Water Resource Management - Australia is expanding desalination capacity to address a growing population and declining rainfall [1] - The expansion focuses on converting seawater to freshwater [1]

Financial Data and Key Metrics Changes - The company reported a strong quarter of sales execution with improved mega project shipments and a rebound in wastewater revenue, reiterating its four-year revenue guidance [3] - Operating expenses (OPEX) guidance has been reduced further due to effective cost control measures [3] Business Line Data and Key Metrics Changes - The CO2 business had a successful summer testing season, with strong OEM engagement, although commercialization is still in early stages [4] - The lithium extraction project in Argentina, valued at $350,000, is expected to contribute to revenue this quarter, indicating growth in the wastewater treatment niche [31] Market Data and Key Metrics Changes - The company is optimistic about long-term trends in desalination and water treatment, although it cautions against expecting near-term results due to the lengthy infrastructure build-out [12] Company Strategy and Development Direction - The company is focused on driving efficiency and lowering costs while continuing to invest in its growing wastewater business [3] - There is a strategic shift towards a top-down approach with OEMs to facilitate customer adoption of new technologies [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing interest from OEMs and the potential for commercialization in 2027, following another summer testing season [23] - The company anticipates a similar backlog pattern for 2026, with a slow start and a heavier second half [26] Other Important Information - The company has signed a Memorandum of Understanding (MOU) with Hillphoenix, indicating progress towards a commercial agreement [11] Q&A Session Summary Question: Key takeaways from the recent white paper on CO2 - The white paper validated energy savings of up to 15% at peak times and significant water savings in specific regions [7][8] Question: Progress with OEMs and commercial agreements - OEMs are beginning discussions with large end users, but commercial agreements are likely a year away [10][11] Question: Visibility for 2026 - The company expects to see backlog building for 2026, although it will be relatively small [26] Question: Cost reductions and international footprint - Cost reductions were achieved independently of international expansion efforts [30] Question: Hiring for wastewater efforts - The company seeks candidates with a track record in wastewater and relevant industry relationships [33] Question: Retailer tests for CO2 technology - Most installations for retailer tests are expected to be skid installations [34]

Water Scarcity and Challenges - Access to safe drinking water remains a significant global challenge, particularly in low-income countries [2] - Women and children in sub-Saharan Africa spend an estimated 40 billion hours annually collecting water [3] - High salinity levels make seawater unsafe for consumption, creating a paradox of abundance and scarcity [3][4] Desalination Technologies and Advancements - Early civilizations used basic distillation methods to purify water [5] - Modern desalination plants emerged in the 1950s in oil-rich, water-poor nations like Kuwait [6] - Singapore popularized reverse osmosis in 2010, turning sewage into ultra-pure drinking water [7] - Desalination provides approximately 42% of the UAE's water supply [7] Sustainability and Renewable Energy Integration - Desalination is energy-intensive and contributes to carbon emissions [8] - Solar-powered desalination offers a sustainable alternative, with the UAE uniquely positioned to lead this transition [9] - Abu Dhabi's Alawila is the world's largest desalination plant powered entirely by solar energy, producing 99,000 cubic meters of water per day [10] - The UAE consumes 500 liters of water per resident daily [10] Bottled Water Consumption and Environmental Impact - In the UAE, 25 billion liters (2.5% billion) of water are bottled annually [13] - Over 80% of people in the UAE prefer bottled water despite access to safe desalinated tap water [13] - The production, packaging, and transportation of bottled water contribute to significant environmental waste and pollution [14][15] Recommendations and Future Outlook - The industry needs a sustainable system for treating, transporting, and consuming water [16] - Decarbonizing desalination and scaling solar-powered desalination are crucial steps [16] - Eliminating plastic use in water packaging is essential for sustainable progress [16]

Environmental Sustainability - Oil companies in the Permian Basin are exploring desalination [1] - Desalination is being explored to recycle fracking wastewater [1] - The recycled water is intended for parched ranches [1]

Project Development - Senegal reached a new agreement with Saudi Arabia's Acwa Power to proceed with a desalination plant [1] International Cooperation - The agreement follows a cost review, indicating potential adjustments to the project's financial terms [1]

Core Viewpoint - Consolidated Water Co. Ltd. (CWCO) is leveraging advanced technology for seawater desalination to meet potable water demands, enhancing its operational performance despite facing challenges related to accounts receivable and weather fluctuations [1][8]. Group 1: Company Operations and Technology - CWCO utilizes Reverse Osmosis Technology at all its water treatment plants, which is crucial for converting seawater to potable water, positioning the company favorably in the desalination market [2][8]. - The company operates 10 desalination plants with a total capacity of 26.2 million gallons per day across four countries, and is actively seeking new market opportunities to expand its drinking water and wastewater services [3][8]. - CWCO aims to grow its operations in complementary service industries through independent ventures or partnerships, targeting advanced water-treatment businesses under medium to long-term contracts with government entities [4][8]. Group 2: Financial Challenges - The Bahamas subsidiary of CWCO is experiencing significant delays in collecting accounts receivable, with balances of $25.5 million and $28.4 million as of March 31, 2025, and December 31, 2024, respectively, with approximately 78% and 81% of these balances being delinquent [5][8]. - Fluctuations in demand for water services are influenced by weather conditions and tourism levels, which could negatively impact the company's operational results and cash flows [6][8]. Group 3: Stock Performance - Over the past three months, CWCO's stock has returned 26.8%, contrasting with a 0.3% decline in the industry, indicating strong market performance [7][8].