Global Water Resources, Inc.

Total revenue in Q2 2026 was $17.8 million, up $3.5 million or 24.8% year over year; year-to-date revenue was $31.1 million, up $4.4 million or 16.3%. Regulated revenue was $15.7 million in Q2, up $1.4 million or 9.9%, and year to date was $28.9 million, up $2.2 million or 8.4%. Operating expenses were $13.3 million in Q2, up $1.7 million or 14.1%; depreciation and amortization increased $1.1 million in the quarter; G&A was $4.3 million versus $4.4 million. Net income was $2.7 million, or $0.10 per diluted share, versus $1.6 million, or $0.06 per diluted share in Q2 2025. Adjusted EBITDA was $7.9 million versus $6.9 million, up $1 million or 15%. For the year to date period, net income was $2.4 million, or $0.08 per diluted share, versus $2.2 million, or $0.08 per diluted share, and adjusted EBITDA was $13.5 million versus $12.6 million, up $900 thousand or 8%. Management did not give formal numeric guidance, but said 2027 capex should be materially lower than 2025 and closer to historical norms. It also said the GW-Santa Cruz settlement contemplates net increased revenues of approximately $1.9 million effective November 1, 2020, and that four rate review filings are expected in the first half of 2027 with estimated new rates in 2028, while the next GW-Santa Cruz review is tentatively aimed at 2029 rates.

Ron Fleming framed the quarter around earnings growth rather than just connection growth, saying the company wants the recent rate base expansion to translate into long-term earnings and shareholder value. He stressed that 2025’s heavy capital spending, including recommissioning the Southwest plant water reclamation facility, was necessary but has increased depreciation and weighed on net income, making new rates important. His tone was constructive and confident, pointing to the rate case settlement, organic growth, and Phoenix-area development as reasons he believes earnings can grow meaningfully over time.

Mike Liebman highlighted the main financial drivers: $2.1 million of unregulated ICFA revenue recognition, the Tucson Water systems acquisition, organic growth, higher consumption, and higher rates. He also walked through the cost pressures, including $1.1 million higher depreciation and amortization in Q2, about $600 thousand higher O&M from medical costs, purchased power, and a plant disposal loss, while noting G&A stayed near flat at $4.3 million. On capital allocation, he said the company aims for a roughly 50/50 equity-debt structure depending on stock price, debt rates, and market conditions, while being mindful of dilution; for capex, he said 2027 should be lower than the heavy 2025 spend and closer to historical norms.

Analysts focused on Phoenix-area development, G&A run-rate, capex, acquisition appetite, and funding strategy. Management said the local economy is supportive, citing major projects, improving transportation, and a recent Arizona Commerce Authority report showing about 26 thousand projected new jobs and more than $109 billion of statewide investment in fiscal 2026. On costs and capital, management said it is actively keeping G&A as flat as possible, expects the 2027 capex level to be below 2025’s heavy investment year, and said the acquisition pipeline remains on the radar but current focus is integrating past deals and filing rate reviews. In response to questions on equity versus debt, management said it targets a balanced capital structure, starting from a 50/50 framework and adjusting for market conditions.