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]

Company Performance - Select Water Solutions, Inc. reported quarterly earnings of $0.1 per share, missing the Zacks Consensus Estimate of $0.13 per share, and down from $0.13 per share a year ago, representing an earnings surprise of -23.08% [1] - The company posted revenues of $364.22 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.28%, and down from $365.13 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Select Water Solutions, Inc. shares have lost about 31.9% since the beginning of the year, while the S&P 500 has gained 7.6% [3] - The current status of estimate revisions translates into a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.16 on revenues of $372.01 million, and for the current fiscal year, it is $0.54 on revenues of $1.47 billion [7] - The outlook for the Waste Removal Services industry, to which the company belongs, is currently in the bottom 30% of the Zacks industries, which may impact stock performance [8]

[Executive Summary & Strategic Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Strategic%20Highlights) This section provides an overview of Select Water Solutions' Q2 2025 financial and operational performance, along with key strategic initiatives and CEO commentary [Q2 2025 Financial & Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20%26%20Operational%20Highlights) Select Water Solutions reported improved profitability and cash flow in Q2 2025, with significant sequential increases in net income and adjusted EBITDA. The Water Infrastructure segment showed strong growth in revenue and gross profit, while the company also announced key strategic initiatives | Metric | Q2 2025 | Sequential Change (vs Q1 2025) | | :-------------------------------- | :------ | :------------------------------ | | Operating Cash Flow | $82.6M | Significantly increased | | Free Cash Flow | $10.8M | Significantly increased | | Net Income | | +22.1% | | Adjusted EBITDA | | +13.4% | | Water Infrastructure Revenue | | +12% | | Water Infrastructure Gross Profit | | +17% | - Announced an asset swap transaction with OMNI Environmental Solutions, acquiring infrastructure assets in the Bakken and divesting certain trucking operations[1](index=1&type=chunk)[6](index=6&type=chunk)[26](index=26&type=chunk) - Initiated the evaluation of strategic alternatives for Peak Rentals, its power solutions, equipment rentals, and wellsite infrastructure business[1](index=1&type=chunk)[7](index=7&type=chunk) - Secured multiple new long-term contracted Water Infrastructure projects in the Permian, backed by nearly **60,000 newly dedicated leasehold acres** and **385,000 acres under right-of-first refusal**[1](index=1&type=chunk)[9](index=9&type=chunk) [CEO's Strategic Commentary](index=1&type=section&id=CEO%27s%20Strategic%20Commentary) CEO John Schmitz highlighted the company's improved profitability and cash flow, driven by strategic advancements in Water Infrastructure. He emphasized the growth in recycling and disposal volumes, the rationalization of the Water Services segment through the OMNI transaction and Peak Rentals evaluation, and the focus on expanding the core Water Infrastructure platform, particularly in the Northern Delaware Basin - Improved profitability and cash flow in Q2 2025, with net income up **22%** and adjusted EBITDA up **13% sequentially**, despite modestly reduced consolidated revenue[2](index=2&type=chunk) - Water Infrastructure segment saw increased recycling and disposal volumes, leading to sequential revenue and gross profit increases of approximately **12%** and **17%**, respectively, with gross margins before D&A reaching **55%**[4](index=4&type=chunk) - The OMNI transaction is expected to meaningfully reduce Water Services revenues short-term but improve consolidated margins and reduce operational risk over time, with plans to upgrade acquired assets in H2 2025 for 2026 growth[6](index=6&type=chunk) - Evaluating capital structure options for Peak Rentals to accelerate growth and optimize the Water Services portfolio, while preserving economic exposure to Peak's future growth[7](index=7&type=chunk)[8](index=8&type=chunk) - New **12-year contract** in Northern Delaware Basin adds **42,000 dedicated acres** and **235,000 right-of-first-refusal acres**, including customer conveyance of existing disposal infrastructure[9](index=9&type=chunk) [Consolidated Financial Performance](index=4&type=section&id=Consolidated%20Financial%20Performance) This section details Select Water Solutions' overall financial results for Q2 2025, including revenue, net income, gross profit, and adjusted EBITDA [Revenue and Net Income](index=4&type=section&id=Revenue%20and%20Net%20Income) Consolidated revenue for Q2 2025 slightly decreased sequentially and year-over-year, while net income increased sequentially but decreased compared to Q2 2024 | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :---------- | :----------- | :----------- | :----------- | | Revenue | 364.2 | 374.4 | 365.1 | | Net Income | 11.7 | 9.6 | 14.9 | [Gross Profit and Margins](index=5&type=section&id=Gross%20Profit%20and%20Margins) Gross profit and gross margin before D&A improved sequentially in Q2 2025, indicating better operational efficiency despite a slight dip in total gross profit compared to Q2 2024 | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------- | :----------- | :----------- | :----------- | | Gross Profit | $57.8M | $55.8M | $60.2M | | Total Gross Margin | 15.9% | 14.9% | 16.5% | | Gross Profit before D&A | $98.8M | $94.4M | $97.6M | | Gross Margin before D&A | 27.1% | 25.2% | 26.7% | [SG&A and Adjusted EBITDA](index=5&type=section&id=SG%26A%20and%20Adjusted%20EBITDA) SG&A expenses remained relatively stable with non-recurring transaction costs impacting both Q1 and Q2 2025. Adjusted EBITDA saw a strong sequential increase in Q2 2025 | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :-------------- | :----------- | :----------- | :----------- | | SG&A | 38.9 | 37.4 | 39.0 | | Adjusted EBITDA | 72.6 | 64.0 | 69.6 | - SG&A in Q2 2025 included **$1.7 million** in non-recurring transaction costs, following **$1.2 million** in Q1 2025[15](index=15&type=chunk) - Adjusted EBITDA in Q2 2025 was adjusted for **$2.0 million** of non-recurring transaction costs, **$1.5 million** of impairments and abandonments, and **$1.1 million** in other adjustments[16](index=16&type=chunk) [Business Segment Performance](index=5&type=section&id=Business%20Segment%20Performance) This section analyzes the individual performance of Select Water Solutions' Water Infrastructure, Water Services, and Chemical Technologies segments [Water Infrastructure Segment](index=5&type=section&id=Water%20Infrastructure%20Segment) The Water Infrastructure segment demonstrated strong sequential revenue growth and improved gross margins before D&A, driven by increased recycling and disposal volumes. The company anticipates continued growth for this segment in the coming quarters and into 2026 | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :------------------------- | :----------- | :----------- | :----------- | | Revenue | 80.9 | 72.4 | 68.6 | | Gross Margin before D&A | 55.2% | 53.7% | 51.0% | - Water Infrastructure revenues increased **11.7%** sequentially, exceeding company guidance[17](index=17&type=chunk) - Anticipates **flat-to-down low single-digit sequential revenue in Q3 2025**, followed by **10% sequential growth in Q4 2025**, and **20% year-over-year growth in 2026**[17](index=17&type=chunk) [Water Services Segment](index=5&type=section&id=Water%20Services%20Segment) The Water Services segment experienced a sequential revenue decrease due to declining activity levels and reduced freshwater sourcing sales. A significant further decrease is expected in Q3 2025, primarily due to the OMNI transaction divestments | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :------------------------- | :----------- | :----------- | :----------- | | Revenue | 215.7 | 225.6 | 230.0 | | Gross Margin before D&A | 19.6% | 19.5% | 22.5% | - Revenues decreased **4.4%** sequentially, less than expected[18](index=18&type=chunk) - Expected Q3 2025 segment revenues to decrease by **approximately 25%** due to the OMNI divestments and decreased macro activity levels[18](index=18&type=chunk) [Chemical Technologies Segment](index=6&type=section&id=Chemical%20Technologies%20Segment) The Chemical Technologies segment saw a sequential revenue decrease but achieved stronger than anticipated margin performance, leading to net sequential gains in gross profit before D&A. Future revenue is expected to decline slightly due to industry activity levels | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :------------------------- | :----------- | :----------- | :----------- | | Revenue | 67.7 | 76.3 | 66.6 |\ | Gross Margin before D&A | 17.5% | 15.2% | 16.4% | - Revenues sequentially decreased more than expected, but stronger margin performance from new product development led to overall net sequential gains in gross profit before D&A[19](index=19&type=chunk) - Anticipates Q3 2025 revenue to decrease **low-to-mid single-digit percentages**, with gross margin before D&A remaining steady in the **15%–17% range**[19](index=19&type=chunk) [Cash Flow and Capital Structure](index=6&type=section&id=Cash%20Flow%20and%20Capital%20Structure) This section examines Select Water Solutions' cash flow generation, capital expenditures, balance sheet position, and liquidity as of Q2 2025 [Cash Flow Activities](index=6&type=section&id=Cash%20Flow%20Activities) Select Water Solutions generated substantial operating cash flow and positive free cash flow in Q2 2025, a significant improvement from the previous quarter, primarily driven by a decrease in net working capital | Metric | Q2 2025 ($M) | Q1 2025 ($M) | Q2 2024 ($M) | | :----------------------------------- | :----------- | :----------- | :----------- | | Cash flow provided by operations | 82.6 | (5.1) | 83.1 | | Net capital expenditures | 71.7 | | | | Free cash flow | 10.8 | (51.5) | | - Cash flow from operations benefited from a **$23.3 million** decrease in net working capital, including a **$28.3 million** inflow from reduced accounts receivable balances[20](index=20&type=chunk) - Financing activities included **$25.0 million** of borrowings from the sustainability-linked credit facility, partially offset by **$8.3 million** in quarterly dividends[22](index=22&type=chunk) [Balance Sheet and Liquidity](index=7&type=section&id=Balance%20Sheet%20and%20Liquidity) The company significantly increased its cash and cash equivalents and total liquidity in Q2 2025, while also increasing borrowings under its credit facility. The borrowing base and available capacity under the sustainability-linked credit facility also improved | Metric | June 30, 2025 ($M) | March 31, 2025 ($M) | December 31, 2024 ($M) | | :----------------------------------- | :----------------- | :------------------ | :--------------------- | | Cash and cash equivalents | 51.2 | 27.9 | 20.0 | | Borrowings outstanding (Term Loan) | 250.0 | 250.0 | | | Borrowings outstanding (Revolver) | 25.0 | 0.0 | | | Borrowing base | 270.3 | 252.2 | | | Available borrowing capacity | 228.1 | 232.3 | | | Total liquidity | 279.3 | 260.2 | 134.8 | [Strategic Updates and Business Development](index=7&type=section&id=Strategic%20Updates%20and%20Business%20Development) This section outlines Select Water Solutions' recent strategic transactions, asset divestments, and new long-term Water Infrastructure contracts [OMNI Environmental Solutions Asset Swap](index=7&type=section&id=OMNI%20Environmental%20Solutions%20Asset%20Swap) Select completed an asset swap with OMNI Environmental Solutions in July 2025, expanding its Water Infrastructure footprint in the Bakken region by acquiring key solids management assets, while divesting certain trucking and rental operations from its Water Services segment. This transaction is expected to enhance margins and reduce operational risk - Acquired a special waste landfill, processing and treatment plant, disposal facilities, and oil reclamation assets in Williams County, North Dakota, expanding Bakken solids management footprint[27](index=27&type=chunk) - Divested certain trucking and equipment rental operations in the Northeast, MidCon, and Bakken regions to OMNI, along with **$7.5 million cash**, **$10.2 million for retained net working capital**, and **862,069 Select Class A shares**[28](index=28&type=chunk) - Anticipates upgrading and expanding acquired landfill and treatment assets in **H2 2025**, adding high-margin growth potential to Water Infrastructure in **2026**[27](index=27&type=chunk) [Other Trucking Divestments](index=8&type=section&id=Other%20Trucking%20Divestments) Separate from the OMNI transaction, Select further reduced its trucking footprint by exiting operations in the MidCon and Haynesville regions, aiming to streamline its Water Services segment - Exited remaining trucking operations in the MidCon and Haynesville regions for additional cash consideration, significantly reducing its trucking footprint to Permian, Eagle Ford, and Rockies regions[29](index=29&type=chunk) | Metric | Full-Year 2024 | Six-Month YTD June 30, 2025 | | :----------------------------------- | :------------- | :-------------------------- | | Divested Trucking Ops Revenue (% of Trucking BU) | **~37%** | **~20%** | | Divested Trucking Ops Gross Profit before D&A (% of Trucking BU) | **~20%** | **~5%** | | Divested Trucking Ops Revenue (% of Water Services) | **~10%** | **~5%** | | Divested Trucking Ops Gross Profit before D&A (% of Water Services) | **~5%** | **~5%** | [Water Infrastructure Business Development](index=8&type=section&id=Water%20Infrastructure%20Business%20Development) Select secured multiple new long-term contracts for full lifecycle produced water infrastructure projects in the Permian Basin, involving significant capital expenditures and expected to be operational in H1 2026 - Executed multiple new long-term contracts for produced water gathering, recycling, disposal, and distribution infrastructure projects in the Permian Basin[31](index=31&type=chunk) - Combined capital expenditures for these new projects are **approximately $40 million**, with each project anticipated to be online in the **first half of 2026**[31](index=31&type=chunk) [Northern Delaware Basin – Eddy County Network Expansion](index=8&type=section&id=Northern%20Delaware%20Basin%20%E2%80%93%20Eddy%20County%20Network%20Expansion) A 12-year agreement was signed for infrastructure expansion in Eddy County, New Mexico, including new recycling facilities, pipelines, and the integration of existing customer disposal facilities, supported by significant dedicated and right-of-first-refusal acreage - **12-year agreement** for construction and expansion of gathering, recycling, disposal, and distribution infrastructure in the Northern Delaware Basin, integrating into Select's Eddy County system[32](index=32&type=chunk) - Plans include two new recycling facilities (**240,000 bpd throughput**, **4 million barrels storage**) and **21 miles of dual-lined pipelines**[32](index=32&type=chunk) - Supported by **approximately 42,000 dedicated acres** and an **additional 235,000 acres under right-of-first-refusal**, with construction expected to be completed during **H1 2026**[32](index=32&type=chunk) [Northern Delaware Basin Infrastructure Expansion and Right-of-First Refusal Execution](index=8&type=section&id=Northern%20Delaware%20Basin%20Infrastructure%20Expansion%20and%20Right-of-First%20Refusal%20Execution) An 8-year contract was secured to support an existing customer's operational expansion in the Northern Delaware basin, involving the assumption of recycling infrastructure operatorship, pipeline construction, and an extension of an existing agreement, adding substantial dedicated and right-of-first-refusal acreage - **8-year contract** to assume operatorship of an existing customer's recycling infrastructure in the Northern Delaware basin and construct **three miles of pipeline** to connect to Select's Lea County network[33](index=33&type=chunk) - Extended the contract term of another existing Lea and Eddy County recycling agreement by **five additional years**[33](index=33&type=chunk) - Supported by **approximately 17,000 additional dedicated acres** and **150,000 acres under right-of-first-refusal**, with the full project expected to be operational by **Q1 2026**[33](index=33&type=chunk) [Financial Outlook and Guidance](index=4&type=section&id=Financial%20Outlook%20and%20Guidance) This section presents Select Water Solutions' forward-looking projections for consolidated and segment performance, along with capital expenditure guidance [Consolidated and Segment Outlook](index=4&type=section&id=Consolidated%20and%20Segment%20Outlook) Select anticipates continued activity softness in H2 2025, particularly in Water Services, but expects resilience and growth from Water Infrastructure. Consolidated Adjusted EBITDA is projected to decline in Q3 before recovering in Q4 - Water Infrastructure revenue is anticipated to be **flat-to-modestly down in Q3 2025**, then grow **10% sequentially in Q4 2025**, setting the stage for **20% year-over-year growth in 2026**[10](index=10&type=chunk)[17](index=17&type=chunk) - Consolidated Adjusted EBITDA in Q3 2025 is expected to decline sequentially to an estimated **$55 – $60 million**, with a tick-up in Q4 driven by Water Infrastructure growth[10](index=10&type=chunk) - Water Services segment revenues are expected to decrease by **approximately 25%** in Q3 2025 due to OMNI divestments and reduced activity levels[18](index=18&type=chunk) - Chemical Technologies revenue is anticipated to decrease **low-to-mid single-digit percentages** in Q3 2025[19](index=19&type=chunk) [Capital Expenditures Guidance](index=4&type=section&id=Capital%20Expenditures%20Guidance) The company maintains its 2025 net capital expenditures guidance, with a bias towards the higher end to support future growth, particularly in Water Infrastructure - Maintains **2025** net capital expenditures guidance of **$225 million to $250 million**, with a bias to the higher-end due to recent contract awards, positioning for **2026** and beyond[11](index=11&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) This section provides the complete unaudited consolidated financial statements, including statements of operations, balance sheets, and cash flows [Consolidated Statements of Operations](index=11&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations provide a detailed breakdown of revenues, costs, and expenses across segments, leading to net income for the three and six months ended June 30, 2025, compared to prior periods | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended March 31, 2025 | Three months ended June 30, 2024 | | :-------------------- | :------------------------------- | :-------------------------------- | :------------------------------- | | Total revenue | $364,215 | $374,384 | $365,131 | | Gross profit | $57,753 | $55,770 | $60,156 | | Income from operations| $15,425 | $15,541 | $20,364 | | Net income | $11,671 | $9,560 | $14,899 | | Net income per share (Class A—Basic) | $0.10 | $0.08 | $0.13 | [Consolidated Balance Sheets](index=12&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets present the company's financial position as of June 30, 2025, March 31, 2025, and December 31, 2024, detailing assets, liabilities, and equity | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------- | :---------------- | | Total current assets | $439,425 | $457,850 | $385,498 | | Total assets | $1,546,489 | $1,545,211 | $1,366,282 | | Total current liabilities | $219,057 | $249,885 | $233,375 | | Total liabilities | $623,370 | $628,262 | $450,748 | | Total equity | $923,119 | $916,949 | $915,534 | [Consolidated Statements of Cash Flows](index=13&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows illustrate the cash generated from or used in operating, investing, and financing activities for the three and six months ended June 30, 2025, and prior periods | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended March 31, 2025 | Three months ended June 30, 2024 | | :-------------------- | :------------------------------- | :-------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities | $82,586 | $(5,061) | $83,114 | | Net cash used in investing activities | $(74,972) | $(132,522) | $(87,211) | | Net cash provided by financing activities | $15,669 | $145,499 | $7,762 | | Net increase (decrease) in cash and cash equivalents | $23,294 | $7,914 | $3,664 | [Non-GAAP Financial Measures & Reconciliations](index=14&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles non-GAAP financial measures used by Select Water Solutions to their most directly comparable GAAP counterparts [Non-GAAP Definitions and Limitations](index=14&type=section&id=Non-GAAP%20Definitions%20and%20Limitations) This section defines non-GAAP financial measures such as EBITDA, Adjusted EBITDA, gross profit before D&A, gross margin before D&A, and free cash flow, explaining their utility for external users while also highlighting their limitations and non-comparability with GAAP measures - EBITDA, Adjusted EBITDA, gross profit before D&A, gross margin before D&A, and free cash flow are non-GAAP measures used to provide useful information to external users by removing effects of capital structure, asset base, and non-recurring items[44](index=44&type=chunk) - These non-GAAP measures should not be considered as alternatives to GAAP measures (Net income, Gross profit, Net cash provided by operating activities) and may not be comparable to similarly titled measures of other companies[45](index=45&type=chunk) - The company is unable to provide a reconciliation of forward-looking non-GAAP measures to GAAP due to the inherent difficulty in predicting certain GAAP amounts with reasonable accuracy[46](index=46&type=chunk) [Reconciliations](index=15&type=section&id=Reconciliations) Detailed reconciliations are provided for free cash flow to net cash provided by operating activities, EBITDA and Adjusted EBITDA to net income, and gross profit before D&A to total gross profit, along with gross margin before D&A calculations | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Net cash provided by (used in) operating activities | $82,586 | $(5,061) | $83,114 | | Purchase of property and equipment | $(79,406) | $(48,427) | $(49,113) | | Proceeds received from sale of property and equipment | $7,659 | $1,944 | $3,379 | | **Free cash flow** | **$10,839** | **$(51,544)** | **$37,380** | | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Net income | $11,671 | $9,560 | $14,899 | | EBITDA | $64,809 | $56,930 | $59,077 | | **Adjusted EBITDA** | **$72,614** | **$64,031** | **$69,647** | | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | As reported gross profit | $57,753 | $55,770 | $60,156 | | Total D&A | $41,054 | $38,675 | $37,445 | | **Gross profit before D&A** | **$98,807** | **$94,445** | **$97,601** | | **Total gross margin before D&A** | **27.1%** | **25.2%** | **26.7%** | [Company Information](index=9&type=section&id=Company%20Information) This section provides general company information, including details for the earnings call, a company overview, and a cautionary statement regarding forward-looking statements [Second Quarter Earnings Conference Call](index=9&type=section&id=Second%20Quarter%20Earnings%20Conference%20Call) Details for the Q2 2025 earnings conference call, including date, time, dial-in information, and webcast access, are provided for investors and interested parties - Conference call scheduled for **Wednesday, August 6, 2025**, at **11:00 a.m. Eastern time / 10:00 a.m. Central time**[34](index=34&type=chunk) - Telephonic replay available through **August 20, 2025**, and webcast archive accessible for approximately **90 days**[34](index=34&type=chunk) [About Select Water Solutions, Inc.](index=9&type=section&id=About%20Select%20Water%20Solutions%2C%20Inc.) Select Water Solutions is a leading provider of sustainable water and chemical solutions to the energy industry, emphasizing safe, environmentally responsible water management and leveraging critical water infrastructure assets and chemical manufacturing capabilities - Select is a leading provider of sustainable water and chemical solutions to the energy industry[35](index=35&type=chunk) - Solutions are supported by critical water infrastructure assets, chemical manufacturing, and water treatment and recycling capabilities[35](index=35&type=chunk) - Places utmost importance on safe, environmentally responsible management of water throughout the lifecycle of a well[35](index=35&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=10&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises readers that the communication contains forward-looking statements, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations. It lists various factors that could impact these statements and disclaims any obligation to update them - All statements other than historical facts are forward-looking and contain current expectations about future results[36](index=36&type=chunk) - Such statements are not guarantees of future performance and are subject to known and unknown risks and uncertainties, including macroeconomic uncertainty, geopolitical conflicts, commodity price volatility, regulatory changes, and technological advancements[36](index=36&type=chunk) - Investors should not place undue reliance on forward-looking statements, and the company undertakes no obligation to publicly update or revise them unless required by law[36](index=36&type=chunk)

Core Insights - The company reported a net income increase of 22.1% and an adjusted EBITDA improvement of 13.4% in Q2 2025 compared to Q1 2025, despite a slight decline in consolidated revenue [3][14] - The Water Infrastructure segment saw revenue and gross profit growth of 12% and 17%, respectively, in Q2 2025 compared to Q1 2025, with gross margins before depreciation and amortization reaching 55% [4][18] - An asset swap transaction with OMNI Environmental Solutions was completed, enhancing the company's Water Infrastructure assets while divesting certain trucking operations [6][27] Financial Performance - Operating cash flow for Q2 2025 was $82.6 million, a significant increase from cash flow used in operations of $5.1 million in Q1 2025 [21] - Total revenue for Q2 2025 was $364.2 million, down from $374.4 million in Q1 2025 but slightly up from $365.1 million in Q2 2024 [14] - Free cash flow for Q2 2025 was $10.8 million, recovering from a negative $51.5 million in Q1 2025 [22] Business Segment Performance - The Water Infrastructure segment generated revenues of $80.9 million in Q2 2025, up from $72.4 million in Q1 2025, with a gross margin before D&A of 55.2% [18] - The Water Services segment reported revenues of $215.7 million in Q2 2025, down from $225.6 million in Q1 2025, with a gross margin before D&A of 19.6% [19] - The Chemical Technologies segment's revenue decreased to $67.7 million in Q2 2025 from $76.3 million in Q1 2025, but gross margin before D&A improved to 17.5% [20] Strategic Developments - The company announced multiple new long-term contracted Water Infrastructure projects in the Permian Basin, backed by nearly 60,000 newly dedicated leasehold acres [2] - The company is evaluating strategic alternatives for Peak Rentals, aiming to enhance growth and access to capital [7][8] - A significant 12-year contract was signed for water recycling and disposal infrastructure in the Northern Delaware Basin, expected to enhance the company's operational capabilities [9][34] Cash Flow and Capital Expenditures - Net capital expenditures for Q2 2025 were $71.7 million, with a focus on supporting ongoing water infrastructure projects [22][11] - The company maintains a 2025 net capital expenditures guidance of $225 million to $250 million, with a bias towards the higher end due to recent project awards [11] Balance Sheet and Liquidity - Total cash and cash equivalents increased to $51.2 million as of June 30, 2025, compared to $27.9 million as of March 31, 2025 [24] - Total liquidity was reported at $279.3 million as of June 30, 2025, up from $260.2 million as of March 31, 2025 [26]

Core Insights - Select Water Solutions achieved significant milestones in sustainability and operational growth in 2024, focusing on water recycling and environmental responsibility [1][2][3] Sustainability Achievements - In 2024, Select treated or recycled 20.0 billion gallons (477 million barrels) of produced water, marking a 9% increase from 2023 [1][4] - The company increased environmentally-responsible wastewater disposal volumes by 41% compared to 2023 [1][4] - Select reduced total Scope 1 and Scope 2 emissions by 8% year-over-year, supported by investments in infrastructure and fleet upgrades [1][4] Performance Against Targets - Select exceeded its annual water recycling target by 324% and employee safety target by 49% as part of its sustainability-linked credit facility [1][4] - The company achieved a total recordable incident rate (TRIR) of 0.54 and a lost time incident rate of 0.25 in 2024 [4] Future Goals - For 2025, Select established a target to increase recycled produced water volumes by 14% at fixed facilities, with an annual increase of 17.5% until reaching a target of 403 million barrels per year by 2029 [8] - The company aims to reduce TRIR by approximately 1.5% each year, outperforming the industry average by 35% by 2029 [8] Commitment to Stakeholders - Select's 2024 Sustainability Report emphasizes its dedication to environmental stewardship and sustainable development within its operational communities [4][5] - The company plans to continue regular reporting on its ESG policies and performance through its website and annual reports [5]

Select Water Solutions, Inc. (WTTR) is expected to deliver flat earnings compared to the year-ago quarter on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on August 5, might help the stock move higher if these key numbers ...

Group 1 - Select Water Solutions, Inc. will release its 2025 second quarter financial results on August 5, 2025, after market close [1] - A conference call to discuss the financial results is scheduled for August 6, 2025, at 11:00 a.m. Eastern Time [1] - The conference call will be accessible via phone or live over the Internet, with a replay available until August 20, 2025 [1] Group 2 - Select Water Solutions is a leading provider of sustainable water and chemical solutions to the energy industry [2] - The company emphasizes safe and environmentally responsible management of water throughout the lifecycle of a well [2] - Select Water Solutions aims to conserve and protect the environment through responsible water resource management [2]

Group 1 - The analyst has over 14 years of experience in stock analysis and writing, with a focus on both long and short positions in an unbiased manner [1] - The primary focus of the analyst's coverage is on the energy sector, specifically the oilfield equipment services sector, for the past 7 years [1] - The analyst also covers the Industrial Supply industry and occasionally collaborates with another contributor [1] Group 2 - There is no disclosure of any stock, option, or similar derivative positions in the companies mentioned, nor any plans to initiate such positions within the next 72 hours [2] - The article expresses the analyst's own opinions and is not compensated beyond contributions to Seeking Alpha [2] - The analyst has no business relationship with any company whose stock is mentioned in the article [2]