Select Energy Services . Class A Stock Earnings Reports

Select Water Solutions reported a very strong start to 2026 with broad-based sequential and year-over-year improvement across all segments. Consolidated highlights: revenue and adjusted EBITDA increased materially versus Q4 2025 (revenue +$19.5M, adjusted EBITDA +$13.5M), net income improved, and consolidated gross margins before D&A exceeded 30% for the first time. Water Infrastructure was the standout: record quarterly revenue (~$97M), recycled and disposal volumes grew, segment gross margin before D&A reached 56%, and management raised full-year Water Infrastructure growth guidance to 25%–30% YoY (from 20%–25%). Commercialization wins included multiple MVCs, dedications, ROFRs and interruptible agreements across Permian, Northeast, Bakken and MidCon, plus subsequent Northern Delaware Basin acquisitions (surface & mineral acres, disposal capacity, water rights, storage) expected to integrate efficiently. Water Services outperformed with sequential revenue +7% and improved margins; Chemical Technologies expects 10%–15% sequential revenue growth in Q2 with margin improvement into ~20%–21% driven by demand for friction reducers and specialty surfactants. Liquidity/capital: completed an equity offering, repaid revolver borrowings, ended Q1 with ~$196M net debt and >$300M total available liquidity. CapEx was $78M in Q1; full-year net CapEx guidance increased to $200M–$250M (from $175M–$225M) with $50M–$60M expected for maintenance. Management expects CapEx-driven growth to position the company for strong free cash flow generation into 2027, while maintaining a maintenance-light model for long-term free cash flow flexibility. Near-term considerations: commodity/geo-political developments may boost activity and skim-oil pricing, management is monitoring customer activity and commodity impacts, and they emphasize continued cost control (SG&A down >6% to $40.6M). Risks noted include working capital (Q1 AR increase causing a short-term cash drag), execution of projects and integration of acquisitions, commodity/market volatility, and forward-looking assumptions.