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