Global Water 2025 Q3 Earnings Misses EPS Estimates, Revenue Beats with 8.4% Growth

Global Water Resources (GWRS) reported Q3 2025 results on Nov 12, 2025, with revenue exceeding expectations but earnings falling short. The company’s shares declined post-announcement, reflecting mixed investor sentiment. Management highlighted strategic growth from the Tucson Water acquisition and rate case implementations, while cautioning about regulatory uncertainties.

Revenue

Total revenue rose 8.4% year-over-year to $15.52 million, driven by the acquisition of seven Tucson Water systems, organic connection growth, and rate increases in Southern Arizona. This outperformed the $15.10 million consensus estimate, underscoring the company’s ability to scale operations despite macroeconomic challenges.

Earnings/Net Income

Earnings per share (EPS) plummeted 50% to $0.06, with net income dropping 41.3% to $1.72 million. The decline was attributed to higher depreciation, interest, and operating costs, including legal fees tied to the Nikola bankruptcy. The EPS shortfall and net income reduction reflect significant margin pressures despite top-line growth.

Post-Earnings Price Action Review

The strategy of buying GWRS shares at earnings release and holding for 30 days delivered a 28.77% return over three years, outperforming the S&P 500’s 24.94%. However, the approach faced volatility, with a maximum drawdown of 18.52% and a standard deviation of 26.78%. While the strategy’s moderate returns and market-beating performance suggest potential, its high volatility and drawdowns necessitate careful risk assessment for investors.

CEO Commentary

President and CEO Ron Fleming emphasized the strategic value of the Tucson Water acquisition, enabling operational consolidation and rate alignment. He highlighted Arizona’s “Ag-to-Urban” program and Highway 347 project as growth catalysts, aligning with the state’s projected 486,000 job gains through 2033.

Guidance

The company anticipates the GW-Santa Cruz and GW-Palo Verde rate cases to conclude by mid-2026, with a requested $4.3 million revenue increase pending regulatory approval. Forward-looking growth remains tied to Arizona’s population and economic trends, though no explicit financial targets are provided.

Additional News

1. M&A Activity: Global Water finalized the acquisition of seven Tucson Water systems in July 2025, boosting revenue and active connections.

2. Dividend Announcement: The company declared a monthly dividend of $0.02533 per share, reinforcing its commitment to shareholder returns.

3. Regulatory Developments: Arizona’s “Ag-to-Urban” program, enabling agricultural-to-urban water rights conversion, is expected to drive long-term growth.