Global Water Resources Net Income Falls 41.5% After Capital Build

The Tip Desk · November 3, 2026 · 4 min read

Third-quarter revenue was $16.3 million as year-over-year growth slowed to 5.0% from 24.8% in the second quarter.

Global Water Resources, Inc. (GWRS), a pure-play water resource management company, reported third-quarter 2026 revenue of $16.3 million, up 5.0% from a year earlier, a sharp slowdown from the 24.8% year-over-year increase to $17.8 million in the second quarter, which had been aided by $2.1 million of unregulated ICFA revenue.

Net income fell $0.7 million, or 41.5%, to $1.0 million, or $0.03 a share, from $1.7 million, or $0.06 a share, in the third quarter of 2025. The company said the decrease primarily reflected increased depreciation expense and net interest expense from its 2025 and 2026 rate-base investments, partially offset by an increase in regulated revenue.

Adjusted EBITDA, a non-GAAP measure, remained largely consistent at $7.8 million in the third quarter of both 2026 and 2025.

Water service revenue was $9.0 million and wastewater and recycled water service revenue was $7.3 million. The company attributed the quarter’s revenue increase to organic growth in active water and wastewater connections, increased consumption from irrigation, residential and multi-family customers, and higher rates at GW-Farmers and GW-Ocotillo.

Depreciation, amortization and accretion rose 30.4% year-over-year to $4.6 million. The company said the increase was substantially attributable to a 15.3% increase in depreciable fixed assets from the 2025 capital improvement plan, which placed a significant number of assets in service in the fourth quarter of 2025. President and CEO Ron Fleming said assets placed in service under the 2025 and 2026 capital improvement plans increased depreciation expense and continued to affect near-term net income and earnings per share.

Operations and maintenance expense was $4.5 million. The company said higher utilities, chemicals and repairs were driven by additional processing equipment from the 2025 capital plan, including two new wastewater treatment plants placed into service after the third quarter of 2025, and by increased electricity rates. General and administrative expense remained relatively flat at $4.8 million, compared with $4.9 million in the prior-year quarter.

Total other expense was $1.0 million. The company said the increase was substantially attributable to higher interest expense from a December 2025 term loan supporting the 2025 capital plan and increased revolving-credit borrowings.

Active service connections at September 30, 2026 increased 2.4% year-over-year to 69,797, slowing from 5.8% year-over-year growth to 69,429 at June 30, 2026. The company said the pace of new connection and permit activity has slowed recently, primarily driven by higher mortgage rates and other macroeconomic factors, and that ongoing development in the Phoenix metropolitan area, particularly in the City of Maricopa, continues to support organic growth. Water consumption remained steady at approximately 1.3 billion gallons.

The company invested $6.9 million in the quarter in infrastructure projects. It completed a $10.0 million private placement of common stock and amended its revolving credit facility, increasing borrowing capacity from $20.0 million to $30.0 million. It declared three monthly cash dividends of $0.02533 a share, or $0.30396 a share on an annualized basis.

GW-Palo Verde filed a motion to withdraw its rate application under a previously announced settlement; the motion was granted July 29, 2026. Global Water plans to refile the GW-Palo Verde rate case in 2027 using a 2026 test year. After quarter-end, GW-Santa Cruz received Arizona Corporation Commission approval of its new water availability fee on October 14, 2026, and an administrative law judge recommended the commission adopt the settlement with new rates for GW-Santa Cruz effective December 1, 2026. The company said it has begun preparing rate reviews for GW-Palo Verde and three Pima County utilities—GW-Saguaro, GW-Farmers and GW-Ocotillo—anticipated to be filed in the first half of 2027 with estimated new rates in 2028, and has started preliminary planning for the next GW-Santa Cruz rate case tentatively using a 2027 test year for a 2028 filing and estimated new rates in 2029.