Consolidated Water Co. Ltd. (CWCO): Results of Operations and Financial Condition
Consolidated Water Co. Ltd. (CWCO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Consolidated Water Reports Second Quarter 2026 Results GEORGE TOWN, Grand Cayman, Cayman Islands, August 10, 2026 -- Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a leading designer, builder and operator of advanced water treatment plants, re
How this was made
The 30-second read
Why it matters
Traders can reassess CWCO’s segment trajectory (manufacturing weakness vs bulk/services strength), cash and working capital position, and the near-to-mid-term revenue pipeline from commissioned plants, contract extensions, and new project procurement/notice-to-proceed milestones.
Market read
Fresh quarterly financials plus multiple project and contract updates create a tradable setup around segment mix, margin drivers, and the timing of manufacturing and construction revenue conversion.
What to watch
Services revenue declined due to O&M contract expirations, and the Hawaii project is still at a limited notice to proceed stage, so timing risk remains before revenue and earnings fully materialize.
Total revenue decreased 2% to $32.9 million as manufacturing revenue decreased by 49% to $2.7 million.
Growth in bulk and services revenue, along with retail stability, was outweighed by a 49% decline in manufacturing revenue. Gross profit, net income from continuing operations and diluted EPS were below the prior-year period, while the company reported a strong cash and working-capital position and cited new project and equipment-order activity.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $32.9 million | – | decreased 2% |
| Gross profitGAAP | $11.0 million (33% of total revenue) | – | – |
| Net income from continuing operations attributable to Consolidated Water stockholdersGAAP | $4.0 million | – | – |
| Diluted EPS from continuing operations attributable to Consolidated Water stockholdersGAAP | $0.25 per diluted share | – | – |
| Net income attributable to Consolidated Water stockholders, including discontinued operationsGAAP | $3.9 million | – | – |
| Diluted EPS including discontinued operationsGAAP | $0.24 per diluted share | – | – |
| First half 2026 revenueGAAP | $62.8 million | – | a decrease of 7% |
| First half 2026 gross profitGAAP | $21.9 million (35% of total revenue) | – | – |
| First half 2026 manufacturing revenueGAAP | $4.1 million | – | decreased by $7.0 million, or 63% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| RetailRetail revenue remained consistent despite a 2% decrease in the volume of water sold. The volume decline was offset by a base water rate increase for a major non-potable water customer resulting from the expiration of that customer’s concessionary water purchase agreement in May 2026. | $8.7 million | – | up 0.3% |
| BulkThe increase was primarily due to an increase in energy-related revenue in the Bahamas operations and, to a lesser extent, revenue from CW-Bahamas’ new plants on Cat Island, The Bahamas. | $9.9 million | – | increased 20% |
| ServicesConstruction revenue totaled $5.3 million, up 89% from the second quarter of 2025, and was partially offset by O&M contract revenue of $6.0 million, a decrease of 27% from the second quarter of 2025, due to the expiration of two PERC contracts. | $11.6 million | – | increased slightly by 1% |
| ManufacturingThe decrease was due to a decrease in the total dollar amount of new purchase orders. | $2.7 million | – | decreased by $2.5 million, or 49% |
What drove it
- Bulk revenue increased primarily because of higher energy-related revenue in the Bahamas operations and revenue from new Cat Island plants.
- The company commissioned a seawater desalination plant on Cat Island, The Bahamas, bringing to two the total plants commissioned on the island in 2026.
- Construction revenue increased through projects including a $3.9 million drinking water plant expansion in Colorado and an $11.7 million wastewater recycling plant in California.
- In July, the client issued a limited notice to proceed for a $204 million project to design, construct, operate and maintain a 1.7-million gallon-per-day seawater desalination plant in Kalaeloa, Hawaii. The notice authorizes approximately $6 million for procurement of long-lead equipment.
- Subsequent to the quarter, the company announced purchase orders totaling approximately $10.1 million for municipal water treatment equipment in Florida.
- The company received a 25-year exclusive water production and supply concession and water utility license for Seven Mile Beach and West Bay in Grand Cayman.
Concerns
- Manufacturing revenue decreased by 49% to $2.7 million because of a decrease in the total dollar amount of new purchase orders.
- Gross profit declined to $11.0 million (33% of total revenue) from $12.8 million (38% of total revenue).
- O&M revenue totaled $6.0 million, a decrease of 27% from the second quarter of 2025, due to the expiration of two PERC contracts.
- Services G&A expenses decreased but were offset by higher cost of revenue from a mix containing a higher proportion of construction revenue and a lower proportion of higher-margin O&M, design and consulting revenue.
- Retail water volume sold in Grand Cayman decreased 2%, with slightly wetter weather cited as a contributor.
What to watch
- Whether the approximately $10.1 million in subsequent Florida municipal-equipment purchase orders supports the company’s expectation that manufacturing revenue will improve in future periods.
- Progress toward expected construction commencement later this year for the $204 million Kalaeloa, Hawaii desalination project once required permits are in place.
- Completion this year of the Colorado and California water treatment construction projects.
- Revenue contribution from the new Cat Island desalination plants and the extended operating and maintenance agreements for the Water Authority-Cayman’s North Sound and North Side Water Works plants through March 31, 2027.
- The effect of expired PERC contracts on O&M revenue and the contribution from the new southern California municipal contract expected to generate approximately $4.5 million in revenue over the three-year contract term.
Balance sheet and cash flow
- Cash and cash equivalents totaled $132.6 million as of June 30, 2026.
- Working capital was $144.6 million as of June 30, 2026.
- Stockholders’ equity was $225.6 million as of June 30, 2026.
Analysis
Second-quarter revenue decreased 2% to $32.9 million from $33.6 million. The primary shortfall was manufacturing, where revenue decreased by $2.5 million, or 49%, to $2.7 million as the total dollar amount of new purchase orders declined. Retail revenue was relatively consistent at $8.7 million despite a 2% decline in Grand Cayman water volume, while bulk revenue increased 20% to $9.9 million and services revenue increased 1% to $11.6 million.
The segment mix pressured profitability. Gross profit was $11.0 million, or 33% of total revenue, compared with $12.8 million, or 38% of total revenue, in the second quarter of 2025. Management attributed the decline primarily to lower manufacturing revenue. In services, increased construction activity was accompanied by a higher cost of revenue because construction represented a greater share of revenue while higher-margin O&M, design and consulting revenue represented a lower share.
Services illustrates the offsetting revenue trends. Construction revenue totaled $5.3 million, up 89% from the second quarter of 2025, driven by projects in Colorado and California. O&M revenue totaled $6.0 million, a decrease of 27%, following the expiration of two PERC contracts. Bulk operations benefited from higher Bahamas energy-related revenue and contributions from new Cat Island desalination plants, while management stated that cost reductions lowered G&A expenses in the retail and bulk segments.
GAAP net income from continuing operations attributable to stockholders was $4.0 million, or $0.25 per diluted share, versus $5.2 million, or $0.32 per diluted share, in the prior-year quarter. The filing provides no prior-quarter comparison, so quarter-over-quarter changes cannot be assessed from the document. For the first half, revenue was $62.8 million, a decrease of 7% from $67.3 million, and manufacturing revenue was $4.1 million, down $7.0 million, or 63%.
The balance sheet remains a central support for the stated growth strategy, with $132.6 million of cash and cash equivalents, $144.6 million of working capital and $225.6 million of stockholders’ equity as of June 30, 2026. Management cited current backlog, approximately $10.1 million of subsequent Florida equipment purchase orders, and a limited notice to proceed on the $204 million Kalaeloa project as support for improved future manufacturing revenue and future revenue and earnings growth. The company did not provide formal quantitative financial guidance.
Management, verbatim
In Q2, revenue grew across our retail, bulk and services segments, while manufacturing revenue fell by about half, reducing consolidated revenue by 2%.
Rick McTaggart, CEO
Based on current backlog, we expect manufacturing revenue to improve in future periods.
Rick McTaggart, CEO
We continue to expect construction to start later this year and believe the project will significantly contribute to revenue and earnings growth in future periods.
Rick McTaggart, CEO
Not in the filing
stated, not guessed- GAAP operating income
- Non-GAAP revenue, gross profit, operating income, net income and EPS
- Operating cash flow
- Free cash flow
- Capital expenditures
- Debt balance
- Share repurchases
- Dividends
- Tax rate
- Formal quantitative revenue guidance
- Formal quantitative gross-margin guidance
- Formal quantitative operating-expense guidance
- Formal quantitative tax-rate guidance
- Prior-quarter comparisons for reported second-quarter metrics
- Prior guidance, as no previous quarterly outlook was provided
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with Exhibit 99.1 covering Consolidated Water Co. Ltd.’s Q2 2026 financial results and operational updates.
Ticker impact
CWCO reported Q2 2026 results, with revenue down 2% to $32.9M and net income from continuing operations at $4.0M, plus segment and operational updates.
Likely modest reaction, with upside bias from new contract/project signals but offset by the reported decline in manufacturing revenue and lower net income vs prior year.
The filing provides fresh, company-specific datapoints (quarterly financials, cash/working capital, and multiple operational milestones) that can move expectations, but it is not a guidance raise or a single binary catalyst like a major acquisition or regulatory action.
Market effects
Highlights demand and contracting activity in municipal and desalination-related water infrastructure, with potential read-through to regional water treatment equipment and O&M markets.
Emphasizes growth drivers in the Caribbean (Grand Cayman, Bahamas) and U.S. states (Colorado, California, Florida, Hawaii), which may influence local infrastructure spending sentiment.
Limited global spillover; primarily a regional infrastructure operator with project-specific catalysts.
Counterpoint
The bulk revenue increase is partly driven by higher energy pass-through charges, which may not be durable if energy costs normalize, while manufacturing revenue fell sharply on lower purchase orders.
Key entities
- companyConsolidated Water Co. Ltd.
NASDAQ-listed water treatment designer, builder, and operator reporting Q2 2026 results and operational milestones.
- customer/contracting entityPERC
Services segment customer whose O&M contracts with two customers expired in Q1 2026, reducing O&M revenue.
- counterpartyWater Authority-Cayman
Entity extending operating and maintenance agreements for North Sound and North Side Water Works plants through March 31, 2027.
- counterpartyWater and Sewerage Corporation of The Bahamas
Receives potable water supplied by Cat Island desalination plants commissioned in 2026.
