Nov 3, 2026, 5:22 PM ETUtilities

Global Water Resources — Third Quarter 2026 Earnings Summary

GWRSGLOBAL WATER RESOURCES INC

Financial Performance

Total revenue for the three months ended September 30, 2026, increased 5.0% year-over-year to $16.3 million; year-to-date revenue increased 12.2% to $47.4 million.
Net income for the quarter decreased 41.5% to $1.0 million ($0.03 per diluted share) compared to $1.7 million ($0.06 per share) in the prior year; year-to-date net income decreased 13.6% to $3.4 million ($0.12 per share) compared to $3.9 million ($0.15 per share).
Adjusted EBITDA for the quarter remained consistent at $7.8 million; year-to-date Adjusted EBITDA increased 5.0% to $21.4 million.
Operating expenses increased 10.4% in the quarter to $13.9 million and 13.1% year-to-date to $40.1 million, driven by higher depreciation and operations and maintenance costs.
Depreciation, amortization, and accretion increased 30.4% in the quarter to $4.6 million and 30.4% year-to-date to $13.3 million due to assets placed in service under the 2025 capital improvement plan.
Net interest expense increased, contributing to lower net income; total other expense rose to $1.0 million for the quarter and $2.7 million year-to-date.
Cash and cash equivalents were $3.5 million as of September 30, 2026, down from $4.1 million at December 31, 2025.
Long-term debt, net, was $127.8 million as of September 30, 2026, compared to $129.8 million at December 31, 2025.
Deferred revenue (ICFA) was $22.4 million as of September 30, 2026.

Management expects new rates for GW-Santa Cruz to take effect on December 1, 2026, following ACC approval of the settlement agreement.
GW-Palo Verde plans to refile its rate case in 2027 using a 2026 test year, with estimated new rates in 2028.
Rate reviews for GW-Palo Verde and three Pima County utilities (GW-Saguaro, GW-Farmers, GW-Ocotillo) are anticipated to be filed in the first half of 2027, with estimated new rates in 2028.
Preliminary planning for the next GW-Santa Cruz rate case is underway, tentatively using a 2027 test year for a 2028 filing and estimated new rates in 2029.
Management anticipates a positive long-term outlook based on forecasted job and population growth in the Phoenix MSA, despite a recent temporary slowdown in new connection and permit activity.
The company expects to benefit from long-term population growth, housing affordability, and infrastructure improvements like the State Route 347 widening.

Total active service connections increased 2.4% year-over-year to 69,797 as of September 30, 2026.
Water consumption remained steady at approximately 1.3 billion gallons.
Organic growth in active water and wastewater connections drove revenue increases, alongside higher rates for GW-Farmers and GW-Ocotillo.
Unregulated revenue of $2.1 million was recognized year-to-date, primarily from ICFA revenue related to the commissioning of a new wastewater reclamation facility in GW-Hassayampa's service territory.
The company invested $6.9 million in infrastructure projects during the third quarter.
Two new wastewater treatment plants were placed into service after the third quarter of 2025, contributing to higher utilities and repairs expenses.
The company acquired seven water systems from the City of Tucson in July 2025, contributing to year-to-date revenue growth.

The Phoenix metropolitan area is the 10th largest MSA in the U.S., with an estimated population of 5.2 million in 2025, projected to reach 5.7 million by 2030 and 6.3 million by 2040.
TSMC increased its planned Arizona investment by $100 billion to $265 billion, supporting additional semiconductor manufacturing and advanced packaging facilities.
Arizona's Ag-to-Urban program provides a pathway to convert agricultural water rights to municipal use, potentially supporting new housing and reducing groundwater demand across approximately 384,000 eligible agricultural acres.
The City of Maricopa offers a median home sales price 24% lower than the City of Phoenix, driving organic growth in that area.
Construction on the State Route 347 Improvement Project began in June 2026, with completion scheduled for 2029.

Higher depreciation and net interest expenses resulting from 2025 and 2026 rate base investments have negatively impacted near-term net income and earnings per share.
Rising medical costs and higher costs to power and operate newly operational plants have increased operations and maintenance expenses.
A recent slowdown in new connection and permit activity, driven by higher mortgage rates and macroeconomic factors, has temporarily affected growth pace.
Regulatory proceedings remain subject to Arizona Corporation Commission (ACC) approval, including the GW-Santa Cruz settlement and GW-Palo Verde rate case refiling.
Forward-looking statements regarding future performance, regulatory approvals, and growth projections are subject to risks and uncertainties.

President and CEO Ron Fleming stated that revenue increased 5.0% and active connections increased 2.4% year-over-year.
Management emphasized a commitment to disciplined expense management, noting that general and administrative expenses remained relatively flat at $4.8 million for the quarter.
Fleming expressed confidence in the region's long-term growth drivers, including TSMC's investment and the Ag-to-Urban program.
Management views the decline in permit activity as temporary and believes the company is well-positioned to benefit from regional population and job growth.
The company highlighted its Total Water Management (TWM) platform as a key differentiator for creating value for customers and shareholders.

Completed a $10.0 million private placement of common stock.
Amended its revolving credit facility, increasing borrowing capacity from $20.0 million to $30.0 million.
Declared three monthly cash dividends of $0.02533 per common share, amounting to $0.30396 on an annualized basis.
GW-Palo Verde filed a motion to withdraw its rate application, which was granted on July 29, 2026.
GW-Santa Cruz received ACC approval of its new water availability fee on October 14, 2026.
An Administrative Law Judge issued a Recommended Opinion and Order on October 19, 2026, recommending the ACC adopt the settlement agreement for GW-Santa Cruz.
Net cash provided by operating activities was $16.1 million for the nine months ended September 30, 2026.
Capital expenditures were $19.8 million for the nine months ended September 30, 2026.
The company owns and operates 39 water and wastewater systems primarily in growth corridors around metropolitan Phoenix and Tucson.