Financial Data and Key Metrics Changes - In 2025, the company generated $1.4 billion in consolidated revenue, with a record adjusted EBITDA of $260 million, despite a challenging macro environment [15][22] - The company achieved a consolidated gross profit margin improvement, with the Water Infrastructure segment gross profit before D&A increasing by 5% in Q4 2025, reaching 54% [16][19] - Adjusted EBITDA for Q4 2025 was $64.2 million, exceeding guidance of $60 million-$64 million [22] Business Line Data and Key Metrics Changes - The Water Infrastructure segment grew recycled produced water volumes by 18%, totaling over 330 million barrels in 2025, contributing to over 800% revenue growth over five years [6][19] - The Chemical Technology segment achieved 19% year-over-year revenue growth and 45% growth in gross profit before D&A in 2025 [12][20] - The Water Services segment maintained market-leading positions and saw a 7% revenue growth in Q4 2025, driven by a 77% sequential uplift in Water Transfer revenues in New Mexico [18][20] Market Data and Key Metrics Changes - The company anticipates a steady commodity price environment in 2026, with oil prices expected to remain in the $55-$65 range [15][16] - The company is well-positioned to benefit from potential upside in the natural gas market, particularly in key gas basins [16] Company Strategy and Development Direction - The company is focusing on expanding its water infrastructure in the Northern Delaware Basin, which is characterized by productive geology and low breakeven costs [8][9] - Strategic investments are being made in long-term diversification efforts across municipal and industrial spaces, including beneficial reuse and mineral extraction technologies [5][11] - The company aims to grow its water infrastructure to account for over 60% of consolidated gross profit within the next 24 months, targeting 20%-25% year-over-year growth in 2026 [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, citing strong demand for water infrastructure solutions and the successful integration of new assets [10][14] - The company is focused on enhancing operational efficiencies and reducing costs, with a target to decrease SG&A expenses below 11% of revenue in 2026 [22][24] - Management highlighted the importance of leveraging existing infrastructure to generate incremental cash flow and high-margin royalty streams [11][27] Other Important Information - The company is entering 2026 with a capital expenditure plan of $175 million-$225 million, with a focus on infrastructure growth and maintenance spending [24][25] - The company has multiple ongoing construction projects and anticipates a heavier CapEx weighting in the first half of 2026 [25][26] Q&A Session Summary Question: Expansion opportunities in Northern Delaware - Management noted a shift towards smaller opportunities as the system matures, with a focus on leveraging the existing infrastructure for attractive returns [30][31] Question: Long-term growth opportunities beyond Northern Delaware - Management indicated plans to explore expansion into other regions, including Winkler County and potentially the Central Basin Platform [33] Question: Lithium extraction partnerships and other high-margin opportunities - Management confirmed ongoing evaluations of additional high-margin revenue streams, including potential iodine and strontium extraction projects [41][42] Question: Update on Peak Rentals business - Management is strategically engaging around Peak Rentals to ensure positive outcomes for both Peak and Select, while exploring opportunities in power generation [43][48] Question: Beneficial reuse pilots and their success - Management discussed successful pilots involving treated produced water, emphasizing the importance of proving water quality and informing regulatory efforts [51][54] Question: Macro environment impact on growth opportunities - Management anticipates a maturation phase in New Mexico, with potential for increased capital allocation and free cash flow generation in the coming years [62]