Global Water Resources (GWRS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 3.9% to $13.5 million, driven by 4.9% growth in active service connections to 63,256, with continued strong population and permit growth in the Phoenix area.

• Net income for Q2 2024 was $1.7 million ($0.07 per share), flat year-over-year, as higher operating expenses offset revenue gains.

• Adjusted EBITDA was $6.8 million, up slightly from Q2 2023; cash and cash equivalents totaled $18.1 million at quarter-end.

• Declared three monthly cash dividends totaling $0.07524 per share for the quarter, with an annualized rate of $0.30096.

• The company continues to benefit from robust housing and multifamily permit growth, major industrial investments, and a strong public health and safety record.

Financial highlights

• Q2 2024 revenue: $13.5M (+3.9% YoY); net income: $1.7M (flat YoY); EPS: $0.07 (flat YoY); adjusted EBITDA: $6.8M (+1.2% YoY).

• H1 2024 revenue: $25.1M (-3.9% YoY, due to nonrecurring ICFA revenue in 2023); H1 net income: $2.4M (-42.4% YoY); H1 adjusted EBITDA: $12.2M (+2.7% YoY).

• Operating expenses Q2: $10.7M (+7.2% YoY), mainly from higher personnel, maintenance, and depreciation costs.

• Cash from operations for H1 2024: $13.6M; capital expenditures: $12.2M; debt at June 30, 2024: $122.9M.

• Dividend payout: $0.02508 per share monthly; company expects to continue monthly dividends.

Outlook and guidance

• Management anticipates continued strong organic growth, supported by favorable macro trends in Arizona and robust housing permit activity.

• Plans to complete the acquisition of seven water systems from the City of Tucson by early 2025, adding about 2,200 service connections.

• 2024 is a test year for major utilities, with new rates needed to address cost increases and investments.

• Expects to grow earnings through organic growth, new service areas, acquisitions, and rate cases.

• Regulatory lag and new environmental standards (PFAS) may impact future costs and rate recovery.