Water Infrastructure Revenue

Q3 2025

Increase by double‐digit percentages " "

Relatively steady or slightly down by low single‐digit percentages "

lowered

Water Infrastructure Gross Margins

Q3 2025

Remains above 50% " "

Remains above 50% "

no change

Water Services Revenue

Q3 2025

Decline by 5% to 10% "

Decline by approximately 25% "

lowered

Water Services Gross Margins

Q3 2025

Improve to 20%-22% "

Remain relatively flat at 19%-20% "

lowered

Chemical Technologies Revenue

Q3 2025

Decrease by mid‐single‐digit percentages "

Decrease by low to mid‐single‐digit percentages "

no change

Chemical Technologies Gross Margins

Q3 2025

Steady at 14%-16% "

Steady at 15%-17% "

raised

Consolidated Adjusted EBITDA

Q3 2025

Increase to $68M to $72M "

In the range of $55M to $60M "

lowered

Depreciation & Amortization (D&A)

Q3 2025

Low $40M range per quarter "

Approximately $45M "

raised

Interest Expense

Q3 2025

$4M to $5M per quarter "

Expected to remain relatively steady "

no change

Capital Expenditures (CapEx)

FY 2025

Net CapEx: $225M–$250M; Maintenance CapEx: $50M–$60M " "

Net CapEx: $225M–$250M; Maintenance CapEx: $50M–$60M "

no change

Tax Rate

FY 2025

Effective book tax rate in the low 20% range, Cash Taxes $10M or less "

Effective Book Tax Rate in low 20% range, Cash Taxes $10M or less "

no change

Water Infrastructure Growth and Long-Term Contracts

Q1 2025 earnings highlighted robust revenue growth, strong margins (54%–50%+), record recycling rates and major long‐term contract wins. " " " Q4 2024 emphasized record water volumes, major organic projects and diverse long-term contracts. " Q3 2024 noted record quarterly revenue/gross profit and long-term contracts adding dedicated acreage. " "

In Q2 2025, the segment delivered 12% revenue growth, 15% gross profit growth and 55% gross margins. Multiple new long-term agreements were signed, with significant capacity expansion and strategic transactions enhancing asset utilization. " " " " " "

The commitment to water infrastructure has remained consistently strong with continuing capacity expansion and an increasing emphasis on long-term contracts that bolster predictable revenue streams. " " "

Portfolio Rationalization and Non-Core Asset Divestitures

Q1 2025 mentioned planned asset sales of $10–20 million to monetize underutilized parts of the business. " Q4 2024 discussed consolidation in the Water Services segment through redeployment of resources and rationalization of non-strategic areas. " Q3 2024 did not include explicit discussion on this topic.

Q2 2025 detailed the Omni transaction—acquiring solid waste and disposal assets—and the divestiture of extensive trucking operations, including exiting operations in multiple regions, to streamline operations and improve margins. " " "

The focus on shedding non-core operations continues and is being intensified, reflecting a persistent drive to align the asset portfolio with the core water infrastructure strategy. " " "

Innovative Electrification Initiatives via Peak Integration

Not mentioned in Q1, Q3, or Q4 2024 [N/A].

Q2 2025 introduced initiatives where Peak Rentals integrated battery storage alongside generators, offering improved fuel efficiency and cleaner power for water infrastructure in remote regions. " " "

This is an emerging topic in Q2, representing a new strategic focus on using distributed power solutions to enhance operational efficiency and sustainability. " " "

Diversification Initiatives (AV Farms and Natural Gas Basin Strategies)

Q1 2025 discussed the AV Farms project—with significant funding and a strategic move to expand into new markets—and outlined natural gas basin strategies in Haynesville and Marcellus/Utica. " " " " " Q4 2024 mentioned diversification through a major Colorado water infrastructure investment and natural gas basin positioning. " " "

Q2 2025 did not contain discussion on diversification initiatives including the AV Farms project or natural gas basin strategies [N/A].

This topic, which was previously discussed in Q1 and Q4, has dropped out of the Q2 narrative, suggesting a temporary de-prioritization in favor of other strategic areas [N/A].

Chemical Technologies Segment Challenges and Margin Pressures

Q3 2024 noted decreased activity with legacy pressure-pumping customers, lower absorption rates and margins around 12.4% with expectations of recovery. " " Q4 2024 reported margins at 13% with a focus on specialty applications and in-basin reactive chemistry. " " Q1 2025 described initiatives around supply chain resilience, vertical integration, and maintained margin guidance of 14%–16%. " "

In Q2 2025, despite an 11% sequential revenue decline due to reduced pressure-pumping activity, the segment achieved gross margins of 17.5%—better than the guided range—and remains focused on new product development for long-term growth. " "

The challenges in the Chemical Technologies segment persist; however, margins in Q2 have exceeded expectations, indicating that strategic initiatives (such as vertical integration and new product innovations) are starting to yield positive results. " " "

Operational Efficiency and Water Balancing Optimization

Q3 2024 emphasized the integration of assets, utilization gains and a focus on interconnecting systems for optimal water balancing, including the use of digital twins. " " " Q4 2024 detailed planned downtime and pipeline conversions to improve long-term efficiency. " " " Q1 2025 discussed ERP implementation and system optimization in pipeline conversions. " "

Q2 2025 highlighted the importance of balancing water inflows and outflows through integrated infrastructure projects, digital forecasting via a digital twin, and operational planning to mitigate downtime and execution risks. " " " "

Operational efficiency and water balancing remain a consistent priority, with continued investments in technology and system integration driving incremental improvements across periods. " " "

High Capital Expenditure Requirements and Associated Project Execution Risks

Q1 2025 detailed a deployment of $86 million in CapEx and acknowledged that such investments might reduce free cash flow in the short-term while positioning for long-term value. " " " Q3 2024 and Q4 2024 discussed capital allocation and maintenance CapEx but with less focus on explicit execution risks. " " "

Q2 2025 referenced a backlog of capital deployment ($225 million overall, with a portion scheduled for the first half of 2026) and discussed ongoing projects; however, explicit mentions of execution risks were less pronounced. " "

The subject of high CapEx requirements remains persistent, although Q2 indicates a slightly reduced emphasis on execution risks—suggesting cautious optimism as the company manages its investment portfolio effectively. " "

Regulatory and Macroeconomic Uncertainties Impacting Operations

Q1 2025 addressed macroeconomic pressures, trade uncertainties and potential impacts on activity levels, while noting strong liquidity and acquisition opportunities. " " " Q3 2024 highlighted state-level regulatory focus and the impact of water injection rules in the Permian. " Q4 2024 mentioned regulatory advantages in Colorado operations alongside a modest decline in the macro outlook. " "

Q2 2025 did not specifically mention regulatory uncertainties but acknowledged macroeconomic challenges affecting parts of the business, though maintaining market-leading positions overall. " "

There is continued awareness of macroeconomic headwinds. However, the current period places less emphasis on regulatory risks, marking a shift toward focusing on macro trends and internal execution. " "

Asset Consolidation and Water Rights Expansion Strategies

Q1 2025 discussed consolidation to support CapEx investments and significant expansion of water rights in Colorado through investments like the AV Farms project. " " Q4 2024 detailed a $62 million investment in a major Colorado water rights portfolio and plans to further invest to increase ownership, along with strategic partnerships. " " " Q3 2024 covered new long-term contracts adding dedicated acreage in the Permian, supporting consolidation efforts. " "

In Q2 2025, asset consolidation was reinforced via the Omni transaction (acquiring key assets while divesting trucking operations), and water rights expansion was highlighted with contracts in the Northern Delaware Basin and projects in Colorado and Eddy County. " " " "

The strategy of consolidating assets and expanding water rights has been maintained and even accelerated, underpinning long-term growth and providing stable, high-margin revenue trajectories. " " "

Shifting Sentiment: Strong Water Infrastructure vs. Challenges in Non-Infrastructure Segments

Q1 2025 described robust water infrastructure performance (high margins, record recycling rates) contrasted against challenges in Water Services and Chemical Technologies, with mixed expectations for near-term activity. " " Q4 2024 similarly underscored strong infrastructure performance coupled with revenue declines and margin pressure in non-infrastructure segments. " " Q3 2024 reiterated this duality with record infrastructure gains and softer performance in Water Services and Chemical Technologies. " " "

Q2 2025 continued to showcase strong water infrastructure performance (with impressive revenue and margin growth) while non-infrastructure areas—like Water Services (with declining revenues) and Chemical Technologies (facing revenue pullbacks but improved margins)—remained challenged. " " "

The overall sentiment remains consistent: a robust and growing infrastructure segment drives optimism, whereas ongoing challenges in non-infrastructure segments necessitate continued strategic adjustments. This duality persists across all periods, with Q2 showing even sharper contrasts between the segments. " " "