Select Water Solutions Reports Mixed Q3 2024 Results with Revenue Decline, but Increased Income and Gross Profit

Select Water Solutions, Inc. reported its financial results for the three and nine months ended September 30, 2024, revealing a mixed performance compared to the same periods in 2023. Total revenue for Q3 2024 was $371.3 million, a decrease of 4.6% from $389.3 million in Q3 2023. For the nine months ended September 30, 2024, revenue totaled $1.1 billion, down 8.9% from $1.2 billion in the prior year.

The decline in revenue was primarily driven by a 7.1% decrease in Water Services revenue, which fell to $234.0 million, and a significant 30.0% drop in Chemical Technologies revenue, which decreased to $55.3 million. In contrast, Water Infrastructure revenue increased by 40.5% to $82.0 million, attributed to acquisitions and growth in the recycling business line.

Despite the revenue decline, Select Water Solutions reported a gross profit of $62.4 million for Q3 2024, an increase of 11.0% from $56.3 million in Q3 2023. Income from operations rose significantly to $24.5 million, up 46.4% from $16.8 million in the prior year quarter. Net income for Q3 2024 was $18.8 million, reflecting a 22.8% increase from $15.3 million in Q3 2023. This resulted in basic earnings per share of $0.16, compared to $0.14 in the same quarter of the previous year.

For the nine-month period, net income was $37.6 million, down 27.1% from $51.6 million in 2023. The decrease was attributed to higher selling, general, and administrative expenses, which rose by 10.2% to $120.2 million, driven by increased compensation and legal fees.

Select Water Solutions continued its strategic growth through acquisitions, completing six business combinations totaling $148.1 million and six asset acquisitions for $11.8 million in the first nine months of 2024. Notable acquisitions included Trinity Acquisition Holdings, enhancing disposal operations in the Permian Basin, and Buckhorn Waste Services, which expanded solids management capabilities in the Bakken region.

As of September 30, 2024, total assets increased to $1.35 billion from $1.22 billion at the end of 2023, while total liabilities rose to $427.2 million from $326.0 million. The company reported total stockholders' equity of $796.5 million, up from $772.5 million at the end of 2023.

Cash and cash equivalents at the end of the period were $10.9 million, down from $25.0 million a year earlier. The company also reported a net cash decrease of $46.1 million for the nine months ended September 30, 2024, compared to an increase of $17.7 million in the same period of 2023.