Select Water Solutions, Inc.
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
WTTR$15.07-6.9%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001104659-26-091156
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001104659-26-124531
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 161 previous paragraphs and 197 current paragraphs.
87 unchanged; 52 reworded; 53 added; 16 removed; 6 previous and 5 current paragraphs rearranged.
Tables are not compared: 16 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (53)
Current report
Notes Offering
Current report
On October 21, 2026, the Issuer completed the Notes Offering of $900.0 million aggregate principal amount of the Notes, issued at par. Interest on the Notes is payable semiannually on May 1 and November 1, beginning May 1, 2027. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of the Issuer’s existing restricted subsidiaries and by certain future restricted subsidiaries that guarantee certain indebtedness of the Issuer or a guarantor under any credit facility. The Notes are not guaranteed by Select Inc. or SES Holdings. The Issuer received net proceeds of approximately $886.5 million, after deducting the initial purchasers’ discount. The Issuer used a portion of the net proceeds from the Notes Offering, together with cash on hand, (i) to fund the cash consideration for the Pilot Water Acquisition, (ii) to repay the outstanding obligations under the Term Loan Facility in full and repay any outstanding loans (together with accrued and unpaid interest thereon) under the Revolving Credit Facility, and (iii) to pay the fees, premiums, expenses and costs incurred in connection with the foregoing and the transactions related thereto. The Issuer intends to use the remainder for general corporate purposes and working capital.
Current report
Reorganization
Current report
On October 20, 2026, in connection with the Notes Offering, SES Holdings completed the Reorganization, pursuant to which SES Holdings contributed substantially all of its assets, including its equity interests in its subsidiaries other than Select Holdings, to Select Holdings, a wholly owned subsidiary of SES Holdings. In connection with the Reorganization, Select Holdings was substituted for SES Holdings as “Parent” under the Sustainability-Linked Credit Facility, upon which SES Holdings was released as a guarantor thereunder and its assets were released from the liens securing the Sustainability-Linked Credit Facility.
Current report
Pilot Water Acquisition
Current report
On September 24, 2026, Select LLC, a subsidiary of SES Holdings, entered into the Pilot Water Acquisition Agreement with the Sellers to acquire all of the issued and outstanding membership interests of Pilot Water, a privately held disposal-focused water midstream company with a core position in the Delaware Basin, for aggregate consideration consisting of $600.0 million in cash (subject to customary purchase price adjustments), the Equity Consideration and $15.0 million of contingent consideration payable in cash to Pilot OFS upon the achievement of certain operational
Current report
milestones. In addition, the Pilot Water Acquisition Agreement provides that if the Measurement Date Share Price is less than the Closing Share Price, Select LLC will make (or cause to be made) a true-up payment to Pilot OFS in cash in an amount equal to (x) (a) the difference between the Closing Share Price and the Measurement Date Share Price multiplied by (b) the number of shares of our Class A common stock delivered to Pilot OFS at closing, minus (y) any cash dividends received or declared (if the record date occurs prior to the Measurement Date) on the Equity Consideration from the closing through the Measurement Date.
Current report
On October 27, 2026, Select LLC and the Sellers entered into the MIPA Amendment to provide that the closing of the Pilot Water Acquisition will take place on November 2, 2026, subject to the satisfaction or waiver of the closing conditions.
Current report
Pilot Water is a leading disposal-focused water midstream company with a core position in the Delaware Basin with approximately 2.7 million barrels per day of active permitted disposal capacity, approximately 0.8 million barrels per day of undeveloped permitted disposal capacity and more than 700 miles of pipeline infrastructure. Pilot Water’s revenues are supported by an attractive contract portfolio, with more than 80% of its annual revenue supported by long-term contracts, including approximately 480,000 barrels per day of minimum volume commitments and 306,000 dedicated acres. Pilot Water’s operational footprint complements our existing Water Infrastructure footprint. We expect the Pilot Water Acquisition and integration into our Delaware Water Infrastructure network to create a balanced recycling and disposal platform to capture the full lifecycle economics of produced and treated-produced water. Unless otherwise indicated, the financial and operating information presented herein does not give effect to the Pilot Water Acquisition and is that of Select only.
Current report
The Pilot Water Acquisition closed on November 2, 2026 and we issued 5,149,331 shares of Class A common stock in connection therewith.
Current report
Credit Agreement
Current report
On October 13, 2026, Select Holdings, an indirect subsidiary of the Company, entered into the New Credit Agreement, among Select Holdings, as borrower, SES Holdings, as parent, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and issuing banks party thereto from time to time.
Current report
The New Credit Agreement provides for the New Revolving Credit Facility, a senior secured revolving credit facility of up to $500.0 million, including a $50.0 million letter of credit sublimit, which became effective on the Effective Date, November 2, 2026, upon the satisfaction or waiver of certain conditions specified in the New Credit Agreement, including the consummation of the Pilot Water Acquisition. See Note 17—Subsequent Events.
Current report
Repayment and Termination of Existing Credit Facility
Current report
On October 21, 2026, following the closing of the Notes Offering, the Company repaid in full and terminated the Term Loan Facility under the Sustainability-Linked Credit Facility. At the time of repayment, $218.8 million of principal was outstanding under the Term Loan Facility.
Current report
On November 2, 2026, upon closing of the Pilot Water Acquisition and the Effective Date occurring under the New Credit Agreement, the Revolving Credit Facility under the Sustainability-Linked Credit Facility was repaid in full and the Sustainability-Linked Credit Facility was fully terminated. At the time of repayment, $10.0 million of borrowings was outstanding under the Revolving Credit Facility.
Current report
Termination of Debt Commitments
Current report
Concurrent with the closing of the Pilot Water Acquisition on November 2, 2026, the financing commitments pursuant to the debt commitment letters entered into in connection with the Pilot Water Acquisition terminated.
Current report
Peak Update
Current report
On September 23, 2026, SES Holdings completed the sale of a 55% interest in Peak to Headwall. SES Holdings retained a 45% ownership interest in Peak and two of five board seats. Headwall owns 55% of Peak, appoints three directors, and directs Peak’s ordinary-course activities and business operations. As a result, we deconsolidated Peak as of September 23, 2026 and began accounting for our retained interest under the equity method. Peak’s results are included in our consolidated results through September 23, 2026.
Current report
Prior to the deconsolidation transaction, Peak, while still wholly owned and consolidated, borrowed $40.0 million under a new first-lien term loan and distributed the net proceeds of $37.5 million to SES Holdings. The Peak term loan is an obligation of Peak and is not guaranteed by Select. At closing, SES Holdings received $1.5 million of cash consideration from Headwall, a $35.3 million secured seller note and retained a 45% equity interest with an estimated closing-date fair value of $30.1 million. The cash consideration is subject to customary post-closing adjustments for cash, indebtedness and working capital, which Headwall may elect to settle in cash or through a corresponding adjustment to the principal amount of the seller note. We recognized a gain of approximately $4.2 million before final closing and valuation adjustments.
Current report
Following the transaction, our consolidated revenue and costs no longer include Peak after September 23, 2026.
Current report
During the Current Quarter, we executed an amended and restated long-term produced water services agreement with a leading public operator in the Northern Delaware Basin, extending our relationship for an additional 12-year term and expanding our contracted acreage position to approximately 500,000 dedicated acres and 375,000 right-of-first-refusal (“ROFR”) acres across Eddy and Lea Counties, New Mexico, including the conversion of 104,000 acres of prior ROFR acreage into dedicated acreage and the addition of 256,000 newly dedicated acres. In connection with this agreement, we expect to invest approximately $120 million to construct approximately 100 miles of additional pipeline, three million barrels of incremental storage capacity and 60,000 barrels per day of additional recycling throughput capacity in Eddy County, New Mexico, with the expanded system expected to interconnect with our existing and ongoing buildout of our broader Northern Delaware network in New Mexico and be fully operational by the end of 2027. The amendment also increases certain fixed pricing terms under the agreement and grants us an exclusive option to take assignment of multiple saltwater disposal wells in Lea County, New Mexico and Culberson County, Texas, further enhancing our integrated recycling and disposal network and supporting predictable, long-term earnings in the region.
Current report
We also continued to expand our portfolio of contracted, recurring revenue opportunities through additional commercial agreements, including produced water takeaway and disposal arrangements, water supply agreements, minimum volume commitments and additional delivery point commitments. These included a 12-year produced water services agreement with a customer in Lea County, New Mexico, providing produced water gathering, treatment and disposal services on a firm basis, together with an acreage-wide right of first refusal covering future development in the area and a separate right of first refusal over the customer's treated water purchase requirements, as well as a complementary pair of seven-year water takeaway and supply agreements in Eddy County, New Mexico, supported by new pipeline infrastructure and exclusive rights of first refusal for both produced water takeaway and treated water supply. We also amended an existing produced water gathering and pipeline agreement in the Bakken (Williams and Mountrail Counties, North Dakota), updating pricing terms and the associated area of dedication, and entered into a new five-year salt water disposal services agreement in the Haynesville/East Texas region (Panola and Shelby Counties, Texas, and DeSoto Parish, Louisiana), supported by our Bethlehem Transfer Station and associated disposal wells, with a minimum volume commitment of 18,000 barrels per day during the first three contract years, stepping down to the greater of a volume election or 12,000 barrels per day thereafter. Collectively, these agreements are intended to increase utilization of our existing infrastructure, support selective capital investments in new pipeline connectivity and delivery points, and provide greater predictability in future revenue generation across our operating regions.
Current report
Costs of revenue increased $52.1 million, or 18.7%, to $330.8 million for the Current Quarter compared to $278.7 million for the Prior Quarter. The increase was comprised of a $25.0 million increase in Water Services costs, a $10.2 million increase in Water Infrastructure costs, a $12.5 million increase in Chemical Technologies costs, and a $4.4 million increase in depreciation, amortization and accretion.
Current report
Chemical Technologies. Costs of revenue increased $12.5 million, or 20.3%, to $73.8 million for the Current Quarter compared to $61.4 million for the Prior Quarter. Cost of revenue as a percentage of revenue increased from 80.1% to 82.2% attributable to higher raw material costs and increased fuel and freight due to higher diesel prices.
Current report
Gain on Deconsolidation of Subsidiary
Current report
During the Current Quarter, we sold a 55% interest in Peak, which resulted in a gain of $4.2 million.
Current report
Remeasurement Gain on Business Combination
Current report
A remeasurement gain of $14.9 million was recognized in the Prior Quarter in connection with Water Services property and equipment that was part of the purchase consideration transferred to Omni.
Current report
Other Income (Expense)
Current report
Other Income was $5.6 million for the Current Quarter compared to Other Expense of $2.3 million for the Prior Quarter. Current Quarter amounts include a $5.5 million insurance reimbursement for lost profits related to a 2024 business combination, while Prior Quarter amounts were primarily attributable to sales tax audit settlements.
Current report
Income Tax Expense
Current report
Income tax expense increased $8.6 million to $9.0 million for the Current Quarter compared to $0.4 million for the Prior Quarter primarily due to higher pre-tax income. The effective tax rate was 27.9% and 5.8% for the Current Quarter and Prior Quarter, respectively, and differs from the 21% U.S. federal statutory rate primarily due to net income allocated to noncontrolling interests, state income taxes, income tax credits and nondeductible items. The difference in the effective tax rate in the Current Quarter versus the Prior Quarter is related to the items impacting the rate above relative to the amount of pretax earnings.
Current report
Costs of revenue increased $46.7 million, or 5.2%, to $950.4 million for the Current Period compared to $903.8 million for the Prior Period. The increase was comprised of a $31.7 million increase in Chemical Technologies costs and a $25.3 million increase in Water Infrastructure costs partially offset by a $27.9 million decrease in** **Water Services costs. Depreciation, amortization and accretion also increased $17.7 million.
Current report
Net interest expense decreased by $0.2 million, or 1.2%, to $16.3 million for the Current Period compared to $16.5 million in the Prior Period.
Current report
Gain on Deconsolidation of Subsidiary
Current report
During the Current Quarter, we sold a 55% interest in Peak, which resulted in a gain of $4.2 million.
Current report
Remeasurement Gain on Business Combination
Current report
A remeasurement gain of $14.9 million was recognized in the Prior Period in connection with Water Services property and equipment that was part of the purchase consideration transferred to Omni.
Showing the first 40 of 53 passages. Open the source sections for the rest.
Removed paragraphs (16)
Previous report
Peak Rentals Update
Previous report
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 report
During the Current Quarter, we entered into a long-term produced water transportation agreement with a major operator to design, construct, and operate a new large-scale pipeline system in the Delaware Basin. The agreement includes the largest minimum volume commitment in the Company’s history, totaling approximately 127.75 million barrels over the initial term, and provides for firm long-term throughput supported by deficiency payment provisions. In connection with the agreement, we received ownership of multiple saltwater disposal wells as non-cash consideration, further enhancing our disposal capacity and integrated water infrastructure footprint in the region. This transaction reflects a strategic partnership with a key customer and is expected to strengthen our long-term earnings through contracted volumes and expanded asset integration.
Previous report
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 report
During the Current Quarter, we entered into a definitive agreement with subsidiaries of ISE Chemicals Corporation (“ISE”) providing for the development of commercial-scale iodine extraction and refining facilities utilizing produced water sourced through our Water Infrastructure network across Texas, New Mexico and Oklahoma. Under the
Previous report
agreement, ISE Chemicals would fund, construct, own and operate the facilities, while Select would provide produced water sourcing, transportation, storage, pretreatment, recycling and infrastructure support in exchange for royalty payments. The initial commercial facility is expected to be commissioned in 2027 within our Permian Basin footprint, with the collaboration targeting approximately 3,000 tons of annual iodine production by the end of 2030.
Previous report
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 report
We also continued pilot testing of advanced treatment technologies intended to evaluate beneficial reuse opportunities for produced water in the Permian and DJ basins. These pilot programs are designed to assess the feasibility of converting produced water into resources that could potentially be used in agricultural or other applications.
Previous report
*Water Infrastructure.*Revenue increased $20.8 million, or 25.7%, to $101.6 million for the Current Quarter compared to $80.9 million for the Prior Quarter. The increase was primarily driven by higher recycling revenues
Previous report
Costs of revenue increased $12.5 million, or 4.1%, to $319.0 million for the Current Quarter compared to $306.5 million for the Prior Quarter. The increase was comprised of a $20.8 million increase in Chemical Technologies costs and a $6.2 million increase in Water Infrastructure costs and a $6.2 million increase in depreciation, amortization and accretion, partially offset by a $20.7 million decrease in** **Water Services costs.
Previous report
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 report
Water Services. Revenue decreased $51.9 million, or 11.8%, to $389.4 million for the Current Period compared to $441.3 million in the Prior Period. The decrease was primarily driven by $49.9 million lower Fluids Hauling revenue associated with divested operations in connection with the Omni transaction. Results were also impacted by lower Peak Rentals 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.
Previous report
Costs of revenue decreased $5.4 million, or 0.9%, to $619.6 million for the Current Period compared to $625.1 million for the Prior Period. The decrease was comprised of a $52.9 million decrease in** **Water Services costs partially offset by a $19.2 million increase in Chemical Technologies costs, a $15.1 million increase in Water Infrastructure costs and a $13.2 million increase in depreciation, amortization and accretion.
Previous report
Water Services segment partially offset by a $13.2 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 18.7% and 15.4% in the Current Period and Prior Period, respectively.
Previous report
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 report
Based on our current cash and cash equivalents balance, operating cash flow, available borrowings under our Sustainability-Linked Credit Facility and the ongoing actions discussed above, we believe that we will be able to maintain sufficient liquidity to satisfy our obligations and remain in compliance with our existing debt covenants through the next twelve months and beyond, prior to giving effect to any future financing that may occur.
Reworded paragraphs (52)
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”) 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.
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 2025 Form 10-K and in our Quarterly Report on Form 10-Q for the period ended June 30, 2026, filed with the Securities and Exchange Commission on August 5, 2026 (our “Q2 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 Q2 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 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).
Current wording
This discussion relates to the Current Quarter, the Current Period, the Prior Quarter and the Prior Period.
Previous wording
During the Current Quarter, we continued advancing certain diversification initiatives, including opportunities related to municipal and industrial water markets, lithium extraction partnerships, and beneficial reuse technologies. These initiatives are intended to evaluate potential opportunities to leverage our existing water infrastructure platform across additional end markets.
Current wording
During the Current Quarter, we continued advancing our diversification initiatives, including opportunities related to municipal and industrial water markets, lithium extraction partnerships, iodine recovery, and beneficial reuse technologies, intended to evaluate potential opportunities to leverage our existing water infrastructure platform across additional end markets. These initiatives are ongoing and continue to progress.
Previous 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.
Current wording
Geopolitical tensions and related hostilities across the Middle East continued during the third 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, 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.
Current wording
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
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.
Current wording
Industry conditions during the first nine months of 2026 reflected a relatively disciplined North American upstream activity environment. Commodity prices, while significantly fluctuating in the first nine months 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
discretion, continue to decrease or increase production, which will continue to impact crude oil and natural gas price volatility. 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 may result in volatility in the industry in which we and our customers operate.
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 discretion, continue to decrease or increase production, which will continue to impact crude oil and natural gas price volatility. 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 may result in volatility in the industry in which we and our customers operate.
Previous wording
Though geopolitical tensions remained elevated across the Middle East, production from OPEC+ countries increased during the Current Quarter as shipments through major oil transit routes, including the Strait of Hormuz partially recovered. However, uncertainty remains regarding the flow of traffic through key shipping lanes as tensions in the Middle East continue. 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 geopolitical developments in the Middle East, heightened trade tensions, global demand, and other various influences and impacts. During the Current Quarter, the average spot price of WTI crude oil was $95.65 versus an average price of $64.57 for the Prior Quarter. The average Henry Hub natural gas spot price during the Current Quarter was $2.95 versus an average of $3.19 for the Prior Quarter. Henry Hub natural gas price levels in the Current Quarter decreased relative to the Prior Quarter due to a variety of factors, including easing concerns over near-term supply disruptions and continued strength in domestic natural gas production.
Current wording
Though geopolitical tensions remained elevated across the Middle East, production from OPEC+ countries increased during the Current Quarter as shipments through major oil transit routes, including the Strait of Hormuz, partially recovered. However, uncertainty remains regarding the flow of traffic through key shipping lanes as tensions in the Middle East continue. 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 geopolitical developments in the Middle East, heightened trade tensions, global demand, and other various influences and impacts. During the Current Quarter, the average spot price of WTI crude oil was $87.12 versus an average price of $65.78 for the Prior Quarter. The average Henry Hub natural gas spot price during the Current Quarter was $2.87 versus an average of $3.03 for the Prior Quarter. Henry Hub natural gas price levels in the Current Quarter decreased relative to the Prior Quarter due to a variety of factors, including easing concerns over near-term supply disruptions and continued strength in domestic natural gas production.
Previous 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.
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 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
Heightened inflation in recent years has driven higher interest rates and increased cost of capital for Select and our customers. Many customers have responded by tightening capital budgets, focusing on cash flow generation and returning capital to investors. Customer consolidation in the Permian Basin can temporarily disrupt activity levels, yet it also creates larger blocks of contiguous acreage that can increase demand for our integrated, long-term water lifecycle solutions. While acquired customers may initially slow activity to integrate operations, we are well-positioned to support these larger entities with comprehensive water management, reuse, recycling and balancing services.
Current wording
Heightened inflation in recent years has driven higher interest rates and increased cost of capital for Select and our customers. In September 2026, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00%, its first increase since 2023, further increasing borrowing costs. Many customers have responded by tightening capital budgets, focusing on cash flow generation and returning capital to investors. Customer consolidation in the Permian Basin can temporarily disrupt activity levels, yet it also creates larger blocks of contiguous acreage that can increase demand for our integrated, long-term water lifecycle solutions. While acquired customers may initially slow activity to integrate operations, we are well-positioned to support these larger entities with comprehensive water management, reuse, recycling and balancing services.
Previous wording
In the first quarter of 2026, the U.S. Supreme Court struck down certain broad tariffs previously imposed through executive orders under the International Emergency Economic Powers Act of 1977 on a wide range of imported goods. In response, President Trump promptly implementeda wide sweeping 10% import surcharge on goods under Section 122 of the Trade Act of 1974, which is scheduled to expire in July 2026 unless otherwise extended. Thesenew tariffs target various categories of imports, including several raw materials used in our operations, including steel, aluminum and copper. While the full scope, duration, and economic impact of these new tariffs remain uncertain, they could result in higher input costs, supply chain disruptions, and potential retaliatory measures from affected trading partners. We continue to monitor these developments closely and evaluate their potential effects on our cost structure and customer demand.
Current wording
In the first quarter of 2026, the U.S. Supreme Court struck down certain broad tariffs previously imposed through executive orders under the International Emergency Economic Powers Act of 1977 on a wide range of imported goods. In response, President Trump promptly implementeda wide sweeping 10% import surcharge on goods under Section 122 of the Trade Act of 1974, which expired in July 2026. These tariffs targeted various categories of imports, including several raw materials used in our operations, including steel, aluminum and copper. While the full scope, duration, and economic impact of these new tariffs remain uncertain, they could result in higher input costs, supply chain disruptions, and potential retaliatory measures from affected trading partners. We continue to monitor these developments closely and evaluate their potential effects on our cost structure and customer demand.
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 $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.
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 $122.7 million, $115.8 million, $355.6 million and $369.6 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 $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.
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 $88.0 million, $71.7 million, $252.7 million and $230.9 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 $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.
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 $76.3 million, $60.4 million, $215.8 million and $184.4 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 $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.
Current wording
We incur variable transportation costs associated with our service lines, predominantly fuel and freight. We incurred fuel and freight costs of $24.8 million, $16.0 million, $69.4 million and $56.8 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
We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income, plus interest expense, income taxes, and depreciation, amortization and accretion. We define Adjusted EBITDA as EBITDA plus any impairment and abandonment charges or asset write-offs pursuant to GAAP, plus non-cash losses on the sale of assets or subsidiaries less remeasurement gains on fixed assets related to business combinations, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(earnings) on unconsolidated entities and plus TRAs expense. The adjustments to EBITDA are generally consistent with such adjustments described in our Sustainability-Linked Credit Facility. See “—Comparison of Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
Current wording
We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income, plus interest expense, income taxes, and depreciation, amortization and accretion. We define Adjusted EBITDA as EBITDA plus any impairment and abandonment charges or asset write-offs pursuant to GAAP, plus non-cash losses on the sale of assets or subsidiaries, less gain on deconsolidation of subsidiary, less remeasurement gains on fixed assets related to business combinations, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(earnings) on unconsolidated entities and plus TRAs expense. The adjustments to EBITDA are generally consistent with such adjustments described in our Sustainability-Linked Credit Facility. See “—Comparison of Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
Previous wording
Our historical financial statements for periods prior to the respective date each acquisition was completed do not include the results of operations of that acquisition. See “—Recent Developments” and “Note 3—Acquisitions” for a description of these transactions.
Current wording
Our historical financial statements for periods prior to the respective date each acquisition was completed do not include the results of operations of that acquisition. See “—Recent Developments” and “Note 3—Acquisitions and Divestitures” for a description of these transactions.
Previous 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:
Current wording
Our revenue increased by $89.9 million, or 27.9%, to $412.2 million for the Current Quarter compared to $322.2 million for the Prior Quarter. This increase was composed of a $45.4 million increase in Water Services revenue, a $31.3 million increase in Water Infrastructure revenue and a $13.2 million increase in Chemical Technologies revenue. For the Current Quarter, our Water Infrastructure, Water Services and Chemical Technologies constituted 26.7%, 51.5% and 21.8% of our total revenue, respectively, compared to 24.5%, 51.7% and 23.8%, respectively, for the Prior Quarter. The revenue changes by reportable segment are as follows:
Previous 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.
Current wording
Chemical Technologies. Revenue increased by $13.2 million, or 17.3%, to $89.8 million for the Current Quarter compared to $76.6 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 $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.
Current wording
Water Infrastructure. Costs of revenue increased $10.2 million, or 27.6%, to $47.2 million for the Current Quarter compared to $37.0 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 46.9% to 42.8% primarily driven by a greater mix of higher-margin recycling revenues, reflecting higher skim oil sales and economies of scale from higher volumes.
Previous wording
Water Services. Costs of revenue decreased $20.7 million, or 11.9%, to $152.7 million for the Current Quarter compared to $173.3 million for the Prior Quarter. As a percentage of revenue, cost of revenue decreased from 80.4% in the Prior Quarter to 77.0% in the Current Quarter. The favorable decrease was primarily driven by improved water transfer margins from increased utilization of Tideline® hose assets, which support greater efficiency and service quality, as well as effective cost controls.
Current wording
Water Services. Costs of revenue increased $25.0 million, or 18.3%, to $161.8 million for the Current Quarter compared to $136.8 million for the Prior Quarter. As a percentage of revenue, cost of revenue decreased from 82.0% in the Prior Quarter to 76.2% in the Current Quarter. The decrease was primarily driven by improved water transfer margins from increased utilization of Tideline® hose assets, which support greater efficiency and service quality, as well as effective cost controls.
Previous 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.
Current wording
Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $4.4 million, or 10.2%, to $48.0 million for the Current Quarter compared to $43.6 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 $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.
Current wording
Gross profit was $81.4 million for the Current Quarter compared to $43.6 million for the Prior Quarter primarily driven by a $21.1 million increase in gross profit from our Water Infrastructure segment, a $20.4 million increase in gross profit from our Water Services segment, and a $0.8 million increase in gross profit from our Chemical Technologies segment partially offset by a $4.4 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 19.7% and 13.5% in the Current Quarter and Prior Quarter, respectively.
Previous wording
Selling, general and administrative expenses increased $2.2 million, or 5.8%, to $41.2 million for the Current Quarter compared to $38.9 million for the Prior Quarter, driven primarily by a $6.0 million increase in incentive and equity-based compensation partially offset by a $1.2 million decrease in credit loss expense, a $1.1 million decrease in transaction costs, a $0.9 million decrease in wages and associated payroll taxes and $0.6 million in other expenses.
Current wording
Selling, general and administrative expenses increased $11.9 million, or 28.6%, to $53.6 million for the Current Quarter compared to $41.7 million for the Prior Quarter, driven primarily by a $5.5 million increase in incentive and equity-based compensation, a $6.6 million increase in transaction costs and $2.0 million in other expenses partially offset by $1.5 million in Prior Quarter severance expense and a $0.7 million decrease in wages and associated payroll taxes.
Previous wording
Net interest expense decreased by $0.6 million, or 11.1%, to $5.0 million for the Current Quarter compared to $5.6 million in the Prior Quarter primarily driven by lower average revolver borrowings, as no amounts were outstanding under the revolving credit facility during the Current Quarter.
Current wording
Net interest expense decreased by $0.6 million, or 10.2%, to $5.4 million for the Current Quarter compared to $6.0 million in the Prior Quarter primarily driven by lower interest rates on the term loan.
Previous 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.
Current wording
Net income increased by $20.6 million to $22.9 million for the Current Quarter compared to $2.3 million for the Prior Quarter, driven primarily by higher gross profit, other income, lower equity investment losses and impairments and abandonments and the gain on deconsolidation of subsidiary, partially offset by the remeasurement gain on business combination in the Prior Quarter, increased selling, general and administrative expenses and higher income tax expense.
Previous wording
Our revenue increased by $23.2 million, or 3.1%, to $761.8 million for the Current Period compared to $738.6 million for the Prior Period. This increase was composed of a $45.1 million increase in Water Infrastructure revenue and a $30.0 million increase in Chemical Technologies revenue partially offset by a $51.9 million decrease in Water Services revenue. For the Current Period, our Water Infrastructure, Water Services and Chemical Technologies constituted 26.0%, 51.2% and 22.8% of our total revenue, respectively, compared to 20.7%, 59.8% and 19.5%, respectively, for the Prior Period. The revenue changes by reportable segment are as follows:
Current wording
Our revenue increased by $113.1 million, or 10.7%, to $1.174 billion for the Current Period compared to $1.061 billion for the Prior Period. This increase was composed of a $76.4 million increase in Water Infrastructure revenue and a $43.2 million increase in Chemical Technologies revenue partially offset by a $6.5 million decrease in Water Services revenue. For the Current Period, our Water Infrastructure, Water Services and Chemical Technologies constituted 26.3%, 51.2% and 22.5% of our total revenue, respectively, compared to 21.9%, 57.3% and 20.8%, respectively, for the Prior Period. The revenue changes by reportable segment are as follows:
Previous 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
Current wording
*Water Infrastructure.*Revenue increased $76.4 million, or 32.9%, to $308.5 million for the Current Period compared to $232.1 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
Previous 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.
Current 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. Recycling and disposal revenues also benefited from higher skim oil volumes and pricing. These increases were partially offset by lower pipeline revenue.
Previous 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.
Current wording
Water Services. Revenue decreased $6.5 million, or 1.1%, to $601.6 million for the Current Period compared to $608.2 million in the Prior Period. The decrease was primarily driven by $45.5 million lower Fluids Hauling revenue primarily due to divested operations in connection with the Omni transaction. 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 Peak revenue driven by increased power generation activity.
Previous wording
Chemical Technologies. Revenue increased by $30.0 million, or 20.8%, to $174.0 million for the Current Period compared to $144.0 million for the Prior Period. 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.
Current wording
Chemical Technologies. Revenue increased by $43.2 million, or 19.6%, to $263.8 million for the Current Period compared to $220.6 million for the Prior Period. 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 $15.1 million, or 21.6%, to $84.8 million for the Current Period compared to $69.7 million for the Prior Period. Cost of revenue as a percentage of revenue decreased from 45.5% to 42.7% primarily driven by a greater mix of higher-margin recycling revenues and margin expansion within that stream, reflecting scale efficiencies, with additional benefit from growth in disposal and solids revenues, where higher activity levels drove economies of scale and disciplined cost management further supported margin expansion.
Current wording
Water Infrastructure. Costs of revenue increased $25.3 million, or 23.7%, to $131.9 million for the Current Period compared to $106.7 million for the Prior Period. Cost of revenue as a percentage of revenue decreased from 46.0% to 42.8% primarily driven by a greater mix of higher-margin recycling revenues, reflecting higher skim oil sales and economies of scale from higher volumes.
Previous 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.
Current wording
Water Services. Costs of revenue decreased $27.9 million, or 5.7%, to $463.9 million for the Current Period compared to $491.8 million for the Prior Period. As a percentage of revenue, cost of revenue decreased from 80.9% in the Prior Period to 77.1% 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.
Previous wording
Chemical Technologies. Costs of revenue increased $19.2 million, or 15.9%, to $139.8 million for the Current Period compared to $120.6 million for the Prior Period. Cost of revenue as a percentage of revenue decreased from 83.7% to 80.3% 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 $31.7** **million, or 17.4%, to $213.6 million for the Current Period compared to $182.0 million for the Prior Period. Cost of revenue as a percentage of revenue decreased from 82.5% to 81.0% attributable to a higher proportion of sales from higher margin products partially offset by higher raw material costs and increased fuel and freight due to higher diesel prices.
Previous wording
Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $13.2 million, or 16.6%, to $93.0 million for the Current Period compared to $79.7 million for the Prior Period 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.
Current wording
Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $17.7 million, or 14.3%, to $141.0 million for the Current Period compared to $123.3 million for the Prior Period 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 $142.1 million for the Current Period compared to $113.5 million for the Prior Period primarily driven by a $30.0 million increase in gross profit from our Water Infrastructure segment, a $10.8 million increase in gross profit from our Chemical Technologies segment, and a $1.0 million increase in gross profit from our
Current wording
Gross profit was $223.5 million for the Current Period compared to $157.1 million for the Prior Period primarily driven by a $51.1 million increase in gross profit from our Water Infrastructure segment, a $21.4 million increase in gross profit from our Water Services segment and an $11.6 million increase in gross profit from our Chemical Technologies segment partially offset by a $17.7 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 19.0% and 14.8% in the Current Period and Prior Period, respectively.
Previous 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.
Current wording
Selling, general and administrative expenses increased $17.3 million, or 14.7%, to $135.3 million for the Current Period compared to $118.0 million for the Prior Period, driven primarily by a $14.0 million increase in incentive and equity-based compensation, an increase of $4.7 million in transaction costs, $1.6 million in higher legal and professional costs and $0.9 million in higher information technology costs partially offset by $1.5 million Prior Period severance expense, a $0.8 million decrease in wages and associated payroll taxes, a $0.5 million decrease in credit loss expense, and $1.1 million in other expenses.
Previous 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.
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 $4.9 million in impairments and abandonments, consisting of $3.1 million in the Water Infrastructure segment primarily associated with SWD abandonments and the termination of a disposal lease,$1.2 million related to the abandonment of back-office software development costs 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
During the Current Period, we recognized $0.6 million in gains on sales of property and equipment and divestitures compared to $7.9 million in gains during the Prior Period. Prior Period amounts were comprised of $4.7 million related to the sale of excess land in the Haynesville/E. Texas region in our Water Infrastructure segment, $2.5 million in underutilized or obsolete property and equipment in our Water Services segment and $0.7 million of obsolete property and equipment in our Chemical Technologies segment.
Current wording
During the Current Period, we recognized $1.7 million in gains on sales of property and equipment and divestitures compared to $10.5 million in gains during the Prior Period. Prior Period amounts were comprised of $5.5 million in underutilized or obsolete property and equipment in our Water Services segment, $4.0 million related to the sale of excess land in the Haynesville/E. Texas region in our Water Infrastructure segment, and $1.0 million of obsolete property and equipment in our Chemical Technologies segment.
Previous wording
Net income increased by $10.8 million, or 50.7%, to $32.0 million for the Current Period compared to $21.2 million for the Prior Period, driven primarily by higher gross profit, partially offset by lower gains on sale of fixed assets, higher selling, general and administrative expenses, higher impairments and abandonments, and higher income tax expense.
Current wording
Net income increased by $31.4 million, or 133.5%, to $54.9 million for the Current Period compared to $23.5 million for the Prior Period, driven primarily by higher gross profit, other income, a decrease in equity investment losses and the gain on deconsolidation of subsidiary, partially offset by higher selling, general and administrative expenses, the remeasurement gain in the Prior Period, lower gains on sale of fixed assets, higher impairments and abandonments, and higher income tax expense.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
*Water Infrastructure.*Revenue increased $31.3 million, or 39.7%, to $110.1 million for the Current Quarter compared to $78.8 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 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. Recycling and disposal revenues also benefited from higher skim oil volumes and pricing. These increases were partially offset by lower pipeline revenue.
Current report — wording carried from elsewhere
Water Services. Revenue increased $45.4 million, or 27.2%, to $212.3 million for the Current Quarter compared to $166.9 million in the Prior Quarter. The increase was primarily driven by underlying organic growth as well as higher water transfer revenues, driven by market share gains supported by our Tideline® hose offering as well as higher Peak revenue driven by increased power generation activity.
Current report — wording carried from elsewhere
During the Prior Quarter, we recognized $2.3 million in impairments and abandonments primarily due to the abandonment of a SWD well in the Water Infrastructure segment.
Current report — wording carried from elsewhere
Following the effectiveness of the New Revolving Credit Facility on November 2, 2026, our primary sources of liquidity are cash on hand, borrowing capacity under the New Revolving Credit Facility, cash flows from operations, proceeds from the sale of excess property and equipment, proceeds from opportunistic underwritten public offerings of our Class A common stock andthe remaining net proceeds from the Notes Offering. Our primary uses of capital have
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
During the Current Quarter, we recognized $0.2 million in impairments and abandonments in connection with the termination of a disposal lease. During the Prior Quarter, we recognized $1.5 million in impairments and abandonments, consisting of $1.3 million related to the abandonment of back-office software development costs and $0.2 million in the Water Infrastructure segment related to the abandonment of property and equipment.
Previous report — wording carried elsewhere
During the Current Quarter, we recognized $0.2 million in gains on sales of property and equipment and divestitures compared to $6.5 million in gains during the Prior Quarter. Prior Quarter amounts were comprised of $4.7 million related to the sale of excess land in the Haynesville/E. Texas region in our Water Infrastructure segment, $1.7 million in underutilized or obsolete property and equipment in our Water Services segment and $0.1 million in obsolete property and equipment in our Chemical Technologies segment.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Gain on sales of property and equipment and divestitures, net
Previous report — wording carried elsewhere
Credit Facility under the Sustainability-Linked Credit Facility was $259.2 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 $18.7 million, and the available borrowing capacity under the Sustainability-Linked Credit Facility was $213.0 million.