Aris Water Solutions, Inc. Reports Third Quarter 2024 Results and Further Increases 2024 Adjusted EBITDA Outlook

Rhea-AI Summary

Aris Water Solutions (NYSE: ARIS) reported strong Q3 2024 results with net income of $16.4 million, up 34% year-over-year. The company achieved Adjusted EBITDA of $54.3 million, increasing 21% from Q3 2023. Produced water volumes grew 6% year-over-year, while recycled water volumes increased 16%. The company maintained a strong balance sheet with 2.0X leverage and $292 million in available liquidity. Based on performance, Aris increased its 2024 Adjusted EBITDA outlook to $208-212 million, while maintaining capital expenditure guidance of $98-105 million.

Positive

• Net income increased 34% YoY to $16.4 million
• Adjusted EBITDA grew 21% YoY to $54.3 million
• Produced water volumes up 6% YoY
• Recycled water volumes increased 16% YoY
• Strong liquidity position with $292 million available
• Increased 2024 Adjusted EBITDA guidance to $208-212 million
• Improved Gross Margin per barrel to $0.32 from $0.26 YoY

Negative

• Groundwater volumes sold decreased 45% YoY

Insights

Financial Analyst

Strong Q3 results demonstrate robust operational execution with significant growth metrics. Net income increased 34% year-over-year to $16.4 million, while Adjusted EBITDA grew 21% to $54.3 million. Key performance indicators show healthy business momentum:

• Produced water volumes up 6% YoY
• Recycled water volumes increased 16% YoY
• Gross margin per barrel improved to $0.32 from $0.26

The company's financial position remains solid with $292 million in available liquidity and a conservative leverage ratio of 2.0X. The increased 2024 Adjusted EBITDA guidance of $208-212 million and maintained capex guidance signals strong execution and improving operational efficiency. Strategic initiatives in water treatment technology and mineral extraction present additional growth vectors for 2025 and beyond.

Environmental Technology Analyst

The company's progress in sustainable water management technologies marks a significant strategic advancement. Three key developments stand out:

• Successful testing of three desalination technologies for high-salinity produced water treatment
• Planned iodine extraction facility development with a strategic partner
• Emerging opportunities in magnesium, ammonia and lithium extraction

These initiatives position Aris at the forefront of produced water recycling and resource recovery, potentially creating new revenue streams while addressing critical environmental challenges. The focus on reducing energy consumption and operating costs in water treatment demonstrates a commitment to both environmental and economic sustainability.

HOUSTON--(BUSINESS WIRE)-- Aris Water Solutions, Inc. (NYSE: ARIS) (“Aris,” “Aris Water” or the “Company”) today announced financial and operating results for the third quarter ended September 30, 2024.

THIRD QUARTER 2024 HIGHLIGHTS

• Increased produced water volumes 2% sequentially and 6% versus the third quarter of 2023
• Increased recycled water volumes 25% sequentially and 16% versus the third quarter of 2023
• Achieved net income of $16.4 million, a 34% increase versus the third quarter of 2023
• Generated Adjusted EBITDA¹ of $54.3 million, up 9% sequentially and up 21% versus the third quarter of 2023
• Achieved Gross Margin per barrel of $0.32 and Adjusted Operating Margin per barrel² of $0.45, a 13% increase in Adjusted Operating Margin per barrel² versus the third quarter of 2023
• Maintained a strong balance sheet with quarter-end leverage³ of 2.0X and $292 million of available liquidity under our revolving credit facility
• Increasing our 2024 Adjusted EBITDA¹ outlook to $208 to $212 million
• Full year 2024 Capital Expenditure⁴ guidance of $98 to $105 million, consistent with prior guidance

“Aris had an exceptional third quarter as we continued to grow our produced water volumes, increased our recycled water sales, and maintained our strong margins. As we anticipated, our capital investment to support these increased activity levels was primarily deployed in the first half of the year and our capital spending in the third quarter declined significantly. We continue to experience steady volume growth and increasing cash generation. We anticipate a strong finish to the year and are extremely proud of our team’s efforts and results,” said Amanda Brock, President and CEO of Aris.

“In addition to the great results in our core business, we continue to collaborate with major operators to accelerate the beneficial reuse of treated produced water outside of the oil and gas industry. By year end, Aris and its partners will finish testing the third of three desalination technologies for the treatment of high salinity produced water. The pilot projects thus far have successfully demonstrated the ability over time to lower energy consumption costs and potential capital and operating costs for the treatment of produced water. In 2025, we will be focused on increasing the scale of these promising technologies and confirming costs as we progress to commercialization.

We also continue to evaluate commercial opportunities for mineral extraction from our produced water stream and are currently selecting a site for an iodine extraction facility with a strategic partner. We have also been approached by mineral extraction companies who specialize in magnesium, ammonia, and lithium. In 2025, we expect to have further updates relating to future potential revenues.

We are also progressing other strategic initiatives to further lower our cost structure, deepen our relationships with our existing customers and further diversify our customer base. We are extremely excited about our progress and look forward to sharing more details in the coming quarters.”

OPERATIONS UPDATE
		Three Months Ended								Three Months Ended
		September 30,			June 30,			% Change		September 30,			% Change
		2024			2024					2023
(thousands of barrels of water per day)
Total Volumes		1,577			1,455			8	%	1,516			4	%
Produced Water Handling Volumes		1,118			1,093			2	%	1,056			6	%
Water Solutions Volumes
Recycled Produced Water Volumes Sold		393			314			25	%	339			16	%
Groundwater Volumes Sold		66			48			38	%	121			(45	)%
Total Water Solutions Volumes		459			362			27	%	460			—	%
Skim oil recoveries (barrels of oil per day)		1,769			1,490			19	%	1,125			57	%
Skim oil recoveries (as a % of produced water volumes)		0.16	%		0.14	%		14	%	0.11	%		45	%

FINANCIAL UPDATE

Net income was $16.4 million for the third quarter of 2024 versus net income of $12.2 million in the third quarter of 2023 and net income of $13.1 million in the second quarter of 2024. Adjusted Net Income¹ was $21.0 million for the third quarter of 2024 versus $13.9 million for the third quarter of 2023 and $17.3 million in the second quarter of 2024.

Adjusted EBITDA¹ was $54.3 million for the third quarter of 2024, up approximately 21% from $44.9 million in the third quarter of 2023, and up approximately 9% from $50.0 million in the second quarter of 2024.

Gross Margin per Barrel for the third quarter of 2024 was $0.32 per barrel versus $0.26 per barrel in the third quarter of 2023.

Adjusted Operating Margin per Barrel² for the third quarter of 2024 was $0.45 per barrel versus $0.40 per barrel in the third quarter of 2023.

Third quarter 2024 Capital Expenditures⁴ totaled approximately $8 million versus $40 million in the third quarter of 2023.

STRONG BALANCE SHEET AND LIQUIDITY

As of September 30, 2024, the Company had net debt of approximately $422 million with $33 million in cash and $292 million available under its revolving credit facility. The Company’s leverage ratio³ at the end of the third quarter of 2024 was 2.0X, below the Company’s target leverage of 2.5X – 3.5X.

FOURTH QUARTER 2024 DIVIDEND

Aris’s Board of Directors declared a dividend on its Class A common stock for the fourth quarter of 2024 of $0.105 per share. In conjunction with the dividend payment, a distribution of $0.105 per unit will be paid to unit holders of Solaris Midstream Holdings, LLC. The dividend will be paid on December 19, 2024, to holders of record of the Company’s Class A common stock as of the close of business on December 5, 2024. The distribution to unit holders of Solaris Midstream Holdings, LLC will be subject to the same payment and record dates.

FOURTH QUARTER 2024 FINANCIAL OUTLOOK

“With three quarters now behind us, 2024 is shaping up to be a record year for volumes, performance, and profitability. Based on customers’ projected activity, we anticipate our growth will continue through year-end on our dedicated acreage. Accordingly, we are increasing our full year Adjusted EBITDA range to $208 to $212 million. Additionally, our forecasted capital expenditures for the full year remain unchanged. We expect continued strong cash generation to further enhance our balance sheet and support increased shareholder returns over the long term.

Turning to 2025, we anticipate produced water volume growth in line with our 2024 produced water volume growth and consistent with oil production forecasts for the Delaware Basin. Our customers continue to allocate significant capital to developing our dedicated acreage. Our capital investment plans for next year will depend on the growth rate of our customers as well as incremental commercial opportunities. We currently anticipate, however, that we will be able to grow alongside our existing customers at a similar or lower level of capital investment to 2024.

We have made tremendous improvements in our margins this year due to revenue escalation clauses in our contracts, electrification, and cost reductions. Additionally, our operational focus on skim oil recoveries led to significant increases in skim oil yield in 2024. While there will be variability quarter to quarter, we expect much of those increases to be sustainable in 2025 and beyond.

Consistent volume growth, additional margin progress, and efficient capital investment in 2025 will provide us with increased flexibility to allocate capital to both shareholder returns and incremental growth projects. We are extremely optimistic about next year and beyond.”

For the fourth quarter of 2024, the Company expects:

• Produced Water Handling volumes between 1,080 and 1,110 thousand barrels of water per day
• Water Solutions volumes between 450 and 490 thousand barrels of water per day
• Adjusted Operating Margin per Barrel² between $0.43 and $0.45
• Skim oil recoveries of approximately 1,550 barrels per day
• Adjusted EBITDA¹ between $51 and $55 million
• Capital Expenditures⁴ of $15 to $22 million, consistent with previous full year 2024 guidance

CONFERENCE CALL

Aris will host a conference call to discuss its third quarter 2024 results on Tuesday, November 5, 2024, 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 13749151.

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 September 30, 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.

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 2024, 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 2024. 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. Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except for share and		Three Months Ended								Nine Months Ended
per share amounts)		September 30,								September 30,
		2024				2023				2024				2023
Revenue
Produced Water Handling		$	59,006			$	47,574			$	172,927			$	143,390
Produced Water Handling — Affiliate			29,418				28,036				84,859				74,357
Water Solutions			16,600				20,370				42,097				49,180
Water Solutions — Affiliate			4,225				3,048				12,920				19,195
Other Revenue			3,063				761				4,032				1,871
Total Revenue			112,312				99,789				316,835				287,993
Cost of Revenue
Direct Operating Costs			46,553				44,687				126,393				132,978
Depreciation, Amortization and Accretion			19,974				19,445				59,102				57,137
Total Cost of Revenue			66,527				64,132				185,495				190,115
Operating Costs and Expenses
Abandoned Well Costs			8				1,214				318				1,214
General and Administrative			17,415				13,526				47,953				38,007
Research and Development Expense			408				809				2,601				1,867
Other Operating (Income) Expense, Net			(358	)			(2,121	)			379				(2,096	)
Total Operating Expenses			17,473				13,428				51,251				38,992
Operating Income			28,312				22,229				80,089				58,886
Other Expense
Interest Expense, Net			9,382				7,955				26,633				23,587
Other			—				—				1				—
Total Other Expense			9,382				7,955				26,634				23,587
Income Before Income Taxes			18,930				14,274				53,455				35,299
Income Tax Expense			2,499				2,032				7,082				4,918
Net Income			16,431				12,242				46,373				30,381
Net Income Attributable to Noncontrolling Interest			8,943				6,829				25,297				16,892
Net Income Attributable to Aris Water Solutions, Inc.		$	7,488			$	5,413			$	21,076			$	13,489
Net Income Per Share of Class A Common Stock
Basic		$	0.23			$	0.17			$	0.64			$	0.42
Diluted		$	0.22			$	0.17			$	0.64			$	0.42
Weighted Average Shares of Class A Common Stock Outstanding
Basic			30,631,995				30,050,560				30,511,701				30,007,433
Diluted			30,919,575				30,050,560				30,621,195				30,007,433

Table 2 Aris Water Solutions, Inc. Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except for share and per share amounts)		September 30,				December 31,
		2024				2023
Assets
Cash		$	32,760			$	5,063
Accounts Receivable, Net			69,854				59,393
Accounts Receivable from Affiliate			31,192				22,963
Other Receivables			15,292				12,767
Prepaids and Deposits			4,459				8,364
Total Current Assets			153,557				108,550
Fixed Assets
Property, Plant and Equipment			1,125,295				1,041,703
Accumulated Depreciation			(150,867	)			(121,989	)
Total Property, Plant and Equipment, Net			974,428				919,714
Intangible Assets, Net			204,487				232,277
Goodwill			34,585				34,585
Deferred Income Tax Assets, Net			15,966				22,634
Operating Lease Right-of-Use Assets, Net			15,650				16,726
Other Assets			5,986				5,995
Total Assets		$	1,404,659			$	1,340,481
Liabilities and Stockholders' Equity
Accounts Payable		$	13,510			$	25,925
Payables to Affiliate			938				894
Insurance Premium Financing Liability			—				5,463
Accrued and Other Current Liabilities			74,830				64,416
Total Current Liabilities			89,278				96,698
Long-Term Debt, Net of Debt Issuance Costs			452,194				421,792
Asset Retirement Obligations			21,499				19,030
Tax Receivable Agreement Liability			98,274				98,274
Other Long-Term Liabilities			16,650				16,794
Total Liabilities			677,895				652,588
Stockholders' Equity
Preferred Stock $0.01 par value, 50,000,000 authorized. None issued or outstanding as of September 30, 2024 and December 31, 2023			—				—
Class A Common Stock $0.01 par value, 600,000,000 authorized, 31,139,032 issued and 30,582,305 outstanding as of September 30, 2024; 30,669,932 issued and 30,251,613 outstanding as of December 31, 2023			311				306
Class B Common Stock $0.01 par value, 180,000,000 authorized, 27,543,565 issued and outstanding as of September 30, 2024 and December 31, 2023			275				275
Treasury Stock (at Cost), 556,727 shares as of September 30, 2024; 418,319 shares as of December 31, 2023			(6,822	)			(5,133	)
Additional Paid-in-Capital			337,609				328,543
Retained Earnings (Accumulated Deficit)			11,332				(87	)
Total Stockholders' Equity Attributable to Aris Water Solutions, Inc.			342,705				323,904
Noncontrolling Interest			384,059				363,989
Total Stockholders' Equity			726,764				687,893
Total Liabilities and Stockholders' Equity		$	1,404,659			$	1,340,481

Table 3 Aris Water Solutions, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)
		Nine Months Ended
(in thousands)		September 30,
		2024				2023
Cash Flow from Operating Activities
Net Income		$	46,373			$	30,381
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Deferred Income Tax Expense			5,730				4,773
Depreciation, Amortization and Accretion			59,102				57,137
Stock-Based Compensation8			13,489				8,945
Abandoned Well Costs			318				1,214
Loss (Gain) on Disposal of Assets, Net			84				(2,574	)
Abandoned Projects			823				128
Amortization of Debt Issuance Costs, Net			2,193				1,580
Other			422				(473	)
Changes in Operating Assets and Liabilities:
Accounts Receivable			(11,039	)			22,594
Accounts Receivable from Affiliate			(8,229	)			22,771
Other Receivables			(3,168	)			(13,359	)
Prepaids and Deposits			4,056				3,564
Accounts Payable			(8,418	)			(155	)
Payables to Affiliate			44				(1,844	)
Accrued Liabilities and Other			9,445				17,843
Net Cash Provided by Operating Activities			111,225				152,525
Cash Flow from Investing Activities
Property, Plant and Equipment Expenditures			(87,201	)			(131,874	)
Proceeds from the Sale of Property, Plant and Equipment			160				20,119
Net Cash Used in Investing Activities			(87,041	)			(111,755	)
Cash Flow from Financing Activities
Dividends and Distributions Paid			(18,192	)			(16,083	)
Repurchase of Shares			(1,418	)			(625	)
Repayment of Credit Facility			(40,000	)			(51,000	)
Proceeds from Credit Facility			69,000				50,000
Payment of Insurance Premium Financing			(5,634	)			—
Payment of Finance Leases			(243	)			—
Net Cash Provided by (Used in) Financing Activities			3,513				(17,708	)
Net Increase in Cash			27,697				23,062
Cash, Beginning of Period			5,063				1,122
Cash, End of Period		$	32,760			$	24,184

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, and Capital Expenditures. 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 or gross margin 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 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 noncash and/or nonrecurring items. The Company calculated 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 noncash and/or nonrecurring 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 September 30, 2024, the Company calculates its leverage ratio as net debt as of September 30, 2024, divided by Adjusted EBITDA for the trailing twelve months. Net debt is calculated as the principal amount of total debt outstanding as of September 30, 2024, less cash and cash equivalents as of September 30, 2024.

The Company calculates Capital Expenditures as cash capital expenditures for property, plant, and equipment additions less changes in accrued capital costs.

The Company believes these presentations are used by investors and professional research analysts 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, and Capital Expenditures 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, or cash paid for property, plant and equipment. 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 cash flows from operating activities.

Although we provide forecasts for the non-GAAP measures Adjusted EBITDA, Adjusted Operating Margin per Barrel, and Capital Expenditures, we are not able to forecast their most directly comparable measures (net income, gross margin, and cash paid for property, plant, and equipment) 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												Nine Months Ended
		September 30,							June 30,					September 30,
		2024				2023				2024				2024				2023
(thousands of barrels of water per day)
Produced Water Handling Volumes			1,118				1,056				1,093				1,123				1,024
Water Solutions Volumes
Recycled Produced Water Volumes Sold			393				339				314				348				298
Groundwater Volumes Sold			66				121				48				47				141
Total Water Solutions Volumes			459				460				362				395				439
Total Volumes			1,577				1,516				1,455				1,518				1,463
Per Barrel Operating Metrics (1)
Produced Water Handling Revenue/Barrel		$	0.86			$	0.78			$	0.84			$	0.84			$	0.78
Water Solutions Revenue/Barrel		$	0.49			$	0.55			$	0.52			$	0.51			$	0.57
Revenue/Barrel of Total Volumes (2)		$	0.75			$	0.71			$	0.76			$	0.75			$	0.72
Direct Operating Costs/Barrel		$	0.32			$	0.32			$	0.30			$	0.30			$	0.33
Gross Margin/Barrel		$	0.32			$	0.26			$	0.31			$	0.32			$	0.24
Adjusted Operating Margin/Barrel		$	0.45			$	0.40			$	0.46			$	0.46			$	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								Nine Months Ended
(in thousands)		September 30,								September 30,
		2024				2023				2024				2023
Net Income		$	16,431			$	12,242			$	46,373			$	30,381
Interest Expense, Net			9,382				7,955				26,633				23,587
Income Tax Expense			2,499				2,032				7,082				4,918
Depreciation, Amortization and Accretion			19,974				19,445				59,102				57,137
Abandoned Well Costs			8				1,214				318				1,214
Stock-Based Compensation			5,275				3,360				13,489				8,945
Abandoned Projects			78				—				823				128
(Gain) Loss on Disposal of Assets, Net			(30	)			(2,631	)			84				(2,574	)
Transaction Costs			(36	)			528				60				673
Research and Development Expense			408				809				2,601				1,867
Other			318				(18	)			845				(612	)
Adjusted EBITDA		$	54,307			$	44,936			$	157,410			$	125,664

Table 6 Aris Water Solutions, Inc. Reconciliation of Gross Margin to Adjusted Operating Margin and Adjusted Operating Margin per Barrel (Unaudited)
		Three Months Ended								Nine Months Ended
(in thousands)		September 30,								September 30,
		2024				2023				2024				2023
Total Revenue		$	112,312			$	99,789			$	316,835			$	287,993
Cost of Revenue			(66,527	)			(64,132	)			(185,495	)			(190,115	)
Gross Margin			45,785				35,657				131,340				97,878
Depreciation, Amortization and Accretion			19,974				19,445				59,102				57,137
Adjusted Operating Margin		$	65,759			$	55,102			$	190,442			$	155,015
Total Volumes (thousands of barrels)			145,069				139,429				416,044				399,525
Adjusted Operating Margin/BBL		$	0.45			$	0.40			$	0.46			$	0.39

Table 7 Aris Water Solutions, Inc. Reconciliation of Net Income to Non-GAAP Adjusted Net Income (Unaudited)
		Three Months Ended								Nine Months Ended
(in thousands)		September 30,								September 30,
		2024				2023				2024				2023
Net Income		$	16,431			$	12,242			$	46,373			$	30,381
Adjusted items:
Abandoned Well Costs			8				1,214				318				1,214
(Gain) Loss on Disposal of Assets, Net			(30	)			(2,631	)			84				(2,574	)
Stock-Based Compensation			5,275				3,360				13,489				8,945
Tax Effect of Adjusting Items (1)			(693	)			(257	)			(1,841	)			(1,003	)
Adjusted Net Income		$	20,991			$	13,928			$	58,423			$	36,963
(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								Nine Months Ended
		September 30,								September 30,
		2024				2023				2024				2023
Diluted Net Income Per Share of Class A Common Stock		$	0.22			$	0.17			$	0.64			$	0.42
Adjusted items:
Reallocation of Net Income Attributable to Noncontrolling Interests From the Assumed Exchange of LLC Interests			0.04				0.03				0.11				0.08
Abandoned Well Costs			—				0.02				0.01				0.02
Gain on Disposal of Assets, Net			—				(0.05	)			—				(0.04	)
Stock-Based Compensation			0.09				0.06				0.23				0.16
Tax Effect of Adjusting Items (1)			(0.01	)			—				(0.03	)			(0.02	)
Diluted Adjusted Net Income Per Share		$	0.34			$	0.23			$	0.96			$	0.62
(1) Estimated tax effect of adjusted items allocated to Aris based on statutory rates.
Basic Weighted Average Shares of Class A Common Stock Outstanding			30,631,995				30,050,560				30,511,701				30,007,433
Adjusted Items:
Assumed Redemption of LLC Interests			27,543,565				27,550,626				27,543,565				27,557,774
Dilutive Performance-Based Stock Units (2)			287,580				—				109,494				—
Diluted Adjusted Fully Weighted Average Shares of Class A Common Stock Outstanding			58,463,140				57,601,186				58,164,760				57,565,207
(2) Dilutive impact of Performance-Based Stock Units already included for the three and nine months ended September 30, 2024 and 2023.

Table 9 Aris Water Solutions, Inc. Computation of Leverage Ratio (Unaudited)
		As of
(in thousands)		September 30, 2024
Principal Amount of Debt at September 30, 2024		$	455,000
Less: Cash at September 30, 2024			(32,760	)
Net Debt		$	422,240
Net Debt		$	422,240
÷ Trailing Twelve Months Adjusted EBITDA			206,718
Leverage Ratio			2.04

Table 10
Aris Water Solutions, Inc.
Reconciliation of Capital Expenditures
(Unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands)		2024				2023				2024				2023
Cash Paid for Property, Plant and Equipment		$	30,322			$	53,893			$	87,201			$	131,874
Change in Capital Related Accruals			(22,144	)			(14,328	)			(3,961	)			4,753
Capital Expenditures		$	8,178			$	39,565			$	83,240			$	136,627

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104315934/en/

David Tuerff

Senior Vice President, Finance and Investor Relations

(281) 501-3070

IR@ariswater.com

Source: Aris Water Solutions, Inc.

FAQ

What was Aris Water Solutions (ARIS) net income in Q3 2024?

Aris Water Solutions reported a net income of $16.4 million in Q3 2024, representing a 34% increase compared to Q3 2023.

How much did ARIS's produced water volumes grow in Q3 2024?

Aris's produced water volumes grew 6% year-over-year and 2% sequentially in Q3 2024, reaching 1,118 thousand barrels of water per day.

What is Aris Water Solutions' (ARIS) updated 2024 Adjusted EBITDA guidance?

Aris Water Solutions increased its 2024 Adjusted EBITDA guidance to $208-212 million.

What was ARIS's Q3 2024 Adjusted EBITDA?

Aris Water Solutions generated Adjusted EBITDA of $54.3 million in Q3 2024, up 21% from Q3 2023 and 9% sequentially.