Select Water Lifts Revenue as Infrastructure Expansion Accelerates
Adjusted EBITDA climbed to $92.7 million as margins widened across all three segments.
The water-management company Select Water Solutions (WTTR) lifted second-quarter revenue 9% from a year earlier to $395.8 million, led by record results in its infrastructure and chemicals businesses. Revenue rose 8% sequentially, accelerating from the first quarter’s 6% increase.
Net income more than doubled from the prior quarter to $22.6 million and nearly doubled from a year earlier. Diluted Class A earnings increased to $0.17 a share from $0.08 sequentially and $0.10 a year earlier. Total gross margin widened to 19.4% from 17.8% in the first quarter and 15.9% a year earlier.
Water Infrastructure revenue reached a record $101.6 million, rising 5% sequentially and 26% from a year earlier as produced-water volumes and skim-oil volumes and pricing increased. Select handled about 1.5 million barrels of produced water a day, up from roughly 1.4 million in the first quarter, and the segment’s gross margin before depreciation and amortization expanded to 58.3%.
Chemical Technologies supplied the strongest sequential growth. Revenue jumped 23% to a record $96.0 million and rose 42% from a year earlier, with gross profit before depreciation and amortization increasing 30% from the first quarter. The segment’s corresponding margin improved to 20.2% despite higher costs for oil-based raw materials.
Water Services revenue increased 4% sequentially to $198.2 million but remained 8% below the year-earlier period, making it Select’s only segment with an annual revenue decline. Its gross margin before depreciation and amortization nevertheless widened to 23.0% from 21.8% in the first quarter and 19.6% a year earlier.
Operating cash flow rebounded to $86.7 million from $10.2 million in the first quarter, and free cash flow swung to positive $17.0 million from negative $67.1 million. Liquidity declined to $277.8 million as cash fell to $33.4 million, though Select continued to have no borrowings under its revolving credit facility.
For the third quarter, Select expects adjusted EBITDA of $90 million to $94 million. The company forecasts another 5% to 10% increase in Water Infrastructure revenue, alongside lower Chemical Technologies revenue and moderating margins in Water Infrastructure and Water Services.
Select raised its 2026 net-capital-expenditure forecast to $250 million to $290 million from $200 million to $250 million to fund new infrastructure awards and opportunities. The expansion included a new seven-year Northern Delaware Basin agreement backed by a 128-million-barrel minimum-volume commitment, with 14 disposal facilities changing hands and 19 miles of pipeline planned at an expected cost of $25 million to $30 million.