Aris Water Solutions, Inc. Reports Fourth Quarter and Full Year 2024 Results and Provides 2025 Outlook; Raises Quarterly Dividend by 33% and Announces Acquisition of the McNeill Ranch

Aris Water Solutions, Inc. (NYSE:ARIS) ("Aris," "Aris Water" or the "Company") today announced financial and operating results for the fourth quarter and full year ended December 31, 2024.

FOURTH QUARTER AND FULL YEAR 2024 HIGHLIGHTS

• Grew produced water volumes 7% year-over-year
• Set a new quarterly record for recycled water volumes, growing 16% for the year and 18% sequentially in the fourth quarter of 2024
• Achieved fourth quarter and full year 2024 net income of $13.8 million and $60.2 million, respectively
• Generated Adjusted EBITDA¹ of $54.5 million for the fourth quarter of 2024, up 10% year-over-year, and $211.9 million for the full year, up 21% from 2023
• Full year 2024 Cash Paid for Property, Plant and Equipment of $100 million
• Full year 2024 Capital Expenditures⁴ of $101 million, down 35% from 2023
• Increased quarterly dividend 33% to $0.14 per share for the first quarter of 2025
• Acquired the 45,000 acre McNeill Ranch in Texas and New Mexico, providing significant optionality for future growth

"Aris had a remarkable fourth quarter and a great year in which we successfully grew both volumes and profitability. We achieved Adjusted EBITDA at the top end of our increased guidance and are now delivering on our goal of increasing shareholder returns by raising our dividend to $0.14 per share, representing a 33% increase. We are extremely proud of what our team accomplished in 2024 and believe we will continue our strong performance in our core business. We are also making progress in mineral extraction, beneficial reuse, and the development of technologies for the treatment of wastewater outside the oil and gas industry," said Amanda Brock, President and CEO of Aris.

"During the fourth quarter, we acquired the 45,000 acre McNeill Ranch located in New Mexico and Texas for $45.0 million. The ranch provides significant additional disposal capacity to support years of future growth adjacent to the fastest growing production areas of the Northern Delaware Basin. This acquisition increases our operational flexibility and allows us to optimize throughput and disposal royalties. We purchased the ranch after detailed sub-surface analysis in collaboration with several of our largest customers and believe it features promising geology and porosity for long-term water infrastructure development.

Given the ranch's advantaged location, there are opportunities to generate additional surface income through rights-of-way, utilization of the surface for power and renewable development, beneficial reuse, and other industrial applications. We are in discussions with both current and potential new customers to further commercialize the ranch.

Aris is also applying its expertise in complex water treatment to industrial uses outside of the oil and gas industry. We recently added assets, intellectual property, and an experienced team to help us further our expansion into broader industrial markets. This team has developed numerous projects to recycle water for large industrial companies and positions us well to expand our treatment business. We will provide further updates as this business grows.

2024 was a phenomenal year and I want to congratulate our team on all of the Company's accomplishments. We now begin 2025 with significant momentum and several exciting strategic initiatives."

OPERATIONS UPDATE

FINANCIAL UPDATE

This table includes reference to non-GAAP measures. See definition and a reconciliation to the most directly comparable GAAP measure in the Appendix.

This table includes reference to non-GAAP measures. See definition and a reconciliation to the most directly comparable GAAP measure in the Appendix.

STRONG BALANCE SHEET AND LIQUIDITY

As of December 31, 2024, the Company had net debt of approximately $422 million with $29 million in cash and $303 million available under its revolving credit facility. The Company's leverage ratio³ at the end of 2024 was 2.0X, below the Company's target leverage of 2.5X – 3.5X.

FIRST QUARTER 2025 DIVIDEND INCREASE

For the first quarter of 2025, Aris's Board of Directors approved a 33% increase to Aris's quarterly dividend to $0.14 per share. In conjunction with the dividend payment, a distribution of $0.14 per unit will be paid to unit holders of Solaris Midstream Holdings, LLC. The dividend will be paid on March 27, 2025, to holders of record of the Company's Class A common stock as of the close of business on March 13, 2025. The distribution to unit holders of Solaris Midstream Holdings, LLC will be subject to the same payment and record dates.

FIRST QUARTER AND FULL YEAR 2025 FINANCIAL OUTLOOK

"In 2025, we continue to expect strong performance from our core water infrastructure business. Produced water volumes are forecasted to increase in line with the production growth of our contracted customers in the Northern Delaware Basin.

We expect additional completion activity on our dedicated acreage to increase our Water Solutions volumes in 2025. We recently extended an acreage dedication contract with one of our largest customers and now approximately 80% of our forecasted Water Solutions business is under long-term dedication with an average tenor of 8 years. In addition to our long-term contracted produced water business, these contracts provide even greater visibility into sustained recycling volumes and related revenue for years to come.

Based on our customers' volumetric outlooks, we expect Adjusted EBITDA of $215 to $235 million and Capital Expenditures to be between $85 and $105 million for the year. Growing volumes, strong sustained margins, and continued capital discipline are expected to drive Free Cash Flow between $75 and $95 million, an increase of approximately 17% over 2024.

2025 is shaping up to be another strong year. Looking forward, we will continue to increase shareholder returns in a sustainable manner while maintaining a strong financial profile and reinvesting in our core water infrastructure businesses. We are encouraged by our opportunities related to the McNeill Ranch and the broader industrial water treatment market," said Mrs. Brock.

For the full year of 2025, the Company expects:

• Produced Water Handling volumes between 1,150 and 1,210 thousand barrels of water per day
• Water Solutions volumes between 460 and 520 thousand barrels of water per day
• Adjusted Operating Margin per Barrel² between $0.43 and $0.45
• Skim oil recoveries of approximately 1,820 barrels per day
• Adjusted EBITDA¹ between $215 and $235 million
• Capital Expenditures⁴ of $85 to $105 million
• Free Cash Flow⁵ of $75 to $95 million

For the first quarter of 2025, net of approximately $1.5 million of Adjusted EBITDA¹ impact from customer shut-ins associated with weather events in January 2025, the Company expects:

• Produced Water Handling volumes between 1,085 and 1,125 thousand barrels of water per day
• Water Solutions volumes between 510 and 550 thousand barrels of water per day
• Adjusted Operating Margin per Barrel² between $0.43 and $0.45
• Skim oil recoveries of approximately 1,800 barrels per day
• Adjusted EBITDA¹ between $50 and $54 million
• Capital Expenditures⁴ of $20 to $25 million

CONFERENCE CALL

Aris will host a conference call to discuss its fourth quarter and full year 2024 results on Thursday, February 27, 2025, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time).

Participants should call (877) 407-5792 and refer to Aris Water Solutions, Inc. when dialing in. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. To listen via live webcast, please visit the Investor Relations section of the Company's website, www.ariswater.com.

An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately fourteen days. It can be accessed by dialing (877) 660-6853 within the United States or (201) 612-7415 outside of the United States. The conference call replay access code is 13750902.

About Aris Water Solutions, Inc.

Aris Water Solutions, Inc. is a leading, growth-oriented environmental infrastructure and solutions company that directly helps its customers reduce their water and carbon footprints. Aris Water delivers full-cycle water handling and recycling solutions that increase the sustainability of energy company operations. Its integrated pipelines and related infrastructure create long-term value by delivering high-capacity, comprehensive produced water management, recycling and supply solutions to operators in the core areas of the Permian Basin.

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1</sup> Adjusted Net Income, Adjusted EBITDA, and Diluted Adjusted Net Income per Share are non-GAAP financial measures. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted Net Income, Adjusted EBITDA, and Diluted Adjusted Net Income per Share and a reconciliation thereof to net income, the most directly comparable GAAP measure.

² Adjusted Operating Margin per Barrel is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted Operating Margin per Barrel and a reconciliation thereof to gross margin, the most directly comparable GAAP measure.

³ Represents a non-GAAP financial measure. Defined as net debt as of December 31, 2024, divided by trailing twelve months Adjusted EBITDA. Net debt is calculated as total debt less cash and cash equivalents. See the supplementary schedules in this press release for a reconciliation to the most directly comparable GAAP measure.

⁴ Capital Expenditures is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Capital Expenditures and a reconciliation thereof to cash paid for property, plant, and equipment, the most directly comparable GAAP measure.

⁵ Free Cash Flow is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Free Cash Flow and a reconciliation thereof to Net Cash Provided by (Used in) Operating Activities, the most directly comparable GAAP measure.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to, statements, information, opinions or beliefs regarding our business strategy, our industry, our future profitability, business and financial performance, including our guidance for 2025, current and potential future long-term contracts, legal and regulatory developments, our ability to identify strategic acquisitions and realize expected benefits therefrom, the development of technologies for the beneficial reuse of produced water and related strategies, plans, objectives and strategic pursuits and other statements that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "guidance," "preliminary," "project," "estimate," "expect," "anticipate," "continue," "sustain," "will," "intend," "strive," "plan," "goal," "target," "believe," "forecast," "outlook," "future," "potential," "opportunity," "predict," "may," "visibility," "possible," "should," "could" and variations of such words or similar expressions. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated or implied by the forward-looking statements including our guidance for 2025. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to, energy prices, the Russia-Ukraine and Middle Eastern conflicts, macroeconomic conditions (such as inflation) and market uncertainty related thereto, legislative and regulatory developments, customer plans and preferences, adverse results from litigation and the use of financial resources for litigation defense, technological innovations and developments, and other events discussed or referenced in our filings made from time to time with the Securities and Exchange Commission ("SEC"), including such factors discussed under "Risk Factors" in our most recent Annual Report on Form 10-K, and if applicable, our subsequent SEC filings, which are available on our Investor Relations website at https://ir.ariswater.com/sec-filings or on the SEC's website at www.sec.gov/edgar. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. All forward-looking statements, expressed or implied, included in this press release and any oral statements made in connection with this press release are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Use of Non-GAAP Financial Information

The Company uses financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), including Adjusted EBITDA, Adjusted Operating Margin, Adjusted Operating Margin per Barrel, Adjusted Net Income, net debt and leverage ratio, Capital Expenditures and Free Cash Flow. Although these Non-GAAP financial measures are important factors in assessing the Company's operating results and cash flows, they should not be considered in isolation or as a substitute for net income, gross margin, net cash flows provided from operating activities or any other measures prepared under GAAP.

The Company calculates Adjusted EBITDA as net income (loss) plus: interest expense; income taxes; depreciation, amortization and accretion expense; abandoned well costs, asset impairment and abandoned project charges; losses on the sale of assets; transaction costs; research and development expense; change in payables related to the Tax Receivable Agreement liability as a result of state tax rate changes; loss on debt modification; stock-based compensation expense; and other non-recurring or unusual expenses or charges (such as litigation expenses, severance costs and amortization expense related to the implementation costs of our new enterprise resource planning system), less any gains on the sale of assets.

The Company calculates Adjusted Operating Margin as Gross Margin (Total Revenue less Total Cost of Revenue) plus depreciation, amortization and accretion. The Company defines Adjusted Operating Margin per Barrel as Adjusted Operating Margin divided by total volumes handled, sold or transferred.

The Company calculates Adjusted Net Income as Net Income (Loss) plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically non-cash and/or non-recurring items. The Company calculates Diluted Adjusted Net Income Per Share as (i) Net Income (Loss) plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically non-cash and/or non-recurring items, divided by (ii) the diluted weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC interests, adjusted for the dilutive effect of outstanding equity-based awards.

For the quarter ended December 31, 2024, the Company calculates its leverage ratio as net debt as of December 31, 2024, divided by Adjusted EBITDA for the trailing twelve months. Net debt is calculated as the principal amount of total debt outstanding as of December 31, 2024, less cash and cash equivalents as of December 31, 2024.

The Company calculates Capital Expenditures as cash capital expenditures for property, plant, and equipment additions less changes in accrued capital costs.

The Company calculates Free Cash Flow as cash provided by (used in) operating activities less changes in operating assets and liabilities which used (provided) cash and cash paid for property, plant and equipment expenditures.

The Company believes these presentations are used by investors and professional research analysts to assess the ability of our assets to generate sufficient cash to meet our business needs and return capital to equity holders, as well as for the valuation, comparison, rating and investment recommendations of companies within its industry. Similarly, the Company's management uses this information for comparative purposes as well. Adjusted EBITDA, Adjusted Operating Margin, Adjusted Operating Margin per Barrel, Adjusted Net Income, Capital Expenditures and Free Cash Flow are not measures of financial performance under GAAP and should not be considered as measures of liquidity or as alternatives to net income (loss), gross margin, cash paid for property, plant and equipment or net cash flows provided from operating activities. Additionally, these presentations as defined by the Company may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) and other measures prepared in accordance with GAAP, such as gross margin, operating income, net income, cash paid for property, plant, and equipment or net cash flows from operating activities.

Although we provide forecasts for the non-GAAP measures Adjusted EBITDA, Adjusted Operating Margin per Barrel, Capital Expenditures and Free Cash Flow, we are not able to forecast their most directly comparable measures (net income, gross margin, cash paid for property, plant, and equipment and net cash flows from operating activities) calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of forward-looking GAAP metrics are not predictable, making it impractical for us to forecast. Such elements include but are not limited to non-recurring gains or losses, unusual or non-recurring items, income tax benefit or expense, or one-time transaction costs and cost of revenue, which could have a significant impact on the GAAP measures. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. As a result, no reconciliation of forecasted non-GAAP measures is provided.

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David Tuerff

Senior Vice President, Finance and Investor Relations

(281) 501-3070

[email protected]