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Select Water Solutions Reports First Quarter 2025 Results

Select Water Solutions, Inc. recently reported impressive financial outcomes for the first quarter of 2025, demonstrating robust growth in revenue and net income. The firm, a prominent provider of sustainable water and chemical solutions, announced consolidated revenue of $374.4 million for the quarter ending March 31, 2025. This reflects an increase of $25 million, or 7%, sequentially from the previous quarter.

Financial Summary

The net income for the first quarter was reported at $9.6 million, a significant recovery from a net loss of $2.1 million in the fourth quarter of 2024. Additionally, the company witnessed an increase in adjusted EBITDA by 14%, reaching $64 million compared to $56.2 million in the prior quarter.

John Schmitz, the company's Chairman of the Board, President, and CEO, emphasized that the first quarter was a strong start to the year, outpacing revenue expectations and improving consolidated margins. The growth trend in the company's Water Infrastructure segment particularly stood out, marked by an increase in recycling and disposal volumes. Despite a decline in revenue and gross profits for the segment, attributed to existing freshwater pipeline assets being offline as they transitioned into produced water distribution lines, the gross margins remained strong at 54%.

Strategic Growth Initiatives

Select Water Solutions has also announced several new long-term contracted projects for water infrastructure in the Permian Basin, backed by a substantial dedication of over 265,000 acres. This strategy is aimed at unlocking additional capital investments totaling between $100 million and $125 million intended for expanding operational capacity. The company underscores the potential of these long-term agreements to bolster its revenue base, particularly from strategies that emphasize full life-cycle project involvement.

“While we are facing macroeconomic pressures that may affect industry activity levels in the second half of 2025, we are confident that our growing asset base positions us favorably,” said Schmitz. The Permian Basin boasts some of the best geological formations in the U.S. for oil production, and the strategic partnerships with leading exploration and production firms position Select Water for resilient performance through the year.

The first-quarter results also included a larger portfolio of long-term contracts with the recent announcement of an 11-year contract that supports the largest single project in the firm’s history. This endeavor encompasses a comprehensive infrastructure development plan for water recycling, storage, and distribution across the Northern Delaware Basin.

Operating and Financial Outlook

Looking forward, Select Water anticipates continued growth in the Water Infrastructure segment, expecting low double-digit revenue increases in the upcoming quarter and maintaining gross margins above 50%. However, the company acknowledges that potential tariff and trade actions could impact the oil and gas sector, which might translate to decreased activity during the latter part of 2025.

While operating cash flow for the first quarter was negative at $5.1 million, primarily due to rising working capital needs, total cash and cash equivalents increased to $27.9 million from $12.8 million a year prior. The company has also implemented a new sustainability-linked credit facility to support its operational costs and capital projects, projecting capital expenditures to rise between $225 million to $250 million in 2025.

In summary, Select Water Solutions showcases a solid financial performance for Q1 2025 and a promising outlook supported by strategic partnerships and capital project growth in the water infrastructure sector. With the leadership’s commitment to sustainable practices and robust operations, the company aims to navigate any upcoming market challenges effectively and continue its long-term expansion strategy.

Conclusion

Select Water Solutions' results signal a positive trajectory and strategic positioning within the water services market, particularly in energy sectors. Stakeholders and investors remain optimistic as the company continues to fortify its infrastructure capabilities and to pursue growth initiatives aligned with sustainability efforts. Further details regarding the company's operational progress and financial health will be provided in the earnings conference call scheduled for May 7, 2025.