regionalization and environmental stewardship[23](index=23&type=chunk) [Growth Drivers](index=4&type=section&id=Growth%20Drivers) Organic growth remains strong, with a 4.3% year-over-year increase in active service connections to 65,163, supported by positive population and economic trends in Arizona's "Sun Corridor," including projected job additions and a strong housing market - Active service connections increased by **4.3%** to **65,163** as of March 31, 2025, compared to the prior year, driven by organic growth[24](index=24&type=chunk) - The Phoenix metropolitan area's population is projected to grow to **5.8 million** by 2030, supported by a diverse employment base and low taxes[25](index=25&type=chunk) - Despite a Q1 pullback, single-family permits in the Greater Phoenix area are projected to remain strong at **27,333** for 2025, supporting future connection growth[11](index=11&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) [Dividend Policy](index=4&type=section&id=Dividend%20Policy) The company has declared a monthly cash dividend of $0.02533 per common share, corresponding to an annualized dividend of $0.30396 per share - A monthly cash dividend of **$0.02533** per common share was declared, payable on May 30, 2025, to holders of record on May 16, 2025[22](index=22&type=chunk) - The annualized dividend rate is **$0.30396** per common share[22](index=22&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) Global Water Resources will host a conference call on Thursday, May 15, 2025, at 1:00 p.m. Eastern time to discuss the first quarter 2025 financial results, with a webcast and replay available Conference Call Details | Item | Detail | | :--- | :--- | | Date | Thursday, May 15, 2025 | | Time | 1:00 p.m. Eastern time | | Toll-free dial-in | 1-833-816-1435 | | International dial-in | 1-412-317-0527 | | Conference ID | 10199311 | [Appendices](index=5&type=section&id=Appendices) [About Global Water Resources](index=5&type=section&id=About%20Global%20Water%20Resources) Global Water Resources, Inc. is a water resource management company that owns and operates 32 water, wastewater, and recycled water systems, primarily in growth areas near Phoenix and Tucson, recognized for its "Total Water Management" (TWM) approach, recycling over 1 billion gallons of water annually - The company operates **32** systems providing water, wastewater, and recycled water services in Arizona[29](index=29&type=chunk) - It utilizes an integrated "Total Water Management" (TWM) approach to manage the entire water cycle and maximize the use of recycled water[30](index=30&type=chunk) [Use of Non-GAAP Measures](index=5&type=section&id=Use%20of%20Non-GAAP%20Measures) This report includes the non-GAAP financial measures EBITDA and Adjusted EBITDA, which management defines and presents as useful supplemental indicators of operating performance, while cautioning against their use as alternatives to GAAP measures - The report uses non-GAAP measures EBITDA and Adjusted EBITDA[33](index=33&type=chunk) - Adjusted EBITDA is defined as EBITDA excluding non-recurring events, restricted stock expense, and gain/loss on disposal of assets[33](index=33&type=chunk) - Management cautions that its calculation of these measures may differ from other companies and should not be used as an alternative to GAAP measures like net income[34](index=34&type=chunk) [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) A reconciliation is provided to bridge the GAAP measure of Net Income to the non-GAAP measures of EBITDA and Adjusted EBITDA, showing that for Q1 2025, Net Income of $0.591 million reconciles to an Adjusted EBITDA of $5.643 million Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $591 | $691 | | Adjustments (Taxes, Interest, D&A) | +$4,890 | +$4,512 | | **EBITDA** | **$5,481** | **$5,203** | | EBITDA adjustments (Stock expense, etc.) | +$162 | +$200 | | **Adjusted EBITDA** | **$5,643** | **$5,403** | [Cautionary Note Regarding Forward-Looking Statements](index=6&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The press release contains forward-looking statements regarding future events and performance, based on current expectations and subject to significant risks and uncertainties, with investors cautioned to consult SEC filings for a comprehensive discussion of risk factors - The report contains forward-looking statements concerning strategies, future performance, growth, rate case outcomes, and acquisitions[36](index=36&type=chunk) - Actual results may differ materially from these statements due to a number of risks, uncertainties, and other factors[36](index=36&type=chunk) - Investors are advised to consult the "Risk Factors" section of the company's SEC filings (Form 10-K and 10-Q) for a full disclosure of potential risks[36](index=36&type=chunk)

Core Viewpoint - Global Water Resources, Inc. reported a 7.3% increase in total revenue for Q1 2025, driven by organic growth in active water and wastewater connections and increased consumption, despite a 14.5% decrease in net income [7][21]. Financial Highlights - Total revenue for Q1 2025 reached $12.5 million, up from $11.6 million in Q1 2024 [7][15]. - Net income decreased to $0.6 million or $0.02 per share, down from $0.7 million or $0.03 per share in the same period last year [21]. - Adjusted EBITDA increased by 4.4% to $5.6 million compared to $5.4 million in Q1 2024 [22]. - Cash and cash equivalents rose significantly to $31.5 million from $9.0 million at the end of 2024 [7]. - The company raised net proceeds of $30.8 million from a public offering of common stock [10]. Operational Highlights - Active service connections increased by 4.3% to 65,163 as of March 31, 2025 [25]. - Water consumption surged by 24.2% to 0.84 billion gallons [7]. - The company invested $15.2 million in infrastructure projects to support existing utilities and growth [7]. Rate Case Applications - In March 2025, the company filed general rate case applications for GW-Santa Cruz and GW-Palo Verde utilities, seeking a net revenue increase of approximately $6.5 million [6][8]. - The Arizona Corporation Commission approved a rate case for GW-Farmers, expected to generate an additional $1.1 million in annual revenue [7][8]. Business Strategy - The company aims to enhance service connections, improve operational efficiencies, and increase utility rates as approved by the Arizona Corporation Commission [24]. - Plans include acquiring seven water systems from the City of Tucson, which would add approximately 2,200 water service connections [11]. Market Outlook - Arizona's economic outlook remains strong, with projections of adding 478,000 jobs by 2032, supporting continued growth in active service connections [13]. - The Phoenix metropolitan area is expected to grow significantly, with a population forecast of 5.8 million by 2030 [26]. Dividend Policy - The company declared a monthly cash dividend of $0.02533 per common share, equating to an annualized rate of $0.30396 [23]. Management Commentary - The CEO expressed confidence in maintaining solid revenue growth through appropriate rate increases and organic growth, supporting potential net income growth [5]. - The CFO highlighted the strengthening of capital resources to fund growth opportunities [10].

Core Viewpoint - Global Water Resources, Inc. has received approval for new water rates for its GW-Farmers utility, expected to increase annual revenue by approximately $1.1 million based on 2023 service connections [1][2]. Rate Increase Details - The rate increase will be implemented in three stages: 50% on May 1, 2025, 25% on November 1, 2025, and the remaining 25% on May 1, 2026 [2]. - The Arizona Corporation Commission also approved a deferral of the recovery of an acquisition premium of approximately $3 million related to the acquisition of GW-Farmers, which will be addressed in a future rate case [2]. Company Operations and Community Impact - The additional revenue from the new rates will support improvements at GW-Farmers, benefiting customers and the Sahuarita community [3]. - GW-Farmers serves the Town of Sahuarita and surrounding unincorporated areas, covering approximately 21.0 square miles with 3,494 active water connections as of the end of 2024 [4]. Company Overview - Global Water Resources operates 32 systems providing water, wastewater, and recycled water services, primarily in growth corridors around metropolitan Phoenix and Tucson [5]. - The company recycles over 1 billion gallons of water annually, totaling 17.7 billion gallons since 2004 [5]. Total Water Management Approach - The company employs Total Water Management (TWM), an integrated approach to managing the entire water cycle, enhancing the beneficial use of recycled water and promoting conservation [6]. - TWM includes advanced technologies and smart water management programs, crucial for water-scarce areas experiencing population growth [6]. Industry Recognition - Global Water has received multiple awards, including national recognition as a 'Utility of the Future Today' for its water reuse practices [7]. - The company was also awarded Cityworks' Excellence in Departmental Practice Award for its leadership in public asset management strategies [7].