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]

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 ...