Select Water Solutions' Q1 2025: Navigating Contradictions in Infrastructure Growth, Margins, and ESG Impact

Water Infrastructure Growth Projections, Impact of Tariffs and Cost Escalations on Anchor Tenant Contracts, Impact of ESG Initiatives on Financial Performance, Water Infrastructure Growth and Margin Expectations, and Water Infrastructure Growth and Profitability are the key contradictions discussed in Select Water Solutions' latest 2025Q1 earnings call.



Revenue and Earnings Growth:
- Select Water Solutions, Inc. reported a 7% increase in revenue for Q1 2025, along with a 14% rise in adjusted EBITDA.
- This growth was driven by strong performance in chemical technologies and water services segments, as well as strategic contract awards and infrastructure developments.

Water Infrastructure Expansion:
- The company's water infrastructure segment saw a 54% gross margin, with significant contract additions and recycling capacity expansions.
- The growth was driven by several large contract awards, including an 11-year support contract in the Northern Delaware Basin, which adds 265,000 acres to dedicated and right-of-first refusal acreage.

Macro and Strategic Positioning:
- Despite potential macroeconomic pressures, Select Water Solutions focused on its diversified footprint across key U.S. unconventional basins.
- The company's strategic positioning in basins like the Permian, Haynesville, and Marcellus Utica offered resilience and support for continued growth amid market uncertainties.

Capital Expenditure and Financial Outlook:
- The company increased its net CapEx guidance to $225 million to $250 million for 2025, up from $170 million to $190 million.
- This increase is attributed to new project awards and a focus on strategic infrastructure investments that support long-term growth and earnings potential.