Shares of Select Water Solutions Inc. (WTTR) plunged 5.15% in after-hours trading on Tuesday after the company reported weaker-than-expected fourth quarter 2024 results, though its water infrastructure business continued to show strong growth potential.

For the fourth quarter ended December 31, 2024, Select Water reported a net loss of $2.1 million, or $0.02 per share, missing analysts' estimates of a $0.09 profit per share. Revenue fell 6.8% year-over-year to $349.0 million, short of the $374.9 million consensus.

However, for the full year 2024, the company's Adjusted EBITDA of $258.4 million was roughly flat compared to 2023 at $258.3 million, reflecting the resilience of its water solutions business amidst challenging industry conditions.

The highlight of the quarter was Select Water's growing water infrastructure segment, which saw revenue rise 26% for the full year 2024 to $290.9 million. Gross profit in this segment jumped 62% year-over-year.

Select Water announced multiple new long-term contracted water infrastructure projects during the quarter, including:

• A 15-year agreement to construct recycling facilities, pipelines, and provide water transfer services in the Northern Delaware Basin, supported by a 31,000 acre dedication.
• A 7-year deal to build a 120,000 barrel per day recycling facility in the Central Basin Platform area, backed by a 124,000 acre produced water recycling dedication.
• A $62 million investment to consolidate water rights and storage in Colorado, targeting high-margin municipal, industrial and agricultural supply contracts.

Looking ahead to 2025, the company expects another record year for Adjusted EBITDA and consolidated margins, driven by 15-25% revenue and gross profit growth in the water infrastructure segment. However, revenue in the water services segment is anticipated to decline modestly due to potential divestitures of underperforming operations.