Global Water Resources (GWRS) 2026年第三季法說會：EPS下滑之際，費率回收成關注焦點

重點摘要

• 2026 年第 3 季營收年增 5% 至 1,630 萬美元，主要受惠於用戶成長、用水量增加，以及 GW-Farmers 與 GW-Ocotillo 的費率調漲。
• 淨利從 170 萬美元（或稀釋後每股盈餘 0.06 美元）降至 100 萬美元（或稀釋後每股盈餘 0.03 美元），主因是折舊費用與淨利息費用增加。
• 調整後 EBITDA 大致持平於 780 萬美元。年初至今調整後 EBITDA 成長 5% 至 2,140 萬美元。
• 活躍服務戶數年增 2.4% 達 69,797 戶。Global Water Resources 於本季在基礎設施改善方面投資了 690 萬美元。
• GW-Santa Cruz 新費率將於 2026 年 12 月 1 日生效，預計每年增加 230 萬美元營收，但部分被 GW-Palo Verde 費率調降 40 萬美元所抵銷，年度淨增額為 190 萬美元。
• 管理階層將落實費率回收與減少監管延遲列為首要之務，特別是針對該公司旗下最大的廢水處理公用事業 GW-Palo Verde。

關鍵財務數據

2026 年前九個月總營收成長 12.2% 達 4,740 萬美元。其中包括 210 萬美元的 ICFA 營收，以及 2025 年 7 月自 Tucson Water 收購的七個供水系統所帶來的額外六個月營收。

年初至今受監管業務營收成長 7.2% 至 4,520 萬美元。淨利為 340 萬美元（或稀釋後每股盈餘 0.12 美元），去年同期則為 390 萬美元（或稀釋後每股盈餘 0.15 美元）。

前九個月營業費用成長 13.1% 至 4,010 萬美元。折舊、攤銷及吸積費用增加 310 萬美元，營運及維護成本增加 150 萬美元。年初至今一般及行政費用持平於 1,350 萬美元。

業務與營運表現

截至季末，活躍服務戶數達 69,797 戶，較去年同期成長 2.4%。管理階層表示，儘管房市活動放緩，鳳凰城都會區（特別是馬里科帕市）的開發活動仍持續支持內生性成長。

2026 年前九個月，鳳凰城地區獨棟住宅建照總數為 15,337 件，年減 10%。同期馬里科帕的建照核發量下滑 2.1%，不過 10 月數據顯示馬里科帕較 2025 年同期領先近 2%。

管理階層將近期的放緩部分歸因於第 3 季利率上升，同時指出人口與就業持續成長，多戶型住宅出租率亦有所提高。

該公司在第 3 季投資 690 萬美元於公用事業基礎設施。新啟用的資產（包括與西南水廠相關的設施）在相應費率生效回收前，推升了折舊與營運成本。

Global Water Resources 於本季透過 1,000 萬美元普通股私募，以及將信貸額度擴大 1,000 萬美元至 3,000 萬美元，增加了 2,000 萬美元的流動性。截至季末，該信貸額度尚未動用。

管理階層展望

亞利桑那州公用事業委員會一致核准 GW-Santa Cruz 費率命令。新費率將於 2026 年 12 月 1 日生效，管理階層預計扣除相關 GW-Palo Verde 費率調降後，每年營收淨增加 190 萬美元。

核准的命令反映出 GW-Santa Cruz 的費率基礎較先前費率決策高出 50%，同時實質解決了西南水廠供水資產的歷史處理問題。

Global Water Resources 計劃於 2027 年上半年提出四項費率申請，涵蓋 GW-Palo Verde、GW-Farmers、GW-Ocotillo 及 Saguaro 區。預計這些申請案將以 2026 年為測試年、2027 年為測試後年，意味著新費率預估將於 2028 年生效。

管理階層表示，GW-Palo Verde 的申請將聚焦於回收與西南水廠廢水處理資產相關的成本。另外三項程序則將尋求整合三種費率結構，並回收與收購及改造公用事業相關的成本。

風險與關注領域

監管延遲仍是獲利的主要限制因素。公司已開始認列尚未完全反映在客戶費率中的資產折舊與營運成本。

GW-Palo Verde 是尤為關鍵的時程問題，因為它是該公司最大的廢水處理公用事業，且費率基礎大於 GW-Santa Cruz。管理階層預期在 2028 年能有更明確的途徑以達到適當費率，但具體時程仍取決於監管審理程序。

折舊、淨利息費用、公用事業費用、化學品成本、維修及醫療費用增加使獲利承壓。此外，公司近期也面臨建照核發放緩的挑戰，不過管理階層仍持續預期鳳凰城都會區將維持長期成長。

分析師問答重點

管理階層證實，在費率生效回收前，單季折舊費用年增約 110 萬美元是每股盈餘承壓的主因。管理階層並補充，GW-Palo Verde 也正為已完工設施承擔營運費用，卻尚未獲得相應的費率救濟。

為減少監管延遲，該公司正在評估針對 GW-Farmers、GW-Ocotillo 及 Saguaro 區採用公式費率，這可能允許進行年度費率差額調整。在適當情況下，公司亦在考慮基礎設施汰換及 PFAS 相關附加費機制。

管理階層並未針對 2027 年計劃提出的四項申請提供量化的費率基礎或營收機會，但表示預計會在下季電話會議上提供更多細節。

該公司表示由於業務集中於亞利桑那州以及受監管的商業模式，目前不提供費率基礎成長、資本支出、股利成長或每股盈餘成長的多年期目標。

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管理層陳述

Operator

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2026 Third Quarter Conference Call. [Operator Instructions] I would like to remind everyone that this call is being recorded on November 5, 2026, at 1:00 p.m. Eastern Time.

I would now like to turn the conference over to Kyle Upchurch, Vice President and Controller. Please go ahead.

Kyle Upchurch

Thank you, operator, and welcome, everyone. Thank you for joining us on today's call. On Tuesday, November 3, we issued our 2026 third quarter financial results by press release, a copy of which is available on our website at gwresources.com.

Speaking today is Ron Fleming, President and Chief Executive Officer; Mike Liebman, Chief Financial Officer; and Chris Krygier, Chief Operating Officer. Ron will summarize the key operational events of the quarter. Mike will review the financial results for the third quarter, and Chris will review Arizona Corporation Commission activity. Ron, Mike and Chris will be available for questions at the end of the call.

This call may include forward-looking statements, including statements regarding our business, operations and financial performance. Such forward-looking statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties as discussed in this week's earnings release and in greater detail in our most recently filed periodic reports and subsequent filings with the SEC. Actual results could differ materially from those expressed or implied in any forward-looking statements and we undertake no obligation to update any forward-looking statement.

Additionally, certain non-GAAP measures may be included within today's call. For a reconciliation of those measures to the comparable GAAP measures, please see the tables included in this week's earnings release, which is available on our website.

I will now turn the call over to Ron.

Ron Fleming

Thank you, Kyle. Good morning, everyone, and thank you for joining us today. First, before jumping to normal operating highlights, I would like to emphasize our focus on earnings growth, which has been under pressure for the last few years. While many key metrics of our business have experienced strong growth over the last 5 years, our goal is to also achieve long-term earnings growth. We are committed to this objective, which we believe will allow us to enhance shareholder value.

As we reported previously, in 2025, we had a near record year for capital investments that were critical to complete. This included the investment necessary to recommission our Southwest Plant Water Reclamation Facility, which was originally constructed 20 years ago, but was mothballed during the Great Recession. Although these investments grow rate base considerably and ensure we can provide safe and reliable service to our customers and communities that we have the privilege to serve, these investments increased certain operating expenses and, most notably, depreciation expense. Such expenses continue to adversely impact net income and earnings per share in the third quarter of 2026.

This is an unfortunate yet necessary part of the historical test year environment here in Arizona. Additionally, certain company expenses such as medical and liability insurance continue to grow at an unprecedented pace. As I've been saying for many quarters now, we need new rates to keep up with all the investment and inflation that we have experienced in our utilities. To this end, as you saw in the press release filed yesterday, we concluded a rate review settlement for a notable rate increase for our largest water utility, GW-Santa Cruz, achieving unanimous approval. Chris will remind everyone on the specifics of this order.

That said, GW-Santa Cruz is only one step in a 2-step process that is critical for said earnings growth, with the other being our largest wastewater utility, GW-Palo Verde, which was delayed primarily due to the difference of opinion on the timing of rate recovery as it relates to the historical Southwest Plant issue. The new schedule provides a clearer path to setting appropriate rates in 2028.

Together, this will allow us to better realize recovery of inflationary expenses and return on and return of our plant investments, including the Southwest Plant, resulting in years of meaningful earnings growth ahead. Chris will discuss all rate review activity for our utilities later on the call. In the meantime, 2026 is about working hard to control G&A expenses, which have remained flat year-over-year. In the years to come, we believe we can maintain solid revenue and earnings growth as we seek to obtain appropriate increases combined with our anticipated organic growth.

Now I'll provide a few operational highlights. Total active service connections increased 2.4% to 69,797 as of the end of the quarter from the 12 months prior. We invested $6.9 million into infrastructure improvements in existing utilities in the third quarter of 2026 to provide safe and reliable service. I want to discuss organic customer growth and what is going on in our core utilities further. The single-family dwelling unit market ended 2025 with approximately 21,815 building permits issued in the Phoenix Greater Metro statistical area. For the 9 months ended September 30, 2026, this market realized 15,337 building permits, representing a 10% decrease compared to the same period in 2025.

Meanwhile, in the Maricopa market, we realized 516 building permits, representing a 2.1% decrease from the same period in 2025. However, notably, October building permits are now in, and this puts Maricopa permits nearly 2% ahead of 2025. While the pace of new connection and permit activity has slowed recently, ongoing development throughout the Phoenix MSA, particularly in the City of Maricopa, continues to support organic growth as reflected in the company's 2.4% year-over-year increase in active connections.

We believe the decline in growth is temporarily due to the spike in interest rates in Q3 and as we remain well positioned to benefit from the anticipated long-term growth of the Phoenix MSA and our specific area drivers, including job growth, affordability, improving transportation, including State Route 347 widening and large Assured Water Supply.

I will now turn the call over to Mike for financial highlights.

Michael Liebman

Thanks, Ron. Hello, everyone. Total revenue for the third quarter of 2026 was $16.3 million, which was up $0.8 million or 5% compared to Q3 2025. Total revenue for the year-to-date period increased $5.1 million or 12.2% to $47.4 million. The revenue increase for the quarter-to-date period was driven by increased connections, increased consumption and higher rates in our GW-Farmers and GW-Ocotillo utilities.

Additionally, revenue for the year-to-date period was aided by unregulated revenue recognition of $2.1 million related to infrastructure coordination and financing agreements, also known as ICFAs, as well as 6 additional months of revenue generated by the 7 water systems acquired from the Tucson Water in July 2025. A more fulsome explanation of ICFAs can be found in our most recent Form 10-K filing. However, as a reminder, ICFAs are agreements we entered into with developers and homebuilders whereby Global Water provides services to plan, coordinate and finance the water and wastewater infrastructure that would otherwise be required to be performed or subcontracted by the developer or homebuilder.

During the second quarter of 2026, our GW-Hassayampa utility put its first wastewater plant into service, allowing us to recognize deferred revenue as we met all of our contractual obligations under the related ICFA agreement.

Regulated revenue, which excludes ICFA revenue for Q3 2026, was $16.3 million which was up $0.8 million or 5% compared to Q3 2025. Regulated revenue for the year-to-date period increased $3 million or 7.2% to $45.2 million. Operating expenses for Q3 2026 increased approximately $1.3 million or 10.4% to $13.9 million compared to $12.6 million in Q3 2025. Operating expenses for the year-to-date period increased approximately $4.6 million or 13.1% to $40.1 million compared to the same period in '25.

Notable changes in operating expenses included depreciation, amortization and accretion increased $1.1 million for Q3 and $3.1 million for the year-to-date period. The increase in both periods was substantially attributable to the additional depreciable utility plant placed in service last year as a result of our 2025 and 2026 capital improvement plans and the commissioning of related projects.

Operations and maintenance costs increased approximately $0.4 million for Q3 and $1.5 million for the year-to-date period. The increase in both periods was primarily driven by higher utilities, chemicals and repairs expense tied to newly operational plant from our 2025 capital improvement plan and rising medical expenses. The increase in the year-to-date period was additionally driven by a loss on the disposal of utility plant and 6 additional months of operating costs associated with the 7 water systems acquired from Tucson Water in July 2025.

G&A costs decreased modestly to $4.8 million in Q3 2026 from $4.9 million in Q3 2025. G&A costs for the year-to-date period also remained relatively flat at $13.5 million in both periods. Until new rates become effective, keeping G&A costs as flat as possible is a top priority, which we have been able to deliver on through the first 9 months of 2026.

Now to discuss other expense. Other expense for Q3 2026 was $1 million compared to $0.6 million in Q3 2025. Other expense for the year-to-date period was $2.7 million compared to $1.4 million in the same prior year period. The increase in both periods is primarily attributable to higher net interest expense and a decrease in income associated with our Buckeye growth premium.

Net income for Q3 2026 was $1 million or $0.03 per diluted share as compared to net income of $1.7 million or $0.06 per diluted share in Q3 2025. Net income for the year-to-date period was $3.4 million or $0.12 per diluted share as compared to net income of $3.9 million or $0.15 per diluted share in the prior year period. The decrease in both periods was primarily driven by higher depreciation and net interest expense.

Adjusted EBITDA, which adjusts for certain nonrecurring and noncash items, such as onetime storm-related expenses, ICFA revenue, the loss on disposal of utility plant and restricted stock expense, adjusted EBITDA for Q3 2026 remained largely consistent with Q3 2025 at $7.8 million. Adjusted EBITDA for the year-to-date period was $21.4 million compared to $20.4 million in the prior year period, an increase of $1 million or 5%. The increase was primarily driven by higher regulated revenue, partially offset by increased operations and maintenance expense.

Lastly, during the quarter, we were able to add $20 million of additional liquidity through a $10 million private placement common stock and a $10 million increase to our line of credit, which went from $20 million to $30 million of availability. The line of credit was unused as of the end of the quarter.

This concludes our update on the third quarter 2026 financial results. I'll now pass the call to Chris to review our regulatory activity for the quarter.

Christopher Krygier

Thank you, Mike, and hello, everyone. As you saw in our press release issued yesterday, we reached an important milestone in the Global Water Santa Cruz rate review with the commissioners unanimously approving the Administrative Law Judge's Recommended Opinion and Order and the new rates are effective December 1, 2026, with anticipated new annual revenue of $2.3 million which we anticipate will be offset by a $0.4 million rate reduction related to Global Water Palo Verde for a net overall increase of $1.9 million. This case represents the next milestone in our path to increase earnings growth, reduce regulatory lag and enhance overall financial results.

Amongst other highlights, this approval materially resolved the history on the Southwest Plant water assets, which has been an issue of over 20 years in the making. This order also reflects Global Water Santa Cruz's rate base that is now 50% higher than the last approved rate decision. With this approval, we now focus on the next milestone, our 4 rate review filings planned for the first half of 2027. The filings include requesting new rates for Global Water Palo Verde, Farmers, Ocotillo and Saguaro District. All 4 of those applications contemplated a 2026 test year with a 2027 post test year implying estimated new rates in 2028.

The main objective of the Global Water Palo Verde application will be to successfully resolve all elements of the Southwest Plant wastewater asset rate recovery and the main objectives of the Global Water Farmers, Ocotillo and Saguaro District will be to consolidate 3 sets of rates into 1 and recover costs related to the acquisition and transformation of these utilities. We look forward to providing more detail on these filings in the upcoming quarters.

This concludes the update on regulatory activity for the quarter. I'll now pass the call back to Ron.

Ron Fleming

Thank you, Chris. Despite the headwinds, our work continues. What we do and how we do it matters to our communities. We truly believe expanding our Total Water Management platform and applying our expertise throughout our regional service areas and to new utilities will be beneficial to all stakeholders involved. We appreciate your investment in and support of us as we grow Global Water to address important utility, water resource and economic development matters along the Arizona Sun corridor, allowing our communities to thrive.

These highlights conclude our prepared remarks. Thank you. We are now available to answer any questions.

Operator

[Operator Instructions] The first question comes from Gerry Sweeney with Roth Capital.

分析師問答

Gerard Sweeney

I think you guys discussed a little bit of -- I mean some of the impact of depreciation and some of the regulatory lag that's going on. But just I wanted to square something up in my model. I think you reported $0.03 this year versus $0.07 last year, but my math is there's a little over $1 million of depreciation increase. So that -- if you were able to recapture that depreciation increase in the rates going forward that kind of squares up like $0.03, $0.035, so you would be on par -- this year would have been on par with last year. Is that kind of the way I should be looking at it?

Michael Liebman

Yes. That's the right way to think about it, Gerry. I mean the depreciation, obviously, we've invested but haven't gotten the rate recovery. So as you start to see the revenue increase that shows the recovery of those depreciation expense that will true up.

Ron Fleming

Yes, I'd like to add to that. You've got that going on, and then you've got the now delay on Palo Verde. But I think it's important everybody thinks about it like this. All of those Palo Verde investments are on and operating. So it's not just depreciation expense. We are incurring the operating expenses associated with entire new facilities. The delay is unfortunate, but if we would have kept the same time line and just got an outcome on the Palo Verde rate case like we did on Santa Cruz and you just could see the rate increase that we believe ultimately is going to be warranted for operating costs that exist today, the model would look totally different. So it's a time delay for sure, but it is on the come.

Gerard Sweeney

And Palo Verde has more assets rate base than Santa Cruz. Is that correct?

Michael Liebman

Yes, that's right.

Ron Fleming

It is. And just to be clear, it is our largest wastewater utility. And these wastewater utilities, certainly because also what we do on the recycled water side, they are our largest, most costly, most complex utilities. So having that one out is why you're seeing what you're seeing in the numbers.

Gerard Sweeney

Got it. Absolutely makes sense. I appreciate that. Well, switching gears back to Maricopa, obviously, you talked about permits and connections, et cetera. But maybe just a quick update of what's going on economically in the region, especially maybe even some of the adjacent areas that looking at semiconductor investment, things like that. My sense is the Phoenix region continues to grow at an exceptionally fast pace and potentially housing may be going at a slower pace. So at some point, something's got to give. But I'm just curious of maybe some anecdotal views from your perspective on that front.

Ron Fleming

Yes. Happy to address that. It is kind of interesting the tailwinds and the headwinds and how they're coming together here in the Metro Phoenix area. On the tailwinds perspective, you're exactly right. I mean, we all know about the TSMC stuff. We've been talking about it forever, but someone should come out here and drive past that project and look at what we're actually talking about. It is unbelievable what's going on out there and projects that are going to also be built adjacent to it.

The announcements just don't stop. And I even forget how much total investment is now predicted for that area, but it's on a scale that's really hard to imagine. And that continues to bleed over to all parts of the Phoenix Metro area, not just where TSMC is. Of course, you have all the other activity from the existing chip manufacturer there, including Intel.

But what's interesting is I do think everybody decided to take a pause a little bit on the housing side when Q3 interest rates peaked back to 7.5%, and that's understandable. But what you're seeing is still population and job growth. And so the way it ties into our company, which I think is what's happening then across all the communities is all of the multifamily housing that has been also very, very strong across all of Metro Phoenix for the last 5 years, including in our area, the occupancy rates are just going up. And so we built a few dozen multifamily projects over the last 5 years in Maricopa. And in some respect, it would have seemed like it was a little bit too much.

There's quite a bit of capacity. While we're seeing nice revenue growth in that line item, multifamily because housing slowed a little bit. So it's got to go one place or the other. You just don't see it in the permit numbers. You don't see it in the new connection numbers because it's not a new meter for home, but we are still seeing it in the population growth numbers and in the revenue numbers.

So it will be interesting to see how that continues to play out in the years to come. But it's -- we're still growing. And that is, in fact, why our capital investment, even though we've cut it back this year, quite a bit from last year. It's the right thing to do in the face of everything that we're talking about here. But we can't cut it off completely because we are growing, right? And that's a good problem to have.

Operator

[Operator Instructions] The next question comes from Adam Kelsey with Titan Partners.

Adam Kelsey

Great. With respect to your stated goal of reigniting earnings growth, you mentioned there's a focus on reducing regulatory lag. I was hoping you could expand a little more on how you are thinking about reducing that lag? And what are those steps that would -- that you would take?

Christopher Krygier

Adam, this is Chris. Thanks for the question. So right now, as we're working hard on the next 4 filings, we're looking at a number of tools for that, including potentially for the Pima County utilities, that's Farmers, Ocotillo and the Saguaro district looking at formula rates that would give us the opportunity to potentially true up rates every year. So we're looking at that for the smaller utilities.

And then for Palo Verde, we're in the process of assessing kind of all the tools that exist today in Arizona. And if those make sense or if there's maybe some new tools we should be considering. So ultimately, no matter the tool, the element we're looking to true up is to reduce the lag by either including the CapEx rates faster or reflect the increased operating expenses we're incurring.

Adam Kelsey

Very helpful. And then with the upcoming rate cases in '27, what additional rate base or revenue opportunities do these proceedings represent?

Christopher Krygier

Yes. So we haven't quantified or provided that detail at this time. I anticipate in the next quarterly call, we'll have more specifics on that.

Operator

[Operator Instructions] The next question comes from Zach Liggett with Desmond Liggett Wealth Advisors.

Zach Liggett

Last question is one I had as well. I guess we'll wait for the next quarter. And I appreciate the response to the regulatory lag question. I was wondering if like infrastructure replacement surcharge mechanisms or like PFAS surcharge mechanisms are possibilities in that toolkit. That's my first question.

And then the second question is, one of your larger peers, I think, does a really nice job in laying out 5-year objectives for rate base growth, CapEx, dividend per share growth, earnings per share growth. I don't think you guys have ever done that in the years that we've been investing with you. I'm curious if that is something you would consider just to give investors some visibility on your internal objectives and to maybe hold you accountable to some numbers.

Christopher Krygier

Zach, this is Chris again. I'll take kind of Part 1, and then I'll ask Mike, our CFO, to take Part 2. So on part one, you talked about like PFAS surcharges or mechanisms. Those are tools that we are looking at. So those are possibilities in the universe. Each utility is going to be a little bit different than what tools might make sense there. But the short answer is yes, those are options under consideration.

And then I'll hand over to Mike for the second question.

Michael Liebman

Yes. Thanks, Zach. And we've obviously seen the same thing. There's a lot of guidance out there. We don't do it. We've kind of tossed it back and forth, but we've opted on the side of not doing it. Very concentrated here in Arizona and being regulated, that's a big reason of why we are -- we don't really provide the guidance.

Ron Fleming

I'm going to sum up the answer to all those questions, but just another point here. I mean I know we're talking a lot about the Southwest Plant. And even though we just cleaned up the water side of that with the Santa Cruz rate case, the Palo Verde, which was mentioned earlier, is a lot bigger number. So you really do have to think about this historical 20-year issue that now even with the delay, we have visibility to. The delay was intentional to clear a disagreement with our regulator on timing. That hurdle has been cleared. So we're full speed ahead. It's our highest priority over the next 18 to 24 months.

Then separate. We invested $70 million last year. And that's what we had to do to keep up with growth that we were dealing with. So when you put those 2 together, we have -- you can look at it on our balance sheet, right? But we have a very high number of high dollar value of CWIP, that's not in rates today. So this company going forward, our highest priorities will be processing rate cases, successful rate cases as quickly as possible to reduce regulatory lag and get a return on all those investments. That's just the strategy.

The growth rates, some of these other things are obviously something we focused on a lot in the past because it's unusual to have a utility like ours growing at 5% to 7% organically, right? That's 5x the national average. And that's what we've had to keep up with. That slowed a little bit. The good news of that is it lets us slow investment a little bit and catch up, and that is our goal. And I just want to make it very clear.

Operator

All right. At this time, this concludes our question-and-answer session. I would like now to turn the call back over to Mr. Fleming. Sir, please go ahead.

Ron Fleming

All right. Thank you, operator. I'd like to thank everyone for participating in the call and for your interest in Global Water Resources. Thanks, and we look forward to speaking with you again.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.