second quarter of 2026
Filed Aug 4, 2026Select Water Solutions reported record Water Infrastructure and Chemical Technologies revenue, with consolidated revenue, net income, gross profit and Adjusted EBITDA rising sequentially.
Consolidated revenue was $395.8 million, net income was $22.6 million and Adjusted EBITDA was $92.7 million, all above first-quarter levels. All three segments increased revenue sequentially, consolidated margins expanded, and the Company guided to $90 – $94 million of third-quarter Adjusted EBITDA.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated revenueGAAP | $395.8 million | 8% | – |
| Net incomeGAAP | $22.6 million | – | – |
| Gross profitGAAP | $76.8 million | – | – |
| Total gross marginGAAP | 19.4% | – | – |
| Gross profit before D&Anon-GAAP | $124.1 million | – | – |
| Gross margin before D&Anon-GAAP | 31.3% | – | – |
| SG&AGAAP | $41.2 million | – | – |
| Adjusted EBITDAnon-GAAP | $92.7 million | – | – |
| Water Infrastructure gross margin before D&Anon-GAAP | 58.3% | – | – |
| Water Services gross margin before D&Anon-GAAP | 23.0% | – | – |
| Chemical Technologies gross margin before D&Anon-GAAP | 20.2% | – | – |
| Cash flow provided by operating activitiesGAAP | $86.7 million | – | – |
| Free cash flownon-GAAP | $17.0 million | – | – |
| Net capital expendituresother | $69.7 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Water InfrastructureIncreases in total produced water volumes handled and the benefit of increased skim oil volumes and pricing. | $101.6 million | 5.0% | 26% |
| Water ServicesPartially driven by modestly improved customer activity levels. | $198.2 million | 3.6% | – |
| Chemical TechnologiesIn-basin manufacturing, rapid new product development pace, steady field execution, market share gains, increased completions intensity and complexity, and growing interest in surfactant technology supported demand for higher margin product offerings. | $96.0 million | 23% | – |
third quarter of 2026 and full year 2026 outlook
- NoteAdjusted EBITDA in the third quarter: $90 – $94 million.
- NoteWater Infrastructure revenues to increase 5% – 10% as compared to the second quarter of 2026; margins in the 56% – 58% range.
- NoteWater Services steady revenues relative to the second quarter of 2026; gross margins before D&A in the 21% – 22% range.
- NoteChemical Technologies revenues of $85 – $90 million; gross margins before D&A of 20% – 21%.
- NoteNet capital expenditures of $250 – $290 million in 2026.
Capital returns
- Payment of $9.6 million of quarterly dividends and distributions.
What drove it
- Approximately 1.5 million barrels of produced water were recycled or disposed per day in the second quarter.
- The Company executed an agreement that includes a 128-million-barrel minimum volume commitment over a seven-year term and direct conveyance of 14 saltwater disposal wells in Lea and Eddy Counties, New Mexico.
- Water Infrastructure benefited from increased produced-water volumes, skim-oil volumes and skim-oil pricing.
- Water Services benefited from modestly improved customer activity levels.
- Chemical Technologies revenue benefited from market share gains and demand for higher-margin product offerings.
Concerns
- Chemical Technologies faced increases to oil-based raw material input costs.
- Third-quarter Chemical Technologies revenue guidance of $85 – $90 million is below second-quarter revenue of $96.0 million.
- Third-quarter Water Services gross-margin-before-D&A guidance of 21% – 22% is below the second-quarter level of 23.0%.
- The Company expects net capital expenditures of $250 – $290 million in 2026 to support infrastructure contract awards and opportunities.
What to watch
- Execution of the 128-million-barrel, seven-year minimum-volume commitment and conveyance of 14 saltwater disposal wells.
- Water Infrastructure third-quarter revenue growth of 5% – 10% and margins in the 56% – 58% range.
- Whether Water Services sustains steady revenue while maintaining gross margins before D&A in the 21% – 22% range.
- Chemical Technologies revenue and margins relative to guidance of $85 – $90 million and 20% – 21%, respectively.
- Third-quarter Adjusted EBITDA relative to the estimated $90 – $94 million range and the pace of 2026 net capital expenditures.
Balance sheet and cash flow
- Total cash and cash equivalents were $33.4 million as of June 30, 2026, compared to $56.0 million as of March 31, 2026, and $18.1 million as of December 31, 2025.
- The Company had $250.0 million of borrowings outstanding under the term loan component of its sustainability-linked credit facility as of June 30, 2026.
- The Company had $12.9 million under the agricultural loan related to the Black River Ranch acquisition as of June 30, 2026.
- No amounts were drawn on the revolving credit facility as of June 30, 2026.
- Capital expenditures were $71.0 million, partially offset by $1.3 million of cash proceeds from asset sales.
- Cash flows from investing activities included $42.0 million of acquisition-related outflows for the Black River Ranch acquisition, multiple disposal acquisitions in the Northern Delaware Basin and buyouts of strategic operating facility leases in Texas.
- Cash flows provided by financing activities were $2.9 million, primarily reflecting $13.0 million of net proceeds from an agricultural loan, partially offset by quarterly dividends and distributions.
Analysis
Select reported broad sequential improvement in the second quarter of 2026. Consolidated revenue was $395.8 million versus $366.0 million in the first quarter, net income was $22.6 million versus $9.4 million, and Adjusted EBITDA was $92.7 million versus $77.6 million. Gross profit increased to $76.8 million, while total gross margin increased to 19.4% from 17.8%. Gross margin before D&A increased to 31.3% from 30.3%.
Water Infrastructure and Chemical Technologies set segment revenue records. Water Infrastructure revenue was $101.6 million, supported by higher produced-water volumes handled and improved skim-oil volumes and pricing, while gross margin before D&A reached 58.3%. The Company handled approximately 1.5 million barrels of produced water recycled or disposed per day. Chemical Technologies revenue was $96.0 million, with gross margin before D&A of 20.2%, as market-share gains and demand for higher-margin offerings offset increases in oil-based raw-material input costs. Water Services revenue increased to $198.2 million and gross margin before D&A increased to 23.0% amid modestly improved customer activity.
Cash generation improved materially from the first quarter. Cash flow provided by operating activities was $86.7 million and free cash flow was $17.0 million, compared with $10.2 million and ($67.1) million, respectively, in the first quarter. Net capital expenditures were $69.7 million, and investing cash flows included $42.0 million of acquisition-related outflows. The Company ended the quarter with $33.4 million of cash and cash equivalents, $250.0 million of term-loan borrowings, $12.9 million under the agricultural loan and no revolving-credit-facility borrowings.
The Company raised its 2026 net capital expenditure expectation to $250 – $290 million in support of infrastructure awards and opportunities. A new agreement includes a 128-million-barrel minimum-volume commitment over seven years and direct conveyance of 14 saltwater disposal wells. The Company also paid $9.6 million of quarterly dividends and distributions, while financing cash flow reflected $13.0 million of net agricultural-loan proceeds.
Third-quarter guidance calls for Adjusted EBITDA of $90 – $94 million. Water Infrastructure is expected to increase revenue by 5% – 10% from the second quarter with margins of 56% – 58%, while Water Services is expected to have steady revenue and 21% – 22% gross margins before D&A. Chemical Technologies is expected to generate $85 – $90 million of revenue and gross margins before D&A of 20% – 21%, making segment-level execution and raw-material-cost management key items for the next reported period.
Management, verbatim
The second quarter was a very strong quarter for Select across all three operating segments, with both our Water Infrastructure and Chemical Technologies segments producing record revenue and gross profit in the quarter.
John Schmitz, Chairman of the Board, President and CEO
We continue to find ways to collaborate with our customers to maximize the value of existing assets and to optimize produced water management as part of their long-term development planning.
John Schmitz, Chairman of the Board, President and CEO
Altogether we expect another strong quarter ahead, and on a consolidated basis, we anticipate Adjusted EBITDA in the third quarter to be an estimated $90 – $94 million.
John Schmitz, Chairman of the Board, President and CEO
Not in the filing
stated, not guessed- GAAP diluted earnings per share and non-GAAP diluted earnings per share were not provided in the supplied filing text.
- Operating income or loss was not provided in the supplied filing text.
- Consolidated operating-expense guidance was not provided in the supplied filing text.
- Tax-rate guidance was not provided in the supplied filing text.
- Share repurchases were not provided in the supplied filing text.
- Prior guidance was not provided, so reported results cannot be compared with prior guidance.
- The supplied filing text is truncated during the discussion of comparative borrowings under the credit facility.
- Segment gross profit amounts were not provided in the supplied filing text.
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.