Ken Dennard / Natalie Hairston WTTR@dennardlascar.com Select Water Solutions Announces Third Quarter 2026 Financial, Operational and Strategic Updates
Select Water Solutions, Inc. (WTTR) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FOR IMMEDIATE RELEASE N ews Release Contacts: Select Water Solutions, Inc. Garrett Williams – VP, Corporate Finance & Investor Relations (713) 296-1010 IR@selectwater.com Dennard Lascar Investor Relations Ken Dennard / Natalie Hairston (713) 529-6600 WTTR@dennardlasc
How this was made
The 30-second read
Why it matters
The earnings release and acquisition provide fresh material for traders, with the company showing robust growth and increased liquidity, likely prompting buying interest.
Market read
The Q3 earnings and strategic acquisition are primary catalysts for WTTR, offering a clear trade opportunity in the water infrastructure niche.
What to watch
Potential regulatory scrutiny of the Pilot Water deal and the impact of higher capital expenditures on cash flow.
Q3 2026 revenue rose 28% year over year to $412 million, with record Water Infrastructure revenue of $110 million and Adjusted EBITDA of $93.5 million; free cash flow was negative at $(3.6) million.
Revenue, gross profit, net income and Adjusted EBITDA all rose sharply year over year, and Water Infrastructure reported a record quarter. Offsetting this, free cash flow was negative at $(3.6) million, SG&A rose to $53.6 million including $7.4 million of transaction costs, cash fell to $34.1 million, and the company issued $900 million of 7.625% senior notes after quarter end.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, Q3 2026GAAP | $412M | – | increase of $90 million or 28% |
| Water Infrastructure revenue, Q3 2026GAAP | $110M | 8.4% sequentially | increase of $31 million or 40% |
| Water Services revenue, Q3 2026GAAP | $212M | 7.1% sequentially | – |
| Chemical Technologies revenue, Q3 2026GAAP | $90M | – | – |
| Gross profit, Q3 2026GAAP | $81.4M | – | – |
| Total gross margin, Q3 2026GAAP | 19.7% | – | – |
| Gross profit before D&A, Q3 2026non-GAAP | $129.4M | – | – |
| Gross margin before D&A, Q3 2026non-GAAP | 31.4% | – | – |
| Selling, general and administrative expense, Q3 2026GAAP | $53.6M | – | – |
| Income (loss) from operations, Q3 2026GAAP | $26.89M | – | – |
| Interest expense, net, Q3 2026GAAP | −$5.35M | – | – |
| Income tax expense, Q3 2026GAAP | −$9.04M | – | – |
| Net income, Q3 2026GAAP | $22.9M | – | increase of $21 million |
| Net income attributable to Select Water Solutions, Inc., Q3 2026GAAP | $20.61M | – | – |
| Net income per diluted Class A share, Q3 2026GAAP | $0.16 | – | – |
| Adjusted EBITDA, Q3 2026non-GAAP | $93.5M | – | increase of $34 million or 57% |
| Net cash provided by operating activities, Q3 2026GAAP | $84M | – | – |
| Free cash flow, Q3 2026non-GAAP | −$3.6M | – | – |
| Purchase of property and equipment, Q3 2026GAAP | −$89.55M | – | – |
| Net capital expenditures, Q3 2026non-GAAP | $88.1M | – | – |
| Water Infrastructure gross margin before D&A, Q3 2026non-GAAP | 57.2% | – | – |
| Water Services gross margin before D&A, Q3 2026non-GAAP | 23.8% | – | – |
| Chemical Technologies gross margin before D&A, Q3 2026non-GAAP | 17.8% | – | – |
| Total revenue, nine months 2026GAAP | $1.17B | – | – |
| Water Infrastructure revenue, nine months 2026GAAP | $308.5M | – | – |
| Water Services revenue, nine months 2026GAAP | $601.6M | – | – |
| Chemical Technologies revenue, nine months 2026GAAP | $263.8M | – | – |
| Gross profit, nine months 2026GAAP | $223.5M | – | – |
| Income from operations, nine months 2026GAAP | $79.20M | – | – |
| Net income, nine months 2026GAAP | $54.92M | – | – |
| Net cash provided by operating activities, nine months 2026GAAP | $181.4M | – | – |
| Net income per diluted Class A share, nine months 2026GAAP | $0.41 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Water InfrastructureThe company states the sequential increase was driven primarily by increases in total produced water volumes handled to 1.7 million barrels per day in Q3 2026 from 1.5 million barrels per day in Q2 2026. Gross margin before D&A was 57.2% versus 58.3% in Q2 2026. Q4 2026 guidance is revenue of $150 - $160 million with gross margin before D&A of 52% – 56%, driven by a partial quarter contribution from Pilot Water. | $110M | 8.4% sequentially | increase of $31 million or 40% |
| Water ServicesThe company states the sequential increase was driven primarily by revenue gains in the Permian Basin region. Peak Rentals, deconsolidated after the Q3 2026 transaction, contributed approximately 21% of the segment's revenues year-to-date. Gross margin before D&A was 23.8% versus 23.0% in Q2 2026. Q4 2026 guidance is revenue of $150 - $160 million with gross margin before D&A of 21% – 24%, with mid single-digit percent sequential declines expected for the remaining segment. | $212M | 7.1% sequentially | – |
| Chemical TechnologiesThe release states Q3 2026 revenue was at the high end of the company's $85 to $90 million guided range, but gives no driver for the quarter's change. Gross margin before D&A was 17.8% versus 20.2% in Q2 2026. Q4 2026 guidance is revenue of $75 – $80 million, which the company attributes to the timing of key customer activity levels and fourth quarter seasonality, with gross margin before D&A in the 17% – 18% range. | $90M | – | – |
Q4 2026 outlook
- NoteAdjusted EBITDA in the fourth quarter growing to an estimated $95 - $100 million, taking into account the divestment and deconsolidation of Peak Rentals and a partial quarter contribution from Pilot Water
- NoteWater Infrastructure revenues of $150 - $160 million in the fourth quarter of 2026, driven by a partial quarter contribution from Pilot Water
- NoteWater Infrastructure gross margins before D&A in the 52% – 56% range in the fourth quarter of 2026
- NoteWater Services revenues of $150 - $160 million in the fourth quarter of 2026, with gross margins before D&A in the 21% – 24% range
- NoteChemical Technologies revenues of $75 – $80 million in the fourth quarter of 2026, with gross margins before D&A in the 17% – 18% range
- NoteNet capital expenditures for 2026 of approximately $300 – $310 million, as now anticipated by the company
Capital returns
- Dividends and distributions paid: $(9,522) thousand in Q3 2026, $(9,576) thousand in Q2 2026, $(8,377) thousand in Q3 2025; $(27,850) thousand in nine months 2026 versus $(25,250) thousand in nine months 2025 (cash flow statement)
- Repurchase of common stock: $(70) thousand in Q3 2026, $(621) thousand in Q2 2026, $(332) thousand in Q3 2025; $(8,309) thousand in nine months 2026 versus $(6,909) thousand in nine months 2025 (cash flow statement)
- Shares outstanding as of September 30, 2026: 131,352,190 Class A shares and 7,107,701 Class B shares issued and outstanding
What drove it
- The company states that Water Infrastructure volumes rose to 1.7 million barrels per day in Q3 2026 from 1.5 million barrels per day in Q2 2026, and that these volume gains drove the segment's revenue growth
- The company states that Water Services sequential revenue growth was driven primarily by revenue gains in the Permian Basin region
- The company states that Q3 2026 Adjusted EBITDA was adjusted for $7.4 million of non-recurring transaction costs, $4.2 million related to a gain on the deconsolidation of Peak Rentals, $0.4 million of non-cash losses in equity investments, and $4.8 million in other adjustments primarily consisting of non-recurring gains related to a historical insurance claim
- The company states that Q3 2026 SG&A was impacted by transaction costs of $7.4 million, compared with $0.6 million in Q2 2026
- The company states that Q4 2026 Adjusted EBITDA guidance reflects the divestment and deconsolidation of Peak Rentals and a partial quarter contribution from Pilot Water
- The company states that Pilot Water was closed as a subsequent event, expanding its water midstream position across the Delaware Basin
Concerns
- Free cash flow was $(3.6) million in Q3 2026, compared with $17.0 million in Q2 2026, and net capital expenditures were $88.1 million
- Gross profit before D&A margin for Chemical Technologies declined to 17.8% from 20.2% in Q2 2026; Chemical Technologies revenue declined to $90 million from $96 million
- SG&A rose to $53.6 million from $41.2 million in Q2 2026, including $7.4 million of transaction costs
- Cash and cash equivalents were $34.1 million at September 30, 2026, and total liquidity declined to $271.6 million from $307.7 million at March 31, 2026
- Accounts receivable trade, net was $280,210 thousand at September 30, 2026, compared with $319,867 thousand at June 30, 2026 (balance sheet)
- The company issued $900 million of 7.625% Senior Notes due 2034 after quarter end; interest expense, net was $(5,354) thousand in Q3 2026
- Q4 2026 guidance for Chemical Technologies revenue of $75 – $80 million and for Water Services revenue of $150 - $160 million, with the company citing typical fourth quarter seasonality for Water Services
What to watch
- Integration of Pilot Water and whether Water Infrastructure revenue reaches the $150 - $160 million Q4 2026 guidance range, with the company citing a partial quarter contribution
- Q4 2026 Adjusted EBITDA against the $95 - $100 million guidance range
- Net capital expenditures for 2026 against the approximately $300 – $310 million the company now anticipates
- Free cash flow trajectory after the Q3 2026 result of $(3.6) million
- Peak Rentals deconsolidation effects on Water Services revenue and the reporting of the retained 45% interest through equity in earnings (losses) of unconsolidated entities
- Water Services gross margin before D&A against the 21% – 24% Q4 2026 guidance range
- Chemical Technologies Q4 2026 revenue against the $75 – $80 million guidance range
Balance sheet and cash flow
- Total cash and cash equivalents: $34.1 million as of September 30, 2026, versus $33.4 million as of June 30, 2026 and $56.0 million as of March 31, 2026
- Term loan borrowings under the sustainability-linked credit facility: $234.4 million as of September 30, 2026, versus $250.0 million as of June 30, 2026
- Other borrowings: $12.8 million as of September 30, 2026, versus $12.9 million as of June 30, 2026; no amounts drawn on the revolving credit facility at either date
- Borrowing base under the sustainability-linked credit facility: $256.2 million as of September 30, 2026, versus $264.0 million as of June 30, 2026
- Available borrowing capacity under the sustainability-linked credit facility: approximately $237.5 million as of September 30, 2026, after outstanding borrowings and letters of credit totaling $18.7 million
- Total liquidity: $271.6 million as of September 30, 2026, versus $277.8 million as of June 30, 2026 and $307.7 million as of March 31, 2026
- Total assets: $1,818,246 thousand as of September 30, 2026; total equity: $1,152,315 thousand as of September 30, 2026
- Q3 2026 cash flows from financing activities of $12.0 million included $39.4 million of net proceeds related to the deconsolidation of Peak Rentals and $(15.8) million of debt payments primarily related to the term loan component of the sustainability-linked credit facility
- Subsequent to quarter end, the company issued $900 million aggregate principal amount of 7.625% Senior Notes due November 1, 2034 in a private placement; the company states the majority of net proceeds were used to fund the cash consideration of the Pilot Water Acquisition and repay the outstanding obligations under the sustainability-linked credit facility
- In connection with the closing of the Pilot Water acquisition, the company fully repaid and terminated the sustainability-linked credit facility and entered into a new five-year $500 million senior secured cash flow revolving credit facility, undrawn as of November 9, 2026, with approximately $483.4 million of available borrowing capacity after letters of credit
- Peak Rentals: on September 23, 2026, the company sold an indirect 55% interest in Peak Rentals HoldCo, LLC for approximately $76.8 million of consideration, including approximately $41.5 million in cash proceeds subject to customary purchase price adjustments and a $35.3 million seller note; the company retained a 45% indirect interest to be reflected as an equity method investment
Analysis
Select Water Solutions reported Q3 2026 total revenue of $412 million, up from $322 million in Q3 2025 and $396 million in Q2 2026. Gross profit rose to $81.4 million from $43.6 million a year earlier, and gross margin reached 19.7% against 13.5%. Gross margin before D&A, a non-GAAP measure, was 31.4% against 27.0% in Q3 2025. Net income was $22.9 million, against $2.3 million in Q3 2025, and Adjusted EBITDA was $93.5 million, against $59.5 million. Income from operations was $26,886 thousand, compared with $(1,772) thousand a year earlier. The Q3 2026 figures include a $4.2 million gain on the deconsolidation of Peak Rentals and $4.8 million of other adjustments that the company describes as primarily non-recurring gains related to a historical insurance claim, both excluded from Adjusted EBITDA.
Mix shifted toward the higher-margin infrastructure business. Water Infrastructure revenue reached a record $110 million, up 40% year over year and 8.4% sequentially, and the company states this reflects produced water volumes of 1.7 million barrels per day against 1.5 million in Q2 2026. The segment's gross margin before D&A was 57.2%, against 58.3% in Q2 2026. Water Services revenue was $212 million, up 7.1% sequentially, which the company attributes primarily to Permian Basin revenue gains. Its gross margin before D&A improved to 23.8% from 23.0%. Chemical Technologies revenue fell to $90 million from $96 million, and its gross margin before D&A declined to 17.8% from 20.2%. The release gives no driver for that decline.
Cash generation and capital spending absorbed most of the operating cash flow. Operating cash flow was $84 million, and purchases of property and equipment were $(89,546) thousand, leaving free cash flow of $(3.6) million against $17.0 million in Q2 2026. SG&A rose to $53.6 million from $41.2 million, including $7.4 million of transaction costs tied to the Peak and Pilot transactions. On the balance sheet, the company repaid $15.8 million of debt in the quarter, reduced term loan borrowings to $234.4 million, and ended the quarter with cash of $34.1 million and total liquidity of $271.6 million, both lower than at March 31, 2026. The Peak Rentals sale for approximately $76.8 million of consideration, including $41.5 million in cash, added $39.4 million of net proceeds in financing activities as the company describes them.
After quarter end, the company issued $900 million of 7.625% senior notes due 2034 and closed the Pilot Water acquisition, and it replaced the sustainability-linked credit facility with a new $500 million revolving credit facility that was undrawn on November 9, 2026, with approximately $483.4 million available. The Q4 2026 guidance calls for Adjusted EBITDA of $95 - $100 million, Water Infrastructure revenue of $150 - $160 million, Water Services revenue of $150 - $160 million, and Chemical Technologies revenue of $75 - $80 million. The company now expects 2026 net capital expenditures of approximately $300 – $310 million. The release does not provide a full-year revenue or EBITDA guide and does not include a reconciliation of forward-looking non-GAAP measures, which the company says it cannot provide without unreasonable efforts.
The figures that deserve attention are the gap between Adjusted EBITDA growth and free cash flow, the segment margin trends in Chemical Technologies, the rise in SG&A including transaction costs, and the pace at which Pilot Water contributes to Water Infrastructure revenue in Q4 2026. The release does not state consensus expectations, and no share price reaction is included in the documents.
Management, verbatim
During the third quarter of 2026, we delivered consolidated revenue and gross profit growth, resulting in $23 million of net income and $93 million of Adjusted EBITDA.
John Schmitz, Chairman of the Board, President and CEO
The third quarter was a strong quarter for Select across all three operating segments, with our Water Infrastructure segment producing another quarter of record revenue and gross profit in the period.
John Schmitz, Chairman of the Board, President and CEO
Not in the filing
stated, not guessed- Full-year 2026 revenue, gross margin, operating expense and tax rate guidance: not provided in the release
- Q4 2026 total revenue and total gross margin guidance: not provided in the release
- Prior-year and prior-quarter comparisons for Water Services and Chemical Technologies revenue change percentages: the release does not print a percentage change for these lines on a year-over-year or quarter-over-quarter basis
- Prior-year Q3 2025 values for net capital expenditures and Q3 2025 Adjusted EBITDA reconciliation line items beyond those shown
- Pilot Water acquisition purchase price, revenue and EBITDA contribution: not printed in the release
- Prior-quarter change for income from operations and tax expense: no percentage change is printed
- Prior guidance comparisons: no previous outlook was provided with this filing
- Consensus estimates and share price reaction: not included in the documents
- Nine-month Adjusted EBITDA, nine-month net capital expenditures and nine-month segment gross margins: not printed in the release
- Explanation of the Chemical Technologies Q3 2026 revenue decline versus Q2 2026: no driver printed for the quarter
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Select Water Solutions, a NYSE‑listed water midstream operator, filed an 8‑K with Q3 2026 results and disclosed a $900M senior notes offering and a $500M revolving credit facility to fund its acquisition.
Ticker impact
Select Water Solutions reported Q3 2026 revenue of $412M, net income of $23M and announced the acquisition of Pilot Water Solutions.
likely upward pressure as investors price in higher revenue and the Pilot Water deal
The earnings beat revenue expectations and the acquisition expands the Water Infrastructure segment, both viewed as growth catalysts.
Market effects
strengthens the water midstream sector and may lift peers with similar exposure
supports energy‑related infrastructure stocks in the U.S. market
limited to water infrastructure niche, no broad global effect
Counterpoint
If the acquisition integration costs exceed expectations, the short‑term boost could fade.
Key entities
- companySelect Water Solutions
NYSE: WTTR, water midstream operator
- companyPilot Water Solutions
Acquired water midstream business expanding Select's infrastructure footprint
