Global Water Resources, Inc. Q3 FY2024 earnings call

Operational Highlights

• Total active service connections increased 4.7% to 63,889 as of September 30, 2024, from the 12 months prior, with a 2024 annualized growth rate of 4.5%.
• Year-to-date, $19.2 million invested in infrastructure improvements. Zero significant compliance events for over seven years.
• Single-family dwelling unit permits in metro-Phoenix up 28% from Q3 2023; in the City of Maricopa up 13%. Multifamily housing units in Maricopa up 281% (1,200 units in 2024 vs. 350 in 2023).
• Industrial manufacturing: $40.7 billion invested in Arizona in 2023, with further expansions at TSMC and Intel announced in 2024.

Regulatory Activity

• Tucson acquisition approval application progressing, with staff recommendation filed and hearing scheduled for next week, expected to close in Q1 2025.
• Global Water Farmers rate case ongoing, with Utilities Division staff expected to file initial recommendations in December 2024.
• Santa Cruz and Palo Verde rate cases to be filed in the first half of 2025, with a year-long process from sufficiency to commission order once filed.

Total revenue for the third quarter of 2024 was $14.3 million, down $0.2 million or 1.5% compared to Q3 2023. Regulated revenue (excluding ICFA) for Q3 2024 was $14.3 million, up $0.3 million or 2.2% compared to Q3 2023. Operating expenses for Q3 2024 were $10.3 million, a decrease of approximately $0.4 million or 3.3% from Q3 2023. Net income for Q3 2024 was $2.9 million or $0.12 per diluted share, compared to $2.6 million or $0.11 per diluted share in Q3 2023. Adjusted EBITDA was $8.2 million in Q3 2024, an increase of approximately $600,000 or 7.2% from Q3 2023.

• Anticipate filing rate cases for Santa Cruz and Palo Verde utilities in the first half of 2025.
• Expect to close the Tucson acquisition in the first quarter of 2025.

Forward-looking statements involve assumptions, risks, uncertainties, etc., that could cause actual results to differ. Factors affecting future results are detailed in Form 10-K filings with the SEC.

Q: Viewpoint on the changed political landscape impacting the Greater Phoenix area and operations?

A: Ron mentions economic development in Arizona is strong, with industrial growth, housing affordability in outlying areas like Buckeye, and power supply considerations driving continued growth in metro-Phoenix and service areas.

Q: How much was the Buckeye premium in the quarter?

A: Mike says the Buckeye premium was just under $920,000 in Q3 2024, up from about $730,000 in Q3 2023, and year-to-date it's at about $2.2 million vs. $1.6 million last year.