Executive Summary

Q4 2024 revenue was $349.0M, down 6.0% q/q and 6.9% y/y; gross margin compressed to 12.7% (from 16.8% in Q3), and the quarter posted a net loss of $2.1M, while Adjusted EBITDA was $56.2M, below Q3’s $72.8M and roughly in line with Q4 2023’s $58.3M .
Water Infrastructure remained the profit engine: Q4 revenue $76.8M (-6% q/q, +26% y/y) with gross margin before D&A at 54.7%; management expects segment revenue to dip low-single-digits in Q1 2025 then accelerate with sharp double‑digit q/q growth in Q2–Q3 as new Permian projects come online, with margins ≥50% through 2025 .
2025 outlook: company guides Q1 2025 Adjusted EBITDA of $60–$64M, Water Infrastructure revenue and gross profit growth of 15–25% for 2025, and consolidated record Adjusted EBITDA with higher consolidated margins; net capex targeted at $170–$190M (maintenance $50–$60M) .
Strategic expansion: announced Colorado water rights/storage partnership (initial $62M, option to invest up to $84M more) targeting ultra long-term municipal/industrial/agricultural contracts with high margin profiles and low volatility cash flows, broadening the infrastructure mix beyond oil & gas .
Consensus estimates from S&P Global for Q4 2024 were not available at preparation time; comparisons to Street are therefore not provided. We anchor estimate comparisons on S&P Global when available.

What Went Well and What Went Wrong

What Went Well
- Water Infrastructure durability: despite asset conversion downtime, gross margin before D&A held at 54.7% in Q4; management reiterated confidence in maintaining 50–60% margins through 2025 and achieving 15–25% y/y segment revenue/gross profit growth in 2025 .
- Contracting momentum and scale: portfolio exceeds 2.5M acres under dedication/ROFR with record backlog; Q4 added a 15‑year Northern Delaware expansion (31k dedicated acres) and a 7‑year Central Basin Platform recycle project (124k acres) .
- Cash generation: Q4 cash from operations (CFO) was $67.8M (+31% q/q), and full year CFO reached $234.9M; Q4 free cash flow (FCF) was $16.2M and FY 2024 FCF was $77.4M, providing funding for growth and shareholder returns .
What Went Wrong
- Seasonal and mix headwinds: consolidated gross margin contracted to 12.7% (from 16.8% in Q3); Water Services revenue fell 10.6% q/q with margins before D&A down to 16.4% (from 20.5% in Q3), and Chemical Technologies margin was 12.9% (below prior-year 14.1%) .
- Q4 profit softness vs internal aims: Adjusted EBITDA of $56.2M came in “a bit below” expectations due to higher costs in Water Services and Chemical Technologies, and diluted EPS was -$0.02 vs +$0.15 in Q3 .
- Near-term deferral in Infrastructure revenues: asset conversions and buildout in Northern Delaware will push some revenue into Q2, with management guiding low single-digit revenue decline in Q1 before inflecting in Q2–Q3 .

Financial Results

Consolidated results (chronological: Q4’23 → Q2’24 → Q3’24 → Q4’24)

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	374.9	365.1	371.3	349.0
Gross Margin (%)	14.6%	16.5%	16.8%	12.7%
Net (Loss) Income ($M)	27.6	14.9	18.8	(2.1)
Diluted EPS ($)	0.30	0.13	0.15	(0.02)
Adjusted EBITDA ($M)	58.3	69.6	72.8	56.2
Cash from Operations ($M)	83.2	83.1	51.9	67.8
Free Cash Flow ($M)	55.2	37.4	20.4	16.2

Segment revenue and margin (chronological: Q4’23 → Q3’24 → Q4’24)

Segment	Revenue Q4 2023 ($M)	Revenue Q3 2024 ($M)	Revenue Q4 2024 ($M)	Gross Margin before D&A Q4 2023	Q3 2024	Q4 2024
Water Infrastructure	60.9	82.0	76.8	43.3%	56.7%	54.7%
Water Services	241.8	234.0	209.3	22.3%	20.5%	16.4%
Chemical Technologies	72.3	55.3	62.9	14.1%	12.4%	12.9%

KPIs and balance sheet

KPI	Q4 2024	FY 2024
Barrels of water moved (bn)	—	>1.5
Total liquidity ($M)	134.8	—
Cash & Equivalents ($M)	20.0	—
Borrowings on prior facility ($M, 12/31/24)	85.0	—
Net Capex ($M)	51.5 (Q4)	157.3
Free Cash Flow ($M)	16.2 (Q4)	77.4
Shares (WASO, Class A/B)	100.34M / 16.22M (Q4)	—

Estimate comparison (S&P Global)

Consensus estimates for Q4 2024 revenue and EPS were unavailable at preparation time; no S&P Global comparison presented. We anchor Street comparisons on S&P Global when available.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	Q4 2024	$60–$62 (issued with Q3 results)	Actual $56.2	Miss vs prior guide
Adjusted EBITDA ($M)	Q1 2025	—	$60–$64	New
Water Infrastructure: Revenue & Gross Profit Growth	FY 2025	—	+15%–+25% y/y	New
Water Infrastructure: Gross Margin before D&A	Q1 2025 / FY 2025	—	≥50% both periods	New
Water Services: Revenue	Q1 2025	—	Low‑to‑mid single‑digit % increase q/q	New
Water Services: GM before D&A	Q1 2025	—	21%–22%	New
Chemical Technologies: Revenue	Q1 2025	—	+10%–+15% q/q	New
Chemical Technologies: GM before D&A	Q1 2025	—	14%–15%	New
Consolidated Adjusted EBITDA	FY 2025	—	Record, margins up y/y	New
Net Capital Expenditures ($M)	FY 2025	—	$170–$190 (maintenance $50–$60)	New
SG&A as % of Revenue	Q1/FY 2025	—	10%–11%	New
Cash Taxes ($M)	FY 2025	—	$5–$10	New
D&A ($M/quarter)	FY 2025	—	Low $40s per quarter	New
Interest Expense ($M/quarter)	FY 2025	—	$4–$5 per quarter	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Water Infrastructure margins/scale	Achieved 51% GM before D&A in Q2; continued margin expansion and 56.7% in Q3; strong sequential growth from acquisitions and utilization	54.7% GM before D&A despite downtime; maintain 50–60% in 2025; 15–25% y/y growth in 2025	Sustained high-margin trajectory; brief Q1 2025 dip before acceleration
Contracting & acreage	Added 30k acres (Q2) and 25k acres + 57k ROFR (Q3); multiple Permian projects	Added 150k+ acres in Q4; 2.5M+ acres under dedication/ROFR; record backlog	Backlog and acreage expanding
Water Services optimization	Margin improvement via consolidation (Q2); Q3 warned of seasonal slowdown/Q4 downtime	Q4 revenue -10.6% q/q; margins 16.4%; evaluating underperforming areas for consolidation in 2025	Further portfolio pruning; targeted margin recovery in Q1
Chemical Technologies	Q2: lower activity and margin; Q3: sequential revenue up mid-teens expected in Q4	Q4 revenue +14% q/q; margin 12.9%; Q1 guide: +10–15% revenue, 14–15% margin on new products/market share	Product-driven recovery underway
Macro & gas exposure	Q2/Q3: navigating pullbacks; infra growth offsets macro	Expect Lower 48 activity modestly down y/y; potential gas upside (Haynesville) with heavy production-weighting	Macro steady-to-soft; gas optionality helps
New markets (Municipal water)	—	Colorado water rights/storage platform launched; ultra long-term, high-margin contracts aimed at 50-year horizons	Strategic diversification to stable cash flows

Management Commentary

“For the full year of 2025, we expect yet another record-setting year for Adjusted EBITDA and consolidated margins... led by gains in the Water Infrastructure segment where we expect revenues and gross profit to grow by another 15%–25%” .
“We now have more than 2.5 million acres under long-term area dedication... our new project potential backlog continues to grow and currently sits at a record high” .
On Colorado: “This type of investment offers substantial differentiated benefits... typical margins for a fully commercialized project... are well in excess of Select’s current Water Infrastructure margins... supported by escalating contracts of up to 50 years in duration” .

Q&A Highlights

Colorado returns and profile: Management framed the Colorado venture as a high‑margin, resource‑owner business with ultra long-term, escalated contracts and predictable cash flows; initial minority stake with exclusive rights to increase ownership beyond 56% as contracts are signed .
Water Infrastructure cadence: After a low single‑digit revenue dip in Q1 due to conversions, management expects double‑digit growth in Q2 and Q3 2025, exiting the year at a meaningfully higher run-rate; comfortable with 50–60% margins .
Gas basin optionality: Strong production‑weighted position in Haynesville with largest disposal platform and pipeline network; able to ramp recycling/treatment and benefit from out‑of‑basin transfer to Texas if gas activity accelerates .
Chemicals share gains: New products tailored to long laterals and produced‑water fracs driving wins with E&Ps; expect revenue and margin improvement through 2025 as manufacturing absorption improves .

Estimates Context

S&P Global consensus for Q4 2024 revenue and EPS was unavailable at preparation time (rate limit). Accordingly, we do not present a Street comparison for Q4 and default to company guidance and actuals. We anchor to S&P Global consensus when available.
Where estimates are critical (e.g., for trading), we recommend re‑querying S&P Global before execution to update the beat/miss view.

Key Takeaways for Investors

Infrastructure-led mix shift intact: Water Infrastructure margins ≥50% and 15–25% growth guide underpin a second straight year of record Adjusted EBITDA in 2025, with H2 > H1 cadence .
Temporary softness likely priced into Q1: Q1 guide calls for $60–$64M Adjusted EBITDA and a modest Infra revenue dip before sharp q/q growth in Q2–Q3 on Permian projects coming online .
Structural expansion into municipal/industrial water: Colorado platform adds high‑margin, ultra long-term, low‑volatility cash flows with line of sight to majority ownership as contracts are executed .
Services optimization a lever: Continued consolidation in Water Services targets margin recovery to 21%–22% in Q1 and further improvement through 2025, enhancing cash conversion to fund infra growth .
Chemicals rebuilding: Product innovation and operator‑direct relationships position the segment for revenue/margin improvement in 2025; early Q4/Q1 momentum evident .
Balance sheet/liquidity supportive: New $550M sustainability‑linked facility ($300M revolver + $250M term) enhances flexibility; total liquidity $134.8M at YE 2024 .
Trading setup: Watch Q2 execution on project ramp and any incremental acreage/contracts; confirmation of Infra growth/margins plus municipal contract wins are likely stock catalysts .

Supporting Disclosures and Additional Press Releases

Q4 2024 earnings 8‑K and press release (Item 2.02; Exhibit 99.1): detailed financials, segment performance, capex, liquidity, and 2025 outlook .
Q4 2024 earnings call transcript (Feb 19, 2025): prepared remarks and Q&A on segment guidance, Colorado venture economics, and 2025 modeling items .
Related Q4‑period press releases: Lost Tank facility milestone (50M barrels recycled; infra expansion, automation, network scale) ; earnings call schedule .
Prior quarters (trend context): Q3 2024 press release (revenue $371.3M; Adj. EBITDA $72.8M; Infra GM before D&A 56.7%) ; Q2 2024 press release (revenue $365.1M; Adj. EBITDA $69.6M; Infra GM before D&A 51.0%) .

Notes: All figures are as reported by Select Water Solutions unless otherwise noted. Consensus estimates from S&P Global were unavailable at preparation time; thus, no Street comparison is included.

Select Water Solutions, Inc. (WTTR)·Q4 2024 Earnings Summary