Consolidated Water (CWCO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined 15% to $33.72M, mainly due to the completion of two major design-build projects and a 42% drop in services revenue.

• Retail and manufacturing segments posted strong growth, with retail revenue up 9% and manufacturing up 10% year-over-year.

• Bulk water segment revenue remained stable at $8.4M, reflecting the long-term nature of these contracts.

• Net income from continuing operations attributable to stockholders was $4.9M ($0.31/diluted share), down from $6.9M ($0.43/diluted share) year-over-year.

• Major operational milestone achieved with client approval for the Hawaii desalination project, expected to begin construction in early 2026.

Financial highlights

• Gross profit for Q1 2025 was $12.3M (36.5–37% margin), down from $13.9M (35% margin) in Q1 2024.

• Net income including discontinued operations was $4.8M ($0.30/diluted share), down from $6.5M ($0.40/diluted share) prior year.

• Cash and cash equivalents rose to $107.9M, with working capital at $136.2M and stockholders' equity at $213.3M as of March 31, 2025.

• Dividends declared per share increased to $0.11 from $0.095 year-over-year, with $1.8M paid in April.

• Capital expenditures for 2025 are projected at $9.1M, including $800K for new Bahamas desalination plants and $1.2M for manufacturing expansion.

Outlook and guidance

• Construction of the $204M Hawaii desalination project is expected to begin in early 2026, pending permit approvals.

• Design-build revenues are anticipated to improve in the second half of 2025 as three smaller projects (~$20M total) commence.

• Long-term growth expected from strong retail sales, stable bulk water contracts, and a robust project pipeline in the Western U.S. and Caribbean.

• Ongoing negotiations for a new retail license in the Cayman Islands could materially impact future operating income and cash flows.

• Management is not aware of any liquidity issues except for delayed receivables in the Bahamas.