WaterBridge Infrastructure LLC (WBI) Earnings

Management highlights

- Core Produced Water Operations & Growth Projects * Speedway Phase 1 launched on schedule in July 2026 as planned, with volumes expected to ramp through the second half of 2026, adding high-margin volume growth for 2026 and beyond * Customer demand for Speedway Phase 2 remains robust, with commercial and operational discussions advancing toward final project underwriting, with a potential sanctioning by the end of 2026 * The New Devon pipeline project construction has been accelerated, moving its in-service date to early 2027, to capitalize on strong customer demand for water infrastructure in the region * The company closed the acquisition of Ranger Water Midstream, adding 70,000 barrels per day of permitted disposal well capacity, 30 miles of gathering pipelines, a 100,000 barrel per day treatment facility, and 1.2 million barrels of storage capacity in disposal-constrained Lee County, New Mexico. The acquisition is immediately accretive, complementary to the Speedway project, and will be connected to Speedway in H2 2026 to unlock additional operational flexibility and throughput. - Environmental Waste Management Expansion * WaterBridge entered into an agreement to acquire the 560-acre NDB Landfill in Lee County, New Mexico, which has 44 million cubic yards of permitted capacity providing over 40 years of open volume, creating a scalable growth platform in a high-activity region * The board approved organic construction of a new 280-acre environmental waste management facility in the state line region, the company's fourth Delaware Basin waste site, with construction starting in Q3 2026 and service expected mid-2027. The project has an expected two-year capital payback period, and will reduce hauling costs for the core water business while expanding integrated service capabilities. - Long-Term Strategic Opportunity: Digital Infrastructure Water Services * WaterBridge holds a unique position to serve as a full-scale utility partner for hyperscaler data centers developing across the Delaware Basin, leveraging its existing scaled infrastructure * The company holds 5 million barrels per day of total produced water handling capacity (2.6 million barrels per day active in Q2 2026) and access to 13.4 million acre feet of brackish water, enough to supply multi-gigawatt scale data center water needs indefinitely * WaterBridge can deliver end-to-end water lifecycle management: supply brackish or treated produced water for cooling, then recycle and dispose of liquid and solid waste byproducts, a full-cycle capability no competitor can match at this scale - Capital Allocation & Balance Sheet * Management follows a disciplined capital allocation framework prioritizing: 1) organic growth and accretive acquisitions, 2) maintaining a conservative balance sheet to hit a long-term net leverage target of below 3.0x, 3) opportunistic capital return to shareholders via dividends and share repurchases * Subsequent to quarter-end, the company expanded its revolving credit facility from $500 million to $750 million (with option to increase to $1 billion) and reduced borrowing costs by 25 basis points, increasing total liquidity to $347.6 million at quarter-end * A $0.05 per share dividend was announced this quarter

Guidance

- Full-year 2026 guidance has been raised for the second consecutive quarter, driven by the accretive impacts of the Ranger and NDB Landfill acquisitions and increased commercially driven capital projects * Full-year 2026 produced water volume guidance is set to a range of 2.55 to 2.75 million barrels per day * Full-year 2026 adjusted EBITDA guidance is set to a range of $435 to $475 million * Full-year 2026 capital expenditure guidance has been increased by $100 million to a range of $530 to $590 million, to fund Ranger integration, the new state line landfill construction, acceleration of the New Devon project, and other commercially driven new build/bolt-on projects. All incremental projects meet or exceed the company's capital allocation criteria, with build multiples below 5x and investment-grade counterparties * Management notes that hitting the lower end of the 2026 volume guidance would require a large, unexpected pullback in drilling activity from current levels, which is viewed as a low-likelihood outcome at this time

Segment performance

WaterBridge reports two core operating segments: core produced water handling, and environmental waste management. For Q2 2026, the company delivered total record revenue of $217.8 million, with 8% sequential revenue growth driven by higher produced water volumes and increased contract rates. Produced water handling represents approximately 90% of total company revenue, with adjusted EBITDA margin of 53% for the overall business in the quarter. Environmental waste management was approximately 5% of revenue prior to the latest announced transactions, and is expected to grow to 10% of total company revenue following completion of the approved NDB Landfill acquisition and new organic waste facility construction. The new waste management investments are projected to double the company's total waste facility count and more than double its permitted waste handling capacity in the Delaware Basin.

Risks & headwinds

- Forward-looking performance is subject to known and unknown risks and uncertainties that could cause actual results to differ materially from guidance, including changes in oil and gas commodity prices that impact upstream producer drilling and completion activity * A significant Black Swan event that pushes commodity prices sharply lower and halts drilling activity could result in full-year 2026 volumes falling to the lower end of guidance * Development of the data center water supply opportunity is dependent on finalizing a clear regulatory framework for non-potable water use, which is still being coordinated with local, state, and federal officials

Analyst Q&A

• Q: Why did WaterBridge choose to acquire the NDB Landfill instead of building a new facility organically in New Mexico, and what is the long-term growth outlook for solid waste, including the convergence of water and solid waste value?

  A: Solid waste management shares the same competitive fundamentals as core produced water: overlapping customer bases, critical permitting barriers that act as moats, and long-term criticality to Delaware Basin operators. Organic development was not feasible in New Mexico due to regulatory barriers, making the acquisition the optimal path. Waste management will grow to 10% of WaterBridge's total business post-transaction, and the expansion creates vertical integration value since WaterBridge generates solid waste from its own core operations. Returns on these investments match or exceed returns from core water projects, matching the successful precedent of peer companies that have integrated water and solid waste operations.

• Q: What impact will the Ranger Water Midstream acquisition have on the sizing and throughput of Speedway Phase 2 ahead of a final investment decision?

  A: Ranger's assets are highly complementary to Speedway, and add new contracted customers that can contribute volumes to the Speedway system. WaterBridge will not overcommit firm pipeline capacity on Speedway, but the combined assets create mutual flexibility: Ranger can absorb overflow from Speedway, while Speedway can absorb overflow from Ranger's existing contracts. The acquisition meets the company's return hurdle of at least 5x investment multiple, in line with organic growth projects.

• Q: Is there appetite for additional waste management acquisitions, and how do returns and margins compare to core water opportunities?

  A: WaterBridge will continue to evaluate additional waste management acquisition opportunities, as long as they meet the company's strict underwriting thresholds. Permitting barriers often make organic development unfeasible in some regions, driving acquisition demand, and demand for waste facilities is expected to increase long term. Organic waste projects like the new state line facility deliver returns that exceed core water projects, with an expected 2-year capital payback, and margin profile that matches or improves on core produced water handling margins.

• Q: What is the current status of Speedway Phase 1 ramp and Speedway Phase 2 development, including timeline for final sanctioning?

  A: Speedway Phase 1 came online on schedule, and is being ramped gradually to test operations and avoid future downtime. It is expected to ramp to ~100,000 barrels per day over the next few months and exit 2026 well above that level. Commercial negotiations for Speedway Phase 2 are progressing well, but contracting with high-quality counterparties takes time. Management still expects to sanction the project by the end of 2026.