Global Water Returned to Profit With Infrastructure Agreement Revenue

The Tip Desk · October 18, 2026 · 3 min read

The water utility reported $17.8 million in second-quarter revenue, with revenue from infrastructure agreements accounting for most of the increase.

Water resource management company Global Water Resources, Inc. (GWRS) returned to profit in the second quarter as it recognized revenue tied to a newly commissioned wastewater plant. Net income was $2.7 million, or $0.10 a diluted share, against a $0.4 million first-quarter loss. The recovery left a divide between reported earnings and adjusted profit, which remained below its year-earlier level.

Revenue growth accelerated to 24.8% year over year from 6.7% in the first quarter. The company recorded $2.1 million of unregulated revenue under infrastructure coordination and financing agreements when its GW-Hassayampa reclamation facility entered service in June. That revenue accounted for more than half of the second quarter's $3.5 million revenue increase.

Adjusted net income was $1.3 million, compared with $1.6 million a year earlier. The decline was primarily due to higher depreciation, amortization and accretion, partly offset by regulated revenue growth. The adjusted profit measure excluded infrastructure agreement revenue, related intangible amortization, asset disposals and applicable tax effects, separating those items from the reported earnings recovery.

Adjusted EBITDA returned to growth, increasing 14.6% to $7.9 million after remaining unchanged year over year in the first quarter. The second-quarter improvement was primarily due to regulated revenue growth. Regulated revenue totaled $15.7 million, providing most of the company's sales despite the contribution from infrastructure agreements.

Within regulated operations, water service generated $8.4 million in revenue, while wastewater and recycled water service contributed $7.3 million. Regulated revenue growth was driven by the seven Tucson water systems acquired in July 2025, organic connections, consumption and higher GW-Farmers rates. Those rates took effect in stages in November 2025 and May 2026.

The operating footprint also expanded. Active service connections reached 69,429 at June 30, and second-quarter water consumption totaled 1.2 billion gallons. Consumption increased because of connection growth and higher usage, with higher usage largely resulting from hotter and drier weather. New permit activity had slowed, while the company expects continued organic connection growth in its Arizona service areas.

The cost of infrastructure already placed in service continued to weigh on earnings. Depreciation, amortization and accretion increased 32.7% to $4.4 million. The increase was substantially due to assets added through its 2025 capital improvement program, with a significant number entering service in the final quarter of that year.

Operations and maintenance expense increased. Higher medical costs and higher spending on purchased power, chemicals and supplies contributed to the increase. The company also incurred wastewater disposal expenses before the Hassayampa facility started operating. Other expense totaled $0.8 million, including interest costs associated with the December 2025 term loan and revolving-credit borrowings.

Global Water invested $6.6 million in infrastructure during the quarter, including maintenance and treatment and delivery facilities. Hassayampa's new reclamation plant had capacity of 60,000 gallons a day. The company also submitted applications to expand assured water supply in its Santa Cruz and Ocotillo service areas, and extended its $20 million revolving credit line to May 2028.

Rate recovery remained the next regulatory step. A proposed settlement called for approximately $2.3 million in additional annual revenue requirements at Santa Cruz. In consideration of the settlement, Palo Verde committed to seek an approximately $0.4 million annual increase in temporary customer bill credits. The company described the proposal as a net $1.9 million rate increase, subject to Arizona Corporation Commission approval.

Palo Verde's withdrawal from its existing rate case was approved in July, and the company plans to refile in 2027 using a 2026 test year. Santa Cruz hearings concluded in August. The company expects a final decision in the fourth quarter and has requested that Santa Cruz's new rates take effect November 1.