10q10k10q10k.net

What changed in Select Water Solutions, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Select Water Solutions, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+539 added−489 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in Select Water Solutions, Inc.'s 2025 10-K

539 paragraphs added · 489 removed · 353 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

237 edited+91 added−75 removed360 unchanged
Biggest changeAlmost half of our revenues are derived from our operations in the Permian Basin of Texas and New Mexico , making us vulnerable to risks associated with geographic concentration generally and the Permian Basin specifically, including Basin-specific supply and demand factors, regulatory changes and severe weather impacts that could materially and adversely affect our business . ​ The Permian Basin of Texas and New Mexico is presently our largest operating region, accounting for approximately 48% of our revenue in both 2024 and in 2023.
Biggest changeThe U.S. is a major exporter of oil, gas and NGLs and may no longer be able to compete with global prices due to the tariffs on oil, gas and NGLs if other nations retaliate with their own tariffs, and such tariffs may reduce the demand for our customers’ products. 34 Table of Contents ​ While the reciprocal tariffs imposed by the U.S. against many other nations are currently deferred, to the extent that any future U.S. trade policy results in retaliatory tariffs against the U.S., such as the escalated retaliatory tariffs with China, such developments could have an adverse effect on our customers’ business, and reduce demand for our services, which could have a material adverse effect on our business, results of operations and financial condition. ​ Approximately half of our revenues are derived from our operations in the Permian Basin of Texas and New Mexico , making us vulnerable to risks associated with geographic concentration generally and the Permian Basin specifically, including Basin-specific supply and demand factors, regulatory changes and severe weather impacts that could materially and adversely affect our business . ​ The Permian Basin of Texas and New Mexico is presently our largest operating region, accounting for approximately 51% and 48% of our revenue in 2025 and 2024, respectively.
Safety & Well-being ​ Safety Culture : We maintain a culture of safety, committed to the protection of the health and the safety of our employees, as well as preserving the environment and our relationships with the communities in which we operate.
Safety & Well-being ​ Safety Culture : We maintain a culture of safety, committed to the protection of the health and safety of our employees, as well as preserving the environment and our relationships with the communities in which we operate.
We have developed or acquired pipeline systems in the Permian Basin, including the Northern Delaware Basin of New Mexico and the Midland Basin in Texas, the Bakken Shale in North Dakota, the Haynesville Shale in Louisiana and the DJ Basin in Colorado within the Rockies region.
We have developed or acquired pipeline systems in the Permian Basin, including the Northern Delaware Basin of New Mexico and the Midland Basin in Texas, the Bakken Shale in North Dakota, the Haynesville Shale in Texas and Louisiana and the DJ Basin in Colorado within the Rockies region.
Under CERCLA, such persons may be subject to joint and several, strict liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies.
Under CERCLA, such persons may be subject to strict, joint and several, liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies.
These laws and regulations change frequently and have the potential to limit or ban altogether the types of chemicals we may use in our products, as well as result in increased costs related to testing, storing, and transporting our products prior to providing them to our customers.
These laws and regulations change frequently and have the potential to limit or ban altogether the types of chemicals we may use in our products, as well as result in increased costs related to testing, storing, and transporting our products prior to providing them to our customers.
Our Water Transfer service line installs temporary above-ground pipeline systems that can be equipped with full automation to deliver water autonomously at high volumes and rates from a water source to water containment facilities (tanks and pits), or directly to the wellsite. ​ We install layflat hose as part of a flexible water transfer solution that can be customized to fit a specific project.
Our Water Transfer service line installs temporary above-ground pipeline and pump systems that can be equipped with full automation to deliver water autonomously at high volumes and rates from a water source to water containment facilities (tanks and pits), or directly to the wellsite. ​ We install layflat hose as part of a flexible water transfer solution that can be customized to fit a specific project.
In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable and commercially justifiable or on terms as favorable as our current arrangements. We enter into master service agreements (“MSAs”) with most of our customers. Our MSAs delineate our and our customer’s respective indemnification obligations with respect to the services we provide.
In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable and commercially justifiable or on terms as favorable as our current arrangements. We enter into master services agreements (“MSAs”) with most of our customers. Our MSAs delineate our and our customer’s respective indemnification obligations with respect to the services we provide.
Through our patented WaterONE™ automation services and our proprietary AquaView® software platform, our Water Services segment provides extensive technology solutions that enable 24/7 monitoring and visibility for our customers into all of their water-related operations, including hydrographic mapping, water volume and quality monitoring, remote pit and tank monitoring, leak detection, asset and fuel tracking and automated-equipment services.
Through our patented AquaView® automation services and our proprietary software platform, our Water Services segment provides extensive technology solutions that enable 24/7 monitoring and visibility for our customers into all of their water-related operations, including hydrographic mapping, water volume and quality monitoring, remote pit and tank monitoring, leak detection, asset and fuel tracking and automated-equipment services.
This includes mandatory participation in monthly, quarterly, and annual environmental, health and safety meetings, a combination of live in-person training and computer-based training tailored to specific job-duties and operational activities, and comprehensive safety reference material. We also empower operational personnel with stop-work authority (“SWA”) as a tool to advance our safety culture.
This includes mandatory participation in monthly, quarterly, and annual environmental, health and safety meetings, a combination of in-person training and computer-based training tailored to specific job-duties and operational activities, and comprehensive safety reference material. We also empower operational personnel with stop-work authority (“SWA”) as a tool to advance our safety culture.
We believe these technologies help our customers lower their operating costs, improve well productivity, increase safety, reduce the risk of spills and reduce the environmental footprint of their operations. ​ Our Chemical Technologies segment develops, manufactures, manages logistics and provides a full suite of chemicals used in hydraulic fracturing, stimulation, cementing, pipelines and well completions.
We believe these technologies help our customers lower their operating costs, improve well productivity, increase safety, reduce the risk of spills and reduce the environmental footprint of their operations. Our Chemical Technologies segment develops, manufactures, manages logistics and provides a full suite of chemicals used in hydraulic fracturing, stimulation, cementing and well completions.
Hydraulic fracturing activities. Hydraulic fracturing involves the injection of water, sand or other proppants and chemical additives under pressure into targeted geological formations to fracture the surrounding rock and stimulate production. Hydraulic fracturing is an important and common practice that is typically regulated by state oil and natural gas commissions or similar agencies.
Hydraulic fracturing involves the injection of water, sand or other proppants and chemical additives under pressure into targeted geological formations to fracture the surrounding rock and stimulate production. Hydraulic fracturing is an important and common practice that is typically regulated by state oil and natural gas commissions or similar agencies.
Under such laws, we could be required to undertake response actions or corrective measures, which could include removal of previously disposed substances and wastes, cleanup of contaminated property or performance of remedial operations to prevent future contamination, the costs of which could be material. Water discharges and use.
Under such laws, we could be required to undertake response actions or corrective measures, which could include removal of previously disposed substances and wastes, cleanup of contaminated property or performance of remedial actions to prevent future contamination, the costs of which could be material. Water discharges and use.
With a diverse geographic footprint across the U.S., we operate through three primary segments: Water Infrastructure, Water Services and Chemical Technologies. Our Water Infrastructure segment develops, builds, and operates permanent and semi-permanent infrastructure solutions to support full life cycle water management and waste treatment solutions.
With a diverse geographic footprint across the U.S., we operate through three primary segments: Water Infrastructure, Water Services and Chemical Technologies. Our Water Infrastructure segment develops, builds, and operates permanent infrastructure solutions to support full life cycle water management and waste treatment solutions.
We have developed some of our larger, strategic water sources into comprehensive, permanent pipeline systems designed to provide water used for drilling, completion and production activity across a wide geography or to collect and redistribute produced water into our recycling and disposal facilities.
We also have developed some of our larger, strategic water sources into comprehensive, permanent pipeline systems designed to provide water used for drilling, completion and production activity across a wide geography or to collect and redistribute produced water into our recycling and disposal facilities.
The amounts payable, as well as the timing of any payments, under the Tax Receivable Agreements are dependent upon future events and significant assumptions, including the timing of the exchanges of SES Holdings LLC Units, the market price of our Class A common stock at the time of each exchange (since such market price will determine the amount of tax basis increases resulting from the exchange), the extent to which such exchanges are taxable transactions, the amount of the exchanging unitholder’s tax basis in its SES Holdings LLC Units at the time of the relevant exchange, the depreciation and amortization periods that apply to the increase in tax basis, the amount of net operating losses available to us as a result of reorganization transactions entered into in connection with the Select 144A Offering, the amount and timing of taxable income we generate in the future, the U.S. federal income tax rate then applicable, and the portion of our payments under the Tax Receivable Agreements that constitute imputed interest or give rise to depreciable or amortizable tax basis.
The amounts payable, as well as the timing of any payments, under the TRAs are dependent upon future events and significant assumptions, including the timing of the exchanges of SES Holdings LLC Units, the market price of our Class A common stock at the time of each exchange (since such market price will determine the amount of tax basis increases resulting from the exchange), the extent to which such exchanges are taxable transactions, the amount of the exchanging unitholder’s tax basis in its SES Holdings LLC Units at the time of the relevant exchange, the depreciation and amortization periods that apply to the increase in tax basis, the amount of net operating losses available to us as a result of reorganization transactions entered into in connection with the Select 144A Offering, the amount and timing of taxable income we generate in the future, the U.S. federal income tax rate then applicable, and the portion of our payments under the TRAs that constitute imputed interest or give rise to depreciable or amortizable tax basis.
In connection with our restructuring at the Select 144A Offering, we entered into the Tax Receivable Agreements with certain affiliates of the then-holders of SES Holdings LLC Units (each such person and any permitted transferee thereof, a “TRA Holder,” and together, the “TRA Holders”) which generally provide for the payment by us to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) or are deemed to realize in certain circumstances as a result of certain tax basis increases, net operating losses available to us as a result of certain reorganization transactions entered into in connection with the Select 144A Offering, and certain tax benefits attributable to imputed interest.
In connection with our restructuring at the Select 144A Offering, we entered into the TRAs with certain affiliates of the then-holders of SES Holdings LLC Units (each such person and any permitted transferee thereof, a “TRA Holder,” and together, the “TRA Holders”) which generally provide for the payment by us to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) or are deemed to realize in certain circumstances as a result of certain tax basis increases, net operating losses available to us as a result of certain reorganization transactions entered into in connection with the Select 144A Offering, and certain tax benefits attributable to imputed interest.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by applicable law, we renounce any interest or expectancy in any business opportunity that involves any aspect of the energy business or industry and that may be from time to time presented to any member of (i) Legacy Owner Holdco; Crestview Partners II SES Investment, LLC; any funds, limited partnerships or other investment entities or vehicles managed by Crestview Partners or controlled by Crestview GP; B-29 Investments, LP; Sunray Capital, LP; Proactive Investments, LP and their respective affiliates, other than us (collectively, the “SES Group”); (ii) the other entities (existing and future) that participate in the energy industry and in which the SES Group owns substantial equity interests (the “Portfolio Companies”) or (iii) any director or officer of the corporation who is also an employee, partner, member, manager, officer or director of any member of the SES Group or the Portfolio Companies, including our Chairman, President and CEO, John D.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by applicable law, we renounce any interest or expectancy in any business opportunity that involves any aspect of the energy business or industry and that may be from time to time presented to any member of (i) Legacy Owner Holdco; Crestview Partners II SES Investment, LLC; any funds, limited partnerships or other investment entities or vehicles managed by Crestview Partners or controlled by Crestview GP; B-29 Investments, LP; Sunray Capital, LP; Proactive Investments, LP and their respective affiliates, other than us (collectively, the “SES Group”); (ii) the other entities (existing and future) that participate in the energy industry and in which the SES Group owns substantial equity interests (the “Portfolio Companies”) or (iii) any director or officer of the corporation who is also an employee, partner, member, manager, officer or director of any member of the SES Group or the Portfolio Companies, including our Chairman, President and Chief Executive Officer (“CEO”), John D.
In the event that new federal, state or local restrictions or bans on the hydraulic fracturing process are adopted in areas where we or our customers conduct business, we or our customers may incur additional costs or permitting requirements to comply with such requirements that may be significant in nature and our customers could experience added costs, restrictions, delays or cancellations in their exploration, development, or production activities, which would in turn reduce the demand for our services and have a material adverse effect on our liquidity, consolidated results of operations, and consolidated financial condition.
In the event that new federal, state or local restrictions or bans on the hydraulic fracturing process are adopted in areas where we or our customers conduct business, we or our customers may incur additional costs or permitting 27 Table of Contents requirements to comply with such requirements that may be significant in nature and our customers could experience added costs, restrictions, delays or cancellations in their exploration, development, or production activities, which would in turn reduce the demand for our services and have a material adverse effect on our liquidity, consolidated results of operations, and consolidated financial condition.
To the extent that any new final rule or rules issued by the EPA and Corps expands the scope of the CWA’s jurisdiction in areas where we or our customers conduct operations, such developments could increase compliance expenditures or mitigation costs, contribute to delays, restrictions, or cessation of the development of projects, and also reduce the rate of production of natural gas or crude oil from operators with whom we have a business relationship and, in turn, have a material adverse effect on our business, results of operations and cash flows.
To the extent that any new final rule or future rules issued by the EPA and Corps expand the scope of the CWA’s jurisdiction in areas where we or our customers conduct operations, such developments could increase compliance expenditures or mitigation costs, contribute to delays, restrictions, or cessation of the development of projects, and also reduce the rate of production of natural gas or crude oil from operators with whom we have a business relationship and, in turn, have a material adverse effect on our business, results of operations and cash flows.
In addition to the reach and capacity of existing area networks, track record, the skill and competency of our people, pricing, safety, the ability to move sufficient volumes at scale and environmental performance are key factors in the bid evaluation. Equipment availability, location, and technical specifications can also be significant considerations.
In addition to the reach and capacity of existing area networks, track record, the skill and competency of our people, pricing, safety, the ability to move sufficient volumes at scale and environmental performance are key factors in the bid evaluation. Equipment availability, location, construction timing and technical specifications can also be significant considerations.
Acquisitions involve numerous risks, including: unanticipated costs and assumption of liabilities and exposure to unforeseen liabilities of the acquired business, including but not limited to environmental liabilities and plug and abandonment obligations; difficulties in integrating the operations and assets of the acquired business and the acquired personnel; limitations on our ability to properly assess and maintain an effective internal control environment over an acquired business; potential losses of key employees and customers of the acquired business; risks of entering markets in which we have limited prior experience; and increases in our expenses and working capital requirements.
Acquisitions involve numerous risks, including: unanticipated costs and assumption of liabilities and exposure to unforeseen liabilities of the acquired business, including but not limited to environmental liabilities and plug and abandonment obligations; difficulties in integrating the operations and assets of the acquired business and the acquired personnel; limitations on our ability to properly assess and maintain an effective internal 53 Table of Contents control environment over an acquired business; potential losses of key employees and customers of the acquired business; risks of entering markets in which we have limited prior experience; and increases in our expenses and working capital requirements.
The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the Tax Receivable Agreements, including (i) the assumption that we have sufficient taxable income to fully utilize the tax benefits covered by the Tax Receivable Agreements, (ii) the assumption that any SES Holdings LLC Units (other than those held by us) outstanding on the termination date are exchanged on the termination date and (iii) certain loss or credit carryovers will be utilized in the taxable year that includes the termination date.
The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the TRAs, including (i) the assumption that we have sufficient taxable income to fully utilize the tax benefits covered by the TRAs, (ii) the assumption that any SES Holdings LLC Units (other than those held by us) outstanding on the termination date are exchanged on the termination date and (iii) certain loss or credit carryovers will be utilized in the taxable year that includes the termination date.
Our technology also provides us with the unique ability to detect potential issues and prevent them from occurring, as well as to reduce manpower and equipment on certain jobs, in turn mitigating safety and environmental risks while reducing overall fuel emissions. ​ ● Water Containment.
Our technology also provides us with the unique ability to detect potential issues and prevent them from occurring, as well as to reduce manpower and equipment on certain jobs, in turn mitigating safety and environmental risks while reducing overall fuel emissions. ​ ● Water Sourcing.
While customer budgets for U.S. onshore development during 2024 were relatively flat on a year over year basis, and are expected to remain relatively so during 2025, factors outside of our control can alter these budgets, or lead customers to underspend their budgets.
While customer budgets for U.S. onshore development during 2025 were relatively flat on a year-over-year basis, and are expected to remain relatively so during 2026, factors outside of our control can alter these budgets, or lead customers to underspend their budgets.
Since the fourth quarter of 2022, we have paid a quarterly cash dividend on our shares of Class A common stock and SES Holdings, LLC Units (along with Class B Shares). Most recently, in January 2025, we announced a quarterly cash dividend of $0.07 per share.
Since the fourth quarter of 2022, we have paid a quarterly cash dividend on our shares of Class A common stock and SES Holdings, LLC Units (along with Class B Shares). Most recently, in January 2026, we announced a quarterly cash dividend of $0.07 per share.
Our Water Treatment team works closely with our Completion Chemicals service line as well as our water monitoring, reuse and recycling teams within our Water Services and Water Infrastructure segments to advise our customers on the best economic and operational solutions to manage their water quality and chemical solutions needs. ​ Chemical Technologies Geographic Areas of Operation We provide Chemical Technologies services in most of the major unconventional shale plays in the continental U.S.
Our Water Treatment team works closely with our Completion Chemicals service line as well as our water monitoring, reuse and recycling teams within our Water Services and Water Infrastructure segments to advise our customers on the best economic and operational solutions to manage their water quality and chemical solutions needs. ​ 22 Table of Contents Chemical Technologies Geographic Areas of Operation We provide Chemical Technologies services in most of the major unconventional shale plays in the continental U.S.
In the course of our operations, we generate some amounts of ordinary industrial wastes, such as paint wastes, waste solvents and waste oils that may be regulated as hazardous wastes. Wastes containing naturally occurring radioactive materials (“NORM”) may also be generated in connection with our operations.
In the course of our operations, we generate some amounts of ordinary industrial wastes, such as paint wastes, waste solvents and waste oils that may be regulated as hazardous wastes. Wastes containing naturally occurring radioactive material (“NORM”) may also be generated in connection with our operations.
Although the Company does not have operations overseas, these conflicts elevate the likelihood of supply chain disruptions, heightened volatility in crude oil and natural gas prices and negative effects on our ability to raise additional capital when required and could have a material adverse impact on our business, financial condition or future results. ​ OPEC+ policy decisions could have a material adverse impact on our business, financial condition or future results.
Although the Company does not have operations overseas, these conflicts elevate the likelihood of supply chain disruptions, heightened volatility in crude oil and natural gas prices and negative effects on our ability to raise additional capital when required and could have a material adverse impact on our business, financial condition or future results. 33 Table of Contents OPEC+ policy decisions could have a material adverse impact on our business, financial condition or future results.
See “—Risks Related to Our Organizational Structure—In certain cases, payments under the Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreements.” Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities, which could adversely affect our business or prospects.
See “—Risks Related to Our Organizational Structure—In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRAs.” Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities, which could adversely affect our business or prospects.
Advances in drilling and completion technology have propelled shale oil production in the U.S. from about 500,000 barrels per day in 2010 to approximately 9 million barrels per day currently, which accounts for approximately 9% of the total global oil supply.
Advances in drilling and completion technology have propelled shale oil production in the U.S. from about 500,000 barrels per day in 2010 to approximately 9 million barrels per day in 2025, which accounts for approximately 9% of the total global oil supply.
If we are unable to retain or meet the growing demand for skilled technical personnel, our operating results and our ability to execute our growth strategies may be adversely affected. ​ Risks Related to Customers and Suppliers Disruptions in production at our chemical manufacturing facilities may have a material adverse impact on our business, results of operations and/or financial condition.
If we are unable to retain or meet the growing demand for skilled technical personnel, our operating results and our ability to execute our growth strategies may be adversely affected. 40 Table of Contents Risks Related to Customers and Suppliers Disruptions in production at our chemical manufacturing facilities may have a material adverse impact on our business, results of operations and/or financial condition.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation or similar governing documents has been challenged in legal proceedings, and it is possible that a court could find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable, including with respect to claims arising under the U.S. federal securities laws.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation or similar governing documents has been challenged in legal proceedings, and it is possible that a court could find the 49 Table of Contents choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable, including with respect to claims arising under the U.S. federal securities laws.
The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory initiatives that impose more stringent 39 Table of Contents standards for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this sector may produce oil and natural gas or generate GHG emissions could result in increased compliance costs or costs of consuming fossil fuels.
The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory initiatives that impose more stringent standards for GHG emissions from the oil and natural gas sector or otherwise restrict the areas in which this sector may produce oil and natural gas or generate GHG emissions could result in increased compliance costs or costs of consuming fossil fuels.
In aggregate, we command a daily permitted disposal capacity of more than 2.2 million barrels per day across our operational footprint. Our disposal services cater to both flowback water generated during and shortly following well completion operations and naturally-occurring produced water extracted during the oil and natural gas production process over the life of a well.
In aggregate, we command a daily permitted disposal capacity of more than 2.3 million barrels per day across our operational footprint. Our disposal services cater to both flowback water generated during and shortly following well completion operations and naturally-occurring produced water extracted during the oil and natural gas production process over the life of a well. ● Solids Management .
For purposes of the Tax Receivable Agreements, cash savings in tax generally will be calculated by comparing our actual tax liability (using the actual applicable U.S. federal income tax rate and an assumed combined state and local income and franchise tax rate) to the amount we would have been required to pay had we not been able to utilize any of the tax benefits subject to the Tax Receivable Agreements.
For purposes of the TRAs, cash savings in tax generally will be calculated by comparing our actual tax liability (using the actual applicable U.S. federal income tax rate and an assumed combined state and local income and franchise tax rate) to the amount we would have been required to pay had we not been able to utilize any of the tax benefits subject to the TRAs.
While we believe that the new presidential administration will provide regulatory tailwinds for our industry, industry conditions are influenced by numerous factors over which we have no control, including, but not limited to those discussed in “ Cautionary Statement Regarding Forward-Looking Statements .” Political instability or armed conflict in crude oil or natural gas producing regions could have a material adverse impact on our business, financial condition or future results.
While we believe that the current presidential administration will provide regulatory tailwinds for our industry, industry conditions are influenced by numerous factors over which we have no control, including, but not limited to those discussed in “ Cautionary Note Regarding Forward-Looking Statements .” Political instability or armed conflict in crude oil or natural gas producing regions could have a material adverse impact on our business, financial condition or future results.
ASTs can also be set up as part of our Water Treatment & Recycling service offerings, which can be bundled with our Water Sourcing and Water 16 Table of Contents Transfer services. A 40,000 barrel AST can be delivered by three trucks and installed in a single day, replacing the equivalent of 80 trucks delivering individual 500-barrel mobile storage tanks.
ASTs can also be set up as part of our Water Treatment & Recycling service offerings, which can be bundled with our Water Sourcing and Water Transfer services. A 40,000 barrel AST can be delivered by three trucks and installed in a single day, replacing the equivalent of 80 trucks delivering individual 500-barrel mobile storage tanks.
If our systems for protecting against cybersecurity risks prove not to be sufficient, we could be adversely affected by, among other things: loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; interruption of our business operations; and increased costs 35 Table of Contents required to prevent, respond to, or mitigate cybersecurity attacks.
If our systems for protecting against cybersecurity risks prove not to be sufficient, we could be adversely affected by, among other things: loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; interruption of our business operations; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks.
As a result, our operations as well as the operations of our oil and natural gas exploration and production customers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs. In the U.S., no comprehensive climate change legislation has been implemented at the federal level.
As a result, our operations as well as the operations of our oil and natural gas E&P customers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs. In the U.S., no comprehensive climate change legislation has been implemented at the federal level.
If we were to incur a significant 34 Table of Contents liability for which we were not fully insured, it could have a material adverse effect on our business, results of operations, financial condition and liquidity. Any interruption in our services due to pipeline breakdowns or necessary maintenance or repairs could reduce sales revenues and earnings.
If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our business, results of operations, financial condition and liquidity. Any interruption in our services due to pipeline breakdowns or necessary maintenance or repairs could reduce sales revenues and earnings.
Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. We are subject to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and therefore are required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose.
Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. We are subject to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and therefore are required to make a formal assessment of the effectiveness of our internal controls over financial 46 Table of Contents reporting for that purpose.
We sell chemicals and provide services primarily to leading E&P operators and pressure-pumping service companies in the U.S. We also provide customized water treatment and flow assurance solutions to our customers throughout the lifecycle of a well. Chemical Technologies Service Lines Our Chemical Technologies segment is made up of the following service lines: ● Chemical Manufacturing.
We sell chemicals and provide services primarily to leading E&P operators and pressure-pumping service companies in the U.S. We also provide customized water treatment and flow assurance solutions to our customers throughout the lifecycle of a well. 21 Table of Contents Chemical Technologies Service Lines Our Chemical Technologies segment is made up of the following service lines: ● Chemical Manufacturing.
For instance, some states require E&P companies to report certain information regarding the water they use for hydraulic fracturing and to monitor the quality of groundwater surrounding some wells stimulated by hydraulic fracturing. Any such decrease in the availability of water, or demand for water services, could adversely affect our business and results of operations.
For instance, some states require E&P companies to report certain information regarding the water they use for hydraulic fracturing and to 35 Table of Contents monitor the quality of groundwater surrounding some wells stimulated by hydraulic fracturing. Any such decrease in the availability of water, or demand for water services, could adversely affect our business and results of operations.
Certain large midstream companies offer some water-oriented and infrastructure services, though these are generally ancillary to their core businesses of gathering and transporting oil and gas volumes. There are also public water-midstream-focused competitors. Additionally, certain of our E&P customers have invested in water infrastructure for their own operations.
Certain large midstream companies offer some water-oriented and infrastructure services, though these are generally ancillary to their core businesses of gathering and transporting oil and gas volumes. There are also a limited number of public water-midstream-focused competitors. Additionally, certain of our E&P customers have invested in water infrastructure for their own operations.
We have an internal program of inspection designed to monitor and enforce compliance with worker safety requirements. 27 Table of Contents In addition, as part of the services we provide, we operate as a motor carrier and therefore are subject to regulation by the U.S. Department of Transportation (“U.S. DOT”) and analogous state agencies.
We have an internal program of inspection designed to monitor and enforce compliance with worker safety requirements. In addition, as part of the services we provide, we operate as a motor carrier and therefore are subject to regulation by the U.S. Department of Transportation (“U.S. DOT”) and analogous state agencies.
In addition to the property and personal losses from these accidents, the frequency and severity of these incidents affect our operating costs and insurability, and our relationship with customers, employees and regulatory agencies. In particular, in recent years many of our large customers have placed an increased emphasis on the safety records of their service providers.
In addition to the property and personal losses from these accidents, the frequency and severity of these incidents affect our operating costs and insurability, and our relationship with customers, employees and regulatory agencies. In particular, 31 Table of Contents in recent years many of our large customers have placed an increased emphasis on the safety records of their service providers.
However, despite this general allocation of risk, we may be unsuccessful in enforcing contractual terms, incur an unforeseen liability that is not addressed by the scope of the contractual provisions or be 29 Table of Contents required to enter into an MSA with terms that vary from our standard allocations of risk, as described above.
However, despite this general allocation of risk, we may be unsuccessful in enforcing contractual terms, incur an unforeseen liability that is not addressed by the scope of the contractual provisions or be required to enter into an MSA with terms that vary from our standard allocations of risk, as described above.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our Class A common stock respecting dividends and distributions, as our 45 Table of Contents board of directors may determine.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our Class A common stock respecting dividends and distributions, as our board of directors may determine.
Additionally, we rely on a number of vendors, suppliers, and in some cases sole-source suppliers, service providers, toll manufacturers and collaborations with other industry participants to provide us with chemicals, feedstocks 37 Table of Contents and other raw materials, along with energy sources and, in certain cases, facilities that we need to operate our business.
Additionally, we rely on a number of vendors, suppliers, and in some cases sole-source suppliers, service providers, toll manufacturers and collaborations with other industry participants to provide us with chemicals, feedstocks and other raw materials, along with energy sources and, in certain cases, facilities that we need to operate our business.
The issue of climate change continues to attract considerable attention in the U.S. and foreign countries. As a result, numerous proposals have been made and are likely to continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of GHGs as well as to eliminate such future emissions.
The issue of climate change continues to attract considerable attention in the U.S. and foreign countries. As a result, numerous proposals have been made and may continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of GHGs as well as to eliminate such future emissions.
Water Infrastructure Competition While our customers typically award contracts after a competitive bidding process, the presence of existing infrastructure in an acreage position can be critical in realizing economic value.
Water Infrastructure Competition While our customers often award contracts after a competitive bidding process, the presence of existing infrastructure in an existing acreage position can be critical in realizing economic value.
Any loss of the RCRA exclusion for drilling fluids, produced waters and related wastes could result in an increase in our and our oil and gas producing customers’ costs to manage and dispose of generated wastes, which 21 Table of Contents could have a material adverse effect on our and our customers’ results of operations and financial position.
Any loss of the RCRA exclusion for drilling fluids, produced waters and related wastes could result in an increase in our and our oil and gas producing customers’ costs to manage and dispose of generated wastes, which could have a material adverse effect on our and our customers’ results of operations and financial position.
Any cost increase that we are not able to pass on to our customers could have a material adverse effect on our business, results of operations, financial condition and liquidity. 38 Table of Contents There are several raw materials for which there are only a limited number of suppliers or a single supplier.
Any cost increase that we are not able to pass on to our customers could have a material adverse effect on our business, results of operations, financial condition and liquidity. There are several raw materials for which there are only a limited number of suppliers or a single supplier.
In addition, we may not be able to realize tax benefits covered under the Tax Receivable Agreements, and we would not be able to recover any payments previously made by us under the Tax Receivable Agreements, even if the corresponding tax benefits (including any claimed increase in the tax basis of SES Holdings’ assets) were subsequently determined to have been unavailable.
In addition, we may not be able to realize tax benefits covered under the TRAs, and we would not be able to recover any payments previously made by us under the TRAs, even if the corresponding tax benefits (including any claimed increase in the tax basis of SES Holdings’ assets) were subsequently determined to have been unavailable.
These persons include the current and past owner or operator of the site where the hazardous substance release occurred and anyone who disposed or arranged for the disposal of a hazardous substance released at the site.
These persons include the current and past owner or operator of the site where the hazardous substance release occurred and anyone who transported, disposed or arranged for the transport or disposal of a hazardous substance released at the site.
In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas such as the Permian Basin, which may cause these conditions to occur with greater frequency or 31 Table of Contents magnify the effects of these conditions.
In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas such as the Permian Basin, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions.
However, despite this general allocation of risk, we might not succeed in enforcing such contractual allocation, might incur an unforeseen liability falling outside the scope 33 Table of Contents of such allocation or may be required to enter into an MSA with terms that vary from the above allocations of risk.
However, despite this general allocation of risk, we might not succeed in enforcing such contractual allocation, might incur an unforeseen liability falling outside the scope of such allocation or may be required to enter into an MSA with terms that vary from the above allocations of risk.
The ESA and comparable state laws restrict activities that may affect endangered or threatened species or their habitats. Similar protections are offered to migratory birds under the MBTA.
The ESA and comparable state laws restrict activities that may affect endangered or threatened species or their habitats. Similar protections are afforded to migratory birds under the MBTA.
Our customers may also incur increased costs or restrictions, delays or cancellations in permitting or operating activities as a result of more stringent environmental laws and regulations, which may result in curtailment of exploration, development or production activities that would reduce the demand for our services.
Our customers may also incur increased costs or restrictions, delays or cancellations in permitting or operating activities as a result of more stringent environmental laws and regulations, which may result in 24 Table of Contents curtailment of exploration, development or production activities that would reduce the demand for our services.
The TRA Holders will not reimburse us for any payments previously made under the Tax Receivable Agreements if any tax benefits that have given rise to payments under the Tax Receivable Agreements are subsequently disallowed, except that excess payments made to the TRA Holders will be netted against payments that would otherwise be made to the TRA Holders, if any, after our determination of such excess.
The TRA Holders will not reimburse us for any payments previously made under the TRAs if any tax benefits that have given rise to payments under the TRAs are subsequently disallowed, except that excess payments made to the TRA Holders will be netted against payments that would otherwise be made to the TRA Holders, if any, after our determination of such excess.
Based on specific market factors and circumstances at the time of prospective impairment reviews and the continuing evaluation of development plans, economics and other factors, we may be required to write 50 Table of Contents down the carrying value of our long-lived and finite- lived intangible assets.
Based on specific market factors and circumstances at the time of prospective impairment reviews and the continuing evaluation of development plans, economics and other factors, we may be required to write down the carrying value of our long-lived and finite- lived intangible assets.
The foregoing number is merely an estimate and the actual payment could differ materially. There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreements. Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we will determine.
The foregoing number is merely an estimate and the actual payment could differ materially. There can be no assurance that we will be able to finance our obligations under the TRAs. Payments under the TRAs will be based on the tax reporting positions that we will determine.
These and other states have begun to consider or adopt laws and regulations 40 Table of Contents that may restrict or otherwise prohibit oilfield fluid disposal in certain areas or underground disposal wells, and state agencies implementing these requirements may issue orders directing certain wells where seismic incidents have occurred to restrict or suspend disposal well operations or impose standards related to disposal well construction and monitoring.
These and other states have begun to consider or adopt laws and regulations that may restrict or otherwise prohibit oilfield fluid disposal in certain areas or underground disposal wells, and state agencies implementing these requirements may issue orders directing certain wells where seismic incidents have occurred to restrict or suspend disposal well operations or impose standards related to disposal well construction and monitoring.
Applicable U.S. Treasury regulations provide for certain safe harbors from treatment as a publicly-traded partnership, and we intend to operate such that exchanges or other transfers of SES Holdings LLC Units qualify for one or more such safe harbors.
Treasury regulations provide for certain safe harbors from treatment as a publicly-traded partnership, and we intend to operate such that exchanges or other transfers of SES Holdings LLC Units qualify for one or more such safe harbors.
Any new restrictions on the development of new products or use of existing products, increases in regulation of those products, or disclosure of confidential, competitive information relating to the products could have an adverse effect on our operations and our cost of doing business.
Any new restrictions on the development of new products or use of existing products, increases in regulation of those products, or disclosure of confidential, competitive information relating to the products could have an adverse effect on our operations and our 43 Table of Contents cost of doing business.
The term of each Tax Receivable Agreement commenced upon the completion of the Select 144A Offering and will continue until all tax benefits that are subject to such Tax Receivable Agreement have been utilized or expired, unless we exercise our right to terminate the Tax Receivable Agreements (or the Tax Receivable Agreements are terminated due to other circumstances, including our breach of a material obligation thereunder or certain mergers or other changes of control) and we make the termination payment specified in the Tax Receivable Agreements.
The term of each TRA commenced upon the completion of the Select 144A Offering and will continue until all tax benefits that are subject to such TRAs have been utilized or expired, unless we exercise our right to terminate the TRAs (or the TRAs are terminated due to other circumstances, including our breach of a material obligation thereunder or certain mergers or other changes of control) and we make the termination payment specified in the TRAs.
The OPA applies to vessels, offshore facilities, and onshore facilities, including E&P facilities that may affect waters of the U.S. Under OPA, responsible parties including owners and operators of onshore facilities may be held strictly liable for oil cleanup costs and natural resource damages as well as a variety of public and private damages that may result from oil spills.
The OPA applies to vessels, offshore facilities, and onshore facilities, including E&P facilities that may affect WOTUS. Under the OPA, responsible parties including owners and operators of onshore facilities may be held strictly liable for oil cleanup costs and natural resource damages as well as a variety of public and private damages that may result from oil spills.
If we incur additional indebtedness or issue additional equity securities, our profitability may be reduced and our stockholders may experience significant dilution. 43 Table of Contents Our Sustainability-Linked Credit Facility subjects us to various financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our Sustainability-Linked Credit Facility.
If we incur additional indebtedness or issue additional equity securities, our profitability may be reduced and our stockholders may experience significant dilution. Our Sustainability-Linked Credit Facility subjects us to various financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our Sustainability-Linked Credit Facility.
We are all connected by WATER: our values – Working Safe, Accountability, Teamwork, Excellence, Respect. These are the foundation for how we strive to accomplish our mission to deliver operational excellence and develop sustainable water and chemistry solutions every day. Our employees put our core values into action daily to improve operational excellence, safety, and the customer experience.
We are all connected by WATER, including our values – Working Safe, Accountability, Teamwork, Excellence, Respect. These are the foundations for how we accomplish our mission to deliver operational excellence and develop sustainable water and chemistry solutions every day. Our employees put our core values into action daily to improve operational excellence, safety, and the customer experience.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations. The Oil Pollution Act of 1990 (“OPA”) amends the CWA and sets minimum standards for prevention, containment and cleanup of oil spills in waters of the U.S.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations. The Oil Pollution Act of 1990 (“OPA”) amends the CWA and sets minimum standards for prevention, containment and cleanup of oil spills in WOTUS.
As a result of either an early termination or a “change of control” (as defined in the Tax Receivable Agreements, as amended), we could be required to make payments under the Tax Receivable Agreements that exceed our actual cash tax savings under the Tax Receivable Agreements.
As a result of either an early termination or a “change of control” (as defined in the TRAs as amended), we could be required to make payments under the TRAs that exceed our actual cash tax savings under the TRAs.
Importantly, these solutions also reduce the environmental impact and carbon footprint of our customers’ operations by limiting spills and diesel exhaust emissions, as well as reducing the social impact of heavy vehicle traffic in the communities in which we operate. We also develop and source water treatment and completion chemicals that are a critical part of the U.S. energy industry.
Importantly, these solutions also aim to reduce the environmental impact and carbon footprint of our customers’ operations by limiting spills and diesel exhaust emissions, as well as reducing the social impact of heavy vehicle traffic in the communities in which we operate. 11 Table of Contents We also develop and source water treatment and completion chemicals that are a critical part of the U.S. energy industry.
This may be more likely as we continue to grow, if we experience high employee turnover or labor shortage, or add inexperienced personnel. See Part I, Item 1. “Business – Environmental and Occupational Safety and Health Matters” for more discussion on worker safety matters.
This may be more likely as we 41 Table of Contents continue to grow, if we experience high employee turnover or labor shortage, or add inexperienced personnel. See Part I, Item 1. “Business – Environmental and Occupational Safety and Health Matters” for more discussion on worker safety matters.
As a result, in such circumstances, we could make payments that are greater than our actual cash tax savings, if any, and may not be able to recoup those payments, which could adversely affect our liquidity. See Part III, Item 13.
As a result, in such circumstances, we could make payments that are greater than our actual cash tax savings, if 51 Table of Contents any, and may not be able to recoup those payments, which could adversely affect our liquidity. See Part III, Item 13.
We provide a diverse set of primary and secondary containment solutions for the temporary storage and containment of water and fluids. We believe we are the largest provider of high-capacity aboveground water storage tanks (“ASTs”) in the U.S.
We provide a diverse set of primary and secondary containment solutions for the temporary storage and containment of water and fluids. We believe we are the largest provider of high-capacity above-ground storage tanks (“ASTs”) in the U.S.
These hazards include chemical spills, pipeline leaks and ruptures, storage tank leaks, discharges or releases of toxic or hazardous substances or gases and other hazards incident to the manufacturing, processing, handling, transportation and storage of hazardous chemicals.
These hazards include chemical spills, pipeline leaks and ruptures, storage tank leaks, discharges or releases of toxic or 37 Table of Contents hazardous substances or gases and other hazards incident to the manufacturing, processing, handling, transportation and storage of hazardous chemicals.
Our flowback and well testing services, covering a dynamic range of temperature, pressure, volume and H2S concentrations, adds value for our customers by providing well productivity data associated with our services, including fracturing support, fracturing plug drill out, flaring operations, ventless flowback operations, sand management and production testing.
Our well testing and flowback services, covering a dynamic range of temperature, pressure, volume and H2S concentrations, aims to add value for our customers by providing well productivity data associated with our services, including fracturing support, fracturing plug drill out, flaring operations, ventless flowback operations, sand management and production testing.
We demonstrate this commitment in our employment practices, through our Code of Conduct, our Equal Employment Opportunity Employer Policy, and our Anti-Harassment Policy, as well as through our policies on safety and security for our employees.
We demonstrate this commitment in our employment practices, through our Code of Conduct, our Equal Employment Opportunity Employer Policy, and our Anti-Harassment Policy, as well as through our policies 15 Table of Contents on safety and security for our employees.
Provisions of our amended and restated certificate of incorporation and amended and restated bylaws impose various procedural and other 44 Table of Contents requirements, which could make it more difficult for stockholders to effect certain corporate actions.
Provisions of our amended and restated certificate of incorporation and amended and restated bylaws impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions.
For a single representative multi-well pad that requires five million barrels of water, we can utilize our pipe and hose infrastructure solutions and eliminate the approximate equivalent of 38,500 tank truck loads from the roads. This significantly reduces the capital and operating expenditure costs for our customers while dramatically improving the safety of our operations.
For a single representative multi-well pad that requires five million barrels of water, we can utilize our pipe and hose infrastructure solutions and eliminate the approximate equivalent of 38,500 tank truck loads from the roads. This can significantly reduce the capital and operating expenses for our customers while dramatically improving the safety of our operations.

… 323 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+2 added−1 removed11 unchanged
Biggest changeOur CTO has an Engineering degree from Rice University, a Master of Business Administration from Harvard Business School, more than 20 years' work experience, and a background in leading digital / software development organizations. Supporting our CTO is the Company’s Vice President of Corporate Platform and Infrastructure and our team of cybersecurity experts (collectively with the CTO, the “Technology Team”).
Biggest changeOur CTO focuses on current and emerging cybersecurity matters and is responsible for establishing and maintaining the Company’s cybersecurity-related policies and procedures. Our CTO has an Engineering degree from Rice University, a Master of Business Administration from Harvard Business School, more than 20 years' work experience, and a background in leading digital / software development organizations.
We seek to assess, identify and manage cybersecurity risks for our IT environment, leveraging the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”), through the processes described below: ​ ● Risk Assessment: We recognize that cybersecurity threats are constantly evolving, and we have implemented risk management procedures designed to protect our systems and data.
We seek to assess, identify and manage cybersecurity risks for our IT environment, leveraging the National Institute of Standards and Technology Cyber Security Framework (“NIST CSF”), through the processes described below: ​ ● Risk Assessment: We recognize that cybersecurity threats are constantly evolving, and we have implemented risk management procedures designed to protect our systems and data.
In the event of a cybersecurity incident, we utilize a range of standard incident response practices to attempt to identify, analyze, contain, and recover the event with the goal of minimizing the impact and restoring normal operations. ​ ● Cybersecurity Training and Awareness: We require that our employees receive periodic cybersecurity trainings including phishing campaigns and general awareness campaigns. ​ 51 Table of Contents ● Access Controls: Users are provided with access consistent with the principle of least privilege, which requires that users be given no more access than necessary to complete their job functions.
In the event of a cybersecurity incident, we utilize a range of standard incident response practices to attempt to identify, analyze, contain, and recover the event with the goal of minimizing the impact and restoring normal operations. ​ ● Cybersecurity Training and Awareness: We require that our employees receive periodic cybersecurity trainings including phishing campaigns and general awareness campaigns. ​ ● Access Controls: Users are provided with access consistent with the principle of least privilege, which requires that users be given no more access than necessary to complete their job functions.
No security measure is infallible. See “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our information or operational technology systems.
No security measure is 55 Table of Contents infallible. See “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our information or operational technology systems.
Board of Directors’ Oversight and Management’s Role Our Board of Directors has delegated the responsibility for the oversight of risks from cybersecurity threats and our cybersecurity practices to the Audit Committee. Our Board of Directors and our Audit Committee receive regular updates on potential cybersecurity risks and mitigation strategies from the Company’s Chief Technology Officer (“CTO”).
Board of Directors’ Oversight and Management’s Role Our Board of Directors has delegated the responsibility for the oversight of risks from cybersecurity threats and our cybersecurity practices to the Audit Committee.
Removed
Management is responsible for assessing and managing risks from cybersecurity threats and implementing the Company’s cybersecurity strategies. Our CTO focuses on current and emerging cybersecurity matters and is responsible for establishing and maintaining the Company’s cybersecurity-related policies and procedures.
Added
Our Board of Directors and our Audit Committee receive regular updates on potential cybersecurity risks and mitigation strategies from the Company’s chief technology officer (“CTO”), who leverages both internal resources and third-party intelligence and contributions to monitor and manage these risks. Management is responsible for assessing and managing risks from cybersecurity threats and implementing the Company’s cybersecurity strategies.
Added
Supporting our CTO is the Company’s Vice President of Corporate Platform and Infrastructure and our team of cybersecurity experts (collectively with the CTO, the “Technology Team”).

Item 2. Properties

Properties — owned and leased real estate

3 edited+4 added−1 removed0 unchanged
Biggest changeHowever, we continue to evaluate the purchase or lease of additional properties or the sale or consolidation of our properties, as our business requires. ​ The following table shows our active leased and owned properties categorized by segment as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classification ​ Water Infrastructure ​ Water Services ​ Chemical Technologies ​ Corporate & Other ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ 43 ​ 45 ​ 4 ​ 6 ​ 98 Owned ​ 35 ​ 38 ​ 6 ​ — ​ 79 ​ ​ 78 ​ 83 ​ 10 ​ 6 ​ 177 ​ ​ ​ ​
Biggest changeHowever, we continue to evaluate the purchase or lease of additional properties or the sale or consolidation of our properties, as our business requires. ​ ​ ​ ​ ​ ​ 56 Table of Contents
Our leased properties are subject to various lease terms and expirations. ​ 52 Table of Contents We believe all the properties that we currently occupy are suitable for their intended uses. We believe that our current facilities are sufficient to conduct our operations.
Our leased properties are subject to various lease terms and expiration dates. ​ We believe all the properties that we currently occupy are suitable for their intended uses. We believe that our current facilities are sufficient to conduct our operations.
In connection with our Chemical Technologies segment, we own two primary manufacturing facilities in Texas, and we lease three primary regional distribution centers through which we provide products to our customers in all major U.S. shale basins.
The substantial majority of our revenue-generating activities occur at our customers’ locations, where our equipment and personnel are deployed to deliver services directly in the field. ● In connection with our Chemical Technologies segment, we own two primary manufacturing facilities in Texas and lease three regional distribution centers through which we provide products to customers across all major U.S. shale basins.
Removed
ITEM 2. PROPERTIES We lease space for our principal executive offices in Houston and Gainesville, Texas and we also lease local office space in the regions in which we operate. Additionally, we own and lease numerous storage facilities, trucking facilities and sales and administrative offices throughout the geographic areas in which we operate.
Added
PROPERTIES We own our headquarters building in Gainesville, Texas, which also houses our remote operating center, and we lease office space in Houston, Texas, as well as local offices across the regions in which we operate. ​ ● Our Water Infrastructure segment includes both owned and leased disposal and recycling facilities, owned landfill assets that support our long-term waste management capabilities and hundreds of miles of pipelines utilizing owned, leased or permitted rights-of-way and easements.
Added
The substantial majority of our revenue-producing activities occur at our various water infrastructure facilities, where we process, recycle, manage or dispose of produced water and other waste streams on behalf of our customers or through transportation fees across our infrastructure networks.
Added
As of December 31, 2025, we had 130 active SWDs and more than 20 active or under construction recycling facilities. ● In support of our Water Services segment, we both own and lease a range of field operations facilities that support our various lines of business.
Added
Our leased properties are subject to various lease terms and expiration dates. Chemicals are either delivered directly to customer locations or applied on-site by our Chemical Technologies personnel as part of our integrated service offering.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+0 added−0 removed7 unchanged
Biggest changeShares remaining available under the 2024 Plan may be issued other than with respect to options, warrants or rights. ​ Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares ​ Maximum Dollar Value of ​ ​ Total Number of ​ Weighted-Average Price ​ Purchased as Part of Publicly ​ Shares that May Yet be Purchased Period ​ Shares Purchased ​ Paid Per Share (1) ​ Announced Plans or Programs ​ Under the Plans or Programs (2) October 1, 2024 to October 31, 2024 ​ 2,648 ​ ​ $10.59 ​ — ​ ​ $21,177,432 November 1, 2024 to November 30, 2024 ​ 125,566 ​ ​ $12.65 ​ — ​ ​ $21,177,432 December 1, 2024 to December 31, 2024 ​ 10,471 ​ ​ $14.21 ​ — ​ ​ $21,177,432 ​ (1) The average price paid per share includes commissions.
Biggest changeShares remaining available under the 2024 Plan may be issued other than with respect to options, warrants or rights. ​ Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased ​ Weighted-Average Price Paid Per Share (1) ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (2) October 1, 2025 to October 31, 2025 ​ — ​ ​ $0.00 ​ — ​ $21,177,432 November 1, 2025 to November 30, 2025 ​ 138,038 ​ ​ $9.62 ​ — ​ $21,177,432 December 1, 2025 to December 31, 2025 ​ 10,799 ​ ​ $10.99 ​ — ​ $21,177,432 ​ (1) The average price paid per share includes commissions.
Our future dividend policy is within the discretion of our board of directors, and all future dividend payments are subject to quarterly review and approval by our board of directors, and will depend upon then-existing conditions, including our results of operations and financial condition, capital requirements, business prospects, statutory and contractual 53 Table of Contents restrictions on our ability to pay dividends, including restrictions contained in our Sustainability-Linked Credit Facility and other factors our board of directors may deem relevant.
Our future dividend policy is within the discretion of our board of directors, and all future dividend payments are subject to quarterly review and approval by our board of directors, and will depend upon then-existing conditions, including our results of operations and financial condition, capital requirements, business prospects, statutory and contractual restrictions on our ability to pay dividends, including restrictions contained in our Sustainability-Linked Credit Facility and other factors our board of directors may deem relevant.
Repurchases under the share repurchase program may be made at any time or from time to time, without prior notice, in the open market or in privately negotiated transactions at prevailing market prices, or such other means as will comply with applicable state and federal securities laws and regulations, including the provisions of the Securities Exchange Act of 1934, including Rule 10b5-1 and, to the extent practicable or advisable, Rule 10b-18 thereunder, and consistent with the Company’s contractual limitations and other requirements. ​ STOCK PERFORMANCE GRAPH ​ The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall the information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing. ​ Set forth below is a line graph comparing the cumulative total stockholder return for the Company’s Class A common stock, based on the market price of the Class A common stock and assuming reinvestment of dividends, with the cumulative total stockholder return of companies with the New York Stock Exchange Market Value Index (the Company’s broad equity market index) and the Philadelphia Stock Exchange Oil Service Sector Index for the period commencing on December 31, 2019 and ending on December 31, 2024.
Repurchases under the share repurchase program may be made at any time or from time to time, without prior notice, in the open market or in privately negotiated transactions at prevailing market prices, or such other means as will comply with applicable state and federal securities laws and regulations, including the provisions of the Securities Exchange Act of 1934, including Rule 10b5-1 and, to the extent practicable or advisable, Rule 10b-18 thereunder, and consistent with the Company’s contractual limitations and other requirements. ​ 58 Table of Contents ​ ​ STOCK PERFORMANCE GRAPH ​ The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall the information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing. ​ Set forth below is a line graph comparing the cumulative total stockholder return for the Company’s Class A common stock, based on the market price of the Class A common stock and assuming reinvestment of dividends, with the cumulative total stockholder return of companies with the New York Stock Exchange Market Value Index (the Company’s broad equity market index) and the Philadelphia Stock Exchange Oil Service Sector Index for the period commencing on December 31, 2020 and ending on December 31, 2025.
On November 8, 2023, our board of directors authorized a share repurchase program of up to $25 million of outstanding shares of Class A common stock. This new authorization was in addition to the $7.5 million 54 Table of Contents remaining outstanding under our previous authorization, as of November 8, 2023.
On November 8, 2023, our board of directors authorized a share repurchase program of up to $25 million of outstanding shares of Class A common stock. This new authorization was in addition to the $7.5 million remaining outstanding under our previous authorization, as of November 8, 2023.
The stock price performance included in this graph is not necessarily indicative of future stock price performance. ​ ​ 55 Table of Contents ​ ​ ITEM 6. RESERVED ​
The stock price performance included in this graph is not necessarily indicative of future stock price performance. ​ ​ ​ ITEM 6. RESERVED ​ 59 Table of Contents
As of December 31, 2024, approximately $21.2 remains outstanding under our prior authorizations, in the aggregate.
As of December 31, 2025, approximately $21.2 remains outstanding under our prior authorizations, in the aggregate.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A common stock is listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “WTTR.” As of February 17, 2025, there were 152 stockholders of record of our Class A common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A common stock is listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “WTTR.” As of February 16, 2026, there were 276 stockholders of record of our Class A common stock.
The Company most recently announced a quarterly dividend of $0.07 per share on January 23, 2025 to be paid on February 14, 2025 to holders of record as of the close of business on February 4, 2025.
The Company most recently announced a quarterly dividend of $0.07 per share on January 22, 2026 to be paid on February 18, 2026 to holders of record as of the close of business on February 6, 2026.
The following table provides information about our Class A common stock that may be issued under our equity compensation plans as of December 31, 2024. ​ Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights(1) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(2) (a) (b) (c) Equity compensation plans approved by security holders 1,030,595 $19.89 8,783,179 Equity compensation plans not approved by security holders — — — Total 1,030,595 $19.89 8,783,179 ​ (1) Only stock options have an exercise price.
See “Note 12 — Equity-Based Compensation” for a description of our equity compensation plans. 57 Table of Contents The following table provides information about our Class A common stock that may be issued under our equity compensation plans as of December 31, 2025. ​ Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights(1) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(2) (a) (b) (c) Equity compensation plans approved by security holders 856,092 $21.98 8,640,281 Equity compensation plans not approved by security holders — — — Total 856,092 $21.98 8,640,281 ​ (1) Only stock options have an exercise price.
On November 3, 2022, our board of directors approved an amendment to the ESPP, which suspended all offerings on or after December 1, 2022. Our board of directors reserves the right to recommence offerings pursuant to its discretion and the terms of the ESPP. See “Note 12 — Equity-Based Compensation” for a description of our equity compensation plans.
On November 3, 2022, our board of directors approved an amendment to the ESPP, which suspended all offerings on or after December 1, 2022. Our board of directors reserves the right to recommence offerings pursuant to its discretion and the terms of the ESPP.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+89 added−58 removed53 unchanged
Biggest changeThe results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 2023 Dollars Percentage ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Revenue ​ ​ ​ ​ ​ Water Infrastructure ​ $ 290,900 ​ $ 229,970 ​ $ 60,930 ​ 26.5 % ​ Water Services ​ ​ 901,657 ​ ​ 1,032,896 ​ ​ (131,239) (12.7) % ​ Chemical Technologies ​ ​ 259,518 ​ ​ 322,487 ​ (62,969) (19.5) % ​ Total revenue ​ 1,452,075 ​ 1,585,353 ​ (133,278) (8.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs of revenue ​ ​ ​ ​ ​ ​ ​ Water Infrastructure ​ ​ 137,573 ​ ​ 138,191 ​ (618) (0.4) % ​ Water Services ​ 720,876 ​ 814,609 ​ (93,733) (11.5) % ​ Chemical Technologies ​ ​ 220,617 ​ ​ 262,078 ​ ​ (41,461) ​ (15.8) % ​ Depreciation, amortization and accretion ​ 153,543 ​ 138,813 ​ 14,730 10.6 % ​ Total costs of revenue ​ 1,232,609 ​ 1,353,691 ​ (121,082) (8.9) % ​ Gross profit ​ 219,466 ​ 231,662 ​ (12,196) (5.3) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 159,978 ​ ​ 155,548 ​ 4,430 2.8 % ​ Depreciation and amortization ​ 3,404 ​ ​ 2,276 ​ 1,128 49.6 % ​ Impairments and abandonments ​ ​ 1,237 ​ ​ 12,607 ​ ​ (11,370) ​ NM ​ ​ Lease abandonment costs ​ 358 ​ ​ 42 ​ 316 NM ​ ​ Total operating expenses ​ 164,977 ​ 170,473 ​ (5,496) (3.2) % ​ Income from operations ​ 54,489 ​ 61,189 ​ (6,700) (10.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ Gain (loss) on sales of property and equipment and divestitures, net ​ ​ 3,255 ​ ​ (210) ​ ​ 3,465 NM ​ ​ Interest expense, net ​ (6,965) ​ ​ (4,393) ​ (2,572) 58.5 % ​ Tax receivable agreements expense ​ ​ (836) ​ ​ (38,187) ​ ​ 37,351 NM ​ ​ Other ​ (573) ​ ​ 2,424 ​ (2,997) NM ​ ​ Income before income tax (expense) benefit and equity in losses of unconsolidated entities ​ 49,370 ​ 20,823 ​ 28,547 137.1 % ​ Income tax (expense) benefit ​ (13,568) ​ 60,196 ​ (73,764) (122.5) % ​ Equity in losses of unconsolidated entities ​ ​ (352) ​ (1,800) ​ 1,448 NM ​ ​ Net income ​ $ 35,450 ​ $ 79,219 ​ $ (43,769) (55.3) % ​ ​ Revenue Our revenue decreased $133.3 million, or 8.4%, to $1.45 billion for the year ended December 31, 2024, compared to $1.59 billion for the year ended December 31, 2023.
Biggest changeThe results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Dollars ​ ​ ​ Percentage ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Water Infrastructure ​ $ 313,239 ​ $ 290,900 ​ $ 22,339 ​ 7.7 % ​ Water Services ​ ​ 786,525 ​ ​ 901,657 ​ ​ (115,132) (12.8) % ​ Chemical Technologies ​ ​ 307,580 ​ ​ 259,518 ​ 48,062 18.5 % ​ Total revenue ​ 1,407,344 ​ 1,452,075 ​ (44,731) (3.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs of revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Water Infrastructure ​ ​ 143,940 ​ ​ 137,573 ​ 6,367 4.6 % ​ Water Services ​ 635,225 ​ 720,876 ​ (85,651) (11.9) % ​ Chemical Technologies ​ ​ 251,284 ​ ​ 220,617 ​ ​ 30,667 ​ 13.9 % ​ Depreciation, amortization and accretion ​ 174,497 ​ 153,543 ​ 20,954 13.6 % ​ Total costs of revenue ​ 1,204,946 ​ 1,232,609 ​ (27,663) (2.2) % ​ Gross profit ​ 202,398 ​ 219,466 ​ (17,068) (7.8) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 161,316 ​ ​ 159,978 ​ 1,338 0.8 % ​ Depreciation and amortization ​ 5,321 ​ ​ 3,404 ​ 1,917 56.3 % ​ Impairments and abandonments ​ ​ 6,221 ​ ​ 1,237 ​ ​ 4,984 ​ NM ​ ​ Lease abandonment costs ​ 734 ​ ​ 358 ​ 376 105.0 % ​ Total operating expenses ​ 173,592 ​ 164,977 ​ 8,615 5.2 % ​ Income from operations ​ 28,806 ​ 54,489 ​ (25,683) (47.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sales of property and equipment and divestitures, net ​ ​ 10,338 ​ ​ 3,255 ​ ​ 7,083 NM ​ ​ Interest expense, net ​ (23,181) ​ ​ (6,965) ​ (16,216) 232.8 % ​ Remeasurement gain on business combination ​ ​ 14,924 ​ ​ — ​ ​ 14,924 NM ​ ​ Tax receivable agreements expense ​ ​ (4,995) ​ ​ (836) ​ ​ (4,159) NM ​ ​ Other ​ (1,141) ​ ​ (573) ​ (568) NM ​ ​ Income before income tax benefit (expense) and equity in losses of unconsolidated entities ​ 24,751 ​ 49,370 ​ (24,619) (49.9) % ​ Income tax benefit (expense) ​ 1,608 ​ (13,568) ​ 15,176 (111.9) % ​ Equity in losses of unconsolidated entities ​ ​ (4,892) ​ (352) ​ (4,540) NM ​ ​ Net income ​ $ 21,467 ​ $ 35,450 ​ $ (13,983) (39.4) % ​ ​ Revenue Our revenue decreased $44.7 million, or 3.1%, to $1.407 billion for the year ended December 31, 2025, compared to $1.452 billion for the year ended December 31, 2024.
As a result of the Russian invasion of the Ukraine, the U.S., the United Kingdom, the member states of the European Union and other public and private actors have imposed severe sanctions on Russian financial institutions, businesses and individuals.
As a result of the Russian invasion of Ukraine, the U.S., the United Kingdom, the member states of the European Union and other public and private actors have imposed severe sanctions on Russian financial institutions, businesses and individuals.
We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP. Note Regarding Non-GAAP Financial Measures EBITDA and Adjusted EBITDA are not financial measures presented in accordance with GAAP.
We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP. Note Regarding Non-GAAP Financial Measures EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are not financial measures presented in accordance with GAAP.
As of the Closing Date, (i) there were no borrowings outstanding under the Revolving Credit Facility and approximately $20 million of letters of credit issued and outstanding thereunder and (ii) the Term Loan Facility was fully funded. Capitalized terms used but not defined herein have the meaning ascribed to them in the Sustainability-Linked Credit Facility.
As of the Closing Date, (i) there were no borrowings outstanding under the Revolving Credit Facility and approximately $20.0 million of letters of credit issued and outstanding thereunder and (ii) the Term Loan Facility was fully funded. Capitalized terms used but not defined herein have the meaning ascribed to them in the Sustainability-Linked Credit Facility.
As costs of capital has increased, many of our customers have demonstrated their resolve to manage their capital spending within budgets and cash flow from operations and increase redemptions of debt and/or returns of capital to investors.
As costs of capital have increased, many of our customers have demonstrated their resolve to manage their capital spending within budgets and cash flow from operations and increase redemptions of debt and/or returns of capital to investors.
Based on our current cash and cash equivalents balance, operating cash flow, available borrowings under our Sustainability-Linked Credit Facility and the ongoing actions discussed above, we believe that we will be able to maintain sufficient liquidity to satisfy our obligations and remain in compliance with our existing debt covenants through the next twelve months and beyond, prior to giving effect to any future financing that may occur. ​ We intend to finance most of our capital expenditures, contractual obligations and working capital needs with cash on hand, cash generated from operations and borrowings under our Sustainability-Linked Credit Facility.
Based on our current cash and cash equivalents balance, operating cash flow, available borrowings under our Sustainability-Linked Credit Facility and the ongoing actions discussed above, we believe that we will be able to 75 Table of Contents maintain sufficient liquidity to satisfy our obligations and remain in compliance with our existing debt covenants through the next twelve months and beyond, prior to giving effect to any future financing that may occur. ​ We intend to finance most of our capital expenditures, contractual obligations and working capital needs with cash on hand, cash generated from operations and borrowings under our Sustainability-Linked Credit Facility.
Ultimately, we intend to play an important role in the advancement of water and chemical solutions that are designed to meet the sustainability goals of key stakeholders. ​ 58 Table of Contents Our water logistics, treatment, and chemical application expertise, in combination with advanced technology solutions, are applicable to other industries beyond oil and gas.
Ultimately, we intend to play an important role in the advancement of water and chemical solutions that are designed to meet the sustainability goals of key stakeholders. ​ 65 Table of Contents Our water logistics, treatment, and chemical application expertise, in combination with advanced technology solutions, are applicable to other industries beyond oil and gas.
Adjusted EBITDA was $258.4 million for the year ended December 31, 2024 compared to $258.3 million for the year ended December 31, 2023. Liquidity and Capital Resources Overview Our primary sources of liquidity are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations and proceeds from the sale of excess property and equipment.
Adjusted EBITDA was $260.3 million for the year ended December 31, 2025 compared to $258.4 million for the year ended December 31, 2024. Liquidity and Capital Resources Overview Our primary sources of liquidity are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations and proceeds from the sale of excess property and equipment.
The adjustments to EBITDA are generally consistent with such adjustments described in our Sustainability-Linked Credit Facility. See “—Comparison of Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
The adjustments to EBITDA are generally consistent with such adjustments described in our Sustainability-Linked Credit Facility. See “—Comparison of Non-GAAP Financial Measures—EBITDA and Adjusted 69 Table of Contents EBITDA” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
In certain cases, payments under the Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreements. ​ We have assessed the amount of any liability under the Tax Receivable Agreements required under the provisions of ASC 450 in connection with preparing the consolidated financial statements.
In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRAs. ​ We have assessed the amount of any liability under the TRAs required under the provisions of ASC 450 in connection with preparing the consolidated financial statements.
Additionally, consolidation among our customers, such as the consolidation of E&P companies in the Permian Basin, can disrupt our market in the near term and the resulting demand for our services.
Furthermore, consolidation among our customers, such as the consolidation of E&P companies in the Permian Basin, can disrupt our market in the near term and the resulting demand for our services.
For a discussion regarding an acceleration of the amounts payable under the Tax Receivable Agreements if we elect to terminate the Tax Receivable Agreements early or they are terminated early due to our failure to honor a material obligation thereunder or due to certain mergers, asset sales, other forms of business combinations or other changes of control and the potential impact of such an acceleration and the potential impact of such acceleration, please read Part I, Item 1A.
For a discussion regarding an acceleration of the amounts payable under the TRAs if we elect to terminate the TRAs early or they are terminated early due to our failure to honor a material obligation thereunder or due to certain mergers, asset sales, other forms of business combinations or other changes of control and the potential impact of such an acceleration and the potential impact of such acceleration, please read Part I, Item 1A.
Furthermore, free cash flow is not a substitute for, or more meaningful than, net cash provided by (used in) operating activities nor any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as free cash flow.
Furthermore, FCF is not a substitute for, or more meaningful than, net cash provided by (used in) operating activities nor any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as FCF.
While we have positioned ourselves to largely not be reliant on any sole supplier and believe we would be 57 Table of Contents able to find alternative sources for our raw materials, any trading disruption (such as tariffs, product restrictions, etc.) in the trading relationships between the U.S. and other nations may adversely impact our business.
While we have positioned ourselves to largely not be reliant on any sole supplier and believe we would be able to find alternative sources for our raw materials, any trading disruption (such as tariffs, product restrictions, etc.) in the trading relationships between the U.S. and other nations may adversely impact our business.
Recoverability is measured by a comparison of their carrying amount to the estimated undiscounted cash flows to be generated by those assets. If the undiscounted cash flows are less than the carrying amount, we record impairment losses for the excess of their carrying value over the estimated fair value.
Recoverability is measured by a comparison of their carrying amount to the estimated undiscounted cash flows to be generated by those assets. If the undiscounted cash flows are less than the carrying amount, we record impairment losses for the excess of their carrying value over the estimated fair 78 Table of Contents value.
We believe free cash flow provides useful information to investors because it is an important indicator of our liquidity, including our ability to reduce net debt, make strategic investments, pay dividends and distributions and repurchase common stock. Our measure of free cash flow may not be directly comparable to similar measures reported by other companies.
We believe FCF provides useful information to investors because it is an important indicator of our liquidity including our ability to reduce net debt, make strategic investments, pay dividends and distributions and repurchase common stock. Our measure of FCF may not be directly comparable to similar measures reported by other companies.
We are working to further commercialize our services in other businesses and industries through our industrial solutions group. Our Segments Our services are offered through three reportable segments: (i) Water Infrastructure; (ii) Water Services; and (iii) Chemical Technologies. ● Water Infrastructure.
We are working to further commercialize our services in other businesses and industries through our industrial solutions group and equity method investments. Our Segments Our services are offered through three reportable segments: (i) Water Infrastructure; (ii) Water Services; and (iii) Chemical Technologies. ● Water Infrastructure.
We incurred labor and labor-related costs of $530.7 million, $554.4 million and $476.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. The majority of our recurring labor costs are variable and dependent on the market environment and are incurred only while we are providing our operational services.
We incurred labor and labor-related costs of $484.2 million, $530.7 million and $554.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The majority of our recurring labor costs are variable and dependent on the market environment and are incurred only while we are providing our operational services.
This metric works in tandem with gross profit to ensure that we do not seek to increase gross profit at the expense of lower 60 Table of Contents margins, nor pursue higher gross margins at the expense of declining gross profits.
This metric works in tandem with gross profit to ensure that we do not seek to increase gross profit at the expense of lower margins, nor pursue higher gross margins at the expense of declining gross profits.
Most of the costs of serving our customers are variable, i.e., they are incurred only when we provide water and water-related services, or chemicals and chemical-related services to our customers. ​ Labor costs associated with our employees and contract labor comprise the largest portion of our costs of doing business.
Overall, our fixed costs are relatively low and most of the costs of serving our customers are variable, i.e., they are incurred only when we provide water and water-related services, or chemicals and chemical-related services to our customers. ​ Labor costs associated with our employees and contract labor comprise the largest portion of our costs of doing business.
See “—Recent Developments” and “Note 3—Acquisitions” for a description of these transactions. ​ ​ 61 Table of Contents Results of Operations The following table sets forth our results of operations, including revenue by segment, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
See “—Recent Developments” and “Note 3—Acquisitions” for a description of these transactions. ​ 70 Table of Contents Results of Operations The following table sets forth our results of operations, including revenue by segment, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Refer to “Note 6—Leases” for operating lease obligations as of December 31, 2024 and “Note 10—Debt” for an update to our Sustainability-Linked Credit Facility as of December 31, 2024. ​ Cash Flows ​ The following table summarizes our cash flows for the years ended December 31, 2024 and 2023.
Refer to “Note 6—Leases” for operating lease obligations as of December 31, 2025 and “Note 10—Debt” for an update to our Sustainability-Linked Credit Facility as of December 31, 2025. ​ 76 Table of Contents Cash Flows ​ The following table summarizes our cash flows for the years ended December 31, 2025 and 2024.
Accordingly, free cash flow should not be considered a measure of the income generated by our business or discretionary cash available to it to invest in the growth of our business. ​ Factors Affecting the Comparability of Our Results of Operations to Our Historical Results of Operations Our future results of operations may not be comparable to our historical results of operations for the periods presented, primarily for the reasons described below and those described in “—Recent Trends and Outlook” above.
Accordingly, FCF should not be considered a measure of the income generated by our business or discretionary cash available to it to invest in the growth of our business. ​ Factors Affecting the Comparability of Our Results of Operations to Our Historical Results of Operations Our future results of operations may not be comparable to our historical results of operations for the periods presented, primarily for the reasons described below and those described in “—Recent Developments” above.
Our primary uses of capital have been to fund current operations, maintain our asset base, implement technological advancements, make capital expenditures to support organic growth, fund acquisitions and minority investments, pay dividends and distributions, make payments under the Tax Receivable Agreements, and when appropriate, repurchase shares of Class A common stock in the open market.
Our primary uses of capital have been to fund current operations, maintain our asset base, implement technological advancements, make capital expenditures to support organic growth, fund acquisitions and equity investments, pay dividends and distributions, make payments under the TRAs, and when appropriate, repurchase shares of Class A common stock in the open market.
With respect to obligations under each of our Tax Receivable Agreements (except in cases where we elect to terminate the Tax Receivable Agreements early, the Tax Receivable Agreements are terminated early due to certain mergers or other changes of control or we have available cash but fail to make payments when due), generally we may elect to defer payments due under the Tax Receivable Agreements if we do not have available cash to satisfy our payment obligations under the Tax Receivable Agreements or if our contractual obligations limit our ability to make these payments.
With respect to obligations under each of our TRAs (except in cases where we elect to terminate the TRAs early, the TRAs are terminated early due to certain mergers or other changes of control or we have available cash but fail to make payments when due), generally we may elect to defer payments due under the TRAs if we do not have available cash to satisfy our payment obligations under the TRAs or if 79 Table of Contents our contractual obligations limit our ability to make these payments.
An intensification of that conflict could also have an adverse effect on our customers and their demand for our services. ​ In addition, since 2021, OPEC+ countries instituted production cuts (as well as voluntary production cuts), which currently cut output by 5.86 million barrels/day in the aggregate.
An intensification of that conflict could also have an adverse effect on our customers and their demand for our services. ​ Since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts), which currently cut output by approximately 3.2 million barrels/day in the aggregate.
The projection of future taxable income and utilization of tax attributes associated with the Tax Receivable Agreements involve estimates which require significant judgment. The amount of the Company’s actual taxable income, passage of future legislation, or consummation of significant transactions in the future may significantly impact the liability related to the Tax Receivable Agreements.
The projection of future taxable income and utilization of tax value attributes associated with the TRAs involve estimates which require judgment. The amount of the Company’s actual taxable income, passage of future legislation, or consummation of significant transactions in the future may impact the liability related to the TRAs.
Any such deferred payments under the Tax Receivable Agreements generally will accrue interest. We account for any amounts payable under the Tax Receivable Agreements in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies.
Any such deferred payments under the TRAs generally will accrue interest. We account for any amounts payable under the TRAs in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies.
The Water Infrastructure segment consists of the Company’s fixed infrastructure assets, including operations associated with our water distribution pipeline infrastructure, our water recycling solutions, and our produced water pipeline gathering systems and SWDs, as well as solids management facilities, primarily serving E&P companies. ● Water Services.
The Water Infrastructure segment consists of the Company’s fixed infrastructure assets, including operations associated with our water distribution pipeline infrastructure, our water recycling facilities, our produced water gathering pipelines, SWDs, and our solids management facilities, primarily serving E&P companies. ● Water Services.
Changes in our current estimates, due to unanticipated market conditions, governmental legislative actions or events, could have a material effect on our ability to utilize deferred tax assets. As of December 31, 2024, valuation allowances against deferred tax assets were $105.4 million.
Changes in our current estimates, due to unanticipated market conditions, governmental legislative actions or events, could have a material effect on our ability to utilize deferred tax assets. As of December 31, 2025, valuation allowances against deferred tax assets were $100.2 million.
This program resulted in a financing outflow of $29.7 million and $24.9 million during the years ended December 31, 2024 and 2023, respectively. This quarterly dividend program is expected to continue into 2025 and beyond.
This program resulted in a financing outflow of $33.7 million and $29.7 million during the years ended December 31, 2025 and 2024, respectively. This quarterly dividend program is expected to continue into 2026 and beyond.
Acquisition Activity As described above, we continuously evaluate potential investments, particularly in water infrastructure and other water-related services and technology. To the extent we consummate acquisitions, any incremental revenues or expenses from such transactions are not included in our historical results of operations. Between January 2023 and December 2024, we completed six business combinations and approximately fourteen asset acquisitions.
Acquisition Activity As described above, we continuously evaluate potential investments, particularly in water infrastructure and other water-related services and technology. To the extent we consummate acquisitions, any pre-transaction revenues or expenses from such transactions are not included in our historical results of operations. Between January 2024 and December 2025, we completed seven business combinations and approximately eighteen asset acquisitions.
Free Cash Flow The following table summarizes our free cash flow for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 2023 ​ ​ (in thousands) Net cash provided by operating activities ​ $ 234,886 ​ $ 285,355 Purchase of property and equipment ​ ​ (173,153) ​ ​ (135,866) Proceeds received from sale of property and equipment ​ ​ 15,809 ​ ​ 16,891 Free cash flow ​ $ 77,542 ​ $ 166,380 ​ Sustainability-Linked Credit Facility On January 24, 2025 (the “Closing Date”), SES Holdings, LLC (“SES Holdings”), a subsidiary of the Company, Select Water Solutions, LLC, a subsidiary of SES Holdings (the “Select LLC”), Bank of America, N.A., as administrative agent, issuing lender and swingline lender (the “Administrative Agent”), and the other lenders party thereto, entered into that certain sustainability-linked senior secured credit facility (the “Sustainability-Linked Credit Facility”), which initially provides for $300.0 million in revolving commitments (the “Revolving Credit Facility”) and $250.0 million in term commitments (the “Term Loan Facility”), in each case, subject to a borrowing base.
Free Cash Flow The following table summarizes our FCF for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (in thousands) Net cash provided by operating activities ​ $ 214,673 ​ $ 234,886 Purchase of property and equipment ​ ​ (294,562) ​ ​ (173,153) Proceeds received from sale of property and equipment ​ ​ 15,251 ​ ​ 15,809 Free cash flow ​ $ (64,638) ​ $ 77,542 ​ ​ 77 Table of Contents Sustainability-Linked Credit Facility On January 24, 2025 (the “Closing Date”), SES Holdings, a subsidiary of the Company, Select Water Solutions, LLC, a subsidiary of SES Holdings (the “Select LLC”), Bank of America, N.A., as administrative agent, issuing lender and swingline lender (the “Administrative Agent”), and the other lenders party thereto, entered into that certain sustainability-linked senior secured credit facility (the “Sustainability-Linked Credit Facility”), which initially provides for $300.0 million in revolving commitments (the “Revolving Credit Facility”) and $250.0 million in term commitments (the “Term Loan Facility”), in each case, subject to a borrowing base.
Among other measures, management considers each of the following: ● Revenue; ● Gross Profit; ● Gross Margins; ● EBITDA; ● Adjusted EBITDA; ● Cash Flows; and ● Free Cash Flow. Revenue We analyze our revenue and assess our performance by comparing actual monthly revenue to our internal projections and across periods.
Among other measures, management considers each of the following: ● Revenue; ● Gross Profit; ● Gross Margins; ● Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”); ● Adjusted EBITDA; ● Cash Flows; and ● Free Cash Flow. Revenue We analyze our revenue and assess our performance by comparing actual monthly revenue to our internal projections and across periods.
As of December 31, 2024, we estimate the range of exposure to be from $18.9 million to $22.8 million and have recorded liabilities of $20.0 million, which represents management’s best estimate of probable loss related to workers’ compensation and employer’s liability, and auto liability.
As of December 31, 2025, we estimate the range of exposure to be from $18.1 million to $22.4 million and have recorded liabilities of $20.1 million, which represents management’s best estimate of probable loss related to workers’ compensation and employer’s liability, and auto liability.
The Water Services segment consists of the Company’s services businesses, including water sourcing, water transfer, flowback and well testing, fluids hauling, water monitoring, water containment and water network automation, primarily serving E&P companies. Additionally, this segment includes the operations of our accommodations and rentals business. ● Chemical Technologies.
The Water Services segment primarily consists of the Company’s water-related services businesses, including water sourcing, water transfer, fluids hauling, water monitoring, water containment and water network automation, primarily serving E&P companies. Additionally, this segment includes the operations of our Peak Rentals businesses. ● Chemical Technologies.
Gross margin as a percentage of revenue was 15.1% and 14.6% during the years ended December 31, 2024 and December 31, 2023, respectively. Selling, General and Administrative Expenses Selling, general and administrative expenses increased $4.4 million, or 2.8%, to $160.0 million for the year ended December 31, 2024, compared to $155.5 million for the year ended December 31, 2023.
Gross margin as a percentage of revenue was 14.4% and 15.1% during the years ended December 31, 2025 and December 31, 2024, respectively. Selling, General and Administrative Expenses Selling, general and administrative expenses increased $1.3 million, or 0.8%, to $161.3 million for the year ended December 31, 2025, compared to $160.0 million for the year ended December 31, 2024.
Tax Receivable Agreements Expense As of December 31, 2024 and 2023, we determined that we were in a position to reasonably estimate the amount of the liability associated with the Tax Receivable Agreements and determined that future payment under the terms of the Tax Receivable Agreements were probable, and therefore recorded expense of $0.8 million and $38.2 million for the years ended December 31, 2024 and 2023, respectively. ​ Income Tax Expense For the years ended December 31, 2024 and December 31, 2023, we recorded $13.6 million in income tax expense and $60.2 million in income tax benefit, respectively .
Tax Receivable Agreements Expense As of December 31, 2025 and 2024, we determined that we were in a position to reasonably estimate the amount of the liability associated with the TRAs and determined that future payments under the terms of the TRAs were probable, and therefore recorded expense of $5.0 million and $0.8 million for the years ended December 31, 2025 and 2024, respectively. ​ Income Tax Benefit (Expense) For the years ended December 31, 2025 and December 31, 2024, we recorded $1.6 million in income tax benefit and $13.6 million in income tax expense, respectively .
For the year ended December 31, 2024, our Water Infrastructure, Water Services and Chemical Technologies revenues constituted 20.0%, 62.1% and 17.9% of our total revenue, respectively, compared to 14.5%, 65.2 % and 20.3%, respectively, for the year ended December 31, 2023. The revenue changes by reportable segment are as follows: ​ Water Infrastructure.
For the year ended December 31, 2025, our Water Infrastructure, Water Services and Chemical Technologies revenues constituted 22.3%, 55.9% and 21.9% of our total revenue, respectively, compared to 20.0%, 62.1 % and 17.9%, respectively, for the year ended December 31, 2024. The revenue changes by reportable segment are as follows: ​ Water Infrastructure.
This segment also utilizes its chemical experience and lab testing capabilities to customize tailored water treatment solutions designed to optimize the fracturing fluid system in conjunction with the quality of water used in well completions.
This segment also utilizes its chemical experience and lab testing capabilities to customize tailored water treatment solutions designed for the recycling and treatment of produced water and to optimize the fracturing fluid system in conjunction with the quality of water used in well completions. How We Generate Revenue ● Water Infrastructure.
As of December 31, 2024 and 2023, we determined that we were in a position to reasonably estimate an amount of liability associated with the Tax Receivable Agreements and determined that future payments under the terms of the Tax Receivable Agreements were probable, and therefore recorded liabilities of $38.5 million and $38.2 million, respectively.
As of December 31, 2025 and 2024, we determined that we were in a position to reasonably estimate an amount of liability associated with the TRAs and determined that future payments under the terms of the TRAs were probable, and therefore recorded liabilities of $43.4 million and $38.5 million, respectively.
Additionally, as of December 31, 2024, accrued health insurance and accrued general liabilities were $4.4 million and $2.2 million, respectively. 71 Table of Contents Tax Receivable Agreements : We intend to fund any obligation under the Tax Receivable Agreements with cash from operations or borrowings under our Sustainability-Linked Credit Facility.
Additionally, as of December 31, 2025, accrued health insurance and accrued general liabilities were $3.9 million and $4.0 million, respectively. Tax Receivable Agreements : We intend to fund any obligation under the TRAs with cash from operations or borrowings under our Sustainability-Linked Credit Facility.
In determining fair values for the reporting units, we rely primarily on the income and market approaches for valuation. In the income approach, we discount predicted future cash flows using a weighted-average cost of capital calculation based on publicly-traded peer companies. In the market approach, valuation multiples are developed from both publicly-traded peer companies as well as other company transactions.
In determining fair values for the reporting units, we rely primarily on the income and market approaches for valuation. In the income approach, we discount predicted future cash flows using a weighted-average cost of capital calculation based on publicly-traded peer companies.
Net cash used in investing activities was $318.6 million for the year ended December 31, 2024, compared to $137.2 million for the year ended December 31, 2023.
Net cash used in investing activities was $405.0 million for the year ended December 31, 2025, compared to $318.6 million for the year ended December 31, 2024.
Impairments and Abandonments For the years ended December 31, 2024 and December 31, 2023, we recorded $1.2 million and $1.4 million of abandonment that was primarily attributable to abandoned property and equipment, respectively.
For the year ended December 31, 2024, we recorded $1.2 million of abandonment that was primarily attributable to abandoned property and equipment.
Net cash provided by financing activities was $46.6 million for the year ended December 31, 2024, compared to net cash used in financing activities of $98.4 million for the year ended December 31, 2023.
Financing Activities. Net cash provided by financing activities was $188.4 million for the year ended December 31, 2025, compared to $46.6 million for the year ended December 31, 2024.
Net cash provided by operating activities was $234.9 million for the year ended December 31, 2024, compared to $285.4 million for the year ended December 31, 2023. The $50.5 million decrease is comprised of a $45.8 million reduction in converting working capital to cash and a decrease of $4.7 million of net income combined with non-cash adjustments. Investing Activities.
Net cash provided by operating activities was $214.7 million for the year ended December 31, 2025, compared to $234.9 million for the year ended December 31, 2024. The $20.2 million decrease is comprised of $14.9 million of net income combined with non-cash adjustments and a $5.3 million decrease in converting working capital to cash. Investing Activities.
Refer to “Note 10—Debt” and “Note 19—Subsequent Events” for further discussion of the Prior Sustainability-Linked Credit Facility and the Sustainability-Linked Credit Facility.
Refer to “Note 10—Debt” for further discussion of the Sustainability-Linked Credit Facility.
The continuation, expansion or worsening of these tariffs may adversely affect the industry in which we operate and reduce demand for our services. ​ When one customer acquires another, drilling and completions activity levels may decrease overall, but acquisitions can lead to larger blocks of consolidated development and production acreage, which can increase the demand for our longer-term integrated full water lifecycle solutions.
When one customer acquires another, drilling and completions activity levels may decrease overall, but acquisitions can lead to larger blocks of consolidated development and production acreage, which can increase the demand for our longer-term integrated full water lifecycle solutions.
All future dividend payments are subject to quarterly review and approval by our board of directors. ​ As of December 31, 2024, cash and cash equivalents totaled $20.0 million and we had approximately $114.8 million of available borrowing capacity under our Prior Sustainability-Linked Credit Facility.
All future dividend payments are subject to quarterly review and approval by our board of directors. ​ As of December 31, 2025, cash and cash equivalents totaled $18.1 million and we had approximately $145.5 million of available borrowing capacity under the Revolving Credit Facility under our Sustainability-Linked Credit Facility.
(“GAAP”), plus non-cash losses on the sale of assets or subsidiaries, non-recurring compensation expense, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(gains) on unconsolidated entities and plus tax receivable agreements expense less bargain purchase gains from business combinations.
Generally Accepted Accounting Principles (“GAAP”), plus non-cash losses on the sale of assets or subsidiaries less remeasurement gains on fixed assets related to business combinations, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(earnings) on unconsolidated entities and plus TRAs expense.
Costs of Conducting Our Business The principal expenses involved in conducting our business are labor costs, vehicle and equipment costs (including depreciation, rental, repair and maintenance and leasing costs), raw materials and water sourcing costs and fuel costs. Our fixed costs are relatively low.
Revenue is recognized upon delivery or consumption of product and performance of services. ​ Costs of Conducting Our Business The principal expenses involved in conducting our business are labor costs, vehicle and equipment costs (including depreciation, rental, repair and maintenance and leasing costs), raw materials including water sourcing costs and fuel costs.
We incur raw material costs in manufacturing our chemical products, as well as for water that we source for our customers. We incurred raw material costs of $242.7 million, $299.9 million and $300.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. We incur variable transportation costs associated with our service lines, predominately fuel and freight.
We incurred raw material costs of $255.2 million, $242.7 million and $299.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. We incur variable transportation costs associated with our service lines, predominately fuel and freight.
Costs of revenue decreased $0.6 million, or 0.4%, to $137.6 million for the year ended December 31, 2024, compared to $138.2 million for the year ended December 31, 2023.
Costs of revenue increased $6.4 million, or 4.6%, to $143.9 million for the year ended December 31, 2025, compared to $137.6 million for the year ended December 31, 2024.
While customers involved in acquisitions may initially slow activity to focus on integration and portfolio management, we believe we are well-positioned to meet the increased responsibilities of overall water management, including water reuse, recycling, transmitting and balancing across customers and regions, and ultimately disposal, for these larger customers and blocks of contiguous acreage. ​ While the financial health of the broader oil and gas industry has shown improvement as compared to prior periods, central bank policy actions and associated liquidity risks and other factors may negatively impact the value of our equity and that of our customers, and may reduce our and their ability to access liquidity in the bank and capital markets or result in capital being available on less favorable terms, which could negatively affect our financial condition and that of our customers. ​ From an operational standpoint, many of the recent trends still apply to ongoing unconventional oil and gas development.
While the financial health of the broader oil and gas industry has shown improvement as compared to prior periods, central bank policy actions and associated liquidity risks and other factors may negatively impact the value of our equity and that of our customers, and may reduce our and their ability to access liquidity in the bank and capital markets or result in capital being available on less favorable terms, which could negatively affect our financial condition and that of our customers. ​ From an operational standpoint, many of the recent efficiency trends still apply to ongoing unconventional oil and gas development.
The average Henry Hub natural gas spot price during the year ended December 31, 2024, was $2.19 versus an average of $2.53 for the year ended December 31, 2023.
During the year ended December 31, 2025, the average spot price of WTI crude oil was $65.39 versus an average price of $76.63 for the year ended December 31, 2024. The average Henry Hub natural gas spot price during the year ended December 31, 2025 was $3.52 versus an average of $2.19 for the year ended December 31, 2024.
The decrease was composed of a $131.2 million decrease in Water Services revenue and a $63.0 million decrease in Chemical Technologies revenue partially offset by a $60.9 million increase in Water Infrastructure revenue.
The decrease was composed of a $115.1 million decrease in Water Services revenue partially offset by a $48.1 million increase in Chemical Technologies revenue and a $22.3 million increase in Water Infrastructure revenue.
Water Services . Costs of revenue decreased $93.7 million, or 11.5%, to $720.9 million for the year ended December 31, 2024, compared to $814.6 million for the year ended December 31, 2023.
Costs of revenue decreased $85.7 million, or 11.9%, to $635.2 million for the year ended December 31, 2025, compared to $720.9 million for the year ended December 31, 2024.
Depreciation, amortization and accretion expense increased $14.7 million, or 10.6%, to $153.5 million for the year ended December 31, 2024, compared to $138.8 million for the year ended December 31, 2023 primarily due to a higher fixed asset base resulting from recent acquisitions as well as investments made into fixed infrastructure projects . 63 Table of Contents Gross Profit Gross profit was $219.5 million for the year ended December 31, 2024 compared to $231.7 million for the year ended December 31, 2023.
Depreciation, amortization and accretion expense increased $21.0 million, or 13.6%, to $174.5 million for the year ended December 31, 2025, compared to $153.5 million for the year ended December 31, 2024 primarily due to a higher fixed asset base resulting from investments made into new organic infrastructure projects as well as recent acquisitions.
The summary of our cash flows for the years ended December 31, 2023 and 2022 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Cash Flow Changes Between the Years Ended December 31, 2024 and 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 2023 Dollars Percentage ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ $ 234,886 ​ $ 285,355 ​ $ (50,469) ​ (17.7) % Net cash used in investing activities ​ ​ (318,623) ​ ​ (137,168) ​ ​ (181,455) ​ (132.3) % Net cash provided by (used in) financing activities ​ ​ 46,641 ​ ​ (98,423) ​ ​ 145,064 ​ 147.4 % Subtotal ​ ​ (37,096) ​ ​ 49,764 ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents ​ ​ (9) ​ ​ (3) ​ ​ (6) ​ NM ​ Net (decrease) increase in cash and cash equivalents ​ $ (37,105) ​ $ 49,761 ​ ​ ​ ​ ​ ​ ​ Operating Activities.
The summary of our cash flows for the years ended December 31, 2024 and 2023 is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Cash Flow Changes Between the Years Ended December 31, 2025 and 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Dollar Change ​ Percentage Change ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ $ 214,673 ​ $ 234,886 ​ $ (20,213) ​ (8.6) % Net cash used in investing activities ​ ​ (404,962) ​ ​ (318,623) ​ ​ (86,339) ​ (27.1) % Net cash provided by financing activities ​ ​ 188,389 ​ ​ 46,641 ​ ​ 141,748 ​ 303.9 % Subtotal ​ $ (1,900) ​ $ (37,096) ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents ​ ​ 6 ​ ​ (9) ​ ​ 15 ​ NM ​ Net decrease in cash and cash equivalents ​ $ (1,894) ​ $ (37,105) ​ ​ ​ ​ ​ ​ ​ Operating Activities.
In the Middle East, various conflicts have resulted in increased hostilities and instability in oil and gas producing regions in the Middle East as well as in key adjacent shipping lanes and supply chains, including elevated tensions with Iran, a major oil producer. ​ The Russia-Ukraine conflict, and the resulting sanctions and concerns regarding global energy security, has contributed to, and conflicts in the Middle East may contribute to, increases and volatility in the prices for oil and natural gas.
In the Middle East, various conflicts have resulted in increased hostilities and instability in oil and gas producing regions in the Middle East as well as in key adjacent shipping lanes and supply chains, including elevated tensions with Iran, a major oil producer.
Additionally, we incur selling, general and 59 Table of Contents administrative costs for compensation of our administrative personnel at our field sites and in our operational and corporate headquarters, as well as for third-party support, licensing and services.
Additionally, we incur selling, general and administrative costs for compensation of our administrative personnel at our field sites and in our operational and corporate headquarters, as well as for third-party support, permitting, licensing and services. We incur significant vehicle and equipment costs in connection with the services we provide, including depreciation, repairs and maintenance, rental and leasing costs.
We define Adjusted EBITDA as EBITDA plus/(minus) loss/(income) from discontinued operations, plus any impairment and abandonment charges or asset write-offs pursuant to accounting principles generally accepted in the U.S.
We define Adjusted EBITDA as EBITDA plus any impairment and abandonment charges or asset write-offs pursuant to U.S.
Although we cannot provide any assurance, we believe that our current cash balance, operating cash flow and available borrowings under our Sustainability-Linked Credit Facility will be sufficient to fund our operations for at least the next twelve months. ​ During the fourth quarter of 2022, we initiated a quarterly dividend and distribution program of $0.05 per share and $0.05 per unit for holders of Class A and Class B shares, respectively.
For a discussion of the Sustainability-Linked Credit Facility, see “—Sustainability-Linked Credit Facility” below. Although we cannot provide any assurance, we believe that our current cash balance, operating cash flow and available borrowings under our Sustainability-Linked Credit Facility will be sufficient to fund our operations for at least the next twelve months.
These investments typically produce higher gross margins and also foster stronger partnerships with customers, as Select becomes an integral partner 56 Table of Contents in ensuring well productivity for ongoing customer production over the life of a well.
These investments typically produce higher gross margins and also foster stronger partnerships with customers, as Select becomes an integral partner in ensuring well productivity for ongoing customer production over the life of a well. Our focus is on integrated solutions that enhance contracted infrastructure projects with logistics services and chemical solutions, and expanding the value we provide to our customers.
Additionally, we believe that responsibly managing water resources through our operations to help conserve and protect the environment in the communities in which we operate is paramount to our continued success.
As a leader in the water solutions industry, we place the utmost importance on safe, environmentally responsible management of oilfield water throughout the lifecycle of a well. Additionally, we believe that responsibly managing water resources through our operations to help conserve and protect the environment in the communities in which we operate is paramount to our continued success.
We prioritize sustained positive free cash flow and a strong balance sheet, and evaluate potential acquisitions and investments in the context of those priorities, in addition to the economics of the opportunity. We believe this approach provides us with additional flexibility to evaluate larger investments as well as improved resilience in a sustained downturn versus many of our peers.
We believe this approach provides us with additional flexibility to evaluate larger investments as well as improved resilience in a sustained downturn versus many of our peers.
The decrease was primarily composed of a $0.6 million decrease in Water Infrastructure costs, a $93.7 million decrease in Water Services costs and a $41.5 million decrease in Chemical Technologies costs reflecting the lower revenue-producing activity discussed above, partially offset by an increase of $14.7 million in depreciation, amortization and accretion. Water Infrastructure .
The decrease was primarily composed of an $85.7 million decrease in Water Services costs partially offset by a $30.7 million increase in Chemical Technologies costs, a $6.4 million increase in Water Infrastructure costs and an increase of $21.0 million in depreciation, amortization and accretion. The costs of revenue changes by reportable segment are as follows: ​ Water Infrastructure .
Revenue increased by $60.9 million, or 26.5%, to $290.9 million for the year ended December 31, 2024, compared to $230.0 million for the year ended December 31, 2023.
Revenue increased by $22.3 million, or 7.7%, to $313.2 million for the year ended December 31, 2025, compared to $290.9 million for the year ended December 31, 2024.
Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible assets are realized. 70 Table of Contents Impairment of goodwill, long-lived assets and intangible assets : Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.
Impairment of goodwill, long-lived assets and intangible assets : Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.
As of December 31, 2024, the borrowing base under the Prior Sustainability-Linked Credit Facility was $218.8 million, we had $85.0 million in outstanding borrowings, and outstanding letters of credit totaled $19.0 million.
As of December 31, 2025, we had $320.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $235.1 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million and outstanding letters of credit totaled $19.6 million.
Gross profit increased by $61.5 million in our Water Infrastructure segment, decreased by $37.5 million in our Water Services segment and decreased by $21.5 million in our Chemical Technologies segment. Also contributing to the decrease in gross profit was a $14.7 million increase in depreciation, amortization and accretion expense.
The decrease was primarily driven by a $29.5 million decrease in gross profit from our Water Services segment and a $21.0 million increase in depreciation, amortization and accretion expense partially offset by a $17.4 million increase in our Chemical Technologies segment and a $16.0 million increase in gross profit from our Water Infrastructure segment.
Cash Flows and Free Cash Flow We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, plus proceeds received from sale of property and equipment.
Cash Flows and Free Cash Flow We define FCF as net cash provided by (used in) operating activities less purchases of property and equipment, plus proceeds received from sale of property and equipment. Our board of directors and executive management team use FCF to assess our liquidity and ability to repay maturing debt, fund operations and make additional investments.
Also impacting the 64 Table of Contents decrease was lower gross profit and higher selling, general and administrative expenses partially offset by the trademark abandonment during the year ended December 31, 2023. ​ Comparison of Non-GAAP Financial Measures Our board of directors, management and investors use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, amortization and accretion) and items outside the control of our management team.
Net Income Net Income decreased by $14.0 million, to a net income of $21.5 million for the year ended December 31, 2025 compared to $35.5 million for the year ended December 31, 2024, d riven primarily by lower gross profit, an increase in interest expense, equity investment losses and tax receivable agreements expense during 2025 partially offset by 2025 income tax benefit compared to 2024 income tax expense, the remeasurement gain on business combination and increased gains on sales of property and equipment and divestitures, net. ​ Comparison of Non-GAAP Financial Measures Our board of directors, management and investors use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, amortization and accretion) and items outside the control of our management team.
The increase was due primarily to a $11.7 million increase in incentive and equity-based compensation cost, $4.9 million in higher wages, associated payroll taxes and employer 401(k) match contributions, $3.2 million in higher legal and professional fees, $0.9 million in higher research and development costs, $0.6 million in higher information technology costs and $0.6 million in severance expense partially offset by $10.5 million in lower transaction and rebranding costs, a $5.1 million decrease in credit loss expense, $0.8 million in lower vehicle lease costs and $1.1million from a combination of other expenses.
The increase was p rimarily driven by $5.4 million in higher information technology costs, a $5.4 million increase in wages and associated taxes and benefits and contract labor, $0.9 million higher bad debt expense and $0.8 million in higher severance expense partially offset by a $6.6 million decline in incentive and equity-based compensation, $2.9 million in lower transaction and rebranding costs, and a $1.7 million reduction in legal and professional fees and other expenses.
The following table sets forth our reconciliation of EBITDA and Adjusted EBITDA to our net (loss) income, which is the most directly comparable GAAP measure, for the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 35,450 ​ $ 79,219 Interest expense, net ​ ​ 6,965 ​ ​ 4,393 Income tax expense (benefit) ​ ​ 13,568 ​ ​ (60,196) Depreciation, amortization and accretion ​ ​ 156,947 ​ ​ 141,089 EBITDA ​ ​ 212,930 ​ ​ 164,505 Tax receivable agreements expense ​ ​ 836 ​ ​ 38,187 Non-cash compensation expenses ​ ​ 26,358 ​ ​ 17,369 Non-recurring severance expenses (1) ​ ​ 648 ​ ​ — Non-cash loss on sale of assets or subsidiaries (2) ​ ​ 3,609 ​ ​ 3,350 Transaction and rebranding costs (3) ​ ​ 10,038 ​ ​ 20,447 Lease abandonment costs ​ ​ 358 ​ ​ 42 Impairments and abandonments ​ ​ 1,237 ​ ​ 12,607 Equity in losses of unconsolidated entities ​ ​ 352 ​ ​ 1,800 Other (4) ​ ​ 2,029 ​ ​ 6 Adjusted EBITDA ​ $ 258,395 ​ $ 258,313 ​ (1) For the year ended December 31, 2024, these costs related to severance costs associated with our former CFO.
Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. 74 Table of Contents The following table sets forth our reconciliation of EBITDA and Adjusted EBITDA to our net income, which is the most directly comparable GAAP measure, for the years ended December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (in thousands) Net income ​ $ 21,467 ​ $ 35,450 Interest expense, net ​ ​ 23,181 ​ ​ 6,965 Income tax (benefit) expense ​ ​ (1,608) ​ ​ 13,568 Depreciation, amortization and accretion ​ ​ 179,818 ​ ​ 156,947 EBITDA ​ ​ 222,858 ​ ​ 212,930 Tax receivable agreements expense ​ ​ 4,995 ​ ​ 836 Non-cash compensation expenses ​ ​ 19,875 ​ ​ 26,358 Non-recurring severance expenses (1) ​ ​ 1,467 ​ ​ 648 Non-cash loss on sale of assets or subsidiaries ​ ​ 1,399 ​ ​ 3,609 Transaction and rebranding costs ​ ​ 10,269 ​ ​ 10,038 Lease abandonment costs ​ ​ 734 ​ ​ 358 Impairments and abandonments ​ ​ 6,221 ​ ​ 1,237 Remeasurement gain on business combination ​ ​ (14,924) ​ ​ — Equity in losses of unconsolidated entities ​ ​ 4,892 ​ ​ 352 Other ​ ​ 2,497 ​ ​ 2,029 Adjusted EBITDA ​ $ 260,283 ​ $ 258,395 ​ (1) For the year ended December 31, 2025, these costs relate to severance expense in connection with the termination of certain former management employees related to a reorganization.
Costs of revenue decreased $41.5 million, or 15.8%, to $220.6 million for the year ended December 31, 2024, compared to $262.1 million for the year ended December 31, 2023.
Revenue decreased $115.1 million, or 12.8%, to $786.5 million for the year ended December 31, 2025, compared to $901.7 million for the year ended December 31, 2024.
The $145.1 million increase in net cash provided by financing activities was due primarily to borrowings net of debt repayments increasing $101.0 million and a $53.9 million decrease in repurchases of shares of Class A common 67 Table of Contents stock partially offset by $4.4 million of cash received from noncontrolling interest holders net of payments during the year ended December 31, 2023, $4.8 million increase in dividends and distributions paid and $0.5 million paid with respect to tax receivable agreements during the year ended December 31, 2024 .
The $141.7 million increase in net cash provided by financing activities was due primarily to a $150.0 million increase in borrowings net of repayments and $2.9 million of cash received from noncontrolling interest holders during the year ended December 31, 2025 partially offset by $7.9 million of debt issuance costs during the year ended December 31, 2025 and a $3.9 million increase in dividends and distributions paid.
Our approach, historically and during the year ended December 31, 2024, has been to streamline operations and offer a more comprehensive and valuable overall package to customers that is built around optimizing the entire water lifecycle as such integrated solutions drive revenue growth and enhance overall value to clients. ​ The armed conflict between Ukraine and Russia continued into 2024, as well as ongoing conflicts in the Middle East, including heightened tensions with Iran.
Our approach has been to streamline operations and offer a more comprehensive and valuable overall package to customers that is built around optimizing the entire water lifecycle, as such integrated solutions drive revenue growth and enhance overall value to clients. ​ During 2025 and 2024, Select has made strategic Water Infrastructure investments across five of the seven regions in which we operate.
We incurred fuel and freight costs of $83.4 million, $115.6 million and $118.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Variability in fuel prices impact our transportation costs, which affect the results of our operations. How We Evaluate Our Operations ​ We use a variety of operational and financial metrics to assess our performance.
Changes to fuel prices impact our transportation costs, which affect the results of our operations. ​ 68 Table of Contents How We Evaluate Our Operations ​ We use a variety of operational and financial metrics to assess our performance.

… 162 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed2 unchanged
Biggest changeThe level of drilling and completion activity is influenced by numerous factors over which we have no control, including, but not limited to: the supply of and demand for oil and gas; war, armed conflicts, economic sanctions and other constraints to global trade and economic growth; current price levels as well as expectations about future prices of oil and gas, including announcements and actions taken by the members of OPEC+ with respect to oil production levels; the magnitude and timing of capital spending by our customers; the cost of exploring for, developing, producing and delivering oil and gas; the extent to which our E&P customers choose to drill and complete new wells to offset decline 72 Table of Contents from their existing wells; the extent to which our E&P customers choose to invest to grow production; discoveries of new oil and gas reserves; available storage capacity and pipeline and other transportation capacity; weather conditions; domestic and worldwide economic conditions; instability in oil-producing countries; environmental regulations; technical advances in alternative forms of energy (e.g., wind and solar electricity, electric vehicles) that encourage substitution for or displacement of oil and gas consumption in end-use markets; the price and availability of alternative fuels; the ability of oil and gas producers to raise equity capital and debt financing; global health events; merger and acquisition activity and consolidation in our industry, and other factors.
Biggest changeThe level of drilling and completion activity is influenced by numerous factors over which we have no control, including, but not limited to: the supply of and demand for oil and gas; war, armed conflicts, economic sanctions and other constraints to global trade and economic growth; current price levels as well as expectations about future prices of oil and gas, including announcements and actions taken by the members of OPEC+ with respect to oil production levels; such as announced production cuts and the willingness of member countries to follow such cuts; the magnitude and timing of capital spending by our customers; the cost of exploring for, developing, producing and delivering oil and gas; the extent to which our E&P customers choose to drill and complete new wells to offset decline from their existing wells; the extent to which our E&P customers choose to invest to grow production; discoveries of new oil and gas reserves; available storage capacity and pipeline and other transportation capacity; weather conditions; domestic and worldwide economic conditions; instability in oil-producing countries; environmental regulations; technical advances in alternative forms of energy (e.g., wind and solar electricity, electric vehicles) that encourage substitution for or displacement of oil and gas consumption in end-use markets; the price and availability of alternative fuels; the ability of oil and gas producers to raise equity capital and debt financing; changes in global trade policy, including the imposition of tariffs; global health events; merger and acquisition activity and consolidation in our industry, and other factors. 80 Table of Contents Any combination of these factors that results in sustained low oil and gas prices and, therefore, lower capital spending and / or reduced drilling and completion activity by our customers, would likely have a material adverse effect on our business, financial condition, results of operations and cash flows.
Interest Rate Risk As of December 31, 2024, we had $85.0 million in outstanding borrowings and $114.8 million of available borrowing capacity under our Prior Sustainability-Linked Credit Facility. As of February 17, 2025, we had $250.0 million in outstanding indebtedness and $211.3 million of available borrowing capacity under our Sustainability-Linked Credit Facility.
Interest Rate Risk As of December 31, 2025, we had $320.0 million in outstanding borrowings and $145.5 million of available borrowing capacity under our Sustainability-Linked Credit Facility. As of February 16, 2026, we had $363.5 million in outstanding borrowings and $81.4 million of available borrowing capacity under our Sustainability-Linked Credit Facility.
We do not currently have or intend to enter into any derivative arrangements to protect against fluctuations in interest rates applicable to our outstanding indebtedness. ​
A hypothetical one percentage point increase in interest rates on our borrowings outstanding under our Sustainability-Linked Credit Facility as of December 31, 2025 would increase our annual interest expense by approximately $3.2 million. We do not currently have or intend to enter into any derivative arrangements to protect against fluctuations in interest rates applicable to our outstanding indebtedness. ​
Removed
Any combination of these factors that results in sustained low oil and gas prices and, therefore, lower capital spending and / or reduced drilling and completion activity by our customers, would likely have a material adverse effect on our business, financial condition, results of operations and cash flows.

Other WTTR 10-K year-over-year comparisons