Global Water Resources posts 24.8% Q2 revenue rise on Arizona growth
Global Water Resources (NASDAQ: GWRS), a Phoenix-area water, wastewater and recycled-water utility, reported second-quarter 2026 total revenue of $17.8 million, up 24.8% year-on-year, as its 2025 acquisition of seven water systems from the City of Tucson, organic connection growth and higher consumption all fed through to the income statement. Net income rose 70.4% to $2.7 million, or $0.10 per diluted share.
The company's regulated revenue, covering core water and wastewater service, grew 9.9% to $15.7 million. A further $2.1 million came from unregulated infrastructure coordination and financing agreement (ICFA) revenue, recognised for the first time in Q2 following the commissioning of a new wastewater reclamation facility in its Hassayampa service territory in June 2026. Adjusted EBITDA, a non-GAAP measure that strips out ICFA revenue, asset disposals and restricted-stock expense, rose 14.6% to $7.9 million.
Operational milestones
Active service connections reached 69,429 at 30 June 2026, a 5.8% increase year-on-year. Excluding the Tucson acquisition, organic connection growth ran at 2.6% annually. Water consumption climbed 6.1% to 1.2 billion gallons for the quarter, partly reflecting hotter and drier conditions in the Phoenix metropolitan area. Capital expenditure in the quarter was $6.6 million, funding infrastructure to support existing utilities and new connections.
The company commissioned a new 60,000-gallon-per-day water reclamation facility at its Hassayampa utility, serving western Maricopa County within Phoenix's growth corridors. A settlement agreement filed with the Arizona Corporation Commission (ACC) proposes a net $1.9 million rate increase for two of its largest utilities: GW-Santa Cruz and GW-Palo Verde. Hearings on the GW-Santa Cruz rate case concluded on 3 August 2026, with a decision expected in Q4 2026 and new rates requested from 1 November 2026. GW-Palo Verde withdrew its current rate application and plans to refile in 2027 using a 2026 test year.
Market context
Global Water's model, which it calls Total Water Management (TWM), involves owning and operating water, wastewater and recycled-water systems within the same service territory to maximise water reuse and minimise waste. The company reports recycling over one billion gallons annually, with 19.9 billion gallons recycled since 2004. In water-scarce, fast-growing regions such as the Phoenix metropolitan statistical area, integrated water-cycle management of this kind is attracting growing interest as a resilience strategy, particularly as semiconductor fabs, data centres and population growth all increase industrial and residential water demand.
Chief executive Ron Fleming pointed to TSMC's announcement on 16 July 2026 of an additional $100 billion US semiconductor manufacturing investment, bringing the chipmaker's planned Arizona spend to a reported $265 billion across 12 facilities. Fleming argued this would sustain demand for water and wastewater connections in GWRS service areas for years. Arizona's Office of Economic Opportunity forecasts 454,000 new jobs in the state through 2034, an annual growth rate roughly four times the US national average, providing a structural tailwind for regulated utilities in the region.
Depreciating assets placed in service following the company's 2025 capital-improvement programme weighed on margins, with depreciation, amortisation and accretion rising 32.7% in Q2 to $4.4 million. Management noted that rate relief from ongoing ACC proceedings is expected to help recover these investments over time.
Looking ahead, Global Water plans further rate case filings in the first half of 2027, covering GW-Palo Verde and a consolidation of its Pima County utilities, followed by a GW-Santa Cruz filing in early 2028. The company extended its $20 million revolving credit facility to May 2028 and declared a monthly dividend of $0.02533 per share, equivalent to $0.304 annualised.