Global Water Resources (GWRS) Q3 2024 earnings summary

Executive summary

• Active service connections grew 4.7% year-over-year to 63,889 as of September 30, 2024, driven by organic growth in core service areas.

• Q3 2024 total revenue was $14.3 million, down 1.5% year-over-year due to non-recurring ICFA revenue in Q3 2023, while regulated revenue rose 2.2% from organic connection growth.

• Net income increased 11% to $2.9 million ($0.12 per diluted share), reflecting higher regulated revenue and lower operating expenses.

• The company continues to invest in infrastructure and expand through acquisitions, including a pending $8.4 million purchase of seven water systems from the City of Tucson.

• Management expects to benefit from strong population and job growth in the Phoenix metropolitan area and ongoing housing development.

Financial highlights

• Q3 2024 revenues: $14.3 million (down 1.5% YoY); nine months ended September 30, 2024: $39.4 million (down 3.0% YoY).

• Q3 2024 net income: $2.9 million (up 11% YoY); nine months ended September 30, 2024: $5.3 million (down 21.8% YoY).

• Q3 adjusted EBITDA: $8.2 million (up 7.2% YoY); nine-month adjusted EBITDA: $20.4 million (up 4.5% YoY).

• Operating expenses decreased 3.3% to $10.3 million, with lower depreciation, amortization, and O&M costs.

• Cash provided by operating activities for nine months ended September 30, 2024: $15.8 million.

Outlook and guidance

• Anticipates continued strong growth in commercial, multi-family, and industrial sectors, especially in Metro Phoenix and Inland Port Arizona.

• Expects to complete the acquisition of seven water systems from the City of Tucson in Q1 2025, pending regulatory approval.

• Plans to file major rate cases in the first half of 2025, with commission decisions about a year after filing.

• Ongoing rate case applications and regulatory activity may impact future revenues and rates.

• Capital expenditures will continue to focus on infrastructure investment and expansion in high-growth areas.