Aris Water Solutions (ARIS) Q3 2024 earnings summary

Executive summary

• Produced water volumes grew 2% sequentially and 6% year-over-year in Q3 2024, with Water Solutions/recycled water volumes up 25% sequentially and 16% year-over-year, reflecting strong demand and completions activity.

• Adjusted EBITDA reached $54.3 million, up 9% sequentially and 21% year-over-year; net income rose 34% to $16.4 million.

• Operational improvements, cost efficiencies, and margin expansion drove robust cash flow and enabled reinvestment and enhanced shareholder returns.

• Advanced beneficial reuse and mineral extraction projects, including desalination pilots and site selection for an iodine extraction facility.

• Maintained disciplined capital allocation, focusing on organic growth, strategic acquisitions, and increasing dividends.

Financial highlights

• Q3 2024 revenue was $112.3 million, up 13% year-over-year; net income was $16.4 million, up 34% year-over-year.

• Adjusted EBITDA for Q3 2024 was $54.3 million, up 21% year-over-year; operating margin per barrel was $0.45, up 13% year-over-year.

• Capital expenditures for Q3 2024 were $8 million, with $83–$87 million spent in the first nine months.

• Produced water handling volumes were 1,118 kbwpd in Q3 2024; Water Solutions volumes were 459 kbwpd.

• Cash from operations for the nine months ended September 30, 2024, was $111.2 million.

Outlook and guidance

• Raised full-year 2024 Adjusted EBITDA guidance to $208–$212 million; Q4 2024 Adjusted EBITDA projected at $51–$55 million.

• 2024 capital expenditures expected to total $98–$105 million.

• Produced water volumes for Q4 2024 expected between 1,080–1,110 kbwpd; Water Solutions volumes forecasted at 450,000–490,000 barrels per day.

• Produced water volume growth in 2025 anticipated at mid-single digits, in line with customer forecasts and similar or lower capital investment.

• Phase 2 of beneficial reuse pilot projects and first iodine extraction facility expected operational by year-end 2025.