Select Water Q3 Revenue Jumps 28% to $412M, Net Income $23M

Select Water Solutions, Inc. (NYSE: WTTR) reported third quarter 2026 consolidated revenue of $412 million on 9 November 2026, an increase of $90 million or 28% compared with the third quarter of 2025, according to the company's earnings release. Net income reached $23 million, up $21 million year-over-year, while Adjusted EBITDA of $93 million rose 57% from $59.5 million a year earlier. The water and chemical solutions provider also completed the recapitalization and sale of a majority interest in Peak Rentals during the quarter and, subsequent to quarter end, closed its acquisition of Pilot Water Solutions.

Context — Why Select Water's Q3 Beat Matters Now

Select's third quarter represents a sharp acceleration from the prior-year period. In the third quarter of 2025, the company generated $322 million of revenue, $2.3 million of net income, and $59.5 million of Adjusted EBITDA. The year-over-year swing of $21 million in net income reflects both higher volumes and improved segment margins.

The sequential picture is steadier. Revenue rose from $396 million in the second quarter of 2026 to $412 million, a 4% increase, while net income was essentially flat at $22.6 million versus $22.9 million. Adjusted EBITDA moved from $92.7 million to $93.5 million.

The catalyst chain runs through produced water volumes. Select said it handled 1.7 million barrels per day in the third quarter, up from 1.5 million barrels per day in the second quarter and more than 30% above the third quarter of 2025. Those volumes flow directly into the Water Infrastructure segment, which the company describes as its highest-margin business.

Two structural moves reshaped the portfolio. Select sold an indirect 55% interest in Peak Rentals HoldCo on 23 September 2026, receiving roughly $76.8 million of consideration including $41.5 million in cash and a $35.3 million seller note. Peak is now deconsolidated, with Select retaining a 45% stake carried as an equity method investment.

Macro conditions in the Permian Basin remain the backdrop. The report does not give a rig count, oil price, or frac spread level, so the volume gains stand on the company's own disclosure rather than an external activity benchmark.

Data — What the Numbers Show

The headline comparison is stark across the year-over-year window. Gross profit was $81.4 million in the third quarter of 2026 versus $43.6 million a year earlier, lifting total gross margin to 19.7% from 13.5%. Gross profit before D&A, the company's preferred measure, reached $129.4 million at a 31.4% margin, compared with $87.1 million at 27.0% in the prior-year quarter.

Metric	Q3 2026	Q3 2025	Change
Revenue	$412.2M	$322.2M	+28%
Net income	$22.9M	$2.3M	+$20.6M
Gross profit	$81.4M	$43.6M	+87%
Adjusted EBITDA	$93.5M	$59.5M	+57%

Segment detail shows where the growth concentrated. Water Infrastructure revenue hit a record $110.1 million, up 40% year-over-year, with gross margin before D&A of 57.2% versus 53.1%. Water Services revenue rose 27% to $212.3 million, and Chemical Technologies revenue climbed 17% to $89.8 million.

Cash generation lagged earnings. Operating cash flow was $84 million, but net capital expenditures of $88.1 million pushed free cash flow to negative $3.6 million for the quarter, versus negative $19.4 million a year earlier and positive $17.0 million in the second quarter.

SG&A jumped to $53.6 million from $41.2 million sequentially, including $7.4 million of transaction costs tied to the Peak and Pilot deals. Total liquidity stood at $271.6 million as of 30 September 2026.

Analysis — What It Means for Energy Sector Tickers

The deconsolidation of Peak Rentals changes how WTTR's income statement should be read going forward. Peak contributed roughly 21% of Water Services segment revenue year-to-date, so the fourth quarter top line will reflect a smaller reporting base even as the underlying business keeps operating. Select keeps 45% of Peak's economics through equity in earnings, which means profit recognition continues but at a lower line item.

The Pilot Water acquisition is the offsetting bet. It expands Select's water midstream footprint in the Delaware Basin, the western half of the Permian. The company funded it with a $900 million senior notes offering at 7.625% due 2034 and replaced its sustainability-linked facility with a new $500 million revolver that remains undrawn.

The counter-argument is use and capital intensity. Net capital expenditures are now guided to $300–$310 million for 2026, up from prior expectations, and the interest burden from the notes will weigh on earnings before the acquired assets reach full contribution. The company said it expects to fund growth from growing earnings and its balance sheet, but the free cash flow print was negative this quarter.

Peers in water midstream and oilfield services trade on infrastructure-style multiples when contracted volumes dominate. Select's positioning depends on whether Pilot Water's contracted volumes convert to the revenue guidance the company gave. Flow into the name will hinge on whether investors treat the quarter as an infrastructure re-rating or a leveraged roll-up.

Outlook — What to Watch Next

Select guided fourth quarter 2026 Adjusted EBITDA to $95–$100 million, a range that assumes the Peak deconsolidation and only a partial quarter of Pilot Water. Water Infrastructure revenue is expected at $150–$160 million with 52–56% gross margins before D&A, while Water Services is guided to $150–$160 million at 21–24% margins and Chemical Technologies to $75–$80 million at 17–18% margins.

The company also said it expects incremental fourth quarter revenue growth in Water Infrastructure from the base business, before any Pilot contribution. Net capital expenditures for the full year are guided to roughly $300–$310 million.

On the calendar, the conference call is scheduled for 9 November 2026 at 11:00 a.m. Eastern time, with a replay available through 23 November 2026. Fourth quarter and full-year results will be the first report to show Peak as an equity method investment and Pilot Water as a consolidated asset.

There is no price level, moving average, or peer multiple in the report to anchor a technical read, so the guidance ranges themselves are the reference points traders will track.

Frequently Asked Questions

What does the Peak Rentals sale mean for Select Water Solutions shareholders?

Select sold 55% of Peak Rentals for about $76.8 million in consideration, including $41.5 million cash and a $35.3 million seller note. Peak is no longer consolidated, so its revenue drops out of Select's reported top line, but Select keeps a 45% equity stake and will record its share of Peak's earnings through equity in earnings of unconsolidated entities.

Why did Select Water's free cash flow turn negative in Q3 2026?

Operating cash flow was $84 million, but net capital expenditures of $88.1 million exceeded that, producing negative $3.6 million of free cash flow. The spending reflects growth projects including the Pilot Water integration and ongoing infrastructure buildout. The company guided full-year 2026 net capital expenditures to approximately $300–$310 million.

How is Select Water funding the Pilot Water Solutions acquisition?

Select issued $900 million of 7.625% senior notes due 1 November 2034 in a private placement. Most of the net proceeds funded the cash consideration for Pilot Water and repaid the outstanding term loan under its sustainability-linked credit facility, which was terminated. The company replaced it with a new five-year $500 million revolving credit facility that remains undrawn.

Bottom Line

Select's record Water Infrastructure quarter and Pilot Water deal reset its growth story, but negative free cash flow and higher capital spending are the risks investors must weigh.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.