Global Water Resources, Inc. Q3 FY26 Results

In the third quarter, total revenue increased 5.0% year over year to $16.3 million. Total active service connections increased 2.4% year over year to 69,797. We invested $6.9 million during the quarter in infrastructure improvements across our existing utilities. These investments build on our significant 2025 capital program, including recommissioning the Southwest Plant Water Reclamation Facility, and expand the rate base needed to continue safe and reliable service to our customers and communities over the long term. As expected, assets placed in service under the 2025 and 2026 capital improvement plans increased depreciation expense and continued to affect near-term net income and earnings per share. Operations and maintenance expense also increased, primarily due to rising medical costs and higher costs to power and operate our newly operational plant. At the same time, general and administrative expense remained relatively flat at $4.8 million, compared with $4.9 million in the prior-year quarter, reflecting our continued focus on cost discipline. We remain committed to pursuing long-term earnings growth by combining disciplined expense management with organic growth and appropriate rate recovery. We appreciate the ALJ issuing his order and opinion to the ACC recommending adoption of the settlement agreement for our GW-Santa Cruz and GW-Palo Verde utilities, which will be deliberated by the ACC at the open meeting on November 4, 2026. If approved, we expect new rates for GW-Santa Cruz to take effect on December 1, 2026. For GW-Palo Verde, the withdrawal of the current rate case provides a clearer path to seeking appropriate recovery using a 2026 test year. We have begun preparing rate reviews for GW-Palo Verde and our three Pima County utilities—GW-Saguaro, GW-Farmers and GW-Ocotillo—which we anticipate filing in the first half of 2027, with estimated new rates in 2028. We have also started preliminary planning for the next GW-Santa Cruz rate case, tentatively using a 2027 test year for a 2028 filing and estimated new rates in 2029. Across these proceedings, we are communicating with community stakeholders and ACC staff about the importance of our investments and the customer benefits they provide. Several long-term growth drivers support our outlook for Arizona’s Sun Corridor. Earlier this year, TSMC increased its planned Arizona investment by $100 billion to $265 billion, supporting additional semiconductor manufacturing and advanced packaging facilities that are expected to drive job creation and regional development. Arizona’s Ag-to-Urban program also creates a pathway to convert agricultural water rights to municipal use, potentially supporting new housing while reducing groundwater demand. With approximately 384,000 eligible agricultural acres across the Phoenix and Pinal active management areas—including about two-thirds in Pinal County—we believe the program could support sustainable development and long-term demand across our core service areas. While the pace of new connection and permit activity has slowed recently, ongoing development throughout the Phoenix metropolitan area—particularly in the City of Maricopa—continues to support organic growth in our active connection base. We believe the decline is temporary, primarily driven by higher mortgage rates and other macroeconomic factors, and that we remain well-positioned to benefit from the region’s long-term population and job growth, housing affordability and transportation improvements such as the State Route 347 widening. By expanding our Total Water Management platform and applying our expertise across our regional service areas and new utilities, we believe we can create lasting value for customers, communities and shareholders.