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]

Financial Data and Key Metrics Changes - In Q1 2025, the company increased revenue by 7%, adjusted EBITDA by 14%, and improved consolidated gross margins by one percentage point [7][19] - Net income grew by $12 million, while consolidated SG&A expenses decreased by 6% [7][19] - The company achieved strong revenue growth of 21% in Chemical Technologies and 8% in Water Services [7] Business Line Data and Key Metrics Changes - Water Infrastructure maintained a strong gross margin of 54%, despite a sequential revenue decline driven by reduced revenues from legacy freshwater pipeline assets [7][16] - Water Services saw an 8% sequential revenue increase, primarily due to improved activity levels [17] - Chemical Technology experienced a strong sequential revenue growth of 21%, exceeding expectations [18] Market Data and Key Metrics Changes - The Northern Delaware Basin now represents 54% of the company's total fixed recycling capacity, reflecting significant growth in contracted acreage [11] - The company has developed a leading water infrastructure network in the Northern Delaware Basin, with over 1 million acres under dedication or right of first refusal agreements [8][11] Company Strategy and Development Direction - The company is focused on expanding its water infrastructure and has secured several large contracts that enhance its long-term revenue potential [8][10] - The strategic location of new projects and partnerships with industry-leading E&P partners are expected to contribute significantly to future earnings [8][10] - The company is also pursuing growth opportunities in agricultural, industrial, and municipal water sectors [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience despite macroeconomic pressures and potential activity dislocations due to tariffs and trade uncertainties [9][14] - The company anticipates continued growth in consolidated adjusted EBITDA of 6% to 12% during Q2 2025, despite potential declines in activity levels later in the year [13][19] - Management highlighted the importance of maintaining a disciplined approach to leverage and capital allocation to support growth initiatives [15][21] Other Important Information - The company successfully implemented a new ERP system across all operations, which is expected to yield efficiencies over time [23] - The company has adjusted its free cash flow expectations for the year to a conversion rate of 5% to 15% relative to adjusted EBITDA [21] Q&A Session Summary Question: Activity pullback in growth areas - Management confirmed that there has not been a pullback in activity in the Permian Basin, indicating confidence in their asset positioning [26][27] Question: Upcoming catalysts for AV Farms project - Management is engaging stakeholders and has letters of intent with potential customers, indicating strong demand and optimism for future revenue generation [28][30] Question: Role of CNA companies in AB Farms project - Management stated that Select will eventually take over operational roles while collaborating with CNA for commercialization [39][41] Question: Impact of tariffs on water infrastructure contracts - Management indicated that tariffs are not expected to materially impact water infrastructure projects due to domestic supply chains [43] Question: Supply chain resilience in Chemical Technologies - Management highlighted efforts to localize the supply chain, reducing reliance on international sourcing, particularly from China [44][45] Question: Future growth in water infrastructure - Management expects to maintain a growth trajectory of around 15% into 2026, supported by new projects and existing contracts [52][53] Question: M&A opportunities in the current environment - Management noted that the current environment presents opportunities for strategic asset purchases, particularly in a down cycle [75][78]