Loading...
•
Dec 31, 2023
Select Water Solutions Q4 2023 Earnings Report
Select Water Solutions reported record full year revenue, net income, adjusted EBITDA, and operating cash flow for 2023, with Q4 results reflecting continued growth in Water Infrastructure segment amid industry activity declines.
Key Takeaways
Select Water Solutions announced its Q4 and full year 2023 financial results, highlighted by record full year consolidated revenue, net income, adjusted EBITDA, and operating cash flow. The Water Infrastructure segment showed continued revenue and profitability gains in Q4, while Water Services and Chemical Technologies were impacted by industry activity declines. The company is targeting net capital expenditures of $140 - $160 million for 2024 and anticipates continued growth in the Water Infrastructure segment.
Full year 2023 consolidated revenue reached a record $1.6 billion, up 14% year-over-year.
Water Infrastructure segment saw full year revenue growth of 84% year-over-year.
Q4 net income improved to $27.6 million, benefiting from a $61.9 million release of a valuation allowance associated with deferred tax assets, partially offset by tax receivable agreements expense of $38.2 million.
Company announced four new business development projects backed by long-term contracts in the Permian, Northeast and Bakken regions.
Revenue by Segment
Forward Guidance
Select Water Solutions anticipates continued growth in the Water Infrastructure segment and expects it to contribute a larger portion of the company's profitability in 2024 and beyond. The company also expects to generate substantial free cash flow and is targeting pulling through more than 40% of its Adjusted EBITDA into free cash flow during 2024.
Positive Outlook
- Water Infrastructure segment revenues are expected to grow by 30% – 40%, with segment gross profit growing by 40% – 50% on a year-over-year basis.
- Company anticipates Water Infrastructure revenues increasing by mid-single digit percentages during the first quarter of 2024.
- Company anticipates revenues growing by low-single digit percentages and gross margins before D&A recovering to the 17% – 18% range for Chemical Technologies segment in Q1 2024.
- Company expects Water Services segment gross margins before D&A of 19 – 21% during the first quarter of 2024 before improving further throughout 2024.
- Company is targeting pulling through more than 40% of its Adjusted EBITDA during 2024 into free cash flow.
Challenges Ahead
- Company expects consolidated Adjusted EBITDA of $52 – $56 million for the first quarter of 2024.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
Loading earnings performance data...
Loading earnings reaction data...