Global Water Resources, Inc. Q3 FY2025 earnings call

• Closed the Tucson acquisition in July 2025, adding ~2,200 connections and ~$7.7 million in rate base at 1.05x rate base. Expected the systems to generate ~$1.5 million in annual revenue until consolidation into Saguaro rate division.
• Arizona Governor signed Ag-to-Urban water legislation, expected to benefit Global Water by improving sustainability and creating new groundwater supply for growth.
• Full funding approved for Highway 347 expansion connecting to Maricopa, estimated construction to begin in FY 2026, expected to drive growth in Maricopa.
• Total active service connections increased 6.6% to 68,130 as of September 30, 2025. Q3 annualized connection growth rate excluding Tucson acquisition was 3.3%.
• Year-to-date invested $49.6 million in infrastructure improvements. Single-family building permits in Phoenix MSA decreased 29% in Q3 2025, Maricopa market permits decreased 20%.
• Rate case for Santa Cruz and Palo Verde utilities continues, expected to finish in mid-2026 with a proposed $4.3 million annual rate increase.

Total revenue for the third quarter of 2025 was $15.5 million, up $1.2 million or 8.4% compared to Q3 2024. Total revenue year-to-date was $42.2 million, up $2.8 million or 7%. Operating expenses for Q3 2025 were $12.6 million, an increase of approximately $2.3 million or 21.9% compared to Q3 2024. Year-to-date operating expenses were $35.4 million, up approximately $4 million or 12.8%. Personnel costs increased due to hiring for acquired systems and medical costs. Other O&M and G&A costs increased due to storm events and professional fees. Depreciation and amortization increased due to additional capital investments. Other expense for Q3 2025 was $0.6 million compared to immaterial other income in Q3 2024. Net income for Q3 2025 was $1.7 million or $0.06 per diluted share, down from $2.9 million or $0.12 per diluted share in Q3 2024. Adjusted EBITDA for Q3 2025 was $7.8 million, down $0.4 million or 5% from Q3 2024.

• Expect the rate case for Santa Cruz and Palo Verde utilities to be completed by mid-2026.
• The Ag-to-Urban water legislation is expected to drive growth in service areas by creating a new groundwater supply for additional growth.

• Uncertainty around rate case outcomes as the ACC may not approve the full proposed rate increase.
• Macro-economic uncertainties affecting building permits and connection growth, which could impact revenue growth.

Q: Gerry Sweeney asks about the rate case timing and how the ag-to-urban law works.

A: Mike Liebman says rates are expected to change by mid-2026. Ron Fleming explains the ag-to-urban law converts historic groundwater pumping rights from farming to municipal supply, benefiting all stakeholders.

Q: Matvey Tayts asks about the rate case proposal difference and the $212.5 million rate base number.

A: Chris Krygier says the rate case is in the middle innings with back-and-forth on post-test year plant and additional information requests. Mike Liebman states the $212.5 million number is in the investor presentation and has decreased slightly but is still correct, not reported in quarterly financials