NYSE$WTTR
Select Water Solutions Inc · Q4 2023 earnings
Q4 2023 earnings · · Investor relations
Briefing
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.
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.
Headline financials
Revenue & EPS history
Select Water Solutions · Revenue · Quarterly
$375M
Revenue by segment
Select Water Solutions · $389M total across 3 segments · Q3 2023
- Water Services$252M+13.8%64.7%
- Chemical Technologies$79M—20.3%
- Water Infrastructure$58.4M-21.5%15.0%
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.
Tailwinds
- 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.
Headwinds
- Company expects consolidated Adjusted EBITDA of $52 – $56 million for the first quarter of 2024.
- Company expects Water Services segment revenues to decline by mid-single digit percentages in Q1 2024.
- Water Infrastructure segment to be modestly impacted by incremental costs associated with onboarding the newly closed acquisitions during the first quarter of 2024, gross margins before D&A of 39 – 42%.
- Recent volatility in natural gas prices and anticipated customer budget declines are likely to have year-over-year revenue impacts within Water Services and Chemical Technologies segments.
- Company will continue to evaluate its Water Services segment for underperforming and non-strategic operations for potential consolidation or divestment during 2024, which when combined with the macro activity outlook, they believe will likely drive Water Services segment revenues down on a year-over-year basis.
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q4 2023
+1.5%
Avg return
Earnings day
+2.1%
Avg return
5 days after
-0.0%
Avg return
30 days after
46%
17 / 37 earnings
Positive
+32.2%
Q3 2024
Best reaction
-13.0%
Q4 2022
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q1 2026 | +0.9% | +2.1% | +4.4% | |
| Q4 2025 | +9.1% | -3.5% | +8.7% | |
| Q3 2025 | -1.3% | -5.8% | -4.1% | |
| Q2 2025 | -5.4% | -9.8% | -8.2% | |
| Q1 2025 | -11.8% | +4.5% | +7.4% | |
| Q4 2024 | -5.4% | -9.0% | -24.0% | |
| Q3 2024 | +32.2% | +32.0% | +38.1% | |
| Q2 2024 | +2.7% | -3.0% | -0.4% | |
| Q1 2024 | -4.1% | -3.7% | +12.2% | |
| Q4 2023 | +16.0% | +12.4% | +18.6% | |
| Q3 2023 | +2.2% | +3.6% | +0.5% | |
| Q2 2023 | +0.1% | -3.3% | -2.3% | |
| Q1 2023 | -2.6% | +0.5% | -0.8% | |
| Q4 2022 | -13.0% | -9.9% | -23.4% | |
| Q3 2022 | -6.2% | +1.1% | -11.2% | |
| Q2 2022 | -1.3% | -2.9% | -3.2% | |
| Q1 2022 | +9.9% | +10.6% | +11.8% | |
| Q4 2021 | +14.0% | +9.8% | +18.6% | |
| Q3 2021 | +4.2% | +15.5% | -5.6% | |
| Q2 2021 | -5.6% | -5.8% | -2.6% | |
| Q1 2021 | +15.2% | +30.1% | +26.3% | |
| Q4 2020 | +3.3% | -1.1% | -16.7% | |
| Q3 2020 | -5.2% | +0.9% | +38.3% | |
| Q2 2020 | +8.7% | +8.7% | -1.3% | |
| Q1 2020 | +4.2% | +22.6% | +31.2% | |
| Q4 2019 | -1.1% | -10.5% | -58.1% | |
| Q3 2019 | -1.1% | -0.2% | +0.0% | |
| Q2 2019 | -4.1% | -3.2% | -3.4% | |
| Q1 2019 | -3.8% | -0.9% | -3.9% | |
| Q4 2018 | +4.9% | +4.9% | +23.4% | |
| Q3 2018 | +11.8% | +4.9% | -10.7% | |
| Q2 2018 | -5.0% | -14.9% | -23.5% | |
| Q1 2018 | +6.9% | +11.6% | -9.6% | |
| Q4 2017 | -6.0% | -6.0% | -17.2% | |
| Q3 2017 | -4.0% | -5.3% | -3.9% | |
| Q2 2017 | -0.7% | -1.3% | -5.5% | |
| Q1 2017 | -1.6% | — | — | |
| Q3 2016 | — | — | — | |
| Q2 2016 | — | — | — | |
| Q1 2016 | — | — | — | |
| Q4 2015 | — | — | — |
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