Select Water Solutions (WTTR) Q4 2024 earnings summary

Executive summary

• Achieved record operational and financial performance in 2024, with $1.5 billion in revenue and significant growth in Water Infrastructure, including a 26% segment revenue increase and 62% gross profit growth year-over-year.

• Expanded long-term contract portfolio to over 2.5 million acres, including multiple new contracts in the Permian and a $62 million water rights/storage partnership in Colorado.

• Entered the municipal, industrial, and agricultural water markets in Colorado, diversifying revenue streams.

• Closed a new $550 million five-year senior secured sustainability-linked credit facility post year-end.

• Free cash flow for 2024 was $78 million, meeting guidance of ~30% Adjusted EBITDA conversion.

Financial highlights

• Generated $1.5 billion in consolidated revenue for 2024, with net income of $35.5 million and gross profit of $219.5 million (15.1% margin).

• Water Infrastructure segment delivered 53% gross margins and 62% gross profit growth year-over-year.

• Achieved $258 million in Adjusted EBITDA and $78 million in Free Cash Flow.

• Returned $38 million to shareholders via dividends and buybacks, with a 17% increase in the quarterly dividend.

• Total liquidity at year-end 2024 was $134.8 million, down from $307.4 million at year-end 2023.

Outlook and guidance

• Water Infrastructure segment revenue and gross profit expected to grow 15%-25% in 2025, with further upside into 2026.

• Anticipate consolidated Adjusted EBITDA growth in 2025, with 30% conversion to Free Cash Flow after CapEx.

• Project $170 million-$190 million in net CapEx for 2025, with $50 million-$60 million for maintenance and margin improvement.

• Guidance for Water Infrastructure gross margins to remain in the 50%-60% range.

• Q1 2025 Adjusted EBITDA guidance is $60–$64 million.