WBI Q3 Earnings Call Highlights

Key Points

• Record Q3 performance drove higher 2026 guidance: WaterBridge handled 2.8 million barrels of produced water per day, while revenue rose 10% sequentially to $240.2 million and adjusted EBITDA increased 7% to $124.2 million. The company raised its EBITDA guidance midpoint to $475 million and its volume guidance midpoint by 2%, while lowering the capital-spending range.
• Speedway Phase I is outperforming expectations: Utilization has exceeded forecasts, and new customer agreements are expected to require little additional capital. Speedway Phase II planning continues, but a final investment decision depends on firm customer commitments and Phase I utilization.
• WaterBridge is pursuing data-center water opportunities: The company is making progress on a solution to source, treat and deliver non-potable water for a large-scale campus in Texas, while managing its water. Management said returns on digital-infrastructure projects are competitive with other investments.

WBI NYSE: WBI, also known as WaterBridge, raised its full-year 2026 volume and adjusted EBITDA guidance after reporting record third-quarter revenue and produced water handling volumes, driven in part by the ramp-up of its Speedway pipeline.

The company handled 2.8 million barrels of produced water per day during the quarter, up 6% from the prior quarter. Revenue increased 10% sequentially to $240.2 million, while adjusted EBITDA rose 7% to $124.2 million.

CEO Jason Long said customer activity in the Delaware Basin, particularly along the Stateline and in New Mexico, is generating growing water volumes. He said disposal capacity in active areas is constrained by elevated pore pressure, creating demand for infrastructure that can move water to locations with more reliable capacity.

Higher Outlook, Lower Capital Spending

WaterBridge raised the midpoint of its full-year produced water handling volume guidance by 2% and its adjusted EBITDA midpoint by 4%. The company now expects:

• Produced water handling volumes of 2.65 million to 2.75 million barrels per day, compared with its previous range of 2.55 million to 2.75 million.
• Adjusted EBITDA of $465 million to $485 million, up from its prior forecast of $435 million to $475 million.
• Capital expenditures of $530 million to $560 million, compared with the previous range of $530 million to $590 million.

CFO Scott McNeely said the reduced capital spending midpoint reflects the timing of payments shifting from late 2026 into early 2027, rather than a meaningful change in when projects are expected to come online. The company spent $123.9 million on capital projects during the third quarter.

WaterBridge’s adjusted EBITDA margin was approximately 52%, within the 50% to 53% range reported over the preceding four quarters. The company expects to provide 2027 guidance alongside its fourth-quarter results.

Speedway Phase I Outperforms Expectations

COO Michael Chop Reitz said Speedway Phase I began moving volumes in July and that utilization has exceeded the company’s expectations. Throughput on the western portion of the system is performing particularly well, he said.

Reitz said WaterBridge has signed several new agreements with exploration and production customers for Speedway volumes that require little additional capital. The company’s produced water handling revenue, excluding skim oil, was $0.77 per barrel in the quarter, up from $0.72 a year earlier. Reitz attributed the improvement in part to higher contract rates, including rates on long-haul pipelines and short-term interruptible capacity in pressure-stressed areas.

WaterBridge is continuing engineering and planning for Speedway Phase II, but management said its timing will depend on firm customer commitments and utilization of the first phase. McNeely said some operators have wanted to complete work related to industry consolidation and their budgeting cycles before making long-term commitments at the scale contemplated for Phase II.

“We do think that comes here in the coming months, and those could very well support an FID on Phase II,” McNeely said, referring to a final investment decision. He added that Phase I still has available capacity and that smaller projects across the network also offer attractive returns.

Reitz said WaterBridge has integrated its acquired Ranger system into Speedway, increasing reliability for both systems. He said the company can expand Ranger’s capacity by using Speedway without deploying capital for deep wells in New Mexico.

Data Center Water Opportunities

Long said WaterBridge has made significant commercial progress on a water supply solution for a large-scale data center. Separately, PowerBridge has broken ground on its Alpha Digital Campus on LandBridge acreage in Reeves County, Texas.

According to Long, PowerBridge expects WaterBridge to source, treat and deliver non-potable water for the campus’s cooling system and manage produced and discharged water from the site. He said PowerBridge has committed not to use municipal or community water for industrial purposes at the campus.

McNeely said prospective customers are comfortable using treated non-potable brackish water, while treated produced water has a longer timeline because of more involved treatment requirements and regulatory complexity. He said the returns WaterBridge is seeing on digital infrastructure water projects are competitive with its other investment opportunities.

Balance Sheet and Regulatory Outlook

WaterBridge ended the quarter with $539.7 million in liquidity, including $34.7 million in cash, and $1.8 billion in total debt. Its covenant net leverage ratio was 3.5 times, compared with its long-term target of less than 3 times.

In August, the company increased commitments under its revolving credit facility to $750 million from $500 million. It also issued an additional $150 million of 6.5% senior unsecured notes due in 2033 and used the proceeds to repay revolver borrowings. WaterBridge announced a dividend of $0.05 per share, payable Dec. 10 to shareholders of record as of Nov. 25.

Asked about the potential impact of the election on regulation, McNeely said he did not expect an abrupt change in how produced water is regulated. He said the company is monitoring producer sentiment, permitting and commodity prices, but does not expect a major near-term shift in operator activity based on the election.

About WBI (NYSE:WBI)

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