Select Water Solutions, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report, as well as the historical consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 18, 2026 (our “2025 Form 10-K”). This discussion and analysis contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors as described under “Cautionary Note Regarding Forward-Looking Statements” and other cautionary statements described under the heading “Risk Factors” included in our 2025 Form 10-K and this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report, as well as the historical consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 18, 2026 (our “2025 Form 10-K”) and in our Quarterly Report on Form 10-Q for the period ended March 31, 2026, filed with the Securities and Exchange Commission on May 6, 2026 (our “Q1 2026 Form 10-Q”). This discussion and analysis contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors as described under “Cautionary Note Regarding Forward-Looking Statements” and other cautionary statements described under the heading “Risk Factors” included in our 2025 Form 10-K, our Q1 2026 Form 10-Q and this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements.

Previous wording

This discussion relates to the three months ended March 31, 2026 (the “Current Quarter”) and the three months ended March 31, 2025 (the “Prior Quarter”).

Current wording

This discussion relates to the three and six months ended June 30, 2026 (the “Current Quarter” and the “Current Period”, respectively) and the three and six months ended June 30, 2025 (the “Prior Quarter” and the “Prior Period”, respectively).

Previous wording

We are a leading provider of sustainable water and chemical solutions to the energy industry in the U.S. As a leader in the water solutions industry, we place the utmost importance on safe, environmentally responsible management of oilfield water throughout the lifecycle of a well. Additionally, we believe that responsibly managing water resources through our operations to help conserve and protect the environment in the communities in which we operate is paramount to our continued success.

Current wording

We are a leading provider of sustainable water and chemical solutions to the energy industry in the U.S. These solutions are supported by our water infrastructure assets, chemical manufacturing and water treatment and recycling capabilities.

Previous wording

During the Current Quarter, we continued executing our strategy of expanding our Water Infrastructure segment as a key component of our long-term growth platform. Our integrated water management systems support operators by providing produced water gathering, transportation, recycling, and disposal services designed to reduce trucking activity, improve operational reliability, and increase water management efficiency across development programs.

Current wording

During the Current Quarter, we continued executing our strategy of expanding our Water Infrastructure segment as a key component of our long-term growth platform. Our integrated water management systems support operators by providing produced water gathering, transportation, recycling, and disposal services designed to reduce costs to our customers, reduce trucking activity, improve operational reliability, and increase water management efficiency across development programs.

Previous wording

Our infrastructure footprint in the Northern Delaware Basin remains a core area of development for our business. Our in-service and under construction systems in New Mexico in Eddy and Lea counties include approximately 1.7 million barrels per day of active fixed recycling capacity, more than 400 miles of pipeline, substantial storage capacity, and more than 1.5 million dedicated acres. This interconnected infrastructure network positions us to manage large volumes of produced water and support customer development programs across the region.

Current wording

Our infrastructure footprint in the Northern Delaware Basin represents a core area of development for our business. Our in-service and under construction systems in New Mexico in Eddy and Lea counties include approximately 1.7 million barrels per day of active fixed recycling capacity, more than 400 miles of pipeline, and 22.2 million barrels of storage capacity across more than 1.5 million dedicated acres. This interconnected infrastructure network positions us to manage large volumes of produced water and support customer development programs across the region.

Previous wording

In August 2025, we announced that we had started an evaluation of strategic alternatives for Peak Rentals business within our Water Services segment. Peak Rentals currently includes our accommodations and rentals platform as well as our well testing and flowback operations. This evaluation includes a range of potential paths forward, including capital structure initiatives and other portfolio optimization opportunities. As of March 31, 2026, no transaction is pending or imminent, and we continue to own 100% of the business. We are continuing to evaluate strategic alternatives for Peak Rentals in the ordinary course; however, there can be no assurance that any particular outcome will ultimately be pursued or completed.

Current wording

In August 2025, we announced that we had started an evaluation of strategic alternatives for Peak Rentals business within our Water Services segment. Peak Rentals currently includes our accommodations and rentals platform, including distributed power solutions, as well as our well testing and flowback operations. This evaluation includes a range of potential paths forward, including capital structure initiatives and other portfolio optimization opportunities. As of June 30, 2026, no transaction is pending or imminent, and we continue to own 100% of the business. We are continuing to evaluate strategic alternatives for Peak Rentals in the ordinary course; however, there can be no assurance that any particular outcome will ultimately be pursued or completed.

Previous wording

During the Current Quarter, we continued to expand our portfolio of contracted and recurring revenue opportunities through new and amended commercial agreements across our water infrastructure footprint, including produced water takeaway and disposal arrangements, water supply agreements, minimum volume commitments, acreage-wide right-of-first-refusal arrangements and additional delivery point commitments. These agreements included, among others, a 12-year water supply and takeaway agreement in Lea County, New Mexico, supported by approximately 7.1 miles of planned pipeline infrastructure, and a five-year produced water takeaway and disposal agreement in Canadian County, Oklahoma. We also executed several shorter-term interruptible disposal, water purchase and reserve capacity arrangements across New Mexico, Texas and Oklahoma, including a water purchase agreement with a minimum volume commitment of approximately 1.8 million barrels. Collectively, these agreements are intended

Current wording

During the Current Quarter, we continued to expand our portfolio of contracted and recurring revenue opportunities through new and amended commercial agreements across our water infrastructure footprint, including produced water takeaway and disposal arrangements, water supply agreements, minimum volume commitments, acreage-wide right-of-first-refusal arrangements and additional delivery point commitments. These included multiple agreements in the Northern Delaware portion of the Permian Basin, including a water treatment and supply agreement with a minimum volume commitment, multiple water sales agreements and several interruptible takeaway arrangements. We also executed a water treatment agreement in the Midland Basin and a produced water disposal agreement in the Bakken with a minimum volume commitment, a disposal agreement in the Northeast with a right-of-first-refusal structure, a disposal agreement in the MidCon region, supported by a four million barrel minimum volume commitment, and an interruptible takeaway arrangement in the Haynesville region. Collectively, these agreements are intended to drive higher utilization of existing infrastructure, support capital-efficient growth and provide greater certainty around future revenue streams.

Previous wording

Progress continued on our equity-method investment in AV Farms, LP related to the Colorado municipal water rights project. In addition, lithium extraction partnerships across the Haynesville, Midland, and Northern Delaware basins continue to progress, with initial royalty-based revenues currently expected to begin in late 2026.

Current wording

In addition, lithium extraction partnerships across the Haynesville, Midland, and Northern Delaware basins continue to progress, with initial royalty-based revenues currently expected to begin in 2027.

Previous wording

The ongoing war in the Middle East involving Iran escalated during the first quarter of 2026, resulting in increased hostilities and instability in oil and gas-producing regions as well as in key adjacent shipping lanes and supply chains. As a major oil producer, Iran’s involvement has heightened concerns over potential supply disruptions and transportation risks, contributing to significant volatility in global oil and natural gas prices. In particular, the restriction or cessation of maritime traffic through the Strait of Hormuz has significantly depressed global supply of oil and natural gas, resulting in increased volatility and overall elevated prices.

Current wording

Geopolitical tensions and related hostilities across the Middle East continued during the second quarter of 2026, resulting in increased instability in oil and gas-producing regions as well as in key adjacent shipping lanes and supply chains. These developments have heightened concerns over potential supply disruptions and transportation risks, contributing to volatility in global oil and natural gas prices. In particular, disruptions to maritime traffic through key shipping corridors, including the Strait of Hormuz have adversely affected global energy markets and contributed to volatility and elevated prices for oil and natural gas.

Previous wording

Further, the ongoing restrictions or cessation of maritime traffic through the Strait of Hormuz has caused disruptions to the global chemicals and oil-derived goods markets, reducing supplies and availability worldwide, and resulting in increased prices. While we are not reliant on any chemicals or other commodities that are exclusively transported through the Strait of Hormuz due to our continued focus on domestic sourcing, such global disruptions to commodities markets can have downstream effects in the domestic markets, including elevated domestic prices, reduced supply and business interruptions to our suppliers. While the ultimate duration, impact and magnitude of these disruptions is currently unknown, a prolonged interruption to the global chemicals commodities and oil-derived goods markets has the potential to materially adversely affect our business and operations and those of our suppliers.

Current wording

Further, disruptions to maritime traffic through key shipping corridors have caused disruptions to the global chemicals and oil-derived goods markets, reducing supplies and availability worldwide and resulting in increased prices. While we are not reliant on any chemicals or other commodities that are exclusively transported through any single shipping corridor due to our continued focus on domestic sourcing, such global disruptions to commodities markets can have downstream effects in the domestic markets, including elevated domestic prices, reduced supply and business interruptions to our suppliers. While the ultimate duration, impact and magnitude of these disruptions is currently unknown, a prolonged interruption to the global chemicals commodities and oil-derived goods markets has the potential to materially adversely affect our business and operations and those of our suppliers.

Previous wording

Additionally, the armed conflict between Ukraine and Russia has continued into 2026. Severe sanctions imposed by the U.S., U.K., European Union and other actors on Russian entities have driven significant volatility in global oil and natural gas prices. U.S. actions in Venezuela, including tanker seizures and a limited military intervention in early 2026, have added uncertainty; as relations stabilize, the potential release of approximately 50 million barrels of previously sanctioned oil could depress global prices. Further, in an effort to reduce the impact of the ongoing conflict with Iran, in March, the Treasury Department’s Office of Foreign Assets Control authorized temporary waivers for the sanctions on Russian hydrocarbons. While these waivers were extended into mid-May, they are limited in duration and will expire unless further extended. Such extensions, future waivers or the imposition of further sanctions may have a significant effect on global hydrocarbon prices. Such commodity swings, combined with higher inflation and interest rates that have raised our cost of capital, have created a more challenging planning environment for us and our customers. The ultimate outcomes remain unpredictable and could materially affect the world economy, customer activity levels, and demand for our services.

Current wording

Additionally, the armed conflict between Ukraine and Russia has continued into 2026. Severe sanctions imposed by the U.S., U.K., European Union and other actors on Russian entities have driven significant volatility in global oil and natural gas prices. U.S. actions in Venezuela, including tanker seizures and a limited military intervention in early 2026, have added uncertainty; as relations stabilize, the potential release of previously sanctioned oil into global markets could depress prices. Changes in sanctions, regimes, waivers, export restrictions or other governmental actions affecting the global energy markets may have a significant effect on hydrocarbon prices. Such commodity swings, combined with higher inflation and interest rates that have raised our cost of capital, have created a more challenging planning environment for us and our customers. The ultimate outcomes remain unpredictable and could materially affect the world economy, customer activity levels, and demand for our services.

Previous wording

Industry conditions during the first quarter of 2026 reflected a relatively stable but disciplined North American upstream activity environment. Commodity prices, while significantly fluctuating in the first quarter, remained supportive of development activity, although operators continued to emphasize capital efficiency, free cash flow generation, and moderated production growth. As a result, drilling and completion activity across key U.S. basins remained generally stable compared to recent periods, with the Permian Basin continuing to represent the primary area of development and the largest concentration of completions activity and associated water handling demand.

Current wording

Industry conditions during the first half of 2026 reflected a relatively disciplined North American upstream activity environment. Commodity prices, while significantly fluctuating in the first half of 2026, remained supportive of development activity, although, even with the recent increases in oil prices following geopolitical tensions in the Middle East, North American operators continued to emphasize capital efficiency, free cash flow generation, and moderated production growth. As a result, drilling and completion activity across key U.S. basins remained generally stable compared to recent periods, with the Permian Basin continuing to represent the primary area of development and the largest concentration of completions activity and associated water handling demand.

Previous wording

Since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts), which currently cut output by approximately 3.0 million barrels/day in the aggregate. Most recently, in April 2026, OPEC+ announced a reduction in voluntary oil production cuts of approximately 0.2 million barrels per day. OPEC+ may, at its discretion, continue to decrease, or increase, production, which will continue to impact crude oil and natural gas price volatility. Further, on April 28, 2026, the United Arab Emirates, the third largest oil and gas producer within OPEC+, announced that it was leaving OPEC. The impact of the United Arab Emirates’ departure from OPEC+ on current OPEC+ production cuts and overall global production is not yet known, but such effects may be magnified if any additional countries leave OPEC+. The actions of OPEC+ countries with respect to oil production levels and announcements of potential changes in such levels, including agreement on and compliance with production targets, as well as each countries’ continued membership in OPEC+, may result in volatility in the industry in which we and our customers operate. However, despite this announced increase in production, the ongoing conflict in Iran, and related hostilities across Gulf countries and the Strait of Hormuz has resulted in a dramatic drop in OPEC+ production, with a decrease of approximately 7.3 million barrels per day month-to-month in March 2026, led by cuts⁠in Kuwait, Iraq, Saudi Arabia and the United Arab Emirates. The average price of West Texas Intermediate (“WTI”) crude oil increased in the Current Quarter versus the Prior Quarter due to a combination of factors, including the conflict in Iran and related hostilities across the Middle East, including the cessation or reduction of maritime traffic through the Strait of Hormuz, heightened trade tensions, global demand, and other various influences and impacts. During the Current Quarter, the average spot price of WTI crude oil was $72.74 versus an average price of $71.78 for the Prior Quarter. The average Henry Hub natural gas spot price during the Current Quarter was $4.71 versus an average of $4.14 for the Prior Quarter. Henry Hub natural gas price levels in the Current Quarter have increased relative to the Prior Quarter due to a variety of factors, including increased demand driven by power consumption, severe weather events, infrastructure disruptions, lower than expected inventories, and the ongoing liquified natural gas (“LNG”) export growth in the U.S., reduced LNG

Current wording

Since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts). More recently, however, OPEC+ has announced a phased return of previously curtailed production. OPEC+ may, at its

Previous wording

Demand for produced water gathering, transportation, disposal, and recycling services remained closely linked to completion activity levels and the steady growth in produced water volumes associated with existing production. Produced water generation continues to increase as horizontal wells mature and as operators develop longer laterals and higher-intensity completion designs. Additionally, water-to-oil ratios in the Delaware and Northern Delaware Basins are among the highest in the United States, and within the Permian Basin, contributing to growing produced water volumes in the Permian Basin. These structural trends continue to support demand for integrated water management infrastructure, including pipeline gathering systems, disposal capacity, and recycling capabilities.

Current wording

Demand for produced water gathering, transportation, disposal, and recycling services remained closely linked to industry activity levels and the steady growth in produced water volumes associated with existing production. Produced water generation continues to increase as operators develop longer laterals and higher-intensity completion designs. Additionally, water-to-oil ratios in the Southern Delaware and Northern Delaware Basins are among the highest within the Permian Basin, and even furthermore, across the United States, contributing to growing produced water volumes in the Permian Basin. These structural trends continue to support demand for integrated water management infrastructure, including pipeline gathering systems, disposal capacity, and recycling capabilities.

Previous wording

Labor costs associated with our employees and contract labor comprise the largest portion of our costs of doing business. We incurred labor and labor-related costs of $115.4 million and $129.4 million for the Current Quarter and Prior Quarter, respectively. The majority of our recurring labor costs are variable and dependent on the market environment and are incurred only while we are providing our operational services. We also incur costs to employ personnel to ensure safe operations, sell and supervise our services and perform maintenance on our assets, which is not as directly tied to our level of business activity. Additionally, we incur selling, general and administrative costs for compensation of our administrative personnel at our field sites and in our operational and corporate headquarters, as well as for third-party support, permitting, licensing and services.

Current wording

Labor costs associated with our employees and contract labor comprise the largest portion of our costs of doing business. We incurred labor and labor-related costs of $117.5 million, $124.4 million, $232.9 million and $253.8 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively. The majority of our recurring labor costs are variable and dependent on the market environment and are incurred only while we are providing our operational services. We also incur costs to employ personnel to ensure safe operations, sell and supervise our services and perform maintenance on our assets, which is not as directly tied to our level of business activity. Additionally, we incur selling, general and administrative costs for compensation of our administrative personnel at our field sites and in our operational and corporate headquarters, as well as for third-party support, permitting, licensing and services.

Previous wording

We incur significant vehicle and equipment costs in connection with the services we provide, including depreciation, repairs and maintenance, rental and leasing costs. We incurred vehicle and equipment costs of $81.0 million and $79.5 million for the Current Quarter and Prior Quarter, respectively.

Current wording

We incur significant vehicle and equipment costs in connection with the services we provide, including depreciation, repairs and maintenance, rental and leasing costs. We incurred vehicle and equipment costs of $83.7 million, $79.7 million, $164.7 million and $159.2 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively.

Previous wording

We incur raw material costs in manufacturing our chemical products, as well as for water that we source for our customers. We incurred raw material costs of $66.5 million and $65.2 million for the Current Quarter and Prior Quarter, respectively.

Current wording

We incur raw material costs in manufacturing our chemical products, as well as for water that we source for our customers. We incurred raw material costs of $73.0 million, $58.8 million, $139.5 million and $123.9 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively.

Previous wording

We incur variable transportation costs associated with our service lines, predominantly fuel and freight. We incurred fuel and freight costs of $20.1 million and $22.3 million for the Current Quarter and Prior Quarter, respectively. Changes to fuel prices impact our transportation costs, which affects the results of our operations.

Current wording

We incur variable transportation costs associated with our service lines, predominantly fuel and freight. We incurred fuel and freight costs of $24.5 million, $18.4 million, $44.7 million and $40.7 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively. Changes to fuel prices impact our transportation costs, which affects the results of our operations.

Previous wording

Our revenue decreased by $8.4 million, or 2.3%, to $366.0 million for the Current Quarter compared to $374.4 million for the Prior Quarter. This decrease was composed of a $34.4 million decrease in Water Services revenue partially offset by a $24.3 million increase in Water Infrastructure revenue and a $1.6 million increase in Chemical Technologies revenue. For the Current Quarter, our Water Infrastructure, Water Services and Chemical Technologies constituted 26.4%, 52.3% and 21.3% of our total revenue, respectively, compared to 19.3%, 60.3% and 20.4%, respectively, for the Prior Quarter. The revenue changes by reportable segment are as follows:

Current wording

Our revenue increased by $31.6 million, or 8.7%, to $395.8 million for the Current Quarter compared to $364.2 million for the Prior Quarter. This increase was composed of a $28.3 million increase in Chemical Technologies revenue and a $20.8 million increase in Water Infrastructure revenue, partially offset by a $17.5 million decrease in Water Services revenue. For the Current Quarter, our Water Infrastructure, Water Services and Chemical Technologies constituted 25.7%, 50.0% and 24.3% of our total revenue, respectively, compared to 22.2%, 59.2% and 18.6%, respectively, for the Prior Quarter. The revenue changes by reportable segment are as follows:

Previous wording

by our ongoing New Mexico infrastructure buildout and related Permian customer development. Results were also supported by increased disposal and solids revenues, reflecting the expansion of our asset base through recent acquisitions, and were partially offset by lower pipeline revenue.

Current wording

associated with the continued ramp-up of volumes under long-term agreements, as well as increased activity supported by our ongoing New Mexico infrastructure buildout and related Permian customer development. Results were also supported by increased disposal and solids revenues, reflecting the expansion of our asset base through recent acquisitions, and were partially offset by lower pipeline revenue.

Previous wording

Water Services. Revenue decreased $34.4 million, or 15.3%, to $191.2 million for the Current Quarter compared to $225.6 million in the Prior Quarter. The decrease was primarily driven by $29.1 million lower Fluids Hauling revenue associated with divested operations in connection with the Omni transaction. Results were also impacted by lower Well Testing and Poly & Containment revenues, reflecting broader macroeconomic conditions. These decreases were partially offset by higher Water Transfer revenues, driven by market share gains supported by our Tideline® hose offering, as well as higher Accommodation and Rentals revenue driven by increased power generation activity and underlying organic growth.

Current wording

Water Services. Revenue decreased $17.5 million, or 8.1%, to $198.2 million for the Current Quarter compared to $215.7 million in the Prior Quarter. The decrease was primarily driven by $20.7** **million lower Fluids Hauling revenue associated with divested operations in connection with the Omni transaction. Results were also impacted by lower Poly & Containment revenues, reflecting broader macroeconomic conditions. These decreases were partially offset by higher Peak Rentals revenue driven by increased power generation activity and underlying organic growth as well as higher water transfer revenues, driven by market share gains supported by our Tideline® hose offering.

Previous wording

Chemical Technologies. Revenue increased by $1.6 million, or 2.2%, to $78.0 million for the Current Quarter compared to $76.3 million for the Prior Quarter. The increase in revenues was primarily driven by enhanced sales performance and new product developments.

Current wording

Chemical Technologies. Revenue increased by $28.3 million, or 41.9%, to $96.0 million for the Current Quarter compared to $67.7 million for the Prior Quarter. The increase in revenues was primarily driven by enhanced sales performance and new product developments as well as price increases to offset increased raw materials costs.

Previous wording

Water Infrastructure. Costs of revenue increased $8.9 million, or 26.5%, to $42.4 million for the Current Quarter compared to $33.5 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 46.3% to 43.8% primarily driven by a greater mix of higher-margin recycling revenues and margin expansion within that stream, reflecting scale efficiencies.

Current wording

Water Infrastructure. Costs of revenue increased $6.2 million, or 17.1%, to $42.4 million for the Current Quarter compared to $36.2 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 44.8% to 41.7% primarily driven by a greater mix of higher-margin recycling revenues and margin expansion within that stream, reflecting scale efficiencies.

Previous wording

Chemical Technologies. Costs of revenue decreased $1.6 million, or 2.5%, to $63.1 million for the Current Quarter compared to $64.7 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 84.8% to 80.9% attributable to a higher proportion of sales from higher margin products, coupled with reduced freight costs resulting from a shift from third-party providers to internal logistics execution.

Current wording

Chemical Technologies. Costs of revenue increased $20.8 million, or 37.2%, to $76.7 million for the Current Quarter compared to $55.9 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 82.5% to 79.8% attributable to a higher proportion of sales from higher margin products, coupled with reduced freight costs resulting from a shift from third-party providers to internal logistics execution.

Previous wording

Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $7.1 million, or 18.3%, to $45.7 million for the Current Quarter compared to $38.7 million for the Prior Quarter primarily due to increased capital expenditures made into new organic infrastructure projects as well as a higher fixed asset base resulting from recent acquisitions.

Current wording

Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $6.2 million, or 15.0%, to $47.2 million for the Current Quarter compared to $41.1 million for the Prior Quarter primarily due to increased capital expenditures made into new organic infrastructure projects as well as a higher fixed asset base resulting from recent acquisitions partially offset by a decreased asset base in our Water Services segment due to the assets divested in the Omni transaction as well as assets becoming fully depreciated.

Previous wording

Gross profit was $65.3 million for the Current Quarter compared to $55.8 million for the Prior Quarter primarily driven by a $15.5 million increase in gross profit from our Water Infrastructure segment and a $3.2 million increase in gross profit from our Chemical Technologies segment partially offset by a $2.2 million decrease in gross profit from our Water Services segment and a $7.1 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 17.8% and 14.9% in the Current Quarter and Prior Quarter, respectively.

Current wording

Gross profit was $76.8 million for the Current Quarter compared to $57.8 million for the Prior Quarter primarily driven by a $14.6 million increase in gross profit from our Water Infrastructure segment, a $7.6 million increase in gross profit from our Chemical Technologies segment, and a $3.2 million increase in gross profit from our Water Services segment partially offset by a $6.2 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 19.4% and 15.9% in the Current Quarter and Prior Quarter, respectively.

Previous wording

Net income decreased by $0.1 million, or 1.3%, to $9.4 million for the Current Quarter compared to $9.6 million for the Prior Quarter, driven primarily by higher gross profit offset by higher impairments and abandonments, higher selling, general and administrative expenses and higher net interest expense.

Current wording

Net income increased by $10.9 million, or 93.3%, to $22.6 million for the Current Quarter compared to $11.7 million for the Prior Quarter, driven primarily by higher gross profit offset by lower gains on the sale of fixed assets, increased selling, general and administrative expenses, and higher income tax expense.

Previous wording

*Water Infrastructure.*Revenue increased $24.3 million, or 33.6%, to $96.7 million for the Current Quarter compared to $72.4 million for the Prior Quarter. The increase was primarily driven by higher recycling revenues associated with the continued ramp-up of volumes under long-term agreements, as well as increased activity supported

Current wording

*Water Infrastructure.*Revenue increased $45.1 million, or 29.4%, to $198.4 million for the Current Period compared to $153.2 million for the Prior Period. The increase was primarily driven by higher recycling revenues associated with the continued ramp-up of volumes under long-term agreements, as well as increased activity supported by our ongoing New Mexico infrastructure buildout and related Permian customer development. Results were also

Previous wording

Water Services. Costs of revenue decreased $32.3 million, or 17.8%, to $149.5 million for the Current Quarter compared to $181.7 million for the Prior Quarter. As a percentage of revenue, cost of revenue decreased from 80.5% in the Prior Quarter to 78.2% in the Current Quarter. The favorable decrease was primarily driven by higher Fluids Hauling margins, reflecting the divestiture of lower-margin operations in connection with the Omni transaction. This was partially offset by lower Well Testing margins, as reduced activity levels limited our ability to proportionally reduce costs.

Current wording

Water Services. Costs of revenue decreased $52.9 million, or 14.9%, to $302.1 million for the Current Period compared to $355.0 million for the Prior Period. As a percentage of revenue, cost of revenue decreased from 80.4% in the Prior Period to 77.6% in the Current Period. The favorable decrease in costs as a percentage of revenue was primarily driven by higher water transfer margins resulting from increased utilization of Tideline® hose assets, which supported greater operating efficiency and service quality, as well as effective cost controls. The decrease was also favorably impacted by a lower relative revenue contribution from fluids hauling following the Omni transaction and a more favorable revenue mix within our containment solutions. These favorable factors were partially offset by lower Peak Rentals margins, as reduced activity levels limited the Company's ability to proportionally reduce costs.

Previous wording

Selling, general and administrative expenses increased $3.1 million, or 8.3%, to $40.6 million for the Current Quarter compared to $37.4 million for the Prior Quarter, driven primarily by a $2.5 million increase in incentive and equity-based compensation, $1.1 million in higher legal and professional costs and $0.5 million in higher information technology costs partially offset by a decrease of $0.8 million in transaction costs and $0.2 million in other expenses.

Current wording

Selling, general and administrative expenses increased $5.4 million, or 7.0%, to $81.7 million for the Current Period compared to $76.4 million for the Prior Period, driven primarily by a $8.6 million increase in incentive and equity-based compensation, $0.9 million in higher legal and professional costs and $0.6 million in higher information technology costs partially offset by a decrease of $2.0 million in transaction costs, a $0.9 million decrease in credit loss expense, a $0.7 million decrease in wages and associated payroll taxes and $1.1 million in other expenses.

Previous wording

During the Current Quarter, we recognized $5.7 million in impairments and abandonments primarily due to the abandonment of a SWD well in the Haynesville region of our Water Infrastructure segment. During the Prior Quarter, we recognized $1.1 million in impairments and abandonments, consisting of $0.6 million in the Water Services segment related to the relocation of operations from a leased facility and $0.5 million in the Water Infrastructure segment associated with the termination of a disposal lease.

Current wording

During the Current Period, we recognized $5.9 million in impairments and abandonments primarily due to the abandonment of a SWD well in the Haynesville region of our Water Infrastructure segment. During the Prior Period, we recognized $2.6 million in impairments and abandonments, consisting of$1.3 million related to the abandonment of back-office software development costs, $0.7 million in the Water Infrastructure segment primarily associated with the termination of a disposal lease and $0.6 million of property and equipment in the Water Services segment related to the relocation of operations from a leased facility.

Previous wording

Net interest expense increased by $1.0 million, or 21.1%, to $5.9 million for the Current Quarter compared to $4.9 million in the Prior Quarter primarily driven by higher interest expense on revolver borrowings, a full quarter of interest expense on the term loan in the Current Quarter compared to a partial period in the Prior Quarter following its issuance on January 24, 2025, as well as lower interest income in the Current Quarter. This increase was partially offset by the Prior Quarter write-off of debt issuance costs in connection with the debt refinancing.

Current wording

Net interest expense increased by $0.4 million, or 3.9%, to $10.9 million for the Current Period compared to $10.5 million in the Prior Period primarily driven by higher interest expense on revolver borrowings, a full period of interest expense on the term loan in the Current Period compared to a partial period in the Prior Period following its issuance on January 24, 2025, as well as lower interest income in the Current Period. This increase was partially offset by the Prior Period write-off of debt issuance costs in connection with the debt refinancing.

Previous wording

EBITDA was $64.6 million for the Current Quarter compared to $56.9 million for the Prior Quarter. The $7.7 million increase in EBITDA was driven primarily by a $16.6 million increase in gross profit, partially offset by a $4.6 million increase in impairments and abandonments, a $3.1 million increase in selling, general and administrative expense and a $1.0 million decrease in gains on asset sales. Adjusted EBITDA was $77.6 million for the Current Quarter compared to $64.0 million for the Prior Quarter.

Current wording

EBITDA was $82.4** **million for the Current Quarter compared to $64.8 million for the Prior Quarter. The $17.6 million increase in EBITDA was driven primarily by a $25.3 million increase in gross profit, partially offset by a $6.3 million decrease in gains on asset sales and a $2.2 million increase in selling, general and administrative expenses. Adjusted EBITDA was $92.7 million for the Current Quarter compared to $72.6 million for the Prior Quarter.

Previous wording

Our primary sources of liquidity are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations and proceeds from the sale of excess property and equipment and proceeds from underwritten public offerings of our Class A common stock. Our primary uses of capital have been to fund current operations, maintain our asset base, implement technological advancements, make capital expenditures to support organic growth, fund acquisitions and equity investments, pay dividends and distributions, make payments under the TRAs, and when appropriate, repurchase shares of Class A common stock in the open market. Depending on available opportunities, market conditions and other factors, we may also issue debt and equity securities in the future, if needed.

Current wording

Our primary sources of liquidity are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations and proceeds from the sale of excess property and equipment and proceeds from opportunistic underwritten public offerings of our Class A common stock. Our primary uses of capital have been to fund current operations, maintain our asset base, implement technological advancements, make capital expenditures to support organic growth, fund acquisitions and equity investments, pay dividends and distributions, make payments under the TRAs, and when appropriate, repurchase shares of Class A common stock in the open market. Depending on available opportunities, market conditions and other factors, we may also issue debt and equity securities in the future, if needed.

Previous wording

During the fourth quarter of 2022, we initiated a quarterly dividend and distribution program of $0.05 per share and $0.05 per unit for holders of Class A and Class B shares, respectively. We paid quarterly dividends at the same rate through the third quarter of 2023, then the board of directors increased the quarterly dividend paid on November 17, 2023 to $0.06 per share and $0.06 per unit for holders of Class A and Class B shares, respectively. We paid quarterly dividends at the same rate through the third quarter of 2024, then the board of directors increased the quarterly dividend paid on November 15, 2024 to $0.07 per share and $0.07 per unit for holders of Class A and Class B shares, respectively. This program resulted in a financing outflow of $8.8 million in the Current Quarter, and this quarterly dividend program is expected to continue. All future dividend payments are subject to quarterly review and approval by our board of directors.

Current wording

During the fourth quarter of 2022, we initiated a quarterly dividend and distribution program of $0.05 per share and $0.05 per unit for holders of shares of Class A and Class B common stock, respectively. We paid quarterly dividends at the same rate through the third quarter of 2023, then the board of directors increased the quarterly dividend paid on November 17, 2023 to $0.06 per share and $0.06 per unit for holders of shares of Class A and Class B common stock, respectively. We paid quarterly dividends at the same rate through the third quarter of 2024, then the board of directors increased the quarterly dividend paid on November 15, 2024 to $0.07 per share and $0.07 per unit for holders of shares of Class A and Class B common stock, respectively. This program resulted in a financing outflow of $18.3 million in the Current Period, and this quarterly dividend program is expected to continue. All future dividend payments are subject to quarterly review and approval by our board of directors.

Previous wording

As of March 31, 2026 cash and cash equivalents totaled $56.0 million, and we had approximately $251.7 million of available borrowing capacity under the Revolving Credit Facility under our Sustainability-Linked Credit Facility. As of March 31, 2026, we had $250.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $271.3 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million and outstanding letters of credit totaled $19.6 million. As of May 4, 2026, we had $250.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $271.3 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million, the outstanding letters of credit totaled $19.6 million, and the available borrowing capacity under the Sustainability-Linked Credit Facility was $251.7 million.

Current wording

As of June 30, 2026 cash and cash equivalents totaled $33.4 million, and we had approximately $244.4 million of available borrowing capacity under the Revolving Credit Facility under our Sustainability-Linked Credit Facility. As of June 30, 2026, we had $262.9 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $264.0 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million and outstanding letters of credit totaled $19.6 million. As of August 3, 2026, we had $274.7 million in outstanding indebtedness, the borrowing base for the Revolving

Previous wording

Analysis of Cash Flow Changes between the three months ended March 31, 2026 and 2025

Current wording

Analysis of Cash Flow Changes between the six months ended June 30, 2026 and 2025

Previous wording

Operating Activities. Net cash provided by operating activities was $10.2 million for the Current Quarter, compared to $5.1 million net cash used by operating activities for the Prior Quarter. The $15.3 million increase is comprised primarily of an increase of $15.2 million of net income combined with non-cash adjustments and a $0.1 million increase in converting working capital to cash.

Current wording

Operating Activities. Net cash provided by operating activities was $97.0 million for the Current Period, compared to $77.5 million for the Prior Period. The $19.5 million increase is comprised primarily of an increase of $43.0 million of net income combined with non-cash adjustments partially offset by a $23.5 million increase in working capital.

Previous wording

Investing Activities. Net cash used in investing activities was $77.5 million for the Current Quarter, compared to $132.5 million for the Prior Quarter The $55.0 million decrease in net cash used in investing activities was due primarily to the $72.1 million investment in unconsolidated entities in the Prior Quarter and a $13.8 million decrease in spending for acquisitions net of cash received partially offset by a $30.0 million increase in purchases of property and equipment and $0.9 million lower proceeds received from sales of property and equipment.

Current wording

Investing Activities. Net cash used in investing activities was $189.7 million for the Current Period, compared to $207.5 million for the Prior Period. The $17.8 million decrease in net cash used in investing activities was due primarily to the $72.1 million investment in unconsolidated entities in the Prior Period partially offset by a $25.0 million increase in spending for acquisitions net of cash received, a $21.6 million increase in purchases of property and equipment and $7.2 million lower proceeds received from sales of property and equipment.

Previous wording

Financing Activities. Net cash provided by financing activities was $105.2 million for the Current Quarter, compared to $145.5 million for the Prior Quarter. The $40.3** million decrease in net cash provided by financing activities was due primarily to a $235.0 **million decrease in borrowings net of repayments, a $2.9 million decrease in cash received from noncontrolling interest holders and a $1.3 million increase in repurchases of common stock partially offset by $191.7 million in proceeds received from a public offering of our Class A common stock and $7.4 million lower debt issuance costs.

Current wording

Financing Activities. Net cash provided by financing activities was $108.1 million for the Current Period, compared to $161.2 million for the Prior Period. The decrease was driven primarily by lower financing inflows, as proceeds from the Class A common stock offering in the Current Period were less than borrowings in the Prior Period. The $53.1** **million decrease in net cash provided by financing activities was comprised of a $247.1 million decrease in borrowings net of repayments, a $2.4 million decrease in cash received from noncontrolling interest holders, a $1.7 million increase in repurchases of common stock, and a $1.4 million increase in dividends and distributions paid partially offset by $191.6 million in proceeds received from a public offering of our Class A common stock and $7.8 million lower debt issuance costs.