Global Water Resources (GWRS) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 18.6% to $53.0M and net income increased 45.0% to $8.0M, supported by rate increases, organic connection growth, Farmers Water, and elevated water consumption.

• Active service connections reached 61,791, up 9.8% YoY; excluding Farmers Water, connections grew 3.7%.

Financial highlights

• Q4 revenue increased 11.4% to $12.4M; FY revenue increased 18.6% to $53.0M, including $2.8M of unregulated revenue.

• Q4 net income rose 38.5% to $1.1M, or $0.05/share; FY net income grew 45.0% to $8.0M, or $0.33/share.

• Adjusted EBITDA increased 5.9% to $5.8M in Q4 and 10.8% to $25.3M for FY 2023.

• FY operating income was $12.3M versus $7.8M in 2022; operating expenses rose 10.4% to $40.7M.

Outlook and guidance

• Near-term priorities include growing service connections, improving operating efficiency, pursuing approved rate increases, and aggregating water and wastewater utilities.

• Rate case filings are planned for Farmers Water in 2024 and Santa Cruz and Palo Verde in 2025; management anticipates continued organic and acquisitive growth.

• Management expects Phoenix-area permitting to increase in 2024, citing improving second-half 2023 trends and anticipated modestly lower mortgage rates.

• Management said it hopes to announce an acquisition in the next quarter.