Select Water Solutions, Inc.

Previous wording

This discussion relates to the three months ended March 31, 2025 (the “Current Quarter”) and the three months ended March 31, 2024 (the “Prior Quarter”).

Current wording

This discussion relates to the three and six months ended June 30, 2025 (the “Current Quarter” and the “Current Period”, respectively) and the three and six months ended June 30, 2024 (the “Prior Quarter” and the “Prior Period”, respectively).

Previous wording

We are one of the few public companies whose primary focus is on the management of water and water logistics in the energy industry with a focus on driving efficient, environmentally responsible, and economical solutions that lower costs throughout the lifecycle of the well. We believe water is a valuable resource and understand that the energy industry, other industries, and the general public are competing for this resource. We continue to provide access to water as demanded by our customers and have significantly increased our focus on the recycling and reuse of produced water, as well as assessing other industrial water sources, to meet the industry’s water demand and align our operations with the goals of our customers. We have invested significantly in the development and acquisition of fixed and mobile recycling facilities that support the advancement of commercialized produced water reuse solutions. By doing so, we strive to reduce the amount of produced water being reinjected into SWDs and to reduce our usage of fresh

Current wording

We are one of the few public companies whose primary focus is on the management of water and water logistics in the energy industry with a focus on driving efficient, environmentally responsible, and economical solutions that lower costs throughout the lifecycle of the well. We believe water is a valuable resource and understand that the energy industry, other industries, and the general public are competing for this resource. We continue to provide access to water as demanded by our customers and have significantly increased our focus on the recycling and reuse of produced water, as well as assessing other industrial water sources, to meet the industry’s water demand and align our operations with the goals of our customers. We have invested significantly in the development and acquisition of fixed and mobile recycling facilities that support the advancement of commercialized produced water reuse solutions. By doing so, we strive to reduce the amount of produced water being reinjected into SWDs and to reduce our usage of fresh water as well as that of our customers. By implementing our innovative approach to end-to-end water solutions, Select has become a leader in recycling produced water to be reused for energy production.

Previous wording

In the first three months of 2025, Select executed three asset acquisitions totaling $13.1 million, enhancing current and future water infrastructure capabilities. These asset acquisitions collectively position Select for future growth and operational efficiency in the water infrastructure segment. In parallel, Select has continued to win new long-term contracts in its infrastructure segment, further strengthening its recurring revenue base and supporting sustained growth. Additionally, we made a $72.1 million equity method investment in an entity to consolidate one of the largest water holdings and storage portfolios in Colorado to serve agricultural, municipal, and industrial stakeholders in the region (Refer to “Note 1—Business and Basis of Presentation” for further discussion on AV Farms). Further, on January 24, 2025, we entered into a $550.0 million sustainability-linked senior secured credit facility and extinguished our prior debt (Refer to “Note 8—Debt” for further discussion of the Sustainability-Linked Credit Facility).

Current wording

In the first six months of 2025, Select executed four asset acquisitions totaling $14.6 million, enhancing current and future water infrastructure capabilities. These asset acquisitions collectively position Select for future growth and operational efficiency in the Water Infrastructure segment. We also acquired certain wastewater treatment facilities for the accommodations and rentals business line in the Permian and Eagle Ford regions for $1.7 million. In parallel, Select has continued to win new long-term contracts in its infrastructure segment, further strengthening its recurring revenue base and supporting sustained growth. Additionally, several Water Infrastructure projects currently under development are anticipated to commence operations in the second half of 2025. Further, we made a $72.1 million equity method investment in an entity to consolidate one of the largest water holdings and storage portfolios in Colorado to serve agricultural, municipal, and industrial stakeholders in the region (Refer to “Note 1—Business and Basis of Presentation” for further discussion on AV Farms). Additionally, on January 24, 2025, we entered into a $550.0 million sustainability-linked senior secured credit facility and extinguished our prior debt (Refer to “Note 8—Debt” for further discussion of the Sustainability-Linked Credit Facility).

Previous wording

The armed conflict between Ukraine and Russia continued into 2025, as well as ongoing conflicts in the Middle East, including heightened tensions with Iran. As a result of the Russian invasion of Ukraine, the U.S., the United Kingdom, the member states of the European Union and other public and private actors have imposed severe sanctions on Russian financial institutions, businesses and individuals. In the Middle East, various conflicts have resulted in increased hostilities and instability in oil and gas producing regions in the Middle East as well as in key adjacent shipping lanes and supply chains, including elevated tensions with Iran, a major oil producer.

Current wording

The armed conflict between Ukraine and Russia has continued into 2025, as well as ongoing conflicts in the Middle East, including heightened tensions with Iran. As a result of the Russian invasion of Ukraine, the U.S., the United Kingdom, the member states of the European Union and other public and private actors have imposed severe sanctions on Russian financial institutions, businesses and individuals. In the Middle East, various conflicts have resulted in increased hostilities and instability in oil and gas producing regions in the Middle East as well as in key adjacent shipping lanes and supply chains, including elevated tensions with Iran, a major oil producer. In addition, in July of 2025, the U.S. government threatened additional sanctions on Russia and additional tariffs on countries that import energy from Russia.

Previous wording

In addition, since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts), which currently cut output by 5.86 million barrels/day in the aggregate. Most recently, in March 2025, OPEC+ announced further production cuts between 0.19 million barrels per day and 0.44 million barrels per day through June 2026 in response to OPEC+ members producing above agreed upon levels. 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. The average price of West Texas Intermediate (“WTI”) crude oil decreased in the Current Quarter versus the Prior Quarter due to a combination of factors, including heightened trade tensions, weakening global demand, the threat of a global recession and increased production from OPEC+ countries. During the Current Quarter, the average spot price of WTI crude oil was $71.78 versus an average price of $77.50 for the Prior Quarter. The average Henry Hub natural gas spot price during the Current Quarter was $4.14 versus an average of $2.15 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 cold weather, lower than expected inventories, and the ongoing LNG export growth in the U.S., and have positively impacted activity levels in natural gas basins.

Current wording

In addition, since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts), which currently cut output by approximately 4.66 million barrels/day in the aggregate, comprised of a core production cut of 3.66 million barrels/day and voluntary production cuts of approximately 1.0 million barrels/day, which is set to be fully unwound by the end of September. Most recently, on July 28, 2025, OPEC+ reaffirmed the existing production cuts including the next scheduled winddown of 0.5 million barrels/day of voluntary production cuts in August. 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. The average price of West Texas Intermediate (“WTI”) crude oil decreased in the Current Quarter versus the Prior Quarter due to a combination of factors, including heightened trade tensions, weakening global demand, rising domestic production, the threat of a global recession and increased production from OPEC+ countries. During the Current Quarter, the average spot price of WTI crude oil was $64.57 versus an average price of $81.81 for the Prior Quarter. The average Henry Hub natural gas spot price during the Current Quarter was $3.19 versus an average of $2.07 for the Prior Quarter. Henry Hub natural gas price levels in the Current

Previous wording

Overall however, even though commodity prices have moderated recently, the financial health of the oil and gas industry is in a generally healthy position overall, including many of our customers specifically, as reflected in revenues and earnings, debt metrics, recent capital raises, and equity valuations. While the financial health of the broader oil and gas industry has shown improvement as compared to prior periods, central bank policy actions and associated liquidity risks and other factors may negatively impact the value of our equity and that of our customers, and may reduce our and their ability to access liquidity in the bank and capital markets or result in capital being available on less favorable terms, which could negatively affect our financial condition and that of our customers.

Current wording

Overall, however, even though commodity prices have moderated recently, the financial health of the oil and gas industry is in a generally healthy position, including many of our customers specifically, as reflected in revenues and earnings, debt metrics, recent capital raises, and recurring shareholder returns. The industry may face additional changes due to recent and future legislative and regulatory changes under the current presidential administration. Most recently, the OBBBA, signed into law in July 2025, includes many provisions intended to expand onshore oil and gas leasing and drilling on federal land, such as increased federal oil and gas lease sales and lower royalty rates on federal oil and gas leases. While the financial health of the broader oil and gas industry has shown improvement as compared to prior periods, central bank policy actions and associated liquidity risks and other factors may negatively impact the value of our equity and that of our customers, and may reduce our and their ability to access liquidity in the bank and capital markets or result in capital being available on less favorable terms, which could negatively affect our financial condition and that of our customers.

Previous wording

From an operational standpoint, many of the recent efficiency trends still apply to ongoing unconventional oil and gas development. The continued trend towards multi-well pad development and simultaneous well completions, executed within a limited time frame, combined with service price inflation and elevated interest rates, has increased the overall intensity, complexity and cost of well completions, while increasing fracturing efficiency and the use of lower-cost in-basin sand has decreased total costs for our customers. However, we note the continued efficiency gains in the well completions process can limit the days we spend on the wellsite and, therefore, negatively impact the total revenue opportunity for certain of our services utilizing day-rate pricing models.

Current wording

From an operational standpoint, many of the recent efficiency trends still apply to ongoing unconventional oil and gas development. The continued trend towards multi-well pad development and simultaneous well completions, executed within a limited time frame, combined with service price inflation and elevated interest rates, has increased the overall intensity, complexity and cost of well completions, while increasing fracturing efficiency and the use of lower-cost in-basin sand has decreased total costs for our customers. However, we note the continued efficiency gains in the

Previous wording

We currently generate most of our revenue through our water-management services associated with well completions as well as ongoing produced water management, provided through our Water Services and Water Infrastructure segments. Most of this revenue is realized through customer agreements with fixed pricing terms and is recognized when delivery of services is provided, generally at our customers’ sites. While we have a growing portfolio of contracts incorporating long-term pricing arrangements, particularly in our Water Infrastructure segment, most of our water and water-related services are priced based on prevailing market conditions, giving due consideration to the customer’s specific requirements.

Current wording

recognized when delivery of services is provided, generally at our customers’ sites. While we have a growing portfolio of contracts incorporating long-term pricing arrangements, particularly in our Water Infrastructure segment, the majority of our water and water-related services are priced based on prevailing market conditions, giving due consideration to the customer’s specific requirements.

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 $129.4 million and $138.3 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 $124.4 million, $126.7 million, $253.8 million and $265.0 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 $79.5** **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 $79.7 million, $79.0 million, $159.2 million and $158.5 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 $65.2 million and $61.4 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 $58.8 million, $63.2 million, $123.9 million and $124.9 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, predominately fuel and freight. We incurred fuel and freight costs of $22.3 million and $24.1 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 $18.4 million, $21.0 million, $40.7 million and $45.0 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 accounting principles generally accepted in the U.S. (“GAAP”), plus non-cash losses on the sale of assets or subsidiaries, non-recurring compensation expense, 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/(gains) on unconsolidated entities and plus tax receivable agreements 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 accounting principles generally accepted in the U.S. (“GAAP”), plus non-cash losses on the sale of assets or subsidiaries, non-recurring compensation expense, 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/(gains) on unconsolidated entities and plus tax receivable agreements 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

Previous wording

similarly useful information to investors for assessing the recent and ongoing financial and operational performance, outlook and liquidity position of the Company. Our measure of free cash flow may not be directly comparable to similar measures reported by other companies. Furthermore, free cash flow is not a substitute for, or more meaningful than, net cash provided by (used in) operating activities nor any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as free cash flow. Accordingly, free cash flow should not be considered a measure of the income generated by our business or discretionary cash available to it to invest in the growth of our business.

Current wording

We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, plus proceeds received from sales of property and equipment. Our board of directors and executive management team use free cash flow to assess our liquidity and ability to fund operations, make additional investments, pay dividends and distributions, repay maturing debt and repurchase common stock. We believe free cash flow provides similarly useful information to investors for assessing the recent and ongoing financial and operational performance, outlook and liquidity position of the Company. Our measure of free cash flow may not be directly comparable to similar measures reported by other companies. Furthermore, free cash flow is not a substitute for, or more meaningful than, net cash provided by (used in) operating activities nor any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as free cash flow. Accordingly, free cash flow should not be considered a measure of the income generated by our business or discretionary cash available to it to invest in the growth of our business.

Previous wording

As described above, we continuously evaluate potential investments, particularly in water infrastructure and other water-related services and technology. To the extent we consummate acquisitions, any incremental revenues or expenses from such transactions are not included in our historical results of operations.

Current wording

As described above, we continuously evaluate potential investments, particularly in water infrastructure and other water-related services and technology. To the extent we consummate acquisitions, any pre-transaction revenues or expenses from such transactions are not included in our historical results of operations.

Previous wording

During the Current Quarter, we completed three asset acquisitions. 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

During the Current Period, we completed five asset acquisitions. 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.

Previous wording

Chemical Technologies. Revenue increased by $1.6 million, or 2.2%, to $76.3 million for the Current Quarter compared to $74.7 million for the Prior Quarter. The increase in revenues was primarily driven by enhanced sales performance.

Current wording

Chemical Technologies. Revenue increased by $1.1 million, or 1.7%, to $67.7 million for the Current Quarter compared to $66.6 million for the Prior Quarter. The increase in revenues was primarily driven by enhanced sales performance and new product developments.

Previous wording

Water Services. Costs of revenue increased $0.2 million, or 0.1%, to $181.7 million for the Current Quarter compared to $181.5 million for the Prior Quarter. As a percentage of revenue, cost of revenue increased from 79.5% in the Prior Quarter to 80.5% in the Current Quarter. This increase was primarily driven by a decline in water sourcing revenue and reduced margins in the water transfer and poly and containment business lines, reflecting selective price reductions implemented to retain key customer relationships. These impacts were partially offset by improved gross margins in our well testing and fluids hauling business lines, attributable to continued cost discipline and operational efficiencies.

Current wording

Water Services. Costs of revenue decreased $5.0 million, or 2.8%, to $173.3 million for the Current Quarter compared to $178.3 million for the Prior Quarter. As a percentage of revenue, cost of revenue increased from 77.5% in the Prior Quarter to 80.4% in the Current Quarter. This increase was primarily driven by a decline in water sourcing revenue and reduced margins in the water transfer, poly and containment and well testing business lines, reflecting selective price reductions implemented to retain key customer relationships. These impacts were partially offset by improved gross margins in our fluids hauling business lines, attributable to continued cost discipline, operational efficiencies and consolidation activities.

Previous wording

Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $1.8 million, or 4.8%, to $38.7 million for the Current Quarter compared to $36.9 million for the Prior Quarter primarily due to a higher fixed asset base resulting from recent acquisitions as well as increased capital expenditures made into new organic infrastructure projects.

Current wording

Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $3.6 million, or 9.6%, to $41.1 million for the Current Quarter compared to $37.4 million for the Prior Quarter primarily due to a higher fixed asset base resulting from recent acquisitions as well as increased capital expenditures made into new organic infrastructure projects.

Previous wording

Gross profit was $55.8 million for the Current Quarter compared to $52.7 million for the Prior Quarter primarily driven by a $9.1 million increase in gross profit from our Water Infrastructure segment, partially offset by a $2.8 million decline in our Water Services segment, a $1.4 million decline in our Chemical Technologies segment and a $1.8 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 14.9% and 14.4% in the Current Quarter and Prior Quarter, respectively.

Current wording

Gross profit was $57.8 million for the Current Quarter compared to $60.2 million for the Prior Quarter primarily driven by a $9.7 million increase in gross profit from our Water Infrastructure segment and a $0.9 million increase in our Chemical Technologies segment, offset by a $9.4 million decline in our Water Services segment and a $3.6 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 15.9% and 16.5% in the Current Quarter and Prior Quarter, respectively.

Previous wording

Net income increased by $5.7 million, or 146.7%, to $9.6 million for the Current Quarter compared to $3.9 million for the Prior Quarter, driven primarily by higher gross profit and lower selling, general and administrative expenses partially offset by higher net interest expense and higher income tax expense.

Current wording

Net income decreased by $3.2 million, or 21.7%, to $11.7 million for the Current Quarter compared to $14.9 million for the Prior Quarter, driven primarily by lower gross profit, higher net interest expense and higher income tax expense partially offset by gains on sales of property and equipment in the Current Quarter.

Previous wording

Our revenue increased by $7.8 million, or 2.1%, to $374.4 million for the Current Quarter compared to $366.5 million for the Prior Quarter. This increase was composed of an $8.9 million increase in Water Infrastructure revenue and a $1.6 million increase in Chemical Technologies revenue partially offset by a $2.7 million decrease in Water Services revenue. The net $7.8 million increase was driven primarily by recent capital investments in our Water Infrastructure segment and enhanced sales performance in Chemical Technologies. For the Current Quarter, our Water Infrastructure, Water Services and Chemical Technologies constituted 19.3%, 60.3% and 20.4% of our total revenue, respectively, compared to 17.3%, 62.3% and 20.4%, respectively, for the Prior Quarter. The revenue changes by reportable segment are as follows:

Current wording

Our revenue increased by $6.9 million, or 0.9%, to $738.6 million for the Current Period compared to $731.7 million for the Prior Period. This increase was composed of a $21.2 million increase in Water Infrastructure revenue and a $2.8 million increase in Chemical Technologies revenue partially offset by a $17.0 million decrease in Water Services revenue. The net $6.9 million increase was driven primarily by recent capital investments in our Water Infrastructure segment and enhanced sales performance in Chemical Technologies. For the Current Period, our Water Infrastructure, Water Services and Chemical Technologies constituted 20.7%, 59.8% and 19.5% of our total revenue, respectively, compared to 18.1%, 62.6% and 19.3%, respectively, for the Prior Period. The revenue changes by reportable segment are as follows:

Previous wording

*Water Infrastructure.*Revenue increased $8.9 million, or 14.0%, to $72.4 million for the Current Quarter compared to $63.5 million for the Prior Quarter. The increase was primarily driven by additional disposal and landfill revenue from 2024 acquisitions and organic growth in our recycling business line supported by recent capital investments, partially offset by lower pipeline distribution volumes.

Current wording

*Water Infrastructure.*Revenue increased $21.2 million, or 16.0%, to $153.2 million for the Current Period compared to $132.1 million for the Prior Period. The increase was primarily driven by organic growth in our recycling business line supported by recent capital investments and additional solids management and disposal revenues impacted by our 2024 and 2025 acquisitions, partially offset by lower pipeline revenue.

Previous wording

Costs of revenue increased $4.7 million, or 1.5%, to $318.6 million for the Current Quarter compared to $313.9 million for the Prior Quarter. The increase was primarily composed of a $3.0 million increase in** **Chemical Technologies costs, a $0.2 million increase in Water Services costs and a $1.8 million increase in depreciation, amortization and accretion partially offset by a $0.2 million decrease in Water Infrastructure costs.

Current wording

Costs of revenue increased $6.2 million, or 1.0%, to $625.1 million for the Current Period compared to $618.8 million for the Prior Period. The increase was primarily composed of a $2.4 million increase in Water Infrastructure costs, a $3.2 million increase in** **Chemical Technologies costs and a $5.4 million increase in depreciation, amortization and accretion partially offset by a $4.8 million decrease in Water Services costs.

Previous wording

Water Infrastructure. Costs of revenue decreased $0.2 million, or 0.6%, to $33.5 million for the Current Quarter compared to $33.7 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased** **from 53.1% to 46.3% due primarily to an increase in gathering and disposal margin benefitted by the margin accretive contributions of recently acquired disposal operations, improved operational utilization and execution, as well as higher skim oil sales. Additionally, growth in high-margin recycling revenue, supported by our recent organic capital projects, favorably impacted gross margin, which was partially offset by a decline in high-margin pipeline revenue.

Current wording

Water Infrastructure. Costs of revenue increased $2.4 million, or 3.6%, to $69.7 million for the Current Period compared to $67.3 million for the Prior Period. Cost of revenue as a percentage of revenue decreased** **from 50.9% to 45.5% due primarily to an increase in high-margin recycling revenue supported by our recent organic capital projects. Also contributing to improved profitability were increases in gathering and disposal margins driven by the accretive impact of recently acquired disposal operations, enhanced operational utilization and execution, and higher skim oil sales.

Previous wording

Chemical Technologies. Costs of revenue increased $3.0 million, or 4.8%, to $64.7 million for the Current Quarter compared to $61.8 million for the Prior Quarter. Cost of revenue as a percentage of revenue increased from 82.6% to 84.8% primarily driven by modest price reductions stemming from macroeconomic factors.

Current wording

Chemical Technologies. Costs of revenue increased $3.2 million, or 2.7%, to $120.6 million for the Current Period compared to $117.4 million for the Prior Period. Cost of revenue as a percentage of revenue increased from 83.1% to 83.7% primarily driven by modest price reductions stemming from macroeconomic factors.

Previous wording

Selling, general and administrative expenses decreased $6.5 million, or 14.9%, to $37.4 million for the Current Quarter compared to $44.0 million for the Prior Quarter. The decrease was primarily driven by $3.8 million in lower transaction and rebranding costs, a $2.6 million decline in incentive and equity-based compensation, a $1.2 million reduction in legal and professional fees, a $0.9 million reduction in contract labor and a $0.6 million reduction in severance expense, partially offset by a $1.1 million increase in wages, associated payroll taxes, and employer 401(k) matching contributions, $1.0 million in higher information technology costs and $0.5 million from a combination of other expenses.

Current wording

Selling, general and administrative expenses decreased $6.6 million, or 7.9%, to $76.4 million for the Current Period compared to $83.0 million for the Prior Period. The decrease was primarily driven by a $5.4 million decline in incentive and equity-based compensation, $4.8 million in lower transaction and rebranding costs, a $1.5 million reduction in contract labor, a $1.1 million reduction in legal and professional fees and a $0.6 million reduction in severance expense, partially offset by a $3.5 million increase in wages, associated payroll taxes, and employer 401(k) matching contributions, $2.6 million in higher information technology costs and $0.7 million from a combination of other expenses.

Previous wording

During the Current 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 $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 $3.6 million, or 283.3%, to $4.9 million for the Current Quarter compared to $1.3 million in the Prior Quarter due to interest on the new Term Loan Facility as well as higher amortization of deferred debt issuance costs in connection with our new Sustainability-Linked Credit Facility and extinguishment costs related to our Prior Sustainability-Linked Credit Facility.

Current wording

Net interest expense increased by $7.2 million, or 219.0%, to $10.5 million for the Current Period compared to $3.3 million in the Prior Period due to interest expense on the new Term Loan Facility as well as higher amortization of deferred debt issuance costs in connection with our new Sustainability-Linked Credit Facility and extinguishment costs related to our Prior Sustainability-Linked Credit Facility.

Previous wording

EBITDA was $56.9 million for the Current Quarter compared to $44.7 million for the Prior Quarter. The $12.2 million increase in EBITDA was driven primarily by a $4.9 million increase in gross profit, a $6.5 million decrease in selling, general and administrative expense and a $1.0 million increase in gains on asset sales. Adjusted EBITDA was $64.0 million for the Current Quarter compared to $59.8 million for the Prior Quarter.

Current wording

EBITDA was $64.8 million for the Current Quarter compared to $59.1 million for the Prior Quarter. The $5.7 million increase in EBITDA was driven primarily by a $6.1 million increase in gains on asset sales and a $1.2 million increase in gross profit partially offset by a $1.4 million increase in impairments and abandonments. Adjusted EBITDA was $72.6 million for the Current Quarter compared to $69.6 million for the Prior Quarter.

Previous wording

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.

Current wording

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

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 resulted in a financing outflow of $8.6 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 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 resulted in a financing outflow of $16.9 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, 2025 cash and cash equivalents totaled $27.9 million, and we had approximately $232.3 million of available borrowing capacity under our Sustainability-Linked Credit Facility. As of March 31, 2025, we had $250.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $252.2 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 $19.9 million. As of May 5, 2025, we had $250.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $271.4 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 $19.9 million, and the available borrowing capacity under the Sustainability-Linked Credit Facility was $251.5 million.

Current wording

As of June 30, 2025 cash and cash equivalents totaled $51.2 million, and we had approximately $228.1 million of available borrowing capacity under our Sustainability-Linked Credit Facility. As of June 30, 2025, we had $275.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $270.3 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 $17.2 million. As of August 4, 2025, we had $280.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $250.3 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 $19.3 million, and the available borrowing capacity under the Sustainability-Linked Credit Facility was $201.0 million.

Previous wording

Analysis of Cash Flow Changes between the three months ended March 31, 2025 and 2024

Current wording

Analysis of Cash Flow Changes between the six months ended June 30, 2025 and 2024

Previous wording

Operating Activities. Net cash used in operating activities was $5.1 million for the Current Quarter, compared to $32.1 million of net cash provided by operating activities for the Prior Quarter. The $37.2 million decrease is comprised of a $43.3 million reduction in converting working capital to cash, primarily associated with increased accounts receivable, offset by an increase of $6.1 million of net income combined with non-cash adjustments.

Current wording

Operating Activities. Net cash provided by operating activities was $77.5 million for the Current Period, compared to $115.2 million for the Prior Period. The $37.7 million decrease is comprised primarily of a $39.4 million reduction in converting working capital to cash, principally associated with increased accounts receivable, partially offset by an increase of $1.7 million of net income combined with non-cash adjustments.

Previous wording

Investing Activities. Net cash used in investing activities was $132.5 million for the Current Quarter, compared to $136.9 million for the Prior Quarter. The $4.4 million decrease in net cash used in investing activities was due primarily to a $94.3 million decrease spent for acquisitions net of cash received partially offset by a $72.1 million investment in unconsolidated entities during the Current Quarter, a $14.7 million increase in purchases of property and equipment and a $3.2 million decrease in proceeds received from sales of property and equipment.

Current wording

Investing Activities. Net cash used in investing activities was $207.5 million for the Current Period, compared to $224.1 million for the Prior Period. The $16.6 million decrease in net cash used in investing activities was due primarily to a $132.6 million decrease spend for acquisitions net of cash received partially offset by a $72.1 million investment in unconsolidated entities during the Current Period and a $45.0 million increase in purchases of property and equipment.

Previous wording

Financing Activities. Net cash provided by financing activities was $145.5 million for the Current Quarter, compared to $60.5 million for the Prior Quarter. The $85.0 million increase in net cash provided by financing activities was due primarily to borrowings net of debt repayments increasing $90.0 million, $2.9 million of cash received from noncontrolling interest holders in the Current Quarter and a $0.7 million decrease in repurchases of shares of Class A common stock partially offset by $7.4 million of debt issuance costs in the Current Quarter and a $1.1 million increase in dividends and distributions paid.

Current wording

Financing Activities. Net cash provided by financing activities was $161.2 million for the Current Period, compared to $68.2 million for the Prior Period. The $93.0** **million increase in net cash provided by financing activities was due primarily to a $100.0 million increase in borrowings net of repayments and $2.9 million of cash received from noncontrolling interest holders in the Current Period partially offset by $7.9 million of debt issuance costs in the Current Period and a $2.4 million increase in dividends and distributions paid.

Previous wording

On January 24, 2025 (the “Closing Date”), SES Holdings, LLC (“SES Holdings”), a subsidiary of the Company, Select Water Solutions, LLC, a subsidiary of SES Holdings (the “Select LLC”), Bank of America, N.A., as

Current wording

On January 24, 2025 (the “Closing Date”), SES Holdings, LLC (“SES Holdings”), a subsidiary of the Company, Select Water Solutions, LLC, a subsidiary of SES Holdings (the “Select LLC”), Bank of America, N.A., as administrative agent, issuing lender and swingline lender (the “Administrative Agent”), and the other lenders party

Previous wording

administrative agent, issuing lender and swingline lender (the “Administrative Agent”), and the other lenders party thereto, entered into that certain sustainability-linked senior secured credit facility (the “Sustainability-Linked Credit Facility”), which initially provides for $300.0 million in revolving commitments (the “Revolving Credit Facility”) and $250.0 million in term commitments (the “Term Loan Facility”), in each case, subject to a borrowing base. The Sustainability-Linked Credit Facility also has a sublimit of $50.0 million for letters of credit and a sublimit of $30.0 million for swingline loans. Subject to obtaining commitments from existing or new lenders, Select LLC has the option to increase the maximum amount under the sustainability-linked senior secured credit facility by (i) $150.0 million for additional revolving commitments and (ii) $50.0 million for additional term commitments, in each case, during the first four years following the Closing Date. As of the Closing Date, (i) there were no borrowings outstanding under the Revolving Credit Facility and approximately $20 million of letters of credit issued and outstanding thereunder and (ii) the Term Loan Facility was fully funded. Capitalized terms used but not defined herein have the meaning ascribed to them in the Sustainability-Linked Credit Facility.

Current wording

thereto, entered into that certain sustainability-linked senior secured credit facility (the “Sustainability-Linked Credit Facility”), which initially provides for $300.0 million in revolving commitments (the “Revolving Credit Facility”) and $250.0 million in term commitments (the “Term Loan Facility”), in each case, subject to a borrowing base. The Sustainability-Linked Credit Facility also has a sublimit of $50.0 million for letters of credit and a sublimit of $30.0 million for swingline loans. Subject to obtaining commitments from existing or new lenders, Select LLC has the option to increase the maximum amount under the sustainability-linked senior secured credit facility by (i) $150.0 million for additional revolving commitments and (ii) $50.0 million for additional term commitments, in each case, during the first four years following the Closing Date. As of the Closing Date, (i) there were no borrowings outstanding under the Revolving Credit Facility and approximately $20 million of letters of credit issued and outstanding thereunder and (ii) the Term Loan Facility was fully funded. Capitalized terms used but not defined herein have the meaning ascribed to them in the Sustainability-Linked Credit Facility.