Executive Summary

Q2 delivered record produced water handling volumes (+4% q/q, +13% y/y) and recycled water growth (+35% y/y). Revenue was $124.09M, up 3% q/q and 23% y/y, with net income of $14.1M and Adjusted EBITDA of $54.6M .
Versus S&P Global consensus, ARIS beat on revenue ($124.09M vs $120.43M*) and Primary EPS ($0.33 vs $0.324*), while EBITDA (SPGI definition) trailed ($47.47M* vs $53.77M*). Company-reported Adjusted EBITDA was $54.6M . Values retrieved from S&P Global.
Strategic catalysts: (1) WES to acquire ARIS in a ~$1.5B equity-and-cash deal announced Aug 6; ARIS did not host a Q2 call given the pending transaction . (2) Seven-year extension of ConocoPhillips water gathering and disposal agreement, extending the primary term to 2040 and lengthening produced-water contract tenor to >10 years on an acreage-weighted basis .
Balance sheet/liquidity remained solid: net debt ~$445M, 2.02x leverage, $57M cash and $347M revolver availability; quarterly dividend maintained at $0.14 per share (payable Sept 18) .

What Went Well and What Went Wrong

What Went Well

Record operating volumes drove strong top-line growth: Produced water handling +4% q/q and +13% y/y; total revenue +23% y/y to $124.09M .
Contract visibility strengthened: ConocoPhillips agreement extended to May 2040, taking produced-water contract tenor from ~6 to >10 years on an acreage-weighted basis; CEO: “This extension…provides Aris with substantial long-term revenue visibility” .
Capital discipline and liquidity: Capex $22.1M; net debt ~$445M; leverage 2.02x; liquidity robust ($57M cash; $347M undrawn revolver) .

What Went Wrong

Margin compression: Gross margin per barrel fell to $0.29 (from $0.32 both q/q and y/y); Adjusted operating margin/bbl declined to $0.41 (from $0.44 q/q and $0.46 y/y), driven in part by higher direct operating costs/bbl ($0.36 vs $0.32 q/q; $0.30 y/y) and lower skim oil price realizations anticipated for Q2 .
Company did not host a Q2 call due to pending WES transaction, limiting real-time details and guidance color .
S&P Global EBITDA miss (SPGI definition) vs consensus despite company Adjusted EBITDA at $54.6M; this reflects definitional differences (GAAP EBITDA vs company “Adjusted EBITDA”), which may cause model reconciliation for some analysts . Values retrieved from S&P Global.

Financial Results

Headline metrics vs prior periods

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$101.12	$120.49	$124.09
Net Income ($USD Millions)	$13.11	$16.00	$14.08
Diluted EPS (GAAP, $)	$0.18	$0.25	$0.19
Diluted Adjusted EPS ($)	$0.29	$0.35	$0.33
Adjusted EBITDA ($USD Millions)	$49.99	$56.54	$54.56
Gross Margin/Barrel ($)	$0.32	$0.32	$0.29
Adjusted Operating Margin/Barrel ($)	$0.46	$0.44	$0.41

Q2 2025 Actual vs S&P Global Consensus

Metric	Consensus	Actual	Result
Revenue ($USD Millions)	$120.43*	$124.09	Beat
Primary EPS ($)	$0.324*	$0.33	Beat
EBITDA ($USD Millions)	$53.77*	$47.47*	Miss

Values retrieved from S&P Global. Note: S&P Global “EBITDA” may differ from company “Adjusted EBITDA” of $54.56M .

Segment breakdown (Q2)

Metric	Q2 2024	Q2 2025
Revenue – Water Gathering & Processing ($M)	$101.12	$123.75
Revenue – Corporate & Other ($M)	$0.00	$0.34
Revenue – Consolidated ($M)	$101.12	$124.09
Operating Income – Water Gathering & Processing ($M)	$41.84	$45.12
Operating Income – Corporate & Other ($M)	$(17.92)	$(18.79)
Operating Income – Consolidated ($M)	$23.92	$26.33

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Produced Water Handling Volumes (kbwpd)	1,093	1,191	1,234
Recycled Produced Water Volumes Sold (kbwpd)	314	475	425
Groundwater Volumes Sold (kbwpd)	48	84	98
Total Water Solutions Volumes (kbwpd)	362	559	523
Total Volumes (kbwpd)	1,455	1,750	1,757
Skim Oil Recoveries (bopd)	1,490	1,962	2,845
Revenue/Barrel of Total Volumes ($)	$0.76	$0.76	$0.77
Direct Operating Costs/Barrel ($)	$0.30	$0.32	$0.36

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2025	$215–$235	Reaffirmed; unchanged	Maintained
Capital Expenditures ($M)	FY 2025	$85–$105	Reaffirmed; unchanged	Maintained
Free Cash Flow ($M)	FY 2025	$75–$95	Reaffirmed; unchanged	Maintained
Produced Water Handling (kbwpd)	FY 2025	1,150–1,210	Reaffirmed; unchanged	Maintained
Water Solutions (kbwpd)	FY 2025	460–520	Reaffirmed; unchanged	Maintained
Adjusted Op Margin/BBL ($)	FY 2025	$0.43–$0.45	Reaffirmed; unchanged	Maintained
Dividend/Share ($)	Q3 2025	n/a	$0.14 declared (pay 9/18; record 9/4)	Announced
Q2 2025 EBITDA ($M)	Q2 2025	$50–$55 (guided May 6)	“High end of range” indicated July 30	Reaffirmed/high end

Earnings Call Themes & Trends

Note: ARIS did not host a Q2 2025 call due to the pending WES transaction .

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Contract duration/visibility	Extended acreage dedication; ~8-year tenor on Water Solutions; focus on long-term, blue-chip customers	ConocoPhillips water gathering & disposal agreement extended to 2040; produced-water contract tenor >10 years (acreage-weighted)	Improving
Beneficial reuse/desalination	Applied to TCEQ for 475 kbpd discharge; aiming for permit by end-2025, 2026 operations	No incremental update in Q2 release; initiatives ongoing	Stable
Industrial water treatment	Added team/assets/IP; expanding outside O&G	No Q2 call; strategy unchanged	Stable
McNeill Ranch optionality	45k-acre acquisition; disposal capacity/royalty savings; phased development 2026–27	No Q2 call; strategy intact	Stable
Margins/costs	Maintained adj. op margin ~$0.44/bbl; noted Q2 maintenance timing and skim oil price headwind	Gross margin/bbl $0.29; adj. op margin/bbl $0.41; direct op costs/bbl up to $0.36	Mild pressure
Macro/tariffs	Monitoring tariffs; minimal direct exposure; scenario planning for oil volatility	No Q2 updates provided (no call)	Stable
Corporate	Dividend raised to $0.14 (Q1); capex discipline, leverage ~2x	WES to acquire ARIS (~$1.5B)	Transformational

Management Commentary

“This extension represents a significant milestone for Aris—lengthening the acreage-weighted remaining term of our produced water contracts from approximately six years to over ten years…[and] provides…substantial long-term revenue visibility” — Amanda Brock, President & CEO, on the ConocoPhillips extension .
“We received record-breaking volumes… and surpassed the top end of our Adjusted EBITDA guidance… We maintained strong margins… [with] an approximately $2 million benefit from the timing of planned maintenance… now… incurred in the second quarter” — Amanda Brock on Q1 setup into Q2 .
“For the second quarter, we expect… adjusted operating margin… $0.41–$0.43 per barrel… down slightly versus the first quarter due to timing of well maintenance expenses and lower skim oil price realizations” — CFO Stephan Tompsett .

Q&A Highlights

No Q2 call (given pending WES transaction) . Key themes from Q1 Q&A:

Capex flexibility and downturn playbook: Ability to flex capex down 20–30% if needed; sustaining capex under ~$50M to hold flat volumes .
McNeill Ranch returns and timing: Phased development with long-term MVC-backed contracts; meaningful EBITDA impact in 2026–27; royalty savings on disposed barrels .
Beneficial reuse economics: Surface discharge desal OpEx targeted below $1/bbl; consortium approach and modular phasing; TCEQ permit targeted by YE25 .
Competitive landscape: Long-haul pipelines (e.g., south of footprint) not expected to impact ARIS’ core; strategy based on controlling water at source and recycling networks .

Estimates Context

Q2 outcomes versus S&P Global consensus: Revenue beat ($124.09M vs $120.43M*), Primary EPS beat ($0.33 vs $0.324*), SPGI EBITDA miss ($47.47M* vs $53.77M*). Company-reported Adjusted EBITDA was $54.56M . Values retrieved from S&P Global.
Implications: Revenue/EPS beats and reiterated FY outlook (plus Conoco extension) support medium-term estimate stability; models using SPGI “EBITDA” may need reconciling to company Adjusted EBITDA definition .

Key Takeaways for Investors

Contracted durability improved: Conoco extension to 2040 extends produced-water contract tenor to >10 years on an acreage-weighted basis—enhancing multi-year volume visibility .
Operational momentum: Record produced-water volumes and strong revenue growth; KPIs signal robust system throughput despite per-barrel margin pressure .
Margins manageable: Q2 per-barrel margin compression aligned with pre-announced maintenance and lower skim oil price; watch direct op costs/bbl and skim realizations into 2H .
Balance sheet intact: 2.02x leverage, ample liquidity, and steady $0.14 dividend underpin equity returns while the transaction is pending .
Corporate catalyst: Pending WES acquisition is the near-term stock driver; absence of a Q2 call reduces incremental guidance color but FY 2025 outlook was reaffirmed pre-release .
Model checks: Use company Adjusted EBITDA ($54.6M) for internal comparability; SPGI EBITDA variance is definitional and may not reflect non-GAAP adjustments ARIS uses .
Watchlist into 2H: Skim oil price sensitivity, maintenance cadence, and any customer plan updates; regulatory progress on TCEQ permit for desal/surface discharge could unlock medium-term optionality .

Appendix: Additional Data Points and Sources

Liquidity and leverage: Net debt ~$444.9M; TTM Adjusted EBITDA $219.9M; leverage 2.02x . Cash $57.36M; revolver availability $347M .
Dividend: Q3 2025 dividend of $0.14/share; payable Sept 18; record Sept 4 .
Transaction: WES to acquire ARIS in ~$1.5B equity-and-cash transaction (announced Aug 6) .

Values retrieved from S&P Global where indicated with an asterisk.

Aris Water Solutions, Inc. (ARIS)·Q2 2025 Earnings Summary