Global Water Resources Reports First Quarter 2026 Results (Form 8-K)

Global Water Resources Reports First Quarter 2026 Results

PHOENIX, AZ - May 13, 2026 - Global Water Resources, Inc. (NASDAQ: GWRS), a pure-play water resource management company, reported results for the first quarter ended March 31, 2026. Unless otherwise noted, all comparisons are to the corresponding period in the prior year. The company will hold a conference call at 1:00 p.m. Eastern time tomorrow to discuss the results (see dial-in information below).

Q1 2026 Financial Highlights

•Total revenue increased 6.7% year-over-year ("YoY") to $13.3 million. The increase was primarily due to the acquisition of seven water systems from Tucson Water in July 2025, organic connection growth, increased consumption and higher rates.

•Net loss totaled $0.4 million or ($0.01) per share, a decrease of $1.0 million YoY compared to net income of $0.6 million or $0.02 per share in the first quarter of 2025. The decrease primarily reflects the company's 2025 rate base investments, which resulted in increased depreciation expense and net interest expense.

•Adjusted EBITDA, a non-GAAP measure, remained consistent YoY at $5.6 million in the first quarter of both 2026 and 2025 (see definition of adjusted EBITDA, and its reconciliation to GAAP, below).

•Declared three monthly cash dividends of $0.02533 per common share or $0.30396 per common share on an annualized basis.

Q1 2026 Operational Highlights

•Total active service connections at March 31, 2026 increased 5.7% YoY to 68,885.

•Annualized active service connection growth rate, excluding the acquisition of seven water systems from Tucson Water, was 1.9%.

•Water consumption increased 7.9% YoY to 902 million gallons.

•Invested $6.3 million in Q1 2026 in infrastructure projects to support existing utilities and continued growth.

Subsequent Events

•On April 28, 2026, the company filed a settlement agreement with the Arizona Corporation Commission (ACC) detailing the terms upon which the parties have agreed to bifurcate and settle the rate cases for Global Water - Santa Cruz Water Company, Inc. (GW-Santa Cruz) and Global Water - Palo Verde Utilities Company, Inc. (GW-Palo Verde). Among other things, the parties have agreed to:

◦an increase in GW-Santa Cruz's annual revenue requirement of approximately $2.3 million,

◦a requested effective date of the new rates for GW-Santa Cruz of November 1, 2026; and,

◦the withdrawal of the GW-Palo Verde rate case, to be refiled in 2027 using a 2026 test year without seeking formula rates.

•In consideration of the settlement agreement, GW-Palo Verde committed to seek an increase to the amount of the temporary bill credit for its customers of approximately $0.4 million annually until resolution of the next GW-Palo Verde rate case. The increase to the temporary bill credit is anticipated to coincide with the new rates described above for GW-Santa Cruz going into effect.

•Secured an extension of the company's $20 million revolving line of credit to May 18, 2028.

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Management Commentary

"As we recently reported, we had a near record year for capital investments that were critical to complete within 2025," commented Global Water Resources President and CEO, Ron Fleming. "Although these investments grow rate base considerably and ensure we can provide safe and reliable service to our customers and communities we have the privilege to serve, these investments increased certain operating expenses and most notably, depreciation expense. Such expenses continued to adversely impact net income and earnings per share in the first 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, continue to grow at an unprecedented pace. As I have 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, while a diversion from our original rate application, the recently announced rate case settlement provides a clearer path to a notable rate increase for our largest water utility GW-Santa Cruz later this year. For GW-Palo Verde, while delayed, the delay deals with the largest difference of opinion on the timing of rate recovery as it relates to our historical Southwest Plant issue. The new schedule provides a clearer path to setting appropriate rates for our largest wastewater utility along this timeline. 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.

"The Administrative Law Judge has set hearings to commence in August. After the hearings, the matter is then evaluated by an Administrative Law Judge who writes a Recommend Opinion and Order for the ACC's consideration. We requested new rates for GW-Santa Cruz to be effective November 1, 2026.

"We plan to announce additional rate case activity for our other utilities in the coming quarters. We believe we can maintain solid revenue and earnings growth in the years to come as we seek to obtain appropriate rate increases combined with our anticipated organic growth.

"In Q1, we continued to generate top-line growth year-over-year. Revenues generated by our water, wastewater and recycled water services increased by 6.7% compared to Q1 2025 primarily as a result of both organic growth in connections, increased consumption and the continued implementation of new rates from prior successful rate cases in several of our smaller systems in Southern Arizona.

"The revenue growth also included a full quarter contribution from our acquisition of seven water systems from Tucson Water, which we completed in July of last year. As part of the acquisition, we adopted Tucson Water's rates for the acquired water systems, with a previously approved five percent rate increase scheduled for July 2026.

"We also anticipate seeing our organic connection growth being driven by Arizona's strong economic outlook. The state's economy is expected to accelerate in 2026, driven by a strong manufacturing sector and population growth. According to Arizona's Office of Economic Opportunity, employment is expected to rise by 454,000 jobs through 2034-an annual growth rate of 1.2%, which is four times the national average of 0.3%.

"Regarding another important development for Arizona, we are pleased to see the State Route 347 Improvement Project is expected to begin this summer, which includes widening the 15-mile corridor with an additional lane in each direction, and upgrading bridges and intersections to ease congestion. The City of Maricopa recently secured its share of the project's funding, and preparation work for the project began in April.

"Looking ahead, we remain focused on our ongoing Southern Arizona plan, which focuses on consolidating operations and rates across our customer base-delivering greater efficiency, affordability, and value through regionalization.

"Given Arizona's positive economic outlook and the strong financial foundation we have laid, we are confident these efforts will provide long-term value for both our customers and shareholders."

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Financial Summary for the Three Months Ended March 31, 2026 and 2025

Revenue

			Three Months Ended						Favorable (Unfavorable)
			March 31,						2026 vs. 2025
(in thousands)			2026			2025						%
Water service			$	6,606		$	5,980		$	626		10.5		%
Wastewater and recycled water service			6,680			6,477			203			3.1		%
Total revenue			$	13,286		$	12,457		$	829		6.7		%

The increase in revenue for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily attributable to:

•Organic growth in active water and wastewater connections.

•Growth from the acquisition of the seven water systems from the City of Tucson in July 2025.

•Increased water consumption, predominantly driven by growth in active connections and higher usage largely as a result of unseasonably warm and dry weather during the quarter.

•Higher rates for GW-Farmers resulting from the GW-Farmers general rate case, effective May 1, 2025 and November 1, 2025.

Operating Expenses

			Three Months Ended						Favorable (Unfavorable)
			March 31,						2026 vs. 2025
(in thousands)			2026			2025			$			%
Personnel costs - operations and maintenance			$	1,483		$	1,340		$	(143)		(10.7)		%
Utilities, chemicals and repairs			1,172			1,032			(140)			(13.6)		%
Other operations and maintenance expenses			1,529			1,315			(214)			(16.3)		%
Total operations and maintenance expense			4,184			3,687			(497)			(13.5)		%
Personnel costs - general and administrative			2,357			2,195			(162)			(7.4)		%
Professional fees			389			467			78			16.7		%
Other general and administrative expenses			1,706			1,525			(181)			(11.9)		%
Total general and administrative expense			4,452			4,187			(265)			(6.3)		%
Depreciation, amortization and accretion			4,261			3,328			(933)			(28.0)		%
Total operating expenses			$	12,897		$	11,202		$	(1,695)		(15.1)		%

Operations and Maintenance

•Higher personnel costs were primarily attributable to rising medical costs.

•Higher utilities, chemicals and repairs were primarily the result of increased purchased power driven by increased water consumption and additional processing equipment in operation as a result of our 2025 capital improvement plan.

•The increase in other operations and maintenance expenses was primarily driven by expenses for wastewater disposal related to the start-up of two new wastewater reclamation facilities.

General and Administrative

•Higher personnel costs were primarily attributable to rising medical costs.

•The increase in other general and administrative expenses was primarily attributable to:

◦Increased contract service costs primarily associated with additional licensing fees.

◦Increased rent expense related to the renewal of our corporate office lease in August 2025.

◦Higher general liability insurance costs.

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Depreciation, Amortization and Accretion

The increase for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was substantially attributable to a 20.1% increase in depreciable fixed assets as a result of our 2025 capital improvement plan, which resulted in a significant number of assets placed in service in the fourth quarter of 2025. In addition, amortization of intangible assets associated with ICFA payments received increased in the first quarter of 2026.

Total Other Expense

The increase in total other expense for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was substantially attributable to:

•An increase in interest expense of $0.2 million primarily due to a new term loan entered into in December 2025 to support our 2025 capital improvement plan.

•A decrease in interest income of $0.1 million as a result of carrying lower average cash balances.

•A decrease in income associated with Buckeye growth premiums of $0.1 million that resulted from fewer new meter connections in the area.

Net Income (Loss)

Net loss totaled $0.4 million or $(0.01) per share in the first quarter of 2026, a decrease of $1.0 million compared to net income of $0.6 million or $0.02 per share in the same period in 2025. The primary drivers include increased depreciation expense and net interest expense as a result of the company's 2025 capital improvement plan.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP measure, remained consistent at $5.6 million in the first quarter of both 2026 and 2025.

Adjusted Net Income (Loss)

Adjusted net loss, a non-GAAP measure, was $0.3 million in the first quarter of 2026, compared to adjusted net income of $0.6 million in the same period in 2025.

Dividend Policy

The company recently declared a monthly cash dividend of $0.02533 per common share (or $0.30396 per share on an annualized basis), payable on May 29, 2026, to holders of record at the close of business on May 15, 2026.

Business Strategy

Global Water's near-term growth strategy involves increasing service connections, improving operating efficiencies, and increasing utility rates as approved by the ACC. The company plans to continue aggregating water and wastewater utilities through strategic acquisitions and entity consolidation, which is expected to enable the company and its customers to realize the benefits of consolidation, regionalization, and environmental stewardship.

Connection Rates

As of March 31, 2026, active service connections increased by 3,722 or 5.7% to 68,885 compared to 65,163 at March 31, 2025. The increase in active service connections was primarily due to new connections associated with the seven acquired water systems from Tucson Water and organic growth in the company's service areas.

Arizona's Growth Corridor: Positive Population and Economic Trends

The company continues to experience organic growth exhibited through its year-over-year organic increase in active connections (i.e., exclusive of acquisition related growth) of 2.6% as of March 31, 2026. According to the 2025 U.S. Census estimates, the Phoenix metropolitan statistical area (MSA) is the 10th largest MSA in the U.S. and had an estimated population of 5.2 million, an increase of 7.9% over the 4.8 million people reported in the 2020 Census. Growth in the Phoenix MSA continues as a result of its excellent weather, large and growing universities, a diverse employment base, and low taxes. The Employment and Population Statistics Department of the State of Arizona

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predicts that the Phoenix metropolitan area will have a population of 5.8 million people by 2030 and 6.5 million by 2040.

The company's organic growth continues to be primarily influenced by the comparatively lower cost of housing in the City of Maricopa relative to other areas within the Phoenix MSA. As of March 2026, the median home sales price in the City of Maricopa was 26% lower than in the City of Phoenix. In addition, preparation work for the construction on the State Route 347 Improvement Project started in April 2026, with construction expected to commence this summer and completion scheduled for 2029. The project represents a transformative investment in regional infrastructure that the company believes will enhance safety, improve mobility and support the continued growth of the City of Maricopa and surrounding areas.

The company continues to monitor potential effects on its operations due to changes in the macroeconomic environment, such as the impacts of tariffs on its operational costs and construction work in progress, as well as new home construction in the company's service areas. The company continues to expect a positive long-term outlook based on forecasted performance of job and population growth, as well as indicators of stabilizing construction in the single-family housing market in the Phoenix MSA.

While new permit activity has slowed, growth in the Phoenix MSA, particularly in the City of Maricopa, is reflected in the company's 2.6% year-over-year organic increase in active connections. Management believes, despite fluctuations in permit projections, the company remains well-positioned to benefit from the anticipated long-term growth of the Phoenix MSA.

Conference Call

Global Water Resources will hold a conference call tomorrow to discuss its first quarter of 2026 results, including a question-and-answer period.

Date: Thursday, May 14, 2026

Time: 1:00 p.m. Eastern time (10:00 a.m. local time)

Toll-free dial-in number: 1-833-816-1435

International dial-in number: 1-412-317-0527

Conference ID: 10208204

Webcast (live and replay): here

The conference call webcast is also available via a link in the Investors section of the company's website at www.gwresources.com.

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you require any assistance connecting to the call, please contact Encore at 1-949-432-7450.

A replay of the call will be available after 4:00 p.m. Eastern time on the same day through May 28, 2026.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 10208204

About Global Water Resources

Global Water Resources, Inc. is a leading water resource management company that owns and operates 39 systems which provide water, wastewater, and recycled water service. The company's service areas are located primarily in growth corridors around metropolitan Phoenix and Tucson. Global Water recycles over 1 billion gallons of water annually with 19.8 billion gallons recycled since 2004.

The company has been recognized for its highly effective implementation of Total Water Management (TWM). TWM is an integrated approach to managing the entire water cycle that involves owning and operating water, wastewater and recycled water utilities within the same geographic area in order to maximize the beneficial use of recycled water. It enables smart water management programs such as remote metering infrastructure and other advanced technologies, rate designs, and incentives that result in real conservation. TWM helps protect water supplies in water-scarce areas experiencing population growth.

Global Water has received numerous industry awards, including national recognition as a 'Utility of the Future Today' for its superior water reuse practices by a national consortium of water and conservation organizations led by the

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Water Environment Federation (WEF). The company also received Cityworks' Excellence in Departmental Practice Award for demonstrating leadership and creativity in applying public asset management strategies to daily operations and long-term planning.

To learn more, visit www.gwresources.com.

Use of Non-GAAP Measures