Global Water 2025 Q3 Earnings Revenue Up 8.4% as Net Income Falls 41.3%

Global Water Resources (GWRS) reported fiscal 2025 Q3 earnings on Nov 13, 2025, with revenue rising 8.4% year-over-year to $15.52 million, outperforming estimates but net income declined 41.3% to $1.72 million amid higher costs. The CEO highlighted growth from acquisitions and rate increases, while analysts noted mixed post-earnings price performance.

Revenue

Driven by the acquisition of seven Tucson Water systems, organic connection growth, and rate hikes, Global Water’s total revenue rose to $15.52 million in Q3 2025. Water service revenue reached $8.48 million, while wastewater and recycled water services contributed $7.04 million, reflecting strong top-line expansion despite margin pressures.

Earnings/Net Income

Earnings per share (EPS) fell 50% to $0.06, and net income declined to $1.72 million, down 41.3% from $2.92 million in 2024 Q3. The drop was attributed to increased depreciation, interest expenses, and operating costs. Despite robust revenue growth, the EPS and net income declines underscore margin compression from higher capital expenditures and regulatory challenges.

Post-Earnings Price Action Review

The strategy of buying GWRS shares on revenue announcements showed mixed results over three years. While it generated a 10.23% gain in the first year, outpacing the market initially, returns deteriorated to -1.03% and -5.95% in subsequent years. Cumulative returns over three years totaled 3.77%, lagging the SPY ETF’s 12.39% gain. Short-term momentum from revenue announcements waned, with monthly returns averaging 6.5% initially but declining to -0.5% over three months. This suggests the strategy may lack resilience against broader market volatility.

CEO Commentary

CEO Ron Fleming emphasized the strategic value of the Tucson acquisition, which enabled operational consolidation and rate alignment in Southern Arizona. He expressed confidence in Arizona’s economic outlook, citing 486,000 expected job additions by 2033, and highlighted the Ag-to-Urban program’s potential to convert agricultural water rights for urban development. Challenges included reduced Buckeye growth premiums and regulatory uncertainties, though management remains optimistic about balancing affordability and rate case outcomes.

Guidance

The company anticipates the GW-Santa Cruz and GW-Palo Verde rate cases to conclude mid-2026, with a hearing scheduled for Dec 15, 2025. Management expects continued organic connection growth (3.3% annualized) and infrastructure-driven benefits but provided no specific financial guidance. Forward-looking initiatives include leveraging the Ag-to-Urban program and Highway 347 expansion, with macroeconomic headwinds deemed temporary.

Additional News

1. M&A Activity: Global Water acquired seven Tucson Water systems in July 2025, boosting revenue by ~$1.5 million annually.

2. Dividend Policy: Declared a monthly dividend of $0.02533 per share, supporting cash-return continuity.

3. Regulatory Developments: The Ag-to-Urban program, allowing agricultural water rights conversion, and Highway 347 expansion are expected to drive long-term growth.