Aris Water Solutions (ARIS) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 volume and margin growth, outperforming guidance and generating significant free cash flow.

• Acquired McNeill Ranch for $45 million, adding 45,000 surface acres and expanding long-term growth opportunities.

• Increased quarterly dividend by 33% to $0.14/share for Q1 2025, with total dividend up 56% since inception.

• Maintained a premier, long-term contracted customer base, with over 80% of 2025 forecasted Water Solutions volumes under contract.

• Advanced sustainability and safety initiatives, including reduced groundwater withdrawal, increased recycled water volumes, and a perfect safety record in 2024.

Financial highlights

• Adjusted EBITDA for 2024 was $211.9 million, up 21% from 2023 and above initial guidance; Q4 2024 Adjusted EBITDA was $54.5 million.

• Adjusted operating margin per barrel increased 15% year-over-year to $0.45.

• Free cash flow for 2024 was $73 million, up ~32% from guidance and a turnaround from negative $29.1 million in 2023.

• Capital expenditures for 2024 totaled $101 million, down 35% from 2023.

• Total revenue for 2024 was $435.4 million, up from $392.1 million in 2023.

Outlook and guidance

• 2025 produced water handling volumes expected between 1,150–1,210 thousand barrels/day; Water Solutions volumes 460–520 thousand barrels/day.

• Adjusted EBITDA guidance for 2025 is $215–$235 million; free cash flow $75–$95 million, up 17% at midpoint.

• Adjusted operating margin per barrel projected at $0.43–$0.45.

• Capital expenditures for 2025 guided at $85–$105 million.

• Q1 2025 guidance reflects temporary weather-related impacts, with adjusted EBITDA expected between $50–$54 million.