Select Water Solutions (NYSE:WTTR) Q4 2025 Earnings call February 18, 2026 11:00 AM ET Company ParticipantsChris George - EVP and CFOConnor Jensen - Senior Equity Research AssociateDerrick Whitfield - Managing Director and Head of Energy Equity ResearchGarrett Williams - VP of Corporate Finance and Investor RelationsJeff Robertson - Managing Director of Natural ResourcesJohn Schmitz - Founder, Chairman, President and CEOMichael Skarke - EVP and COOMike Lyons - EVP and Chief Strategy and Technology OfficerSe ...

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 [17][25] - The company improved consolidated margins and achieved a gross profit margin of 54% in the fourth quarter [18][22] - Adjusted EBITDA for the fourth quarter was $64.2 million, exceeding guidance [25] Business Line Data and Key Metrics Changes - The Water Infrastructure segment saw revenue growth of over 800% over five years, becoming the largest segment by profitability [8] - The Chemical Technology segment achieved 19% year-over-year revenue growth and 45% growth in gross profit before depreciation and amortization [13][24] - The Water Services segment maintained market-leading positions and achieved 7% revenue growth in the fourth quarter [20][22] Market Data and Key Metrics Changes - The company anticipates a steady commodity price environment in 2026, with oil prices expected to remain between $55-$65 [17] - The company expects 20%-25% year-over-year growth in the Water Infrastructure segment for 2026 [9][21] 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 breakevens [9][10] - Strategic investments are being made in long-term diversification efforts, including beneficial reuse and mineral extraction [7][12] - The company aims to grow its water infrastructure to represent over 60% of consolidated gross profit in the next 24 months [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2026, supported by ongoing construction projects and customer demand [16][21] - The company is well-positioned to benefit from market-leading positions in key gas basins and anticipates stable activity levels [17][18] Other Important Information - The company is targeting a reduction in SG&A expenses to below 11% of revenue for the full year 2026 [25] - Capital expenditures for 2026 are expected to be between $175 million and $225 million, with a focus on water infrastructure growth [27][28] Q&A Session Summary Question: Expansion opportunities in Northern Delaware - Management noted that smaller opportunities are more prevalent as the system matures, with some larger projects still being pursued [32][34] Question: Long-term growth opportunities beyond Northern Delaware - Management indicated potential expansion into other basins, including Winkler County, and emphasized the unique opportunities in Lea and Eddy County [35][37] Question: Lithium extraction partnerships and other high-margin opportunities - Management confirmed ongoing evaluations of additional high-margin revenue streams, including iodine and strontium extraction [42][44] Question: Update on Peak Rentals business - Management is strategically engaging around Peak Rentals to ensure positive outcomes for both Peak and Select [46][50] Question: Beneficial reuse pilots - Management highlighted successful pilots in collaboration with operators and universities, focusing on treated produced water applications [53][56]