Executive Summary

Q1 2025 delivered regulated top-line growth but mixed earnings: revenue rose 7.3% YoY to $12.46M on connection growth and higher consumption, while net income fell 14.5% to $0.6M ($0.02) on higher O&M, D&A, and lower Buckeye growth premiums . Versus consensus, GWRS posted a clean beat: revenue $12.457M vs $12.0M* and EPS $0.02 vs $0.015* [functions.GetEstimates].
Management highlighted constructive regulatory momentum: ACC approved Farmers rate case (+~$1.1M annual revenue, phased through May 2026), and the Santa Cruz/Palo Verde general rate case (requesting +$6.5M net annual revenue) progressed with a procedural schedule set (hearings targeted for Q4 2025) .
Liquidity expanded materially after a March equity raise (~$30.8M net) and revolver upsizing/extension (to $20M, May 2027), ending Q1 with $31.5M cash and >$50M total liquidity to fund capex and the Tucson systems acquisition anticipated mid‑2025 .
Near‑term catalysts: phasing of Farmers rate increases, potential approval of Santa Cruz/Palo Verde case, and closing of the City of Tucson water systems (~2,200 connections) support accelerating revenue/earnings trajectory through 2025‑2026, notwithstanding near‑term cost pressure and housing permit volatility .

What Went Well and What Went Wrong

What Went Well
- Solid regulated growth: revenue +7.3% YoY on 4.3% active connection growth and higher consumption; water consumption +24.2% YoY to 0.84B gallons .
- Regulatory progress and revenue uplift: ACC approved Farmers rate case (+~$1.1M annual revenue phased 5/2025–5/2026); Santa Cruz/Palo Verde rate case filed (+$6.5M net annual revenue requested) with schedule set (hearings expected in Q4 2025) .
- Strengthened balance sheet and liquidity: ~$30.8M equity proceeds and revolver increased to $20M and extended to May 2027, giving >$50M liquidity to fund growth and acquisitions .
What Went Wrong
- Earnings compression: net income down 14.5% YoY to $0.6M as O&M rose (chemicals/power/repairs and IT services), and D&A increased with higher depreciable plant .
- Other expense headwind: Buckeye growth premiums fell ~$0.2M YoY and net interest expense was higher, pressuring below‑the‑line results .
- Permit softness near term: Q1 2025 single‑family permits declined 41.5% in Maricopa and 15.0% in Greater Phoenix, though management views Q1 variability as non‑trend and expects multi‑family/industrial demand to offset .

Financial Results

Core P&L vs prior quarters and consensus

Metric	Q3 2024	Q4 2024	Q1 2025 (Actual)	Q1 2025 (Consensus)
Revenue ($)	$14.321M	$13.251M*	$12.457M	$12.000M*
Diluted EPS ($)	$0.12	$0.0183*	$0.02	$0.015*
EBIT Margin (%)	27.82%*	9.93%*	10.07%*	N/A
EBITDA Margin (%)	48.30%*	39.04%*	36.79%*	N/A

Notes: Asterisk indicates values retrieved from S&P Global. Values retrieved from S&P Global.
YoY Q1 2025 revenue +7.3% and EPS $0.02; sequential revenue declined from seasonal Q4 levels and normal consumption mix, while margins remained pressured by higher O&M and D&A .

Segment revenue breakdown (regulated)

Segment	Q1 2024	Q1 2025	YoY Δ
Water service ($)	$5.226M	$5.980M	+14.4%
Wastewater & recycled water ($)	$6.384M	$6.477M	+1.5%
Total regulated revenue ($)	$11.610M	$12.457M	+7.3%

KPIs

KPI	Q1 2024	Q1 2025	YoY Δ
Active service connections (period-end)	62,451	65,163	+4.3%
Capex (Cash flow) ($)	$5.761M	$15.216M	+$9.455M
Cash & equivalents ($)	$20.655M	$31.467M	+$10.812M
Adjusted EBITDA ($)	$5.403M	$5.643M	+4.4%

Why deltas: higher consumption and connections drove revenue; cost inflation and increased plant lowered operating leverage; liquidity uplift from equity raise and revolver changes .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Monthly dividend per share	Ongoing	$0.02533 (initiated Nov 2024 annualized $0.30396)	Maintained at $0.02533; payable May 30 and June 30, 2025 (monthly cadence continues)	Maintained
Farmers rate case revenue	Ann’l at full phase-in	N/A	~+$1.1M annual revenue; phased 50% (May 1, 2025), +25% (Nov 1, 2025), +25% (May 1, 2026)	New (Approved)
Santa Cruz & Palo Verde rate case	Ann’l	N/A	Filed requesting net +$6.5M annual revenue; hearings expected to commence in Q4 2025	New (Filed)
Revolving credit facility	Liquidity	$15M, July 2026	Extended to May 18, 2027; increased to $20M	Raised/Extended

Company does not provide formal revenue/EPS guidance; regulatory milestones and dividend policy serve as proxies for forward trajectory .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Regulatory/rate cases	Q3: Pima County rate approval; Farmers case deemed complete; prep for Santa Cruz/Palo Verde filing . Q4: Filed Santa Cruz/Palo Verde; proposed CSA formula-rate concept .	ACC approved Farmers (+~$1.1M); Santa Cruz/Palo Verde filed; schedule set with hearings targeted Q4 2025 .	Positive momentum; multiple revenue levers in 2025–2026 .
Arizona housing permits & mix	Q3: Strong 2024 permit recovery; multi‑family up sharply YTD . Q4: 2024 permits up; multi‑family surge in Maricopa .	Q1: Q1 permits down (Maricopa −41.5%, Greater Phoenix −15.0%); management views as timing; expects multi‑family/industrial to offset .	Near‑term softness; medium‑term constructive on multi‑family/industrial .
Industrial/large customers (TSMC/P&G)	Q4: Special industrial contract signed with P&G; awaiting NTP .	Reaffirmed P&G contract; industrial growth viewed as “when, not if” .	Pipeline intact; timing visibility still limited .
Cost inflation & O&M	Q3: O&M mix varied; D&A down in Q3; full-year Opex higher . Q4: Opex up on wages/medicals/power; D&A up with plant .	Q1: O&M up (power, chemicals, repairs, IT/labor); D&A higher with plant additions .	Persistent cost pressure; rate relief intended to offset .
Technology/IT	Q3: Noted lower IT expense vs PY in Q3 . Q4: Higher phone/internet/IT services YoY .	Higher contract IT services from contracts begun in Q4 2024 .	Upward cost drift; supports operations/scale .
Capital & liquidity	Q3: RCF extended to July 2026; cash $18.1M .	Equity raise (~$30.8M), RCF to $20M and extended to May 2027; cash $31.5M .	Significantly improved funding for capex/M&A .

Management Commentary

“In Q1 2025, we continued to increase our top-line primarily due to organic growth in active water and wastewater connections and increased consumption.” — Ron Fleming, CEO .
“Together, these transactions brought our capital resources to approximately $51.5 million... We believe our capital resources position us well to fund and engage in a variety of growth opportunities, such as capital improvements and acquisitions.” — Mike Liebman, CFO .
“We believe 2025 will be another solid year for Global Water… putting [organic connections, new greenfield utilities, acquisitions and rate cases] together… you can see how Global Water is going to be able to grow considerably in the years to come.” — Ron Fleming, CEO .
“We started charging [Farmers] new rates on May 1… we filed our Santa Cruz and Palo Verde rate case on March 5, 2025, requesting a net revenue increase of $6.5 million… hearings scheduled to begin in the middle of December this year.” — Chris Krygier, COO .

Q&A Highlights

Q1 2025 call featured no analyst Q&A (operator closed the queue), indicating limited external pushback or outstanding questions this quarter .
Prior quarter (Q4 2024) Q&A emphasized the proposed CSA (formula rate) mechanism to reduce regulatory lag, with annual updates to reflect cost/investment changes over a five‑year program, and timing/process around P&G industrial development (NTP leads to design/permit and then construction over 2–3 years) .

Estimates Context

Q1 2025 beat on both lines: Revenue $12.457M vs $12.0M* (+3.8% beat) and EPS $0.02 vs $0.015* (penny beat), albeit on only two covering estimates, underscoring limited sell‑side coverage depth [functions.GetEstimates].
Estimate implications: Cost pressure (power/chemicals/repairs/IT) and higher D&A persisted, but regulatory tailwinds (Farmers approval; Santa Cruz/Palo Verde in process) and anticipated Tucson closing suggest upward bias to outer‑quarter revenue/EBITDA trajectories; EPS sensitivity remains tied to timing/magnitude of rate relief and connection growth mix .
Notes: Asterisk indicates values retrieved from S&P Global. Values retrieved from S&P Global.

Key Takeaways for Investors

Clean revenue/EPS beat vs consensus with regulated growth engines intact; mix and seasonality drove sequential declines vs Q4 [functions.GetEstimates].
Regulatory catalysts stacking: Farmers (~~$1.1M annual uplift) now in effect; Santa Cruz/Palo Verde case (~~$6.5M requested) advancing toward hearings—key drivers for 2026 earnings power .
Liquidity now ample (> $50M) to fund capex and M&A (Tucson systems), mitigating execution risk on growth capex plans .
Cost inflation persisted in Q1 (power, chemicals, repairs, IT), but management expects rate relief and scale to improve earnings durability .
Housing permits softened in Q1, but multi‑family and industrial demand (P&G, broader TSMC ecosystem) underpin medium‑term connection growth .
Dividend maintained at $0.02533/month (3.0396% annualized per $1 nominal), signaling stability while funding growth .
Near‑term stock catalysts: Evidence of Farmers uplift in Q2 results, Tucson closing mid‑2025, and visibility on Santa Cruz/Palo Verde staff testimony and hearing schedule .

Appendix: Additional Detail

Q1 drivers of margin/EPS: O&M increased on chemicals/power/repairs and contract IT; D&A rose with plant additions; Buckeye growth premium income lower YoY; partial offsets from AFUDC-Equity and liquidity actions .
Dividend specifics: monthly dividend of $0.02533 per share declared and paid on standard cadence (e.g., May 30 and June 30, 2025) .

Notes on data sources and citations:

All figures and statements are sourced from company 8‑K, press releases, and earnings call transcripts as cited.
Asterisk indicates values retrieved from S&P Global. Values retrieved from S&P Global.

Global Water Resources, Inc. (GWRS)·Q1 2025 Earnings Summary