How will the Ranger Water Midstream acquisition impact the total throughput of Project Speedway Phase 2, especially as the FID decision approaches?

Management stated that Ranger is a complementary asset with new customers that could add volumes to the Speedway system. They emphasized that they would not overcommit firm capacity on the pipeline system and that Ranger assets could be used for overflow from Speedway, and vice-versa. They expect Ranger to achieve a 5x investment multiple, similar to organic growth projects. “So we do think that it could add volumes to the Speedway system as it grows, but we'll remind you that we're not going to overcommit our firm capacity on that pipeline system.”

Is there appetite for further waste management investments, how do returns compare to water opportunities, and what is the margin profile difference between the two businesses?

Management confirmed they will continue to evaluate waste management acquisition opportunities that meet their underwriting thresholds and do not cannibalize existing business. They noted that organic waste management build-out returns, like the Stateline facility, can eclipse water infrastructure returns, with a 2-year payback expected. Margin profiles for waste management are expected to be equivalent to or slightly improved compared to water handling. “the returns on the organic build-out here eclipse even what we see on the water side. And so that Stateline opportunity on build-out that we're going to be working through, we expect a 2-year payback on the capital needed for that facility.”

How critical is long-term water security for hyperscaler customers, and can treated produced water support a water-positive ESG narrative for these companies, impacting commercial demand for water treatment?

Management highlighted that water is critical for data center operations. They see a strong value proposition in using non-potable brackish water from LandBridge and, more excitingly, treated produced water for cooling. They expressed high confidence in the operational and commercial viability of treated produced water for cooling and are actively working with regulatory bodies and blue-chip counterparties to define the necessary framework, expecting positive news soon. “And I would say with where we sit at the moment, we have incredibly high confidence in both the operational and the commercial viability of deploying treated produced water for cooling.”

WBI

WaterBridge (WBI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Aug 6, 2026

Source: earnings call transcript

Executive summary

WaterBridge Q2 FY26 — Record Revenue & Adjusted EBITDA, Strategic Acquisitions, and Raised Guidance

WaterBridge Infrastructure delivered a strong Q2 FY26, marked by record financial performance driven by organic growth and strategic acquisitions. The company raised its full-year guidance for volumes and adjusted EBITDA, reflecting confidence in its expanded infrastructure and waste management footprint. Management emphasized disciplined capital allocation and a robust balance sheet to fund high-return projects, while also highlighting emerging opportunities in digital infrastructure.

Highlights

Achieved record revenue of $217.8 million, representing 8% sequential growth.
Adjusted EBITDA increased to $115.8 million, up 12% sequentially from Q1.
Adjusted EBITDA margin improved to 53%.
Raised full-year 2026 guidance for volumes (2.55M-2.75M bbl/d) and adjusted EBITDA ($435M-$475M) for the second consecutive quarter.
Expanded revolving credit facility from $500 million to $750 million and reduced borrowing costs by 25 basis points.

Concerns

Increased full-year 2026 capital expenditures guidance by $100 million to a range of $530 million to $590 million.
Covenant net leverage ratio stood at 3.3x, above the long-term target of sub 3x.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 volumes	2.55 million to 2.75 million barrels per day high materiality	FY26	High
Full-year 2026 adjusted EBITDA	$435 million to $475 million high materiality	FY26	High
Full-year 2026 Capital Expenditures	$530 million to $590 million high materiality	FY26	High
Stateline environmental waste management facility construction start	Q3 2026 medium materiality	Q3 · FY26	High
New Devon project in-service date	early 2027 medium materiality	early 2027 · FY27	High
Speedway Phase 2 FID decision	by year-end 2026 high materiality	FY26	High

Orderbook & backlog

Ranger Water Midstream contracts Established contracts and acreage dedications Q2 FY26

With blue-chip producers already in place, anticipated to be immediately accretive.

Speedway Phase 2 customer demand Robust customer demand Q2 FY26

Commercial and operational discussions advancing towards underwriting the project, with FID expected by year-end 2026.

Commercially driven new build and bolt-on infrastructure projects Numerous projects Q2 FY26

Expected in the second half of this year, delivering build multiples of 5x or better.

Deals & partnerships

Ranger Water Midstream Acquisition of produced water infrastructure assets

Includes disposal wells with ~70,000 bbl/d permitted capacity, ~30 miles of gathering pipelines, a 100,000 bbl/d water treatment facility, and 1.2M bbl storage capacity in Lea County, New Mexico. Established contracts and acreage dedications with blue-chip producers.

NDB Landfill Agreement to acquire an oilfield waste facility

A 560-acre oilfield waste facility in Lea County, New Mexico, with 44 million cubic yards of permitted capacity and over 40 years of future volumes. Expected to double total facility count and permitted waste handling capacity in the Delaware Basin when combined with organic build.

Capital programs

Speedway Phase 1 launched

Period spend: $123.3 million (Q2 FY26 capex)

Benefit:Connects growing produced water volumes in Lea and Eddy County to long-term out-of-basin disposal capacity

Launched on schedule with first volumes coming online in July. Volumes expected to ramp through the second half of the year.

Stateline environmental waste management facility approved organic construction

Start: Q3 2026

Benefit:Significantly expand integrated waste management capabilities in the region, create operational efficiencies, 280 acres

Represents a high-return opportunity with an approximately 2-year capital payback period expected. Will be the company's fourth site in the basin.

New Devon project accelerated construction

Benefit:Transport volumes from New Mexico to low-pressure LandBridge-owned pore space in Loving and Winkler counties

Acceleration moves up its in-service date, shifting growth from this project into early 2027.

Ranger and Speedway integration planned

Benefit:Fully unlock operational advantages of acquired infrastructure, enable recycling and treated water supply, maximize throughput

Planned investment in the second half of the year to connect Ranger and Speedway infrastructure.

Risks & headwinds

Commodity price volatility and drilling activity pullback Short-term

Unquantified

Mitigation:Conservative guidance approach, expecting a 'black swan event' for the lower end of guidance to be realized.

Pore pressure constraints limiting injection capacity Ongoing

Unquantified

Mitigation:WaterBridge offers responsible long-term disposal solutions, creating new growth opportunities in the near term.

Regulatory framework for treated produced water for data centers Near-term

Unquantified

Mitigation:Working with local, state, and national officials to define the regulatory framework, with buy-in from blue-chip counterparties.

Covenant net leverage ratio above target Ongoing

3.3x vs. sub 3x target

Mitigation:Committed to long-term leverage target of sub 3x; increased liquidity through expanded revolving credit facility.

What to watch in Q3 FY26

Speedway Phase 2 FID decision

by year-end 2026

Current Commercial discussions advancing

Target Sanctioning decision

Why it matters

Sanctioning of Speedway Phase 2 is crucial for future high-margin volume growth and expanding infrastructure in a key region.

Yes, potentially imminent, but back half of this year, we have a high degree of confidence in.

Find out whether WBI delivers this. Inve re-checks your case every morning.

Q&A highlights

Why acquire the NDB Landfill in New Mexico instead of building, and what is the broader growth opportunity for solid waste, including the convergence of water and solid waste streams?

Management explained that waste management shares similar fundamentals with their core water business, such as critical geography, surface control, and regulatory moats. They acquired NDB due to these competitive moats making organic build-out difficult in New Mexico, unlike the organic Stateline project. They see significant growth potential, vertical integration benefits for their own operations, and attractive returns, citing the SECURE Waste acquisition by GFL Environmental as a positive market precedent.

“from our seat, they're really -- because of those competitive moats, there wasn't an opportunity to work through the organic build-out in New Mexico like we had in the fourth site in Texas. And so it made stepping into this acquisition make all of the sense at the time.”

asked by Derrick Whitfield · answered by Scott McNeely

3 min read 6 chapters

Detailed narrative

Strategic Acquisitions and Investments

WaterBridge closed the acquisition of Ranger Water Midstream, significantly increasing its capacity in Lea County, New Mexico, with 70,000 barrels per day of permitted disposal capacity, 30 miles of pipelines, and a 100,000 barrels per day water treatment facility. The company also acquired the NDB Landfill in Lea County, a 560-acre facility with 44 million cubic yards of permitted capacity, representing over 40 years of future volumes.

Additionally, WaterBridge approved the organic construction of a 280-acre environmental waste management facility in the Stateline region, expected to begin construction in Q3 2026 and be in-service by mid-2027, with an anticipated 2-year capital payback period. These waste management transactions are expected to double the company's total facility count and permitted waste handling capacity in the Delaware Basin.

Operational Milestones and Project Acceleration

Speedway Phase 1 launched on schedule in July, with first volumes coming online, and is expected to ramp up to approximately 100,000 barrels per day over the next couple of months, adding high-margin volume growth. Momentum for Speedway Phase 2 continues to build, with robust customer demand and commercial discussions advancing towards a Final Investment Decision (FID) expected by year-end 2026.

The New Devon project, a pipeline to transport volumes from New Mexico to low-pressure LandBridge-owned pore space, had its in-service date accelerated to early 2027, shifting growth into the next fiscal year. The company also plans to invest in connecting Ranger and Speedway in the second half of the year to fully unlock operational advantages.

Strong Financial Performance and Outlook

WaterBridge delivered record Q2 revenue of $217.8 million, an 8% sequential increase, primarily driven by higher produced water volumes and new contract rates. Adjusted EBITDA grew 12% sequentially to $115.8 million, with the adjusted EBITDA margin improving to 53%, reflecting scalability and operating discipline.

Net income was $14.6 million, up from $9.5 million in Q1. As a result of accretive acquisitions and accelerated projects, the company raised its full-year 2026 guidance for volumes to 2.55 million to 2.75 million barrels per day and adjusted EBITDA to $435 million to $475 million.

Capital expenditures guidance was also increased by $100 million to $530 million to $590 million to fund these opportunities.

Disciplined Capital Allocation and Enhanced Liquidity

The company maintains a disciplined capital allocation framework, prioritizing organic growth, accretive acquisitions, and a conservative balance sheet. All incremental projects are expected to meet or exceed capital allocation criteria, featuring build multiples below 5x, long-term contracts, and creditworthy counterparties.

WaterBridge ended the quarter with total liquidity of $347.6 million, including $47.6 million of cash and $300 million of available borrowing capacity. Subsequent to quarter-end, the revolving credit facility was expanded from $500 million to $750 million, with the ability to grow to $1 billion, and borrowing costs were reduced by 25 basis points, enhancing financial flexibility.

The covenant net leverage ratio was 3.3x, with a long-term target of sub 3x.

Emerging Digital Infrastructure Opportunity

WaterBridge is uniquely positioned to participate in the rapidly developing digital infrastructure market in the Delaware Basin, potentially serving as a full-scale utility partner to hyperscalers. This opportunity leverages the company's 5 million barrels per day of produced water handling capacity and LandBridge's access to approximately 13.4 million acre-feet of brackish water.

The integrated network connects these resources to high-demand growth centers. The company is actively exploring the use of treated produced water for data center cooling and is collaborating with local, state, and national officials to define the necessary regulatory framework, expressing high confidence in the operational and commercial viability of this solution.

Growth in Environmental Waste Management Business

The environmental waste management business is growing to approximately 10% of WaterBridge's total business, up from 5% at IPO. This expansion is driven by similar fundamentals to the core produced water business, including overlapping customers, criticality of surface control, and regulatory competitive moats.

The NDB Landfill acquisition provides immediate high-margin revenue, while the organic Stateline facility offers attractive returns, with a 2-year capital payback expected. The company views this as a natural, intelligent growth area that also provides vertical integration benefits by reducing waste hauling costs for its core water operations.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.