Core Insights - Select Water Solutions is a leading provider of sustainable full life cycle water solutions to the energy industry and is emerging in the municipal and industrial markets [1] - The company has critical water infrastructure assets, including pipelines, recycling, storage, disposal, and treatment facilities, which create high barriers to entry [2] - The Water Infrastructure segment is the highest margin and fastest-growing segment, expected to contribute about 60% of gross profit in the next 12 to 24 months, up from 51% for the first 9 months of 2025 [2][3] Company Overview - Select Water Solutions operates connected networks of water services and chemical technologies segments [2] - The company’s scale and solutions provide significant free cash flow generation capacity to fund organic growth prospects backed by long-term customer contracts [2] - The Water Infrastructure segment is positioned to enhance shareholder return opportunities [2]

Core Points - Munich Re is hosting an Investor Day focused on its new Strategic and Financial Ambition for 2030 [1] - The event features presentations from key executives, including the CEO and CFO, followed by a Q&A session [2] Group 1: Strategic Overview - The event is led by Christian Becker-Hussong, who is responsible for Investor Relations and Rating Agency Relations [1] - Joachim Wenning, the CEO, will provide insights from a leadership perspective [2] Group 2: Financial Insights - Christoph Jurecka, the CFO, will present the group's financial performance [2] Group 3: Business Segments - The presentations will cover various business fields, starting with ERGO, led by CEO Markus Rieß [2] - The session will conclude with insights from Thomas Blunck, CEO of Reinsurance [2]

I have more than 14 years of experience in analyzing and writing on stocks. I write on both long and short sides in an unbiased manner. I have been covering the energy sectors for the past 7 years, with the primary focus on the oilfield equipment services sector. I also cover the Industrial Supply industry.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article ...

Select Water Solutions (NYSE: WTTR) FY Conference Summary Company Overview - **Company**: Select Water Solutions - **Ticker**: WTTR - **Industry**: Water solutions for oil and gas, primarily focused on the Permian Basin - **Founded**: 2007 - **Segments**: - Water Infrastructure (largest segment) - Water Services (temporary solutions) - Chemical Technologies (smallest segment) Core Points and Arguments - **Water's Importance**: Water management in oil and gas is critical, especially in the Permian Basin, which is a growing concern for the industry [2][4] - **Business Transition**: The company has shifted from a service-based model (80% income from water services in 2018) to a focus on water infrastructure, aiming for 60% of income from infrastructure in the future [4][5] - **Growth Rates**: Water recycling and produced water disposal have seen compound annual growth rates of 75-80% since 2020 [5] - **Recycling Focus**: Select Water Solutions is the leading recycling provider in New Mexico, currently recycling about 50% of completion water, with a goal to increase this to 85-90% [9][11] - **Economic Advantage of Recycling**: Recycling costs approximately $0.50 per barrel compared to $1 for local disposal and $1.25 for distant disposal, making it the most cost-effective solution [11][12] - **Long-term Contracts**: The company has secured nearly 1 million acres of dedicated and right of first refusal acres in New Mexico, with an average contract duration of 11 years, providing stability and cash flow [15][16] Industry Dynamics - **Regulatory Challenges**: New Mexico is not permitting significant disposal capacity, necessitating new solutions for distant disposal [9][10] - **Competitors**: Major competitors include WaterBridge, WBI, and Aeris, which are primarily disposal-focused, while Select Water Solutions emphasizes recycling [34][35] - **Future Opportunities**: The company is exploring municipal, agricultural, and industrial markets, with plans to secure long-term contracts for water rights [25][40] Financial Insights - **CapEx Expectations**: Expected net CapEx for the current year is $250 million-$275 million, with a decrease anticipated next year [37] - **Debt Management**: The company maintains a conservative debt-to-EBITDA ratio of around 1 to 1.25 times, funding infrastructure build-out primarily through free cash flow [29][30] - **Shareholder Returns**: The company has instituted a dividend and has increased it twice since 2022, indicating a commitment to shareholder returns as infrastructure spending stabilizes [30][31] Additional Considerations - **Infrastructure Build-out**: The company is focused on building a robust pipeline network in Lea County, New Mexico, to enhance water management efficiency [18][19] - **Beneficial Reuse Initiatives**: Select Water Solutions is conducting trials for using distilled produced water for crop irrigation, aiming to educate regulators on beneficial reuse [14][39] - **Market Positioning**: The company positions itself as a leader in water solutions, with a strong emphasis on recycling and long-term contracts to mitigate cyclicality in the oil and gas sector [24][28] This summary encapsulates the key points discussed during the conference, highlighting the company's strategic focus, market dynamics, and financial outlook.

Company Overview - Select Water Solutions is a leading provider of sustainable full-life cycle water solutions to the energy industry and is expanding into municipal and industrial markets[11] - The company's market capitalization is $1400 million and enterprise value is $1687 million[14] - Select Water is transforming into an infrastructure-led company, expecting infrastructure to represent over 60% of company gross profits over time[23] Financial Performance & Growth - Water Infrastructure's Gross Profit before D&A grew at a 72% CAGR from 2021 to 2025E[9] - Production and full-lifecycle water solutions activities have grown from less than 10% to 33% contribution since 2020[21] - The company anticipates over 30% additional growth in gross profit before D&A for Water Infrastructure by the end of 2026[26] - Select expects a 10%+ gross profit increase for Water Infrastructure in Q4 2025[18] Water Infrastructure & Contracts - The company has a large contract portfolio comprising more than 25 million acres under long-term acreage and ROFR dedication, primarily in the Permian basin[9,48] - Recently executed contracts include production and full lifecycle water dedications with high margins[47] - Weighted average contract length of 112 years for deals closed during 2024 and the first 9 months of 2025[48] Strategic Initiatives - Select is investing in AV Farms, LP ("AVF") to expand into the under-supplied Colorado Municipal and Industrial Water Market, with 16300-acre feet of owned, senior annual water rights[77,81] - Select Water and Mariana Minerals are partnering to build Texas's First Produced Water Lithium Facility, expected to generate up to $5 million in annual cash flow for Select through royalty payments[82,83]

Core Insights - Select Water Solutions, Inc. (NYSE:WTTR) experienced an 11.97% decline in share price from November 11 to November 18, 2025, ranking among the energy stocks that lost the most during that week [1] Financial Performance - For Q3, Select Water Solutions reported an adjusted EPS of $0.04, which was $0.01 below estimates, while revenue reached $322.2 million, exceeding expectations by over $16 million despite a year-over-year decline of over 13% [3] - The Chemical Technologies segment showed strong performance, with revenue and gross profit increasing by 13% and 34% year-over-year, attributed to new product launches and increased market share [3] Analyst Ratings - Northland downgraded Select Water Solutions from 'Outperform' to 'Market Perform' on November 13, setting a price target of $12, citing that the current valuation is reasonable but requires larger growth in adjusted EBITDA for FY 2026 to become more positive on the shares [4] - The firm also expressed interest in seeing more bolt-on projects, such as the recently announced lithium extraction, or improved activity in the American onshore market [4]

Financial Performance - Revenue for Q3 2025 was $322 million, down from $364.2 million in Q2 2025 and $371.3 million in Q3 2024[10] - Net income for Q3 2025 was $2.3 million, compared to $11.7 million in Q2 2025 and $18.8 million in Q3 2024[10] - Adjusted EBITDA for Q3 2025 was $59.5 million, down from $72.6 million in Q2 2025[13] - Total revenue for Q3 2025 was $322.2 million, a decrease from $371.3 million in Q3 2024, with Water Services revenue at $166.9 million[36] - Gross profit for Q3 2025 was $43.6 million, down from $62.4 million in Q3 2024, reflecting a gross margin decline[36] - Net income attributable to Select Water Solutions, Inc. for Q3 2025 was $2.7 million, compared to $15.8 million in Q3 2024[36] - Net income per share attributable to common stockholders for Q3 2025 was $0.03, down from $0.16 in Q3 2024[36] - Net income for the three months ended September 30, 2025, was $2,294 thousand, a decrease of 87.8% compared to $18,810 thousand for the same period in 2024[40] - EBITDA for the same period was $53.579 million, down from $64.809 million quarter-over-quarter and $66.135 million year-over-year[45] - Adjusted EBITDA for the three months ended September 30, 2025, was $59.481 million, compared to $72.614 million in the previous quarter and $72.750 million in the same quarter last year[45] - Free cash flow for the three months ended September 30, 2025, was $(19.380) million, a significant decline from $10.839 million in the previous year[45] Segment Performance - Chemical Technologies revenue increased by 13% and gross profit by 34% in Q3 2025 compared to Q2 2025[1] - Water Infrastructure segment generated revenues of $78.8 million in Q3 2025, a 2.5% sequential decline from Q2 2025[14] - Water Services segment revenues decreased by 22.6% sequentially to $166.9 million in Q3 2025, impacted by divested trucking operations[15] - The water infrastructure segment reported gross profit of $16.775 million, down from $22.392 million in the previous quarter and $28.957 million in the same quarter last year[45] - The water services segment gross profit decreased to $13.245 million from $25.259 million quarter-over-quarter and $28.482 million year-over-year[45] - The chemical technologies segment gross profit increased to $13.533 million from $10.102 million in the previous quarter and $5.010 million in the same quarter last year[45] Cash Flow and Liquidity - Cash flow from operations was $71.7 million in Q3 2025, benefiting from a $26 million decrease in net working capital[17] - Total liquidity was $175.5 million as of September 30, 2025, down from $279.3 million as of June 30, 2025[23] - Cash and cash equivalents decreased to $17,828 thousand at the end of the period from $51,186 thousand at the end of the previous quarter, reflecting a decline of 65.2%[40] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $149,221 thousand, down from $167,119 thousand for the same period in 2024[40] - The company incurred $126,212 thousand in net cash used in investing activities for the three months ended September 30, 2025, compared to $74,972 thousand in the previous quarter[40] - The company reported a cash flow from financing activities of $21,162 thousand for the three months ended September 30, 2025, compared to a cash outflow of $17,232 thousand for the same period in 2024[40] Assets and Liabilities - Total assets increased to $1,588,151 thousand as of March 31, 2025, up from $1,366,282 thousand a year earlier, representing a growth of approximately 16.2%[38] - Total liabilities rose to $656,496 thousand, an increase of 45.6% from $450,748 thousand a year ago[38] - Long-term debt increased to $285,440 thousand as of March 31, 2025, up from $85,000 thousand a year earlier, indicating a significant rise in leverage[38] - Total stockholders' equity increased to $931,655 thousand as of March 31, 2025, compared to $915,534 thousand a year earlier, reflecting a growth of 1.3%[38] Strategic Agreements and Acquisitions - In Q3 2025, Select signed a 7-year acreage dedication agreement for produced water services in the Midland Basin, supported by approximately 5,400 acres dedicated for gathering, recycling, and disposal[25] - A 12-year acreage dedication agreement was signed in the Northern Delaware Basin, integrating into Select's New Mexico system, with approximately 3,000 acres dedicated for produced water services[26] - Select signed a 12-year contract for operational expansion in Winkler County, Texas, supported by approximately 16,500 dedicated acres and over 40,000 acres under right-of-first-refusal for future development[27] - A long-term water transfer agreement was established for a key customer's operations in the Delaware Basin, covering approximately 309,000 acres of combined leasehold and right-of-first-refusal[28] - Select closed multiple strategic infrastructure acquisitions, adding 78,000 barrels per day of incremental permitted disposal capacity across various regions, including the Permian and Northeast[29] - The company executed a strategic asset swap with Omni Environmental Services, acquiring landfill, treatment, and disposal assets in the Bakken region[30]

Financial Performance - Total revenue for Q3 2025 was $322,243,000, a decrease of 13.2% from $371,349,000 in Q3 2024[16] - Water Services revenue decreased to $166,877,000 in Q3 2025 from $234,019,000 in Q3 2024, representing a decline of 28.7%[16] - Gross profit for Q3 2025 was $43,554,000, down 30.3% from $62,449,000 in Q3 2024[16] - Net income attributable to Select Water Solutions, Inc. for Q3 2025 was $2,683,000, a decrease of 83.0% compared to $15,791,000 in Q3 2024[16] - The net income for the three months ended September 30, 2025, was $2.683 million, compared to $32.284 million for the same period in 2024, indicating a significant decrease of approximately 91.7%[22] - Net income for the nine months ended September 30, 2025, was $23,525,000, a decrease of 37.4% compared to $37,584,000 in the same period of 2024[24] - Total revenue for the nine months ended September 30, 2025, was $1.060842 billion, a decrease of 3.8% from $1.103028 billion in the prior year[172] Assets and Liabilities - Total assets increased to $1,588,151,000 as of September 30, 2025, up from $1,366,282,000 at the end of 2024, reflecting a growth of 16.2%[14] - Long-term debt increased significantly to $285,440,000 in Q3 2025 from $85,000,000 in Q4 2024, marking a rise of 235.7%[14] - Total liabilities rose to $656,496,000 as of September 30, 2025, compared to $450,748,000 at the end of 2024, an increase of 45.6%[14] - Cash and cash equivalents decreased to $17,828,000 as of September 30, 2025, from $19,978,000 at the end of 2024, a decline of 10.8%[14] - The company’s accumulated deficit improved to $(184,578,000) as of September 30, 2025, from $(206,147,000) at the end of 2024[14] - As of September 30, 2025, the total stockholders' equity increased to $931.655 million from $915.534 million as of December 31, 2024, reflecting a growth of approximately 1.3%[20] Cash Flow and Investments - Net cash provided by operating activities decreased to $149,221,000 from $167,119,000, reflecting a decline of 10.7%[24] - Cash used in investing activities increased to $333,706,000, up 26.3% from $264,243,000 in the prior period[24] - The company made substantial investments in property and equipment, totaling $223,063,000, compared to $118,080,000 in the prior period, indicating a 88.9% increase[24] - The Company acquired Omni Environmental Solutions for a total consideration of $46.145 million, including $17.747 million in cash and 862,069 shares of Class A common stock[57] - The Company made asset acquisitions in the Permian Basin and Northeast region for a total of $23.4 million and $1.0 million, respectively, improving disposal capacity and infrastructure connectivity[62] Segment Performance - The Water Infrastructure segment generated revenue of $233.766 million, while the Water Services segment generated $614.914 million, and the Chemical Technologies segment contributed $221.895 million for the nine months ended September 30, 2025[172] - The Water Services segment reported the highest revenue of $169.014 million for the three months ended September 30, 2025, while the Water Infrastructure segment generated $79.877 million[171] - The company emphasized the importance of segment EBITDA as a key profitability measure for decision-making, with total EBITDA for the three months ended September 30, 2025, reported at $53.579 million[170] Debt and Financing - The company entered into a $550 million sustainability-linked senior secured credit facility, which includes $300 million in revolving commitments and $250 million in term commitments[82] - As of September 30, 2025, the Company had $305.0 million in borrowings outstanding under the Sustainability-Linked Credit Facility and $85.0 million under the Prior Sustainability-Linked Credit Facility[108] - The Company incurred $7.9 million of debt issuance costs in connection with the entry into the Sustainability-Linked Credit Facility[110] - The Company was in compliance with all debt covenants as of September 30, 2025[111] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2025, was 5.8%, compared to 24.2% for the same period in 2024, indicating a significant decrease in tax expense[157] - The Company anticipates that the OBBBA will decrease its tax liabilities due to increased deductions available[159] - The recognized liability under the Tax Receivable Agreements could materially change based on various factors, including changes in economic projections and significant future transactions[155] Operational Highlights - The company generates most of its revenue through water-management services associated with well completions and ongoing produced water management[207] - The Chemical Technologies segment provides completion and specialty chemicals, with revenue based on the quantity of chemicals used[209] - The company is focusing on developing innovative water treatment and reuse services to meet sustainability goals[203] - Multi-well pad development and upstream acreage consolidation present significant opportunities for the company[202] Market Conditions - The average spot price of WTI crude oil decreased to $65.78 in the Current Quarter from $76.43 in the Prior Quarter, a decline of approximately 13.5%[196] - The average Henry Hub natural gas spot price increased to $3.03 in the Current Quarter from $2.11 in the Prior Quarter, an increase of approximately 43.7%[196] - Increased inflation has led to higher interest rates, affecting the cost of capital for the company and its customers[198] - The financial health of the oil and gas industry remains generally strong, with improvements in revenues, earnings, and debt metrics despite recent commodity price moderation[199]

Financial Data and Key Metrics Changes - In Q3 2025, Select Water Solutions achieved cash flow from operating activities of $72 million, exceeding adjusted EBITDA for the second consecutive quarter [16][22] - Adjusted EBITDA for Q3 was just under $60 million, at the high end of previous guidance, with expectations for Q4 to grow to $60 million-$64 million [19][20] - SG&A expenses increased to $42 million in Q3, primarily due to severance and deal costs, but are expected to return to approximately $40 million in Q4 [19][22] Business Line Data and Key Metrics Changes - Water Infrastructure revenue decreased by 2.5% in Q3, with margins at 53%, slightly below prior quarter levels, primarily due to reduced skim oil sales and lower realized oil prices [16][17] - Water Services segment saw a revenue decrease of approximately 23% sequentially, heavily impacted by the divestment of legacy trucking operations, but gross margins before D&A improved to 19%-20% in Q4 [17][18] - Chemical Technologies achieved a sequential revenue increase of 13% in Q3, with gross margins before D&A at 19.9%, resulting in a gross profit before D&A of $15.2 million, a 29% sequential increase [18][19] Market Data and Key Metrics Changes - The Permian Basin remains the most active area in the industry, with Select Water Solutions recycling nearly 1 million barrels of water per day [7][8] - The company added nearly 800,000 acres under dedication in 2025, with expectations to continue adding dedications before year-end [9][10] - The company anticipates water infrastructure growth of 10% in Q4 and over 20% in 2026 [13][17] Company Strategy and Development Direction - The company is focused on enhancing long-term water infrastructure scale and cash flow generation, consolidating and divesting in Water Services for margin enhancement, and increasing market share in Chemical Technologies [5][6] - Select Water Solutions aims to provide comprehensive and flexible water midstream solutions, balancing produced water management with recycling and disposal capabilities [10][11] - The company is advancing mineral extraction efforts, including a lithium extraction facility in East Texas, which is expected to generate significant royalty payments [12][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver stable long-term earnings despite a lower commodity price environment, emphasizing the importance of unlocking incremental economics and efficiencies for customers [14][15] - The company expects strong growth into 2026, supported by a backlog of ongoing construction projects and new contract wins [17][24] - Management highlighted the importance of integrating water services with infrastructure to improve efficiency and margin profiles [61] Other Important Information - The company is committed to maintaining a low-leverage balance sheet while executing strategic initiatives to streamline operations and enhance shareholder value [23][24] - Select Water Solutions is actively pursuing beneficial reuse solutions and partnerships with regulators and universities to advance its mineral extraction and recycling capabilities [11][30] Q&A Session Summary Question: How does the company feel positioned regarding disposal capacity in the Permian? - The company emphasizes a recycling-first approach, with disposal capacity serving as a necessary backup to manage produced water volumes effectively [26] Question: What is the opportunity set for beneficial reuse and mineral extraction over the next five years? - The company is in the early stages of monetizing its mineral extraction capabilities and is optimistic about future revenue generation from these initiatives [30][39] Question: How does the integrated approach between infrastructure and services differentiate the company from peers? - The company highlighted its unique position as the largest water transfer provider, leveraging its infrastructure contracts to secure multi-year agreements for water transfer services [54][55]

Select Water Solutions, Inc. (WTTR) reported $322.24 million in revenue for the quarter ended September 2025, representing a year-over-year decline of 13.2%. EPS of $0.03 for the same period compares to $0.15 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $306.17 million, representing a surprise of +5.25%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.03.While investors closely watch year-over-year changes in headline numbers -- revenue and ...