To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

Accessibility StatementSkip Navigation JOAQUIN, Texas, Oct. 22, 2025 /PRNewswire/ -- Select Water Solutions, Inc. ("Select", NYSE: WTTR) and Mariana Minerals ("Mariana") today announced the groundbreaking of a pioneering produced water lithium extraction facility in Joaquin, Texas, located in Shelby County, within the Haynesville shale region. The facility will be funded, designed, constructed, and operated by Mariana Minerals and leverage Select's extensive water treatment expertise and existing pipeline ...

Core Viewpoint - Select Water Solutions, Inc. (NYSE:WTTR) has gained significant investor attention following a 'Buy' rating and a price target of $18 initiated by Texas Capital, despite a decline of over 21% in share price since the beginning of 2025 [2][4]. Company Overview - Select Water Solutions, Inc. is a leader in water management and chemical technology, primarily serving the oil and gas industry as well as other industrial applications [2]. - The company is undergoing a transformation to an infrastructure-led business model, which aims to replace volatile, activity-based revenue with more stable and predictable cash flows from long-term contracts [3]. Market Performance - The share price of Select Water Solutions surged by 10.27% between October 10 and October 17, 2025, making it one of the top-performing energy stocks for that week [1]. - Despite the recent increase, the company's share price has experienced a significant decline of over 21% since the start of 2025 [4]. Investment Potential - The research firm views Select Water Solutions as an attractive investment opportunity due to its position as a market leader in complete lifecycle water solutions and its relative valuation [3].

, /PRNewswire/ -- Select Water Solutions, Inc. (NYSE: WTTR) today announced that it will release 2025 third quarter financial results on November 4, 2025 after the market closes. In conjunction with the release, the Company has scheduled a conference call, which will also be broadcast live over the Internet, on Wednesday, November 5, 2025 at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). What: Select Water Solutions 2025 Third Quarter Earnings Conference Call When: Wednesday, November 5, 2025 at 11:00 a ...

Summary of Select Water Solutions (WTTR) FY Conference Call Company Overview - Select Water Solutions is a publicly traded company on the New York Stock Exchange, founded in 2007 and went public in April 2017 [1] - The company operates in the oil and gas water space, focusing on infrastructure for water recycling and disposal [2] Industry and Market Position - The company claims to be the fastest-growing infrastructure platform in the oil and gas water sector [2] - It has established long-term contracts that provide economic value through full life cycle water management [3] - The company has a low capital maintenance business model, with a focus on free cash flow conversion [4] Financial Performance - The company has a conservative balance sheet with debt less than one year of EBITDA [7] - It has a regular dividend and has engaged in share buybacks over the past five years [7] - The gross margin for the infrastructure segment was reported at 55.6% in the last quarter [26] Business Segments - The company operates in three segments: water infrastructure, water services, and chemical technology [9] - The water infrastructure segment is less cyclical and has high gross margins, while the water services segment has lower margins (22%-25%) [10] - The chemical technology segment has the lowest margins, primarily serving upstream oil and gas companies [10][41] Growth and Expansion - The company has expanded its recycling capacity to 3 million barrels per day and has over 100 disposal wells [14] - It has dedicated acreage of over 2.5 million acres, with a right of first refusal (ROFR) on additional acreage [16] - The company is transitioning into municipal and industrial markets, focusing on long-term water leasing agreements [6][31] Strategic Initiatives - The company is investing in beneficial reuse of water, treating it to an environmentally acceptable quality for agricultural use [33] - It is also exploring opportunities in direct air carbon capture and other industrial applications [32] - The company has a significant backlog of contracts and is focused on converting conversations into contracts before investing capital [28] Risks and Considerations - The company acknowledges potential impacts from a slowdown in completion activity, which could affect water volumes needed for fracking [40] - Regulatory changes and seismic activity in the Permian Basin could also impact operations [43][44] Conclusion - Select Water Solutions is positioned as a leader in the oilfield water infrastructure sector, with a strong focus on growth, shareholder returns, and sustainable practices [35] - The company believes its infrastructure model will provide better free cash flow compared to previous service models, with significant opportunities in both the oil and gas sector and municipal markets [36][37]

Core Viewpoint - Select Water Solutions has announced its dual listing on NYSE Texas, enhancing its presence in the Texas market where it was founded and operates predominantly [1][2]. Company Overview - Select Water Solutions is a leading provider of sustainable water management and chemical solutions for the energy industry, emphasizing safe and environmentally responsible water management throughout the lifecycle of a well [4]. - The company maintains critical water infrastructure assets, chemical manufacturing, and water treatment and recycling capabilities, which are essential for its operations [4]. Listing Details - The company will retain its primary listing on the New York Stock Exchange while trading under the same ticker symbol "WTTR" on NYSE Texas [3]. - As a Founding Member of NYSE Texas, Select Water Solutions expresses its commitment to supporting the growth of Texas's economy and entrepreneurial spirit [2].

[Filing Information](index=1&type=section&id=Filing%20Information) This is a Quarterly Report on Form 10-Q for the period ended June 30, 2025 - This is a Quarterly Report on Form 10-Q for the period ended **June 30, 2025**[2](index=2&type=chunk) - The registrant, **SELECT WATER SOLUTIONS, INC.**, is a large accelerated filer and not an emerging growth company or a shell company[2](index=2&type=chunk)[3](index=3&type=chunk) | Title of each class | Trading Symbol | Name of each exchange on which registered | | :------------------ | :------------- | :---------------------------------------- | | Class A common stock, par value $0.01 per share | WTTR | New York Stock Exchange | [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) The report includes forward-looking statements based on current expectations and assumptions, subject to various risks and uncertainties - The report includes forward-looking statements based on current expectations and assumptions, which are subject to various risks and uncertainties[7](index=7&type=chunk) - Important factors that could cause actual results to differ materially include global economic distress, actions by **OPEC+**, changing trade policies, and volatility in oil and gas prices[8](index=8&type=chunk)[9](index=9&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements after the date they are made[10](index=10&type=chunk) [PART I—FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income, changes in equity, and cash flows, with detailed notes for periods ended **June 30, 2025**, and **December 31, 2024** [Consolidated Balance Sheets](index=8&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $1,546,489 | $1,366,282 | $180,207 | 13.2% | | Total Liabilities | $623,370 | $450,748 | $172,622 | 38.3% | | Total Equity | $923,119 | $915,534 | $7,585 | 0.8% | | Cash and cash equivalents | $51,186 | $19,978 | $31,208 | 156.2% | | Accounts receivable trade, net | $309,211 | $281,569 | $27,642 | 9.8% | | Total current assets | $439,425 | $385,498 | $53,927 | 14.0% | | Total property and equipment, net | $800,407 | $725,654 | $74,753 | 10.3% | | Investments in unconsolidated entities | $83,272 | $11,347 | $71,925 | 633.9% | | Total current liabilities | $219,057 | $233,375 | $(14,318) | (6.1)% | | Long-term debt, net | $270,837 | $85,000 | $185,837 | 218.6% | [Consolidated Statements of Operations](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | % Change | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :------- | | Total revenue | $364,215 | $365,131 | $(916) | (0.3)% | | Gross profit | $57,753 | $60,156 | $(2,403) | (4.0)% | | Income from operations | $15,425 | $20,364 | $(4,939) | (24.3)% | | Net income attributable to Select Water Solutions, Inc. | $10,647 | $12,868 | $(2,221) | (17.3)% | | Class A—Basic EPS | $0.10 | $0.13 | $(0.03) | (23.1)% | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | % Change | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :------- | | Total revenue | $738,599 | $731,679 | $6,920 | 0.9% | | Gross profit | $113,523 | $112,833 | $690 | 0.6% | | Income from operations | $30,966 | $27,369 | $3,597 | 13.1% | | Net income attributable to Select Water Solutions, Inc. | $18,886 | $16,493 | $2,393 | 14.5% | | Class A—Basic EPS | $0.19 | $0.17 | $0.02 | 11.8% | [Consolidated Statements of Comprehensive Income](index=10&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | % Change | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :------- | | Comprehensive income attributable to Select Water Solutions, Inc. | $10,647 | $12,868 | $(2,221) | (17.3)% | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | % Change | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :------- | | Comprehensive income attributable to Select Water Solutions, Inc. | $18,886 | $16,493 | $2,393 | 14.5% | [Consolidated Statements of Changes in Equity](index=11&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Balance as of December 31, 2024/2023 | $915,534 | $892,172 | | Equity-based compensation | $6,679 | $12,560 | | Issuance of restricted shares | $1,158 | $1,262 | | Repurchase of common stock | $(6,145) | $(7,031) | | Dividends and distribution declared | $(16,765) | $(14,279) | | Net income | $21,231 | $18,774 | | Balance as of June 30, 2025/2024 | $923,119 | $902,130 | [Consolidated Statements of Cash Flows](index=13&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :------- | | Net cash provided by operating activities | $77,525 | $115,243 | $(37,718) | (32.7)% | | Net cash used in investing activities | $(207,494) | $(224,119) | $16,625 | 7.4% | | Net cash provided by financing activities | $161,168 | $68,213 | $92,955 | 136.3% | | Net increase (decrease) in cash and cash equivalents | $31,208 | $(40,666) | $71,874 | NM | | Cash and cash equivalents, end of period | $51,186 | $16,417 | $34,769 | 211.8% | [Notes to Consolidated Financial Statements](index=14&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [NOTE 1—BUSINESS AND BASIS OF PRESENTATION](index=14&type=section&id=NOTE%201%E2%80%94BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) Select Water Solutions, Inc. provides sustainable water-management solutions to the U.S. energy industry, with a new partnership, AV Farms, LP, formed in **February 2025**, to consolidate Colorado water holdings - Company changed its name to **Select Water Solutions, Inc.** on **May 8, 2023**, to reflect a strategic focus on water-management solutions[26](index=26&type=chunk) - Entered into a new partnership arrangement, **AV Farms, LP**, on **February 14, 2025**, to consolidate water holdings in Colorado for agricultural, municipal, and industrial stakeholders[34](index=34&type=chunk)[35](index=35&type=chunk) | Investment | Type of Investment | Attained Accounting Method | As of June 30, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :-------------------------------- | :----------------- | :------------------------- | :--------------------------------- | :----------------------------------- | | Water Infrastructure | 39% minority interest | Equity-method | $71,276 | — | | Water Services | 20% minority interest | Equity-method | $4,100 | $4,017 | | Water Services | 38% minority interest | Equity-method | $5,046 | $4,388 | | Water Services | 47% minority interest | Equity-method | $2,850 | $2,942 | | Total investment in unconsolidated entities | | | $83,272 | $11,347 | [NOTE 2—SIGNIFICANT ACCOUNTING POLICIES](index=17&type=section&id=NOTE%202%E2%80%94SIGNIFICANT%20ACCOUNTING%20POLICIES) Financial statements rely on management estimates; allowance for credit losses increased to **$5.1 million** as of **June 30, 2025**, and ARO increased to **$64.2 million** | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Allowance for credit losses | $5,059 | $4,543 | | Asset Retirement Obligations (ARO) | $64,238 | $63,230 | - Defined Contribution Plan match expense was **$1.3 million** for the Current Quarter and **$3.2 million** for the Current Period[49](index=49&type=chunk) - Paid **$14.1 million** in dividends for Class A common stock and **$2.3 million** in distributions to noncontrolling interests during the Current Period[51](index=51&type=chunk) [NOTE 3—ACQUISITIONS](index=22&type=section&id=NOTE%203%E2%80%94ACQUISITIONS) In **2025**, the company completed four asset acquisitions for **$14.6 million** and acquired wastewater treatment facilities for **$1.7 million**, enhancing water infrastructure | Acquisition Type | Acquisition Date | Cash Consideration (in thousands) | Total Consideration (in thousands) | Segment | | :------------------------------------ | :--------------- | :------------------------------ | :------------------------------- | :------------------ | | Four Smaller Asset Acquisitions | Multiple 2025 Dates | $14,580 | $14,580 | Water Infrastructure | | One Smaller Asset Acquisition | April 1, 2025 | $1,725 | $1,725 | Water Services | | Eight Smaller Asset Acquisitions | Multiple 2024 Dates | $14,591 | $14,622 | Water Infrastructure | | Six Business Combinations (2024) | Multiple 2024 Dates | $148,113 | $148,113 | Water Infrastructure | [NOTE 4—REVENUE](index=23&type=section&id=NOTE%204%E2%80%94REVENUE) Revenue is primarily from water services and chemical technologies, with Water Infrastructure including longer-term contracts; **Permian Basin** was the largest contributor at **$187.3 million** for Q2 2025 - Most Water Services and Chemical Technologies customer agreements are short-term (less than one year), while Water Infrastructure includes both short-term and long-term agreements[64](index=64&type=chunk) - Water Infrastructure segment includes contracts with acreage dedications, AMIs, wellbore dedications, and minimum volume commitments (MVCs), which are typically longer-term[66](index=66&type=chunk) | Geographic Region (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Permian Basin | $187,293 | $180,656 | $367,136 | $349,079 | | Rockies | $39,041 | $52,903 | $88,626 | $109,586 | | Marcellus/Utica | $44,466 | $33,512 | $87,021 | $70,847 | | Eagle Ford | $36,019 | $37,259 | $78,713 | $86,500 | | Bakken | $25,389 | $19,755 | $48,053 | $34,890 | | Mid-Continent | $23,162 | $19,362 | $47,746 | $38,843 | | Haynesville/E. Texas | $12,688 | $24,057 | $27,948 | $47,406 | | Total | $364,215 | $365,131 | $738,599 | $731,679 | [NOTE 5—INVENTORIES](index=27&type=section&id=NOTE%205%E2%80%94INVENTORIES) Inventories increased to **$41.7 million** as of **June 30, 2025**, with raw materials up and finished goods down; inventory reserve was **$4.9 million** | Inventory Component (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :--------------------------------- | :------------ | :---------------- | :----- | :------- | | Raw materials | $33,907 | $24,884 | $9,023 | 36.3% | | Finished goods | $7,773 | $13,563 | $(5,790) | (42.7)% | | Total Inventories | $41,680 | $38,447 | $3,233 | 8.4% | - The company's inventory reserve for excess and obsolete items was **$4.9 million** as of **June 30, 2025**, up from **$4.8 million** at **December 31, 2024**[73](index=73&type=chunk) [NOTE 6—PROPERTY AND EQUIPMENT](index=28&type=section&id=NOTE%206%E2%80%94PROPERTY%20AND%20EQUIPMENT) Net property and equipment increased to **$800.4 million** as of **June 30, 2025**, driven by infrastructure growth; depreciation expense rose to **$43.0 million** for Q2 2025 | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------ | :------------ | :---------------- | :----- | :------- | | Total property and equipment, net | $800,407 | $725,654 | $74,753 | 10.3% | | Gathering and disposal infrastructure | $342,640 | $309,854 | $32,786 | 10.6% | | Pipelines | $156,086 | $103,425 | $52,661 | 50.9% | | Recycling facilities | $147,251 | $115,227 | $32,024 | 27.8% | | Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Depreciation, amortization and accretion | $42,972 | $38,193 | $82,572 | $76,343 | - Impairments and abandonments were **$1.5 million** for the Current Quarter and **$2.6 million** for the Current Period, including software development costs and property/equipment abandonments[75](index=75&type=chunk)[76](index=76&type=chunk) [NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS](index=30&type=section&id=NOTE%207%E2%80%94GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) Goodwill remained stable at **$18.2 million** as of **June 30, 2025**, while net intangible assets decreased to **$115.0 million** due to amortization of definite-lived assets | Asset (in thousands) | June 30, 2025 (Net Value) | December 31, 2024 (Net Value) | Change | % Change | | :------------------------------------ | :-------------------------- | :---------------------------- | :----- | :------- | | Goodwill | $18,215 | $18,215 | $0 | 0.0% | | Other intangible assets, net | $114,959 | $123,715 | $(8,756) | (7.1)% | | Customer relationships (definite-lived) | $103,350 | $111,068 | $(7,718) | (6.9)% | | Patents and other intellectual property (definite-lived) | $4,982 | $5,751 | $(769) | (13.4)% | | Water rights (definite-lived) | $1,346 | $1,615 | $(269) | (16.7)% | | Water rights (indefinite-lived) | $5,281 | $5,281 | $0 | 0.0% | - Annual amortization of intangible assets is projected to be **$8.8 million** for the remainder of **2025**, **$17.4 million** in **2026**, and **$16.9 million** in **2027**[79](index=79&type=chunk) [NOTE 8—DEBT](index=32&type=section&id=NOTE%208%E2%80%94DEBT) On **January 24, 2025**, a new **$550.0 million** Sustainability-Linked Credit Facility was established, with **$275.0 million** outstanding and **$228.1 million** available as of **June 30, 2025** - Entered into a new **$550.0 million** Sustainability-Linked Credit Facility on **January 24, 2025**, consisting of a **$300.0 million** Revolving Credit Facility and a **$250.0 million** Term Loan Facility[80](index=80&type=chunk) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :--------------------------- | :------------------------------- | | Long-term debt, net | $270,837 | $85,000 | | Outstanding borrowings | $275,000 | $85,000 | | Available borrowing capacity | $228,100 | $199,800 (Prior Facility) | | Borrowing Base (Revolving Credit Facility) | $270,300 | $218,800 (Prior Facility) | | Interest rate (Revolving Credit Facility) | 5.91% | N/A | | Interest rate (Term Loan) | 7.42% | N/A | - Incurred **$7.9 million** in debt issuance costs for the new Sustainability-Linked Credit Facility during the Current Period[109](index=109&type=chunk) [NOTE 9—COMMITMENTS AND CONTINGENCIES](index=40&type=section&id=NOTE%209%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) The company is involved in ordinary course legal proceedings, not expecting a material adverse effect, and is self-insured for various liabilities - No currently pending lawsuits or claims are expected to have a material adverse effect on the company's financial position, results of operations, or cash flows[111](index=111&type=chunk) - The company is self-insured up to certain retention limits for workers' compensation, general liability, vehicle liability, and health insurance[112](index=112&type=chunk) [NOTE 10—EQUITY-BASED COMPENSATION](index=42&type=section&id=NOTE%2010%E2%80%94EQUITY-BASED%20COMPENSATION) The **2024 Equity Incentive Plan** reserved **8.5 million** Class A shares; compensation expense for restricted stock was **$6.4 million** for the Current Period, with **$19.7 million** unrecognized - The **2024 Equity Incentive Plan** was approved, reserving **8,487,004** shares of Class A common stock, with **8,148,829** shares available for future awards as of **June 30, 2025**[114](index=114&type=chunk) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restricted Stock Awards Compensation Expense | $3,400 | $2,900 | $6,400 | $6,600 | | PSUs Compensation Expense | $(200) (credit) | $3,300 | $300 | $5,900 | - As of **June 30, 2025**, **$19.7 million** of unrecognized compensation expense existed for restricted stock awards and **$8.7 million** for unvested PSUs, both with a weighted-average remaining life of **1.9 years**[118](index=118&type=chunk)[128](index=128&type=chunk) - Repurchased **576,430** shares of Class A common stock during the Current Period, primarily for cashless exercise of options and tax withholding requirements[131](index=131&type=chunk) [NOTE 11—FAIR VALUE MEASUREMENT](index=47&type=section&id=NOTE%2011%E2%80%94FAIR%20VALUE%20MEASUREMENT) The company uses a three-level valuation hierarchy for fair value measurements, with current financial instruments and debt approximating fair value - Fair value measurements are categorized into **Level 1** (quoted prices in active markets), **Level 2** (quoted prices for similar assets/liabilities in non-active markets or observable inputs), and **Level 3** (unobservable and significant inputs)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - Carrying values of current financial instruments (cash, accounts receivable, accounts payable) and debt approximate their fair value due to short-term nature or variable market rates[138](index=138&type=chunk) [NOTE 12—RELATED-PARTY TRANSACTIONS](index=49&type=section&id=NOTE%2012%E2%80%94RELATED-PARTY%20TRANSACTIONS) The company engages in related-party transactions, with purchases totaling **$15.4 million** for the Current Period; TRA liability was **$38.4 million** as of **June 30, 2025** | Transaction Type (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Sales to related parties | < $100 | $200 | $200 | $400 | | Purchases from related-party vendors | $10,000 | $5,400 | $15,400 | $10,000 | - The liability for Tax Receivable Agreements (TRAs) was **$38.4 million** as of **June 30, 2025**, and **$38.5 million** as of **December 31, 2024**, reflecting **85%** of anticipated net cash savings[149](index=149&type=chunk) [NOTE 13—INCOME TAXES](index=51&type=section&id=NOTE%2013%E2%80%94INCOME%20TAXES) Total income tax expense for Q2 2025 was **$4.5 million** with an effective tax rate of **27.6%**, differing from the **21%** U.S. federal rate | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total income tax expense | $4,521 | $3,959 | $7,415 | $5,411 | | Effective Tax Rate | 27.6% | 21.1% | 25.8% | 22.1% | [NOTE 14—NONCONTROLLING INTERESTS](index=53&type=section&id=NOTE%2014%E2%80%94NONCONTROLLING%20INTERESTS) Total noncontrolling interests were **$123.8 million** as of **June 30, 2025**, primarily from Class B common stock holders, with a **$2.9 million** cash contribution received | Noncontrolling Interest Type (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Attributable to joint ventures | $(410) | $(1,570) | | Attributable to Class B common stock holders | $124,249 | $123,584 | | Total noncontrolling interests | $123,839 | $122,014 | - Received a **$2.9 million** cash contribution from a noncontrolling interest for business development during the Current Period[154](index=154&type=chunk) [NOTE 15—INCOME PER SHARE](index=53&type=section&id=NOTE%2015%E2%80%94INCOME%20PER%20SHARE) Basic Class A EPS was **$0.10** for the Current Quarter and **$0.19** for the Current Period; diluted Class A EPS was **$0.10** and **$0.18**, respectively | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Class A—Basic EPS | $0.10 | $0.13 | $0.19 | $0.17 | | Class A—Diluted EPS | $0.10 | $0.13 | $0.18 | $0.16 | [NOTE 16—SEGMENT INFORMATION](index=56&type=section&id=NOTE%2016%E2%80%94SEGMENT%20INFORMATION) The company operates three segments: Water Infrastructure, Water Services, and Chemical Technologies, with Water Infrastructure revenue growing **17.9%** to **$80.9 million** in Q2 2025 - The company operates three reportable segments: **Water Infrastructure**, **Water Services**, and **Chemical Technologies**, with performance assessed primarily by segment EBITDA[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) | Segment (in thousands) | 3 Months Ended June 30, 2025 Revenue | 3 Months Ended June 30, 2024 Revenue | YoY Change | % Change | | :--------------------- | :----------------------------------- | :----------------------------------- | :--------- | :------- | | Water Infrastructure | $80,855 | $68,564 | $12,291 | 17.9% | | Water Services | $215,660 | $230,008 | $(14,348) | (6.2)% | | Chemical Technologies | $67,700 | $66,559 | $1,141 | 1.7% | | Total Revenue | $364,215 | $365,131 | $(916) | (0.3)% | | Segment (in thousands) | 6 Months Ended June 30, 2025 Revenue | 6 Months Ended June 30, 2024 Revenue | YoY Change | % Change | | :--------------------- | :----------------------------------- | :----------------------------------- | :--------- | :------- | | Water Infrastructure | $153,246 | $132,072 | $21,174 | 16.0% | | Water Services | $441,308 | $458,315 | $(17,007) | (3.7)% | | Chemical Technologies | $144,045 | $141,292 | $2,753 | 1.9% | | Total Revenue | $738,599 | $731,679 | $6,920 | 0.9% | | Segment EBITDA (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Water Infrastructure | $40,650 | $28,889 | $70,976 | $52,340 | | Water Services | $38,039 | $46,755 | $75,392 | $86,145 | | Chemical Technologies | $7,754 | $5,584 | $15,504 | $13,283 | | Total EBITDA | $64,809 | $59,077 | $121,739 | $103,826 | [NOTE 17—SUBSEQUENT EVENTS](index=58&type=section&id=NOTE%2017%E2%80%94SUBSEQUENT%20EVENTS) On **July 1, 2025**, the company acquired Omni Environmental Solutions' Bakken assets for **$17.7 million** cash and **862,069** Class A shares, while divesting certain hauling operations - Acquired **Omni Environmental Solutions'** assets in the Bakken region on **July 1, 2025**, for **$17.7 million** cash and **862,069** shares of Class A common stock, expanding Water Infrastructure capabilities[167](index=167&type=chunk)[168](index=168&type=chunk) - Divested rental and oil hauling operations in the Bakken, Northeast fluids hauling, Midcon fluids hauling, and one Midcon SWD as part of the Omni transaction[167](index=167&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, enacted **July 4, 2025**, is expected to reduce future tax liability and defer payments under Tax Receivable Agreements[170](index=170&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section compares financial results for the three and six months ended **June 30, 2025**, and **2024**, analyzing revenue, costs, gross profit, operating expenses, and net income [Overview](index=60&type=section&id=Overview) Select Water Solutions, Inc. is a leading U.S. provider of sustainable water and chemical solutions to the energy industry - The company is a leading provider of sustainable water and chemical solutions to the U.S. energy industry, focusing on safe and environmentally responsible water management[173](index=173&type=chunk) [Sustainability](index=60&type=section&id=Sustainability) Select's corporate strategy emphasizes environmental consciousness, health and safety, human capital, and community outreach, integrated into its sustainability-linked credit facility - Select's corporate strategy focuses on stakeholders, including people, customers, environment, and communities, with four priorities: Environmental Consciousness, Health and Safety, Human Capital Management, and Community Outreach[174](index=174&type=chunk) - The company's sustainability commitment is exemplified by its sustainability-linked credit facility, which incorporates targets for growing produced water recycling volumes and maintaining market-leading employee safety performance[174](index=174&type=chunk) - The company is significantly increasing its focus on recycling and reuse of produced water and assessing other industrial water sources to meet industry demand and reduce freshwater usage[176](index=176&type=chunk) [Recent Developments](index=62&type=section&id=Recent%20Developments) The company acquired **Omni Environmental Solutions'** Bakken assets, divested lower-margin hauling operations, completed **$14.6 million** in asset acquisitions, and invested **$72.1 million** in AV Farms - Acquired **Omni Environmental Solutions'** assets in the Bakken region on **July 1, 2025**, including a solids waste landfill, processing facility, SWD, and oil storage tank farm, enhancing the Water Infrastructure segment[179](index=179&type=chunk)[182](index=182&type=chunk) - Divested lower-margin fluids hauling operations in the Haynesville and Midcon regions, while retaining higher-margin operations in Permian, Rockies, and Eagle Ford[179](index=179&type=chunk) - In the first six months of **2025**, completed four asset acquisitions totaling **$14.6 million** for water infrastructure and acquired wastewater treatment facilities for **$1.7 million**[181](index=181&type=chunk) - Made a **$72.1 million** equity method investment in **AV Farms** to consolidate water holdings and storage in Colorado[181](index=181&type=chunk) - Prioritizing investments in Water Infrastructure projects for predictable revenue, higher gross margins, and stronger customer partnerships through integrated solutions[184](index=184&type=chunk) [Market Trends and Outlook](index=64&type=section&id=Market%20Trends%20and%20Outlook) Geopolitical conflicts, energy price volatility, and changing trade policies create uncertainty; **WTI crude oil** prices decreased in Q2 2025, while **Henry Hub natural gas** prices increased - Global geopolitical conflicts (Russia-Ukraine war, Middle East instability) and economic uncertainty (inflation, high interest rates) are decreasing demand for oil and natural gas or contributing to price volatility[8](index=8&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) | Commodity Price | Current Quarter (Q2 2025) | Prior Quarter (Q1 2025) | Change | | :-------------------- | :------------------------ | :---------------------- | :----- | | WTI crude oil (average spot price) | $64.57 | $81.81 | $(17.24) | | Henry Hub natural gas (average spot price) | $3.19 | $2.07 | $1.12 | - Industry consolidation, especially in the **Permian Basin**, can initially slow activity but ultimately increase demand for longer-term integrated full water lifecycle solutions[191](index=191&type=chunk)[196](index=196&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, enacted in **July 2025**, includes provisions to expand onshore oil and gas leasing and drilling on federal land[192](index=192&type=chunk) - Increased reuse of produced water drives demand for additional chemical treatment solutions and advanced "on-the-fly" solutions for water and chemical blending at well sites[197](index=197&type=chunk) [Our Segments](index=68&type=section&id=Our%20Segments) The company operates three segments: Water Infrastructure (fixed assets), Water Services (water sourcing, transfer, hauling), and Chemical Technologies (chemical applications and water treatment solutions) - Water Infrastructure segment includes fixed assets such as water distribution pipelines, recycling facilities, produced water gathering pipelines, saltwater disposal wells (SWDs), and solids management facilities[200](index=200&type=chunk) - Water Services segment provides water sourcing, transfer, fluids hauling, water monitoring, water containment, water network automation, accommodations and rentals, and flowback and well testing businesses[200](index=200&type=chunk) - Chemical Technologies segment offers technical solutions, products, and expertise for chemical applications in hydraulic fracturing, stimulation, cementing, and well completions, including tailored water treatment solutions for produced water recycling[200](index=200&type=chunk) [How We Generate Revenue](index=69&type=section&id=How%20We%20Generate%20Revenue) Most revenue is generated from water-management services (Water Services and Water Infrastructure), with Water Infrastructure utilizing long-term contracts and Chemical Technologies based on chemical quantities - Most revenue is generated from water-management services in Water Services and Water Infrastructure segments, associated with well completions and produced water management[200](index=200&type=chunk)[201](index=201&type=chunk) - Water Infrastructure segment utilizes long-term contracts with acreage dedications, AMIs, wellbore dedications, and minimum volume commitments (MVCs)[203](index=203&type=chunk) - Chemical Technologies revenue is based on the quantity of chemicals provided, typically under short-term contracts[204](index=204&type=chunk) [Costs of Conducting Our Business](index=70&type=section&id=Costs%20of%20Conducting%20Our%20Business) Principal business expenses include labor, vehicle and equipment, raw materials, and fuel, with labor costs being the largest component at **$124.4 million** for Q2 2025 - Principal expenses include labor, vehicle and equipment, raw materials (chemicals, water sourcing), and fuel, with most costs being variable[205](index=205&type=chunk) | Cost Category (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Labor and labor-related costs | $124.4 | $126.7 | $253.8 | $265.0 | | Vehicle and equipment costs | $79.7 | $79.0 | $159.2 | $158.5 | | Raw material costs | $58.8 | $63.2 | $123.9 | $124.9 | | Fuel and freight costs | $18.4 | $21.0 | $40.7 | $45.0 | [How We Evaluate Our Operations](index=72&type=section&id=How%20We%20Evaluate%20Our%20Operations) Operations are evaluated using Revenue, Gross Profit, Gross Margins, EBITDA, Adjusted EBITDA, Cash Flows, and Free Cash Flow, with non-GAAP measures used for performance comparison - Key operational and financial metrics used to assess performance include Revenue, Gross Profit, Gross Margins, EBITDA, Adjusted EBITDA, Cash Flows, and Free Cash Flow[215](index=215&type=chunk) - EBITDA and Adjusted EBITDA are non-GAAP measures used to compare operating performance by excluding interest expense, income taxes, depreciation, amortization, accretion, and other non-recurring items[214](index=214&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Free cash flow is defined as net cash from operating activities less purchases of property and equipment, plus proceeds from sales of property and equipment, used to assess liquidity and ability to fund operations, investments, and debt repayment[218](index=218&type=chunk) [Factors Affecting the Comparability of Our Results of Operations to Our Historical Results of Operations](index=74&type=section&id=Factors%20Affecting%20the%20Comparability%20of%20Our%20Results%20of%20Operations%20to%20Our%20Historical%20Results%20of%20Operations) Future results may not be comparable to historical results due to ongoing acquisition activity, with five asset acquisitions completed in the Current Period - Future results of operations may not be comparable to historical results due to continuous evaluation and consummation of acquisitions, especially in water infrastructure and related services[219](index=219&type=chunk)[220](index=220&type=chunk) - Five asset acquisitions were completed during the Current Period, and their pre-transaction results are not included in historical financial statements prior to their respective completion dates[221](index=221&type=chunk) [Results of Operations](index=75&type=section&id=Results%20of%20Operations) This section compares financial results for the three and six months ended **June 30, 2025**, and **2024**, analyzing revenue, costs, gross profit, operating expenses, and net income [Current Quarter Compared to the Prior Quarter](index=75&type=section&id=Current%20Quarter%20Compared%20to%20the%20Prior%20Quarter) Total revenue slightly decreased by **0.3%** to **$364.2 million**; Water Infrastructure revenue increased by **17.9%**, while Water Services revenue decreased by **6.2%** | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :----- | :------- | | Total revenue | $364,215 | $365,131 | $(916) | (0.3)% | | Water Infrastructure Revenue | $80,855 | $68,564 | $12,291 | 17.9% | | Water Services Revenue | $215,660 | $230,008 | $(14,348) | (6.2)% | | Chemical Technologies Revenue | $67,700 | $66,559 | $1,141 | 1.7% | | Gross profit | $57,753 | $60,156 | $(2,403) | (4.0)% | | Net income | $11,671 | $14,899 | $(3,228) | (21.7)% | - Water Infrastructure revenue increase was driven by organic growth in recycling and solids management, supported by capital investments[226](index=226&type=chunk) - Water Services revenue decrease was due to a decline in water sourcing (shift to produced water) and reduced margins in certain business lines, partially offset by improved fluids hauling margins[227](index=227&type=chunk)[231](index=231&type=chunk) - Net interest expense increased by **178.6%** to **$5.6 million** due to the new Term Loan Facility and higher amortization of debt issuance costs[238](index=238&type=chunk) [Current Period Compared to the Prior Period](index=79&type=section&id=Current%20Period%20Compared%20to%20the%20Prior%20Period) Total revenue increased by **0.9%** to **$738.6 million**; Water Infrastructure revenue grew **16.0%**, while Water Services revenue decreased by **3.7%** | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :----- | :------- | | Total revenue | $738,599 | $731,679 | $6,920 | 0.9% | | Water Infrastructure Revenue | $153,246 | $132,072 | $21,174 | 16.0% | | Water Services Revenue | $441,308 | $458,315 | $(17,007) | (3.7)% | | Chemical Technologies Revenue | $144,045 | $141,292 | $2,753 | 1.9% | | Gross profit | $113,523 | $112,833 | $690 | 0.6% | | Net income | $21,231 | $18,774 | $2,457 | 13.1% | - Selling, general and administrative expenses decreased by **7.9%** to **$76.4 million**, primarily due to lower incentive/equity-based compensation and transaction costs[251](index=251&type=chunk) - Net interest expense increased by **219.0%** to **$10.5 million** due to the new Term Loan Facility, higher amortization of debt issuance costs, and extinguishment costs[254](index=254&type=chunk) [Comparison of Non-GAAP Financial Measures](index=83&type=section&id=Comparison%20of%20Non-GAAP%20Financial%20Measures) EBITDA for the Current Quarter increased by **$5.7 million** to **$64.8 million**, and Adjusted EBITDA increased to **$72.6 million** | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | EBITDA | $64,809 | $59,077 | $5,732 | 9.7% | | Adjusted EBITDA | $72,614 | $69,647 | $2,967 | 4.3% | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | EBITDA | $121,739 | $103,826 | $17,913 | 17.2% | | Adjusted EBITDA | $136,645 | $129,405 | $7,240 | 5.6% | [Liquidity and Capital Resources](index=84&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity comes from cash, the Sustainability-Linked Credit Facility, and operations; operating cash flow decreased, while financing cash flow increased due to new debt [Overview](index=84&type=section&id=Overview) Primary liquidity sources are cash, the Sustainability-Linked Credit Facility, and operations; cash and cash equivalents were **$51.2 million** as of **June 30, 2025** - Primary liquidity sources are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations, and proceeds from asset sales[263](index=263&type=chunk) - Prioritizes sustained positive free cash flow and a strong balance sheet, evaluating acquisitions and investments in this context[264](index=264&type=chunk) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------------------------------------ | :-------------------------- | :------------------------------ | | Cash and cash equivalents | $51.2 | $19.9 | | Available borrowing capacity (Sustainability-Linked Credit Facility) | $228.1 | N/A (Prior Facility) | | Outstanding indebtedness | $275.0 | $85.0 (Prior Facility) | - Increased quarterly dividend to **$0.07** per share/unit for Class A and Class B holders, effective **November 15, 2024**[269](index=269&type=chunk) [Cash Flows](index=87&type=section&id=Cash%20Flows) Net cash from operating activities decreased by **32.7%** to **$77.5 million**; investing activities decreased by **7.4%** to **$207.5 million**; financing activities increased by **136.3%** to **$161.2 million** | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | :------- | | Net cash provided by operating activities | $77,525 | $115,243 | $(37,718) | (32.7)% | | Net cash used in investing activities | $(207,494) | $(224,119) | $16,625 | 7.4% | | Net cash provided by financing activities | $161,168 | $68,213 | $92,955 | 136.3% | - Operating cash flow decrease primarily due to a **$39.4 million** reduction in converting working capital to cash[274](index=274&type=chunk) - Investing cash flow decrease driven by **$132.6 million** lower acquisition spend, partially offset by a **$72.1 million** investment in unconsolidated entities and **$45.0 million** increase in property and equipment purchases[275](index=275&type=chunk) - Financing cash flow increase primarily due to a **$100.0 million** increase in net borrowings and **$2.9 million** cash from noncontrolling interests[276](index=276&type=chunk) [Free Cash Flow](index=87&type=section&id=Free%20Cash%20Flow) Free cash flow for the six months ended **June 30, 2025**, was negative **$40.7 million**, a significant decrease from positive **$40.9 million** in the prior period | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | | Free cash flow | $(40,705) | $40,912 | $(81,617) | [Sustainability-Linked Credit Facility](index=87&type=section&id=Sustainability-Linked%20Credit%20Facility) The new **$550.0 million** Sustainability-Linked Credit Facility, effective **January 24, 2025**, includes a **$300.0 million** Revolving Credit Facility and a **$250.0 million** Term Loan Facility - The new Sustainability-Linked Credit Facility provides **$300.0 million** in revolving commitments and **$250.0 million** in term commitments, with options to increase by **$150.0 million** and **$50.0 million**, respectively[280](index=280&type=chunk) - Interest rate margins and facility fees are subject to annual adjustments based on performance against sustainability targets for total recordable incident rate and barrels of recycled produced water[85](index=85&type=chunk) [Contractual Obligations](index=89&type=section&id=Contractual%20Obligations) Contractual obligations primarily include the Sustainability-Linked Credit Facility and operating leases, with details in Note 8—Debt and the **2024 Form 10-K** - Contractual obligations include the Sustainability-Linked Credit Facility and operating leases[282](index=282&type=chunk) [Critical Accounting Policies and Estimates](index=89&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No changes to critical accounting policies from those disclosed in the **2024 Form 10-K** - No changes to critical accounting policies from the **2024 Form 10-K**[283](index=283&type=chunk) [Recent Accounting Pronouncements](index=89&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 2—Significant Accounting Policies for details on recent accounting pronouncements - Refer to **Note 2** for recent accounting pronouncements[284](index=284&type=chunk) [Off-Balance-Sheet Arrangements](index=89&type=section&id=Off-Balance-Sheet%20Arrangements) As of **June 30, 2025**, the company had no material off-balance-sheet arrangements, indicating no significant exposure to risks - No material off-balance-sheet arrangements as of **June 30, 2025**[285](index=285&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=91&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Business performance is highly dependent on U.S. oil and gas drilling and completion activity, influenced by commodity prices and geopolitical factors, with interest rate risk on **$275.0 million** in variable-rate debt - Business performance is highly dependent on U.S. oil and gas drilling and completion activity, influenced by factors such as oil/gas supply and demand, geopolitical conflicts, commodity prices, and economic conditions[286](index=286&type=chunk) - As of **June 30, 2025**, **$275.0 million** in outstanding borrowings under the Sustainability-Linked Credit Facility are subject to variable interest rates, with no derivative arrangements to protect against fluctuations[288](index=288&type=chunk) [Item 4. Controls and Procedures](index=91&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective at a reasonable assurance level as of **June 30, 2025**, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective at the reasonable assurance level as of **June 30, 2025**[290](index=290&type=chunk) - No material changes in internal control over financial reporting during the quarter ended **June 30, 2025**[291](index=291&type=chunk) [PART II—OTHER INFORMATION](index=91&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=91&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, not expecting a material adverse effect on its financial position, results of operations, or cash flows - No legal proceedings are currently expected to have a material adverse effect on the company's financial position, results of operations, or cash flows[293](index=293&type=chunk) [Item 1A. Risk Factors](index=93&type=section&id=Item%201A.%20Risk%20Factors) New risk factors include adverse effects on **AV Farms** investment, ERP system implementation challenges, and impacts from changing U.S. and international trade policies, including tariffs - Investment in **AV Farms** is subject to risks from lack of sole decision-making authority, reliance on co-investors' financial condition, and potential disputes[295](index=295&type=chunk) - Challenges with the recently implemented **ERP** system could disrupt business operations, negatively affect employee morale, and impact the effectiveness of internal controls over financial reporting[296](index=296&type=chunk) - Changes in U.S. and international trade policies, including tariffs (e.g., **51%** blended average on Chinese imports), may increase raw material costs, reduce demand for services, and adversely impact business[297](index=297&type=chunk)[299](index=299&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In connection with the Omni acquisition, the company issued **862,069** unregistered Class A common stock shares; **32,143** Class A shares were repurchased in the Current Quarter for employee tax withholding - Issued **862,069** shares of Class A common stock as stock consideration for the Omni acquisition, unregistered under the Securities Act[302](index=302&type=chunk) | Period | Total Number of Shares Purchased | Weighted-Average Price Paid Per Share | | :----------------------------- | :------------------------------- | :------------------------------------ | | April 1, 2025 to April 30, 2025 | 281 | $10.59 | | May 1, 2025 to May 31, 2025 | 27,010 | $8.87 | | June 1, 2025 to June 30, 2025 | 4,852 | $8.87 | | Total (Current Quarter) | 32,143 | N/A | - Repurchases were primarily to satisfy employee minimum tax withholding requirements for vested shares under the **2016 Equity Incentive Plan**[303](index=303&type=chunk) [Item 3. Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities - No defaults upon senior securities[305](index=305&type=chunk) [Item 4. Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Mine Safety Disclosures are not applicable[306](index=306&type=chunk) [Item 5. Other Information](index=96&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended **June 30, 2025** - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended **June 30, 2025**[307](index=307&type=chunk) [Item 6. Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed, furnished, or incorporated by reference, including CEO and CFO certifications and financial statements in Inline XBRL format - Includes certifications of the Chief Executive Officer and Chief Financial Officer (**Exhibits 31.1, 31.2, 32.1, 32.2**)[309](index=309&type=chunk) - Financial statements for the quarter ended **June 30, 2025**, are formatted in Inline XBRL (**Exhibit 101**)[309](index=309&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2025, the company increased net income by 22% and adjusted EBITDA by 13% [7][17] - Consolidated gross margins improved by nearly two percentage points, reaching 55% in the Water Infrastructure segment [7][17] - SG&A expenses increased to $39 million, representing just under 11% of revenue [22] Business Line Data and Key Metrics Changes - Water Infrastructure segment revenues increased by 12% with gross profit before D&A growing by 15%, achieving a gross margin of 55% [17][19] - Water Services segment revenues decreased by approximately 4% sequentially, with gross margins holding relatively flat at around 20% [19][20] - Chemical Technologies segment saw a sequential revenue decline of approximately 11%, but gross margins before D&A exceeded expectations at 17.5% [22] Market Data and Key Metrics Changes - The company added approximately 60,000 acres of leasehold dedication and 385,000 acres under right of first refusal agreements in the Northern Delaware Basin [13][15] - New Mexico's contribution to total fixed recycling capacity increased from zero to over 60% in about two years [15] Company Strategy and Development Direction - The company is focused on growing its water infrastructure, scale, and margin, with a strategic emphasis on long-term contracts and rationalizing its water services segment [6][8] - The acquisition of assets from Omni Environmental Solutions aims to enhance the infrastructure business while monetizing non-core parts of the water service segment [9][10] - The company is exploring financing options for Peak Rentals to unlock value while maintaining strategic alignment with its core water infrastructure growth strategy [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong 20% year-over-year growth in the Water Infrastructure segment for 2026, building on double-digit growth expected in 2025 [16][18] - Despite anticipated challenges in the second half of 2025 for the completions-oriented parts of the business, management expects continued strong free cash flow generation [18][23] Other Important Information - The company generated over $10 million of free cash flow during Q2 2025, despite significant capital expenditures [24][25] - The company expects net CapEx in 2025 to be between $225 million and $250 million, with a focus on growth capital [25][26] Q&A Session Summary Question: What inning is the company in regarding market opportunities? - Management indicated that they are far along in the build-out phase, with major contracts in place and starting to receive calls for additional acreage [28][30] Question: What is the market opportunity for Peak Rentals? - Management highlighted Peak's unique position in the market, particularly in power generation, and the potential for economic value through battery technology integration [38][41] Question: What is the expected CapEx budget for 2026 to support growth? - Management stated that the 20% growth projection for 2026 is based on current contracts, with an expected capital deployment of approximately $225 million in 2025 [52][53] Question: Are there other assets being considered for divestiture? - Management confirmed that while they have rationalized trucking operations, they are focused on maintaining strategic relationships with remaining assets that support infrastructure [75][79] Question: What is the status of operations in Colorado? - Management reported ongoing progress in Colorado, with a focus on developing a reliable water network and engaging with local stakeholders [82][85]

Group 1 - Laura Starks is the founder and CEO of Starks Energy Economics, LLC, established in 2007, with expertise in energy investments [1] - Starks holds a degree in chemical engineering and an MBA focused on finance, which she utilizes for personal investments and insights on energy companies [1] - The coverage of Starks includes various sectors such as utilities, independent power producers, energy service companies, petrochemical companies, and all segments of oil and natural gas: upstream, midstream, and downstream [1]

Group 1 - Select Water Solutions, Inc. reported revenue of $364.22 million for the quarter ended June 2025, reflecting a year-over-year decline of 0.3% and an EPS of $0.10 compared to $0.13 a year ago [1] - The reported revenue was a surprise of -0.28% against the Zacks Consensus Estimate of $365.22 million, with an EPS surprise of -23.08% compared to the consensus estimate of $0.13 [1] - The stock has returned -0.6% over the past month, underperforming the Zacks S&P 500 composite's +1% change, and currently holds a Zacks Rank 4 (Sell) [3] Group 2 - Revenue from Chemical Technologies was $67.7 million, below the four-analyst average estimate of $73.97 million, representing a year-over-year change of +1.7% [4] - Revenue from Water Services was $215.66 million, exceeding the average estimate of $207.72 million, but showing a -6.2% change compared to the year-ago quarter [4] - Revenue from Water Infrastructure was $80.86 million, slightly below the average estimate of $81.22 million, with a year-over-year change of +17.9% [4] - Gross Profit before D&A for Water Services was $42.35 million, below the average estimate of $44.87 million [4] - Gross Profit before D&A for Chemical Technologies was $11.82 million, slightly above the average estimate of $11.58 million [4] - Gross Profit before D&A for Water Infrastructure was $44.64 million, exceeding the average estimate of $42.69 million [4]