Select Water Solutions Inc · Q2 2022 earnings

Briefing

Select Energy Services' financial performance improved significantly, driven by sequential revenue growth and strategic acquisitions.

Select Energy Services reported a strong second quarter in 2022, with revenue reaching $335.9 million, a 14% increase from the previous quarter and net income of $14.6 million. The company's profitability improved significantly, with Net Income and Adjusted EBITDA growing 83% and 48%, respectively, quarter over quarter. The company also made progress on the integration of recent acquisitions, capturing continued efficiencies and cost synergy realizations, which has contributed to sequential margin improvement across each of its segments.

• Revenue increased by 14% sequentially to $335.9 million.
• Net income was $14.6 million, up from $8.0 million in the first quarter.
• Adjusted EBITDA grew 48% quarter over quarter to $47.7 million.
• Gross margin before depreciation and amortization improved across all three segments.

Headline financials

Revenue & EPS history

The Company expects to see mid- to high-single digit percentage revenue growth with modest continued improvements to gross margins before D&A, supported by continued pricing improvements and market activity in Water Services. The Company anticipates mid-single digit percentage revenue growth, with gross margins before D&A in mid- to high-20 percent range, supported by continued growth in recycled water volumes in Water Infrastructure. The Company anticipates relatively stable to modestly improving revenues in Oilfield Chemicals with gross margins before D&A of at least 15% as operational efficiencies and pricing improvements counteract rising raw materials costs.