On March 6, 2025, Global Water Resources Inc (GWRS, Financial) released its 8-K filing detailing the financial results for the fiscal year ending December 31, 2024. The company, a water resources management firm operating primarily in metropolitan Phoenix, Arizona, reported a 4.9% increase in regulated revenue to $52.7 million, driven by organic connection growth. However, total revenue saw a slight decline of 0.6% to $52.7 million due to the absence of $2.8 million in unregulated revenue from infrastructure coordination and financing agreements (ICFAs) that were present in 2023.
Company Overview
Global Water Resources Inc operates as a water resources management company that owns, operates, and manages water, wastewater, and recycled water utilities in strategically located communities, principally in metropolitan Phoenix, Arizona. The company focuses on providing sustainable water solutions through its Total Water Management approach.
Performance and Challenges
The company's net income decreased by 27.5% to $5.8 million, or $0.24 per share, compared to $0.33 per share in 2023. This decline was primarily due to the non-recurrence of ICFA revenue recognized in the previous year. Despite this, adjusted net income increased by 2.0% to $6.3 million, or $0.26 per share, indicating stable core operations. The decrease in net income highlights the challenges faced by the company in maintaining revenue streams from non-regulated sources.
Financial Achievements
Global Water Resources Inc's adjusted EBITDA rose by 5.2% to $26.7 million, reflecting improved operational efficiency. The company also announced an increase in its annualized dividend to $0.30396 per share, demonstrating a commitment to returning value to shareholders. These achievements are crucial for a regulated utility company, as they indicate financial stability and the ability to invest in infrastructure and growth.
Key Financial Metrics
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Regulated Revenue | $52.7 million | $50.2 million | +4.9% |
| Total Revenue | $52.7 million | $53.0 million | -0.6% |
| Net Income | $5.8 million | $8.0 million | -27.5% |
| Adjusted EBITDA | $26.7 million | $25.3 million | +5.2% |
Operational Highlights and Strategic Initiatives
The company reported a 4.4% increase in total active service connections, reaching 64,520 by the end of 2024. Water consumption also rose by 3.3% to 4.16 billion gallons. Global Water Resources Inc invested $32.3 million in infrastructure projects to support existing utilities and continued growth. These investments are vital for maintaining service quality and expanding the company's footprint in Arizona's growth corridors.
Management Commentary
“In 2024, we continued to grow our customer base and regulated revenue at a notable pace when you consider the ongoing interest rate environment,” commented Global Water Resources president and CEO, Ron Fleming. “The increase in regulated revenue for the year was primarily attributable to the organic growth in active water and wastewater connections and increased consumption.”
Analysis and Outlook
Global Water Resources Inc's performance in 2024 reflects a mixed outcome, with strong regulated revenue growth offset by challenges in maintaining non-regulated revenue streams. The company's strategic focus on infrastructure investment and expansion in Arizona's growth corridors positions it well for future growth. However, the decline in net income underscores the importance of diversifying revenue sources and managing operational costs effectively.
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Explore the complete 8-K earnings release (here) from Global Water Resources Inc for further details.
