Q1 2025 Select Water Solutions Inc Earnings Call Transcript
Key Points
- Select Water Solutions Inc (WTTR) reported a 7% increase in revenue and a 14% rise in adjusted EBITDA for the first quarter of 2025.
- The company achieved strong revenue growth of 21% in chemical technologies and 8% in water services, maintaining a robust 54% gross margin in water infrastructure.
- Several new agreements were signed for large gathering, recycling, distribution, and disposal projects, significantly adding to the company's contracted and dedicated acreage position.
- The company successfully converted a 40-mile freshwater pipeline to transport produced water, integrating it into their expanding northern Delaware network.
- Select Water Solutions Inc (WTTR) executed an agreement to expand infrastructure on the central basin platform recycling project, adding significant acreage dedication and pipeline buildout.
- Revenue from legacy freshwater pipeline assets was modestly down sequentially, impacting overall revenue.
- The company anticipates a potential impact from lower commodity prices and supply chain dislocations due to tariff and trade-related uncertainties.
- There is an expected 5% to 10% revenue decline in the second quarter for water services due to decreased traditional freshwater sourcing sales and legacy trucking revenues.
- Interest expense increased due to incremental borrowings under the new sustainability-linked credit facility.
- The company adjusted its free cash flow expectation for the year to a 5% to 15% conversion rate relative to adjusted EBITDA, reflecting increased capital expenditures.
Greetings and welcome to the Select quarter Solutions 2025 1st quarter earnings conference call.
(Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Garrett Williams, Vice President of Corporate finance and Investor Relations.
Thank you, sir. You may begin.
Thank you, operator, and good morning everyone. We appreciate you joining us for Select Water Solutions conference call and webcast to review our financial and operational results for the first quarter of 2025.
With me today are John Schmitz, our founder, Chairman, President and Chief Executive Officer, Christopher George, executive Vice President and Chief Financial Officer, Michael Skarke, Executive Vice President and Chief Operating Officer, and Mike Lyons, executive Vice President and chief strategy and Technology officer.
Before I turn the call over to John, I have a few housekeeping items to cover.
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