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  Title	Aris Water Solutions, Inc. Reports Fourth Quarter and Full Year 2024 Results and Provides 2025 Outlook; Raises Quarterly Dividend by 33% and Announces Acquisition of the McNeill Ranch
  ID	7327187
  External ID	212600737
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  Published Date	Feb. 26, 2025, 3:26 p.m.
  Summary	Unlock stock picks and a broker-level newsfeed that powers Wall Street. Upgrade Now Aris Water Solutions, Inc. Reports Fourth Quarter and Full Year 2024 Results and Provides 2025 Outlook; Raises Quart
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  Content ID	4632433
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  Content	Unlock stock picks and a broker-level newsfeed that powers Wall Street. Upgrade Now Aris Water Solutions, Inc. Reports Fourth Quarter and Full Year 2024 Results and Provides 2025 Outlook; Raises Quarterly Dividend by 33% and Announces Acquisition of the McNeill Ranch Business Wire Wed, Feb 26, 2025, 4:26 PM 13 min read In This Article: ARIS +22.14% HOUSTON, February 26, 2025 --( BUSINESS WIRE )--Aris Water Solutions, Inc. (NYSE: ARIS) ("Aris," "Aris Water" or the "Company") today announced financial and operating results for the fourth quarter and full year ended December 31, 2024. FOURTH QUARTER AND FULL YEAR 2024 HIGHLIGHTS Grew produced water volumes 7% year-over-year Set a new quarterly record for recycled water volumes, growing 16% for the year and 18% sequentially in the fourth quarter of 2024 Achieved fourth quarter and full year 2024 net income of $13.8 million and $60.2 million, respectively Generated Adjusted EBITDA 1 of $54.5 million for the fourth quarter of 2024, up 10% year-over-year, and $211.9 million for the full year, up 21% from 2023 Full year 2024 Cash Paid for Property, Plant and Equipment of $100 million Full year 2024 Capital Expenditures 4 of $101 million, down 35% from 2023 Increased quarterly dividend 33% to $0.14 per share for the first quarter of 2025 Acquired the 45,000 acre McNeill Ranch in Texas and New Mexico, providing significant optionality for future growth "Aris had a remarkable fourth quarter and a great year in which we successfully grew both volumes and profitability. We achieved Adjusted EBITDA at the top end of our increased guidance and are now delivering on our goal of increasing shareholder returns by raising our dividend to $0.14 per share, representing a 33% increase. We are extremely proud of what our team accomplished in 2024 and believe we will continue our strong performance in our core business. We are also making progress in mineral extraction, beneficial reuse, and the development of technologies for the treatment of wastewater outside the oil and gas industry," said Amanda Brock, President and CEO of Aris. "During the fourth quarter, we acquired the 45,000 acre McNeill Ranch located in New Mexico and Texas for $45.0 million. The ranch provides significant additional disposal capacity to support years of future growth adjacent to the fastest growing production areas of the Northern Delaware Basin. This acquisition increases our operational flexibility and allows us to optimize throughput and disposal royalties. We purchased the ranch after detailed sub-surface analysis in collaboration with several of our largest customers and believe it features promising geology and porosity for long-term water infrastructure development. Given the ranch’s advantaged location, there are opportunities to generate additional surface income through rights-of-way, utilization of the surface for power and renewable development, beneficial reuse, and other industrial applications. We are in discussions with both current and potential new customers to further commercialize the ranch. Story Continues Aris is also applying its expertise in complex water treatment to industrial uses outside of the oil and gas industry. We recently added assets, intellectual property, and an experienced team to help us further our expansion into broader industrial markets. This team has developed numerous projects to recycle water for large industrial companies and positions us well to expand our treatment business. We will provide further updates as this business grows. 2024 was a phenomenal year and I want to congratulate our team on all of the Company’s accomplishments. We now begin 2025 with significant momentum and several exciting strategic initiatives." OPERATIONS UPDATE Three Months Ended Three Months Ended December 31, September 30, % Change December 31, % Change 2024 2024 2023 (thousands of barrels of water per day) Total Volumes 1,636 1,577 4 % 1,577 4 % Produced Water Handling Volumes 1,112 1,118 (1 )% 1,095 2 % Water Solutions Volumes Recycled Produced Water Volumes Sold 463 393 18 % 401 15 % Groundwater Volumes Sold 61 66 (8 )% 81 (25 )% Total Water Solutions Volumes 524 459 14 % 482 9 % Skim oil recoveries (barrels of oil per day) 1,762 1,769 — % 1,362 29 % Skim oil recoveries (as a % of produced water volumes) 0.16 % 0.16 % — % 0.12 % 33 % Year Ended December 31, % Change 2024 2023 (thousands of barrels of water per day) Total Volumes 1,548 1,492 4 % Produced Water Handling Volumes 1,120 1,042 7 % Water Solutions Volumes Recycled Produced Water Volumes Sold 377 324 16 % Groundwater Volumes Sold 51 126 (60 )% Total Water Solutions Volumes 428 450 (5 )% Skim oil recoveries (barrels of oil per day) 1,688 1,219 38 % Skim oil recoveries (as a % of produced water volumes) 0.15 % 0.12 % 25 % FINANCIAL UPDATE Three Months Ended Three Months Ended (in thousands) December 31, September 30, % Change December 31, % Change 2024 2024 2023 Net Income $ 13,805 $ 16,431 (16 )% $ 13,031 6 % Adjusted Net Income 18,102 20,991 (14 )% 15,377 18 % Adjusted EBITDA 54,475 54,307 — % 49,308 10 % Gross Margin/Barrel $ 0.31 $ 0.32 (3 )% $ 0.27 15 % Adjusted Operating Margin/Barrel $ 0.44 $ 0.45 (2 )% $ 0.41 7 % Capital Expenditures $ 17,845 $ 8,178 118 % $ 19,767 (10 )% This table includes reference to non-GAAP measures. See definition and a reconciliation to the most directly comparable GAAP measure in the Appendix. (in thousands) Year Ended December 31, % Change 2024 2023 Net Income $ 60,178 $ 43,412 39 % Adjusted Net Income 76,613 52,396 46 % Adjusted EBITDA 211,885 174,972 21 % Gross Margin/Barrel $ 0.31 $ 0.25 24 % Adjusted Operating Margin/Barrel $ 0.45 $ 0.39 15 % Capital Expenditures 101,085 156,394 (35 )% Net Cash Provided by Operating Activities 178,876 183,873 (3 )% Free Cash Flow $ 72,625 ($ 29,125 ) 349 % This table includes reference to non-GAAP measures. See definition and a reconciliation to the most directly comparable GAAP measure in the Appendix. STRONG BALANCE SHEET AND LIQUIDITY As of December 31, 2024, the Company had net debt of approximately $422 million with $29 million in cash and $303 million available under its revolving credit facility. The Company’s leverage ratio 3 at the end of 2024 was 2.0X, below the Company’s target leverage of 2.5X – 3.5X. FIRST QUARTER 2025 DIVIDEND INCREASE For the first quarter of 2025, Aris’s Board of Directors approved a 33% increase to Aris’s quarterly dividend to $0.14 per share. In conjunction with the dividend payment, a distribution of $0.14 per unit will be paid to unit holders of Solaris Midstream Holdings, LLC. The dividend will be paid on March 27, 2025, to holders of record of the Company’s Class A common stock as of the close of business on March 13, 2025. The distribution to unit holders of Solaris Midstream Holdings, LLC will be subject to the same payment and record dates. FIRST QUARTER AND FULL YEAR 2025 FINANCIAL OUTLOOK "In 2025, we continue to expect strong performance from our core water infrastructure business. Produced water volumes are forecasted to increase in line with the production growth of our contracted customers in the Northern Delaware Basin. We expect additional completion activity on our dedicated acreage to increase our Water Solutions volumes in 2025. We recently extended an acreage dedication contract with one of our largest customers and now approximately 80% of our forecasted Water Solutions business is under long-term dedication with an average tenor of 8 years. In addition to our long-term contracted produced water business, these contracts provide even greater visibility into sustained recycling volumes and related revenue for years to come. Based on our customers’ volumetric outlooks, we expect Adjusted EBITDA of $215 to $235 million and Capital Expenditures to be between $85 and $105 million for the year. Growing volumes, strong sustained margins, and continued capital discipline are expected to drive Free Cash Flow between $75 and $95 million, an increase of approximately 17% over 2024. 2025 is shaping up to be another strong year. Looking forward, we will continue to increase shareholder returns in a sustainable manner while maintaining a strong financial profile and reinvesting in our core water infrastructure businesses. We are encouraged by our opportunities related to the McNeill Ranch and the broader industrial water treatment market," said Mrs. Brock. For the full year of 2025, the Company expects: Produced Water Handling volumes between 1,150 and 1,210 thousand barrels of water per day Water Solutions volumes between 460 and 520 thousand barrels of water per day Adjusted Operating Margin per Barrel 2 between $0.43 and $0.45 Skim oil recoveries of approximately 1,820 barrels per day Adjusted EBITDA 1 between $215 and $235 million Capital Expenditures 4 of $85 to $105 million Free Cash Flow 5 of $75 to $95 million For the first quarter of 2025, net of approximately $1.5 million of Adjusted EBITDA 1 impact from customer shut-ins associated with weather events in January 2025, the Company expects: Produced Water Handling volumes between 1,085 and 1,125 thousand barrels of water per day Water Solutions volumes between 510 and 550 thousand barrels of water per day Adjusted Operating Margin per Barrel 2 between $0.43 and $0.45 Skim oil recoveries of approximately 1,800 barrels per day Adjusted EBITDA 1 between $50 and $54 million Capital Expenditures 4 of $20 to $25 million CONFERENCE CALL Aris will host a conference call to discuss its fourth quarter and full year 2024 results on Thursday, February 27, 2025, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). Participants should call (877) 407-5792 and refer to Aris Water Solutions, Inc. when dialing in. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. To listen via live webcast, please visit the Investor Relations section of the Company’s website, www.ariswater.com . An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately fourteen days. It can be accessed by dialing (877) 660-6853 within the United States or (201) 612-7415 outside of the United States. The conference call replay access code is 13750902. About Aris Water Solutions, Inc. Aris Water Solutions, Inc. is a leading, growth-oriented environmental infrastructure and solutions company that directly helps its customers reduce their water and carbon footprints. Aris Water delivers full-cycle water handling and recycling solutions that increase the sustainability of energy company operations. Its integrated pipelines and related infrastructure create long-term value by delivering high-capacity, comprehensive produced water management, recycling and supply solutions to operators in the core areas of the Permian Basin. _______________________________________________________________ 1 Adjusted Net Income, Adjusted EBITDA, and Diluted Adjusted Net Income per Share are non-GAAP financial measures. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted Net Income, Adjusted EBITDA, and Diluted Adjusted Net Income per Share and a reconciliation thereof to net income, the most directly comparable GAAP measure. 2 Adjusted Operating Margin per Barrel is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted Operating Margin per Barrel and a reconciliation thereof to gross margin, the most directly comparable GAAP measure. 3 Represents a non-GAAP financial measure. Defined as net debt as of December 31, 2024, divided by trailing twelve months Adjusted EBITDA. Net debt is calculated as total debt less cash and cash equivalents. See the supplementary schedules in this press release for a reconciliation to the most directly comparable GAAP measure. 4 Capital Expenditures is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Capital Expenditures and a reconciliation thereof to cash paid for property, plant, and equipment, the most directly comparable GAAP measure. 5 Free Cash Flow is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Free Cash Flow and a reconciliation thereof to Net Cash Provided by (Used in) Operating Activities, the most directly comparable GAAP measure. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to, statements, information, opinions or beliefs regarding our business strategy, our industry, our future profitability, business and financial performance, including our guidance for 2025, current and potential future long-term contracts, legal and regulatory developments, our ability to identify strategic acquisitions and realize expected benefits therefrom, the development of technologies for the beneficial reuse of produced water and related strategies, plans, objectives and strategic pursuits and other statements that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "guidance," "preliminary," "project," "estimate," "expect," "anticipate," "continue," "sustain," "will," "intend," "strive," "plan," "goal," "target," "believe," "forecast," "outlook," "future," "potential," "opportunity," "predict," "may," "visibility," "possible," "should," "could" and variations of such words or similar expressions. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated or implied by the forward-looking statements including our guidance for 2025. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to, energy prices, the Russia-Ukraine and Middle Eastern conflicts, macroeconomic conditions (such as inflation) and market uncertainty related thereto, legislative and regulatory developments, customer plans and preferences, adverse results from litigation and the use of financial resources for litigation defense, technological innovations and developments, and other events discussed or referenced in our filings made from time to time with the Securities and Exchange Commission ("SEC"), including such factors discussed under "Risk Factors" in our most recent Annual Report on Form 10-K, and if applicable, our subsequent SEC filings, which are available on our Investor Relations website at https://ir.ariswater.com/sec-filings or on the SEC’s website at www.sec.gov/edgar . Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. All forward-looking statements, expressed or implied, included in this press release and any oral statements made in connection with this press release are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Table 1 Aris Water Solutions, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except for share and Three Months Ended Year Ended per share amounts) December 31, December 31, 2024 2023 2024 2023 Revenue Produced Water Handling $ 53,162 $ 51,817 $ 226,089 $ 195,207 Produced Water Handling — Affiliate 34,404 27,965 119,263 102,322 Water Solutions 20,845 17,445 62,942 66,625 Water Solutions — Affiliate 5,137 6,416 18,057 25,611 Other Revenue 5,061 482 9,093 2,353 Total Revenue 118,609 104,125 435,444 392,118 Cost of Revenue Direct Operating Costs 52,003 44,995 178,396 177,973 Depreciation, Amortization and Accretion 20,057 19,495 79,159 76,632 Total Cost of Revenue 72,060 64,490 257,555 254,605 Operating Costs and Expenses Abandoned Well Costs 200 89 518 1,303 General and Administrative 17,362 12,447 65,315 50,454 Research and Development Expense 433 1,253 3,034 3,120 Other Operating Expense (Income), Net 1,890 866 2,269 (1,230 ) Total Operating Expenses 19,885 14,655 71,136 53,647 Operating Income 26,664 24,980 106,753 83,866 Other Expense Interest Expense, Net 9,600 9,266 36,233 32,853 Other — 107 1 107 Total Other Expense 9,600 9,373 36,234 32,960 Income Before Income Taxes 17,064 15,607 70,519 50,906 Income Tax Expense 3,259 2,576 10,341 7,494 Net Income 13,805 13,031 60,178 43,412 Net Income Attributable to Noncontrolling Interest 8,024 7,632 33,321 24,524 Net Income Attributable to Aris Water Solutions, Inc. $ 5,781 $ 5,399 $ 26,857 $ 18,888 Net Income Per Share of Class A Common Stock Basic $ 0.17 $ 0.17 $ 0.81 $ 0.59 Diluted $ 0.17 $ 0.17 $ 0.81 $ 0.59 Weighted Average Shares of Class A Common Stock Outstanding Basic 30,767,853 30,128,424 30,575,739 30,037,681 Diluted 31,646,961 30,128,424 30,877,637 30,037,681 Table 2 Aris Water Solutions, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except for share and per share amounts) December 31, December 31, 2024 2023 Assets Cash $ 28,673 $ 5,063 Accounts Receivable, Net 63,016 59,393 Accounts Receivable from Affiliate 12,016 22,963 Other Receivables 13,829 12,767 Prepaids and Deposits 10,418 8,364 Total Current Assets 127,952 108,550 Fixed Assets Property, Plant and Equipment 1,188,781 1,041,703 Accumulated Depreciation (160,176 ) (121,989 ) Total Property, Plant and Equipment, Net 1,028,605 919,714 Intangible Assets, Net 195,223 232,277 Goodwill 34,585 34,585 Deferred Income Tax Assets, Net 13,449 22,634 Operating Lease Right-of-Use Assets, Net 15,016 16,726 Other Assets 5,284 5,995 Total Assets $ 1,420,114 $ 1,340,481 Liabilities and Stockholders' Equity Accounts Payable $ 20,182 $ 25,925 Payables to Affiliate 941 894 Insurance Premium Financing Liability 6,725 5,463 Accrued and Other Current Liabilities 77,339 64,416 Total Current Liabilities 105,187 96,698 Long-Term Debt, Net of Debt Issuance Costs 441,662 421,792 Asset Retirement Obligations 21,865 19,030 Tax Receivable Agreement Liability 98,781 98,274 Other Long-Term Liabilities 17,335 16,794 Total Liabilities 684,830 652,588 Stockholders' Equity Preferred Stock $0.01 par value, 50,000,000 authorized. None issued or outstanding as of December 31, 2024 and December 31, 2023 — — Class A Common Stock $0.01 par value, 600,000,000 authorized, 31,516,468 issued and 30,857,526 outstanding as of December 31, 2024; 30,669,932 issued and 30,251,613 outstanding as of December 31, 2023 314 306 Class B Common Stock $0.01 par value, 180,000,000 authorized, 27,493,565 issued and outstanding as of December 31, 2024; 27,543,565 issued and outstanding as of December 31, 2023 274 275 Treasury Stock (at Cost), 658,942 shares as of December 31, 2024; 418,319 shares as of December 31, 2023 (8,988 ) (5,133 ) Additional Paid-in-Capital 343,342 328,543 Retained Earnings (Accumulated Deficit) 13,676 (87 ) Total Stockholders' Equity Attributable to Aris Water Solutions, Inc. 348,618 323,904 Noncontrolling Interest 386,666 363,989 Total Stockholders' Equity 735,284 687,893 Total Liabilities and Stockholders' Equity $ 1,420,114 $ 1,340,481 Table 3 Aris Water Solutions, Inc. Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Year Ended (in thousands) December 31, December 31, 2024 2023 2024 2023 Cash Flow from Operating Activities Net Income $ 13,805 $ 13,031 $ 60,178 $ 43,412 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Deferred Income Tax Expense 2,959 2,526 8,689 7,299 Depreciation, Amortization and Accretion 20,057 19,495 79,159 76,632 Stock-Based Compensation 4,700 2,624 18,189 11,569 Abandoned Well Costs 200 89 518 1,303 Loss (Gain) on Disposal of Assets, Net 18 (32 ) 102 (2,606 ) Abandoned Projects 714 88 1,537 216 Amortization of Debt Issuance Costs, Net 756 700 2,949 2,280 Change in Payables Related to Tax Receivable Agreement Liability 229 413 229 413 Other 638 566 1,060 93 Changes in Operating Assets and Liabilities: Accounts Receivable 6,837 (1,878 ) (4,202 ) 20,716 Accounts Receivable from Affiliate 19,176 333 10,947 23,104 Other Receivables 2,309 3,711 (859 ) (9,648 ) Prepaids and Deposits (6,921 ) (6,123 ) (2,865 ) (2,559 ) Accounts Payable 1,912 4,092 (6,506 ) 3,937 Payables to Affiliate 3 (283 ) 47 (2,127 ) Accrued Liabilities and Other 259 (8,004 ) 9,704 9,839 Net Cash Provided by Operating Activities 67,651 31,348 178,876 183,873 Cash Flow from Investing Activities Property, Plant and Equipment Expenditures (12,784 ) (37,862 ) (99,985 ) (169,736 ) Cash Paid for Asset Acquisitions (46,104 ) — (46,104 ) — Proceeds from the Sale of Property, Plant and Equipment 359 35 519 20,154 Net Cash Used in Investing Activities (58,529 ) (37,827 ) (145,570 ) (149,582 ) Cash Flow from Financing Activities Dividends and Distributions Paid (6,367 ) (5,346 ) (24,559 ) (21,429 ) Repurchase of Shares (2,166 ) (738 ) (3,584 ) (1,363 ) Repayment of Credit Facility (46,000 ) (67,000 ) (86,000 ) (118,000 ) Proceeds from Credit Facility 35,000 59,000 104,000 109,000 Payment of Debt Issuance Costs Related to Credit Facility — (3,942 ) — (3,942 ) Proceeds from Insurance Premium Financing 8,779 6,636 8,779 6,636 Payment of Insurance Premium Financing (2,145 ) (1,252 ) (7,779 ) (1,252 ) Payment of Finance Leases (310 ) — (553 ) — Net Cash Used in Financing Activities (13,209 ) (12,642 ) (9,696 ) (30,350 ) Net Increase in Cash (4,087 ) (19,121 ) 23,610 3,941 Cash, Beginning of Period 32,760 24,184 5,063 1,122 Cash, End of Period $ 28,673 $ 5,063 $ 28,673 $ 5,063 Use of Non-GAAP Financial Information The Company uses financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), including Adjusted EBITDA, Adjusted Operating Margin, Adjusted Operating Margin per Barrel, Adjusted Net Income, net debt and leverage ratio, Capital Expenditures and Free Cash Flow. Although these Non-GAAP financial measures are important factors in assessing the Company’s operating results and cash flows, they should not be considered in isolation or as a substitute for net income, gross margin, net cash flows provided from operating activities or any other measures prepared under GAAP. The Company calculates Adjusted EBITDA as net income (loss) plus: interest expense; income taxes; depreciation, amortization and accretion expense; abandoned well costs, asset impairment and abandoned project charges; losses on the sale of assets; transaction costs; research and development expense; change in payables related to the Tax Receivable Agreement liability as a result of state tax rate changes; loss on debt modification; stock-based compensation expense; and other non-recurring or unusual expenses or charges (such as litigation expenses, severance costs and amortization expense related to the implementation costs of our new enterprise resource planning system), less any gains on the sale of assets. The Company calculates Adjusted Operating Margin as Gross Margin (Total Revenue less Total Cost of Revenue) plus depreciation, amortization and accretion. The Company defines Adjusted Operating Margin per Barrel as Adjusted Operating Margin divided by total volumes handled, sold or transferred. The Company calculates Adjusted Net Income as Net Income (Loss) plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically non-cash and/or non-recurring items. The Company calculates Diluted Adjusted Net Income Per Share as (i) Net Income (Loss) plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically non-cash and/or non-recurring items, divided by (ii) the diluted weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC interests, adjusted for the dilutive effect of outstanding equity-based awards. For the quarter ended December 31, 2024, the Company calculates its leverage ratio as net debt as of December 31, 2024, divided by Adjusted EBITDA for the trailing twelve months. Net debt is calculated as the principal amount of total debt outstanding as of December 31, 2024, less cash and cash equivalents as of December 31, 2024. The Company calculates Capital Expenditures as cash capital expenditures for property, plant, and equipment additions less changes in accrued capital costs. The Company calculates Free Cash Flow as cash provided by (used in) operating activities less changes in operating assets and liabilities which used (provided) cash and cash paid for property, plant and equipment expenditures. The Company believes these presentations are used by investors and professional research analysts to assess the ability of our assets to generate sufficient cash to meet our business needs and return capital to equity holders, as well as for the valuation, comparison, rating and investment recommendations of companies within its industry. Similarly, the Company’s management uses this information for comparative purposes as well. Adjusted EBITDA, Adjusted Operating Margin, Adjusted Operating Margin per Barrel, Adjusted Net Income, Capital Expenditures and Free Cash Flow are not measures of financial performance under GAAP and should not be considered as measures of liquidity or as alternatives to net income (loss), gross margin, cash paid for property, plant and equipment or net cash flows provided from operating activities. Additionally, these presentations as defined by the Company may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) and other measures prepared in accordance with GAAP, such as gross margin, operating income, net income, cash paid for property, plant, and equipment or net cash flows from operating activities. Although we provide forecasts for the non-GAAP measures Adjusted EBITDA, Adjusted Operating Margin per Barrel, Capital Expenditures and Free Cash Flow, we are not able to forecast their most directly comparable measures (net income, gross margin, cash paid for property, plant, and equipment and net cash flows from operating activities) calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of forward-looking GAAP metrics are not predictable, making it impractical for us to forecast. Such elements include but are not limited to non-recurring gains or losses, unusual or non-recurring items, income tax benefit or expense, or one-time transaction costs and cost of revenue, which could have a significant impact on the GAAP measures. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. As a result, no reconciliation of forecasted non-GAAP measures is provided. Table 4 Aris Water Solutions, Inc. Operating Metrics (Unaudited) Three Months Ended Year Ended December 31, September 30, December 31, 2024 2023 2024 2024 2023 (thousands of barrels of water per day) Produced Water Handling Volumes 1,112 1,095 1,118 1,120 1,042 Water Solutions Volumes Recycled Produced Water Volumes Sold 463 401 393 377 324 Groundwater Volumes Sold 61 81 66 51 126 Total Water Solutions Volumes 524 482 459 428 450 Total Volumes 1,636 1,577 1,577 1,548 1,492 Per Barrel Operating Metrics (1) Produced Water Handling Revenue/Barrel $ 0.86 $ 0.79 $ 0.86 $ 0.84 $ 0.78 Water Solutions Revenue/Barrel $ 0.54 $ 0.54 $ 0.49 $ 0.52 $ 0.56 Revenue/Barrel of Total Volumes (2) $ 0.75 $ 0.71 $ 0.75 $ 0.75 $ 0.72 Direct Operating Costs/Barrel $ 0.35 $ 0.31 $ 0.32 $ 0.31 $ 0.33 Gross Margin/Barrel $ 0.31 $ 0.27 $ 0.32 $ 0.31 $ 0.25 Adjusted Operating Margin/Barrel $ 0.44 $ 0.41 $ 0.45 $ 0.45 $ 0.39 (1) Per Barrel operating metrics are calculated independently. Therefore, the sum of individual amounts may not equal the total presented. (2) Does not include Other Revenue. Table 5 Aris Water Solutions, Inc. Reconciliation of Net Income to Non-GAAP Adjusted EBITDA (Unaudited) Three Months Ended Year Ended (in thousands) December 31, December 31, 2024 2023 2024 2023 Net Income $ 13,805 $ 13,031 $ 60,178 $ 43,412 Interest Expense, Net 9,600 9,266 36,233 32,853 Income Tax Expense 3,259 2,576 10,341 7,494 Depreciation, Amortization and Accretion 20,057 19,495 79,159 76,632 Abandoned Well Costs 200 89 518 1,303 Stock-Based Compensation 4,700 2,624 18,189 11,569 Abandoned Projects 714 88 1,537 216 Loss (Gain) on Disposal of Assets, Net 18 (32 ) 102 (2,606 ) Transaction Costs 937 129 997 802 Research and Development Expense 433 1,253 3,034 3,120 Change in Payables Related to Tax Receivable Agreement Liability 229 413 229 413 Litigation Expenses 333 222 1,580 222 Other 190 154 (212 ) (458 ) Adjusted EBITDA $ 54,475 $ 49,308 $ 211,885 $ 174,972 Table 6 Aris Water Solutions, Inc. Reconciliation of Gross Margin to Adjusted Operating Margin and Adjusted Operating Margin per Barrel (Unaudited) Three Months Ended Year Ended (in thousands) December 31, December 31, 2024 2023 2024 2023 Total Revenue $ 118,609 $ 104,125 $ 435,444 $ 392,118 Cost of Revenue (72,060 ) (64,490 ) (257,555 ) (254,605 ) Gross Margin 46,549 39,635 177,889 137,513 Depreciation, Amortization and Accretion 20,057 19,495 79,159 76,632 Adjusted Operating Margin $ 66,606 $ 59,130 $ 257,048 $ 214,145 Total Volumes (thousands of barrels) 150,503 145,122 566,547 544,647 Adjusted Operating Margin/BBL $ 0.44 $ 0.41 $ 0.45 $ 0.39 Table 7 Aris Water Solutions, Inc. Reconciliation of Net Income to Non-GAAP Adjusted Net Income (Unaudited) Three Months Ended Year Ended (in thousands) December 31, December 31, 2024 2023 2024 2023 Net Income $ 13,805 $ 13,031 $ 60,178 $ 43,412 Adjusted items: Abandoned Well Costs 200 89 518 1,303 Loss (Gain) on Disposal of Assets, Net 18 (32 ) 102 (2,606 ) Stock-Based Compensation 4,700 2,624 18,189 11,569 Tax Effect of Adjusting Items (1) (621 ) (335 ) (2,374 ) (1,282 ) Adjusted Net Income $ 18,102 $ 15,377 $ 76,613 $ 52,396 (1) Estimated tax effect of adjusted items allocated to Aris based on statutory rates. Table 8 Aris Water Solutions, Inc. Reconciliation of Diluted Net Income Per Share to Non-GAAP Diluted Adjusted Net Income Per Share (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Diluted Net Income Per Share of Class A Common Stock $ 0.17 $ 0.17 $ 0.81 $ 0.59 Adjusted items: Reallocation of Net Income Attributable to Noncontrolling Interests From the Assumed Exchange of LLC Interests 0.05 0.05 0.17 0.14 Abandoned Well Costs — — 0.01 0.02 Loss (Gain) on Disposal of Assets, Net — — — (0.05 ) Stock-Based Compensation 0.08 0.05 0.31 0.20 Tax Effect of Adjusting Items (1) (0.01 ) (0.01 ) (0.04 ) (0.02 ) Diluted Adjusted Net Income Per Share $ 0.29 $ 0.26 $ 1.26 $ 0.88 (1) Estimated tax effect of adjusted items allocated to Aris based on statutory rates. Basic Weighted Average Shares of Class A Common Stock Outstanding 30,767,853 30,128,424 30,575,739 30,037,681 Adjusted Items: Assumed Redemption of LLC Interests 27,527,261 27,543,565 27,539,489 27,554,221 Dilutive Performance-Based Stock Units (2) 879,108 — 301,898 — Diluted Adjusted Fully Weighted Average Shares of Class A Common Stock Outstanding 59,174,222 57,671,989 58,417,126 57,591,902 (2) Dilutive impact of Performance-Based Stock Units already included for the three and twelve months ended December 31, 2024 and 2023. Table 9 Aris Water Solutions, Inc. Computation of Leverage Ratio (Unaudited) As of (in thousands) December 31, 2024 Principal Amount of Debt at December 31, 2024 $ 450,725 Less: Cash at December 31, 2024 (28,673 ) Net Debt $ 422,052 Net Debt $ 422,052 ÷ Trailing Twelve Months Adjusted EBITDA 211,885 Leverage Ratio 1.99 Table 10 Aris Water Solutions, Inc. Reconciliation of Capital Expenditures (Unaudited) Three Months Ended Year Ended December 31, December 31, (in thousands) 2024 2023 2024 2023 Cash Paid for Property, Plant and Equipment $ 12,784 $ 37,862 $ 99,985 $ 169,736 Change in Capital Related Accruals 5,061 (18,095 ) 1,100 (13,342 ) Capital Expenditures $ 17,845 $ 19,767 $ 101,085 $ 156,394 Table 11 Aris Water Solutions, Inc. Reconciliation of Free Cash Flow (Unaudited) Year Ended December 31, (in thousands) 2024 2023 Net Cash Provided by Operating Activities $ 178,876 $ 183,873 Changes in Operating Assets and Liabilities Which Used (Provided) Cash: Accounts Receivable 4,202 (20,716 ) Accounts Receivable from Affiliate (10,947 ) (23,104 ) Other Receivables 859 9,648 Prepaids and Deposits 2,865 2,559 Accounts Payable 6,506 (3,937 ) Payables to Affiliates (47 ) 2,127 Accrued Liabilities and Other (9,704 ) (9,839 ) Property, Plant and Equipment Expenditures (99,985 ) (169,736 ) Free Cash Flow $ 72,625 $ (29,125 ) Cash Flow Information Net Cash Provided by Operating Activities $ 178,876 $ 183,873 Net Cash Used in Investing Activities $ (145,570 ) $ (149,582 ) Net Cash Used in Financing Activities $ (9,696 ) $ (30,350 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20250226178196/en/ Contacts David Tuerff Senior Vice President, Finance and Investor Relations (281) 501-3070 IR@ariswater.com View Comments Terms and Privacy Policy Privacy Dashboard More Info Recommended Stories
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