gwrs-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________________________________

FORM 10-Q

_____________________________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-37756

______________________________________________________________

Global Water Resources, Inc.

(Exact Name of Registrant as Specified in its Charter)

______________________________________________________________

Delaware

90-0632193

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

21410 N. 19th Avenue #220

Phoenix,

Arizona

85027

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (480) 360-7775

Securities registered pursuant to Section 12(b) of the Act:

______________________________________________________________


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	GWRS	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

As of May 8, 2026, the registrant had 28,763,634 shares of common stock, $0.01 par value per share, outstanding.

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Table of Contents

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			5
ITEM 1. Financial Statements (Unaudited)			5
Condensed Consolidated Balance Sheets (unaudited)			5
Condensed Consolidated Statements of Operations (unaudited)			6
Condensed Consolidated Statements of Shareholders’ Equity (unaudited)			7
Condensed Consolidated Statements of Cash Flows (unaudited)			8
Notes to the Condensed Consolidated Financial Statements (unaudited)			9
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
ITEM 3. Qualitative and Quantitative Disclosures About Market Risk			30
ITEM 4. Controls and Procedures			31
PART II. OTHER INFORMATION			32
ITEM 1. Legal Proceedings			32
ITEM 1A. Risk Factors			32
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			32
ITEM 3. Defaults Upon Senior Securities			32
ITEM 4. Mine Safety Disclosures			32
ITEM 5. Other Information			32
ITEM 6. Exhibits			33
Signatures			34

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Table of Contents

DEFINED TERMS

The following is a list of frequently used abbreviations or acronyms that are found in this report:


The Company’s Utilities
GW-Santa Cruz			Global Water - Santa Cruz Water Company, Inc.
GW-Palo Verde			Global Water - Palo Verde Utilities Company, Inc.
GW-Farmers			Global Water - Farmers Water Company, Inc.
GW-Hassayampa			Global Water - Hassayampa Utilities Company, Inc.
GW-Belmont			Global Water - Belmont Water Company, Inc.
GW-Turner			Global Water - Turner Ranches Irrigation, Inc.
GW-Saguaro			Global Water - Saguaro District Water Company, Inc.
GW-Ocotillo			Global Water - Ocotillo Water Company, Inc.
Abbreviations and Other
ACC			Arizona Corporation Commission

ADWR			Arizona Department of Water Resources
AFUDC			Allowance for funds utilized during construction
Ag-to-Urban			The June 2025 Arizona Senate Bill 1611, known as the Arizona Assured Water Supply “Ag-to-Urban” program
AIAC			Advances in Aid of Construction
ALJ			Administrative Law Judge


ARO			Asset retirement obligation
ASC			Accounting Standards Codification
ASU			Accounting Standards Update


CIAC			Contributions in Aid of Construction
CODM			Chief operating decision maker
Company (we, us, our, GWRI)			Global Water Resources, Inc.
CP Water			CP Water Company
DAWS			Designation of Assured Water Supply

EPS			Earnings (loss) per share
FASB			Financial Accounting Standards Board
GAAP			Accounting principles generally accepted in the United States of America
HUF			Hook-up fee
ICFA			Infrastructure coordination and financing agreement

IT			Information technology



Northern Trust			The Northern Trust Company, an Illinois banking corporation


Revolver			Revolving credit facility with Northern Trust

RSA			Restricted stock award
RSU			Restricted stock unit

RUCO			The Residential Utility Consumer Office, an office representing the interests of residential utility ratepayers

SEC			Securities and Exchange Commission
SOFR			Secured Overnight Financing Rate
Sonoran			Sonoran Utility Services, Inc.
Southwest Plant			All GW-Palo Verde and GW-Santa Cruz water and wastewater infrastructure located in Pinal County, southwest of the City of Maricopa (e.g. mains, tanks, water reclamation facility, wells, etc.)


WIFA			Water Infrastructure Finance Authority of Arizona

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Table of Contents

Index to Condensed Consolidated Financial Statements (unaudited)


Condensed Consolidated Balance Sheets (unaudited)			5
Condensed Consolidated Statements of Operations (unaudited)			6
Condensed Consolidated Statements of Shareholders’ Equity (unaudited)			7
Condensed Consolidated Statements of Cash Flows (unaudited)			8
Notes to the Condensed Consolidated Financial Statements (unaudited)			9
1. Description of Business, Basis of Presentation, Significant Accounting Policies, and Recent Accounting Pronouncements			9
2. Acquisitions			10
3. Regulatory Matters			11
4. Revenue Recognition			12
5. Earnings (Loss) Per Share			13
6. Prepaid Expenses and Other Current Assets			14
7. Equity			14
8. Debt			14
9. Accrued Expenses and Other Current Liabilities			15
10. Fair Value			15
11. Income Taxes			15
12. Share-based Compensation			16
13. Transactions With Related Parties			16
14. Commitments and Contingencies			16
15. Business Segment Information			17
16. Other, Net			18
17. Supplemental Cash Flow Information			18

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Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Balance Sheets (unaudited)


(in thousands, except share and per share amounts)	March 31, 2026		December 31, 2025
Assets
Utility Plant	$	618,784	$	610,766
Less: accumulated depreciation	(173,377)		(168,915)
Net utility plant	445,407		441,851
Current Assets
Cash and cash equivalents	1,800		4,080
Accounts receivable, net of allowance for credit losses of $225 and $244, respectively	3,418		3,746
Unbilled revenue	3,527		3,409
Prepaid expenses and other current assets	4,674		3,388
Total current assets	13,419		14,623
Other Assets
Goodwill	6,512		6,512
Intangible assets, net	5,938		6,062
Regulatory assets	6,832		7,003
Restricted cash	3,072		2,755
Right-of-use assets, net	3,796		3,990
Other noncurrent assets	117		117

Total other assets	26,267		26,439
Total Assets	$	485,093	$	482,913
Capitalization and Liabilities
Capitalization
Common stock, $0.01 par value, 60,000,000 shares authorized; 29,123,855 and 29,116,183 shares issued, respectively	$	286	$	285
Treasury stock, 360,221 and 359,329 shares, respectively	(2)		(2)
Additional paid-in capital	85,277		87,294
Retained deficit	(1,327)		(961)
Total shareholders’ equity	84,234		86,616
Long-term debt, net	129,749		129,756
Total Capitalization	213,983		216,372
Current Liabilities
Accounts payable	1,352		2,251
Customer and meter deposits	1,688		1,725
Long-term debt, current portion	3,945		3,942
Leases, current portion	843		850
Accrued expenses and other current liabilities	12,001		10,457
Total current liabilities	19,829		19,225
Other Liabilities
Revolver borrowings	1,000		—
Long-term lease liabilities	3,537		3,741
Deferred revenue - ICFA	23,044		22,772
Regulatory liabilities	5,189		5,214
Advances in aid of construction	157,212		155,414
Contributions in aid of construction, net	37,424		37,857
Deferred income tax liabilities, net	9,695		9,699
Hook-up fee liabilities	10,061		8,410
Other noncurrent liabilities	4,119		4,209
Total other liabilities	251,281		247,316
Commitments and contingencies (Refer to Note 14)
Total Capitalization and Liabilities	$	485,093	$	482,913

See accompanying notes to the Condensed Consolidated Financial Statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Operations (unaudited)


	Three Months Ended March 31,
(in thousands, except share and per share amounts)		2026		2025
Revenue
Water service		$	6,606	$	5,980
Wastewater and recycled water service		6,680		6,477

Total revenue		13,286		12,457
Operating Expenses
Operations and maintenance		4,183		3,687
General and administrative		4,453		4,187
Depreciation, amortization and accretion		4,261		3,328
Total operating expenses		12,897		11,202
Operating Income		389		1,255
Other Income (Expense)
Interest income		39		99
Interest expense		(1,650)		(1,478)
Other, net		751		898
Total other expense		(860)		(481)
Income (Loss) Before Income Taxes		(471)		774
Income Tax Benefit (Expense)		105		(183)
Net Income (Loss)		$	(366)	$	591

Basic earnings (loss) per common share		$	(0.01)	$	0.02
Diluted earnings (loss) per common share		$	(0.01)	$	0.02
Dividends declared per common share		$	0.08	$	0.08

Weighted average number of common shares used in the determination of:
Basic		28,758,361		24,370,052
Diluted		28,758,361		24,434,283

See accompanying notes to the Condensed Consolidated Financial Statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Shareholders’ Equity (unaudited)


(in thousands, except share and per share amounts)	Common Stock Shares	Common Stock		Treasury Stock Shares	Treasury Stock		Additional Paid-in Capital		Retained Deficit		Total Equity
Balance as of December 31, 2025	29,116,183	$	285	(359,329)	$	(2)	$	87,294	$	(961)	$	86,616
Dividend declared $0.08 per share	—	—		—	—		(2,186)		—		(2,186)


Share-based compensation	7,672	1		(892)	—		169		—		170
Net Loss	—	—		—	—		—		(366)		(366)
Balance as of March 31, 2026	29,123,855	$	286	(360,221)	$	(2)	$	85,277	$	(1,327)	$	84,234



















	Common Stock Shares	Common Stock		Treasury Stock Shares	Treasury Stock		Additional Paid-in Capital		Retained Earnings		Total Equity
Balance as of December 31, 2024	24,570,994	$	240	(344,978)	$	(2)	$	47,366	$	—	$	47,604
Dividend declared $0.08 per share	—	—		—	—		(1,332)		(591)		(1,923)
Issuance of common stock, net	3,220,000	32		—	—		30,751		—		30,783

Share-based compensation	5,905	—		(943)	—		161		—		161
Net income	—	—		—	—		—		591		591
Balance as of March 31, 2025	27,796,899	$	272	(345,921)	$	(2)	$	76,946	$	—	$	77,216

See accompanying notes to the Condensed Consolidated Financial Statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)


	Three Months Ended March 31,
(in thousands)	2026		2025
Cash Flows from Operating Activities:
Net income (loss)	$	(366)	$	591
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	4,261		3,328
Share-based compensation	183		174
Deferred income tax expense	11		183
AFUDC-Equity	(277)		(279)

Operating lease expense	82		108
Other adjustments	55		55
Changes in assets and liabilities

Accounts receivable and other current assets	(28)		1,967
Accounts payable and other current liabilities	266		1,405
Other noncurrent assets	123		(67)
Other noncurrent liabilities	165		12
Net cash provided by operating activities	4,475		7,477
Cash Flows from Investing Activities:
Capital expenditures	(6,277)		(15,216)



Net cash used in investing activities	(6,277)		(15,216)
Cash Flows from Financing Activities:
Dividends paid	(2,186)		(1,841)
Advances and contributions in aid of construction	1,389		725
Refunds of advances for construction	(213)		—

Principal payments under finance lease	(114)		(99)


Revolver borrowings	2,250		—
Revolver repayments	(1,250)		—


Issuance of common stock, net of issuance costs	—		31,041
Financing costs of debt and equity transactions	—		(34)






Other financing activities	(37)		(34)
Net cash provided by (used in) financing activities	(161)		29,758
Increase (Decrease) in cash, cash equivalents, and restricted cash	(1,963)		22,019
Cash, cash equivalents, and restricted cash — Beginning of period	6,835		11,156
Cash, cash equivalents, and restricted cash — End of period	$	4,872	$	33,175

See accompanying notes to the Condensed Consolidated Financial Statements (unaudited)

Supplemental disclosure of cash flow information:


	Three Months Ended March 31,
(in thousands)	2026		2025
Cash and cash equivalents	$	1,800	$	31,467
Restricted cash	3,072		1,708
Total cash, cash equivalents, and restricted cash	$	4,872	$	33,175

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GLOBAL WATER RESOURCES, INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)

1. Description of Business, Basis of Presentation, Significant Accounting Policies, and Recent Accounting Pronouncements

Basis of Presentation and Principles of Consolidation

The Company’s Condensed Consolidated Financial Statements (unaudited) and related disclosures as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These financial statements follow the same accounting policies and methods of their application as the Company’s most recent annual consolidated financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In the Company’s opinion, these financial statements include all normal and recurring adjustments necessary for the fair statement of the results for the interim period. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year, due to the seasonality of our business.

The Company prepares its financial statements in accordance with the rules and regulations of the SEC. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which improves and clarifies the guidance regarding when disclosures should be provided in interim reporting periods. The standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impacts this amendment will have on its interim disclosures, as well as the timing of adoption.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the accounting for government grants, including grants related to an asset and grants related to income. This standard specifies the timing of recognition, the two available approaches to record the grant (the deferred income and the cost accumulation approach) and requires disclosure consistent with current disclosure requirements. The standard is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impacts this amendment will have on its consolidated financial statements and required disclosures, as well as the timing of adoption.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). This pronouncement requires disaggregated disclosure of income statement expenses for public business entities. In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of this standard. This standard requires disclosure in tabular format of disaggregation of relevant expense captions presented on the income statement by certain natural expense categories with certain related qualitative disclosures within the notes to the financial statements. The ASU does not change the expense captions an entity presents on the income statement. The standard is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impacts this amendment will have on its consolidated financial statements and required disclosures and will adopt the guidance on the effective date.

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2. Acquisitions

Acquisition of Water Systems from City of Tucson

On July 8, 2025, the Company’s GW-Ocotillo subsidiary completed the previously announced acquisition of seven water systems from Tucson Water, the City of Tucson’s water utility, in an all-cash transaction for an amended purchase price of approximately $8.1 million. The systems served approximately 2,200 water service connections in and around Pima County with a rate base of approximately $7.7 million at the time of acquisition.

The acquisition, which served to grow our footprint in Pima County, was accounted for as a business combination under ASC Topic 805, Business Combinations and the purchase price was allocated to the acquired utility assets and liabilities based on the acquisition-date fair values. Fair values are determined in accordance with ASC Topic 820, Fair Value Measurement, which allows for the characteristics of the acquired assets and liabilities to be considered, particularly restrictions on the use of the asset and liabilities. Regulation is considered both a restriction on the use of the assets and liabilities, as it relates to inclusion in rate base, and a fundamental input to measuring the fair value in a business combination. Substantially all the Company’s operations are subject to the rate-setting authority of the ACC and are accounted for pursuant to accounting guidance for regulated operations. The rate-setting and cost recovery provisions currently in place for the Company’s regulated operations provide revenues derived from costs, including a return on investment of assets and liabilities included in rate base. As such, the fair value of the acquired utility assets and liabilities subject to these rate-setting provisions approximates the pre-acquisition carrying values and does not reflect any net valuation adjustments.

The purchase price allocation of the net assets acquired in the transaction is as follows as of the acquisition date:


Net assets acquired (in thousands):
Utility plant, net	$	7,731
Cash	25
Accounts receivable	162





Other accrued liabilities	(25)



Total net assets assumed	7,893
Goodwill	230
Total purchase price	$	8,123

The goodwill reflects the value paid primarily for the long-term potential for connection growth as a result of the Company’s increased scale and diversity, opportunities for synergies, and an improved risk profile.

While the Company uses the best available estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, such estimates are inherently uncertain and subject to refinement. Events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. As a result, during the one-year measurement period from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Any adjustments subsequent to the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, will be recorded in the Company’s Condensed Consolidated Statements of Operations.

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3. Regulatory Matters

Recent ACC Rulings and Activity

2025 GW-Santa Cruz and GW-Palo Verde Rate Cases

On March 5, 2025, GW-Santa Cruz and GW-Palo Verde each filed a general rate case application and related schedules with the ACC for, among other things, increased water and wastewater rates, respectively, based on a test year ended December 31, 2024, with updates for post-test year plant. On October 1, 2025, the ACC Utilities Division (“ACC Staff”) and RUCO filed their respective initial written testimonies with the ACC in the rate cases, with subsequent rebuttal, surrebuttal and rejoinder testimonies having been filed by the parties.

On April 28, 2026, the parties entered into a settlement agreement (the “Settlement Agreement”) to bifurcate the two rates cases pursuant to which, among other things: (i) the GW-Santa Cruz rate case has settled; (ii) GW-Palo Verde will withdraw its rate case application with the intent of refiling its rate case in 2027 using a 2026 test year; and (iii) GW-Palo Verde will seek authorization to increase the temporary bill credit for customers related to the Company’s Southwest Plant that was originally approved in connection with Decision No. 79424 issued by the ACC.

In addition, under the terms of the Settlement Agreement, the parties have agreed to, among other things: (i) an increase in GW-Santa Cruz’s annual revenue requirement of approximately $2.3 million; (ii) a requested effective date of the new rates for GW-Santa Cruz of November 1, 2026; and (iii) $3.4 million of utility plant for GW-Santa Cruz would be classified as plant held for future use for ratemaking purposes. The settlement preserves the Company’s ability to seek inclusion of these assets in rate base in a future rate case, subject to ACC review and approval. The Company has also agreed to miscellaneous adjustments that would result in disallowances of approximately $0.1 million.

The parties expect testimony supporting the settlement to be filed by May 22, 2026, followed by hearings before the ALJ beginning August 3, 2026. The Settlement Agreement remains subject to the approval of the ACC, and there can be no assurance that the ACC will approve the Settlement Agreement in the form filed or otherwise modify provisions contained therein. Therefore, no adjustments related to this settlement have been reflected in the accompanying Condensed Consolidated Financial Statements (unaudited).

2024 GW-Farmers Rate Case - Decision No. 80695 - Issued April 29, 2025

On June 27, 2024, GW-Farmers filed a rate case application with the ACC for increased water rates based on a 2023 test year, with updates for changes in post-test year plant through December 31, 2024. On April 29, 2025, the ACC approved GW-Farmers’ rate case application in Decision No. 80695. Among other approvals, Decision No. 80695 approved an increase in GW-Farmers’ annual revenue requirement of $1.1 million and a return on equity of 9.6%, with increased rates to be phased-in over three periods. 50% of the increase was effective on May 1, 2025, with another 25% effective on November 1, 2025. The final 25% increase was phased in on May 1, 2026. In addition to the rate increase, Decision No. 80695 also approved a deferral of the recovery of an acquisition premium of approximately $3 million related to the Company’s acquisition of GW-Farmers, which the Company recorded as of March 31, 2025. Decision No. 80695 calls for the acquisition premium to be recovered in a future rate case, subject to the GW-Farmers utility being found viable by the ACC.

Southwest Plant

In January 2024, the Company discovered that approximately $7.8 million of construction costs for the Southwest Plant had been prematurely included as “plant in service” for rate making purposes in 2007 and were reflected in the calculation of customer rates in Decision No. 71878 (September 15, 2010). Those costs were also included as “plant in service” in Decision No. 74364 (February 26, 2014) and Decision No. 78644 (July 27, 2022). The Company disclosed this circumstance to the ACC on March 1, 2024, and on April 25, 2024, GW-Palo Verde filed an application with the ACC requesting a monthly bill credit for customers that would be in place until the conclusion of the next GW-Palo Verde rate case. The ACC issued Decision No. 79424 on July 18, 2024 approving the bill credit with an effective date of August 1, 2024. The bill credit reduced revenue earned by $0.2 million for both of the three months ended March 31, 2026 and 2025. For additional information regarding the bill credit, refer to “2025 GW-Santa Cruz and GW-Palo Verde Rate Cases” above.

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4. Revenue Recognition

Disaggregated Revenue

Disaggregated revenue from contracts with customers by major source and customer class was as follows:


	Three Months Ended March 31,
(in thousands)		2026		2025
Regulated revenue
Water Service
Residential		$	4,844	$	4,388
Irrigation		743		620
Commercial		480		383
Multi-family		135		81
Construction		154		327
Other water revenue		250		181
Total water revenue		6,606		5,980
Wastewater and recycled water service
Residential		6,057		5,868
Commercial		311		287
Multi-family		104		49
Recycled water revenue		120		193
Other wastewater revenue		88		80
Total wastewater and recycled water revenue		6,680		6,477






Total revenue		$	13,286	$	12,457

Contract Balances

The Company’s contract assets and liabilities consisted of the following:


(in thousands)	March 31, 2026		December 31, 2025
Contract assets
Accounts receivable, net	$	3,418	$	3,746
Total contract assets	$	3,418	$	3,746
Contract liabilities
Deferred revenue - ICFA	$	23,044	$	22,772


Total contract liabilities	$	23,044	$	22,772

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consisted of the following:


(in thousands)	March 31, 2026		December 31, 2025
Billed receivables	$	3,643	$	3,990
Less: provision for credit losses	(225)		(244)
Accounts receivable, net	$	3,418	$	3,746

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The following table summarizes the allowance for credit loss activity:


(in thousands)	March 31, 2026		December 31, 2025
Beginning of period	$	(244)	$	(163)
Credit loss expense	(14)		(193)
Write offs	36		123
Recoveries	(3)		(11)
End of period	$	(225)	$	(244)

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Deferred revenue from ICFAs is recognized as revenue once the obligations specified within the applicable ICFA are met, including construction of sufficient operating capacity to serve the customers for which revenue was deferred. Due to the uncertainty of future events, the Company is unable to estimate when to expect recognition of deferred revenue from ICFAs.

The following table summarizes the ICFA deferred revenue activity:


(in thousands)	March 31, 2026
Beginning of period	$	22,772
Payments allocated to deferred revenue	272

End of period	$	23,044

5. Earnings (Loss) Per Share

Basic EPS in each period of this report were calculated by dividing net income (loss) by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (options and restricted stock awards), if dilutive. In periods of a net loss position, basic and diluted weighted average common shares are the same. A reconciliation of the denominator used in basic and diluted EPS calculations is shown in the following table:


	Three Months Ended March 31,
(in thousands)		2026	2025
Basic weighted average common shares outstanding		28,758	24,370
Effect of dilutive securities:
Option grants		—	48
Restricted stock awards		—	16
Total dilutive securities		—	64
Diluted weighted average common shares outstanding		28,758	24,434
Anti-dilutive shares excluded from earnings (loss) per diluted share		468	—

For the three months ended March 31, 2026, we had a net loss on the Condensed Consolidated Statements of Operations (unaudited), and any potentially dilutive shares would have had an anti-dilutive impact on EPS.

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6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


(in thousands)	March 31, 2026		December 31, 2025
ICFA receivable	$	1,182	$	—
Prepaid expense	1,045		800
Prepaid income tax	855		738
Buckeye growth premiums receivable	498		564
Prepaid insurance	374		625
Regulatory assets, current	373		219
Stop loss medical claims	106		340





Other current assets	241		102
Prepaid expenses and other current assets	$	4,674	$	3,388

7. Equity

Public Offering of Common Stock

On March 27, 2025, the Company completed a public offering of 3,220,000 shares of its common stock at a public offering price of $10.00 per share, which included 420,000 shares issued and sold to the underwriters following the exercise in full of their option to purchase additional shares of common stock. Certain existing shareholders, including certain directors and/or their affiliates, purchased an aggregate of 1,439,200 shares of common stock at the public offering price. The public offering resulted in approximately $32.2 million of gross proceeds or $30.8 million of net proceeds, after deducting underwriting discounts, commissions and offering expenses paid by the Company.

8. Debt

Revolver

The Company maintains a revolving credit facility with Northern Trust pursuant to a loan agreement entered into between the parties (as amended, the “Northern Trust Loan Agreement”). On April 30, 2026, the Company and Northern Trust entered into a seventh amendment to the Northern Trust Loan Agreement to, among other things, extend the scheduled maturity date from May 18, 2027 to May 18, 2028. Pursuant to the Northern Trust Loan Agreement, the amounts outstanding bear interest, payable monthly, at a rate equal to the SOFR plus 2.10%. Additionally, the Company pays a quarterly facility fee equal to 0.35% of the average daily unused amount of the Revolver.

The Company had $1.0 million of outstanding borrowings under the Revolver as of March 31, 2026 and no outstanding borrowings as of December 31, 2025.

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9. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


(in thousands)	March 31, 2026		December 31, 2025
Project liabilities	$	3,130	$	1,650
Interest	2,206		1,242
AIAC refunds, current portion	1,500		1,685
Other taxes	935		1,496
Payroll	757		943
Dividend payable	729		728
Customer prepayments	651		781
Medical claims	391		237
License fees	326		349
Professional fees	256		277
ACC Assessment Fee	229		189
Contingent Consideration, current portion	85		73
Other accrued liabilities	806		807
Total accrued expenses and other current liabilities	$	12,001	$	10,457

10. Fair Value

Fair Value Measurements

Recurring Fair Value Measurements

Financial assets and liabilities measured at fair value on a recurring basis were as follows:


	March 31, 2026								December 31, 2025
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total





Liabilities:
Contingent Consideration	$	—	$	—	$	1,907	$	1,907	$	—	$	—	$	1,908	$	1,908

Total	$	—	$	—	$	1,907	$	1,907	$	—	$	—	$	1,908	$	1,908

Contingent consideration is included within Other noncurrent liabilities on the Condensed Consolidated Balance Sheets (unaudited). Refer to Note 14 — “Commitments and Contingencies” for additional information about contingent consideration.

Other Fair Value Disclosures for Financial Instruments

HUF Funds - restricted cash and Certificates of Deposit - Restricted are presented on the Restricted cash line item of the Company’s Condensed Consolidated Balance Sheets (unaudited) and are valued at amortized cost, which approximates fair value.

The fair value of outstanding long-term debt is estimated based on interest rates considered available for instruments of similar terms and remaining maturities. Certain premium costs associated with the early settlement of long-term debt are not taken into consideration in determining fair value. These fair value measurements are classified within Level 2 of the fair value hierarchy. The carrying amount and estimated fair values of these financial instruments were as follows:


	March 31, 2026				December 31, 2025
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt	$	133,694	$	130,820	$	133,698	$	130,840

11. Income Taxes

Our interim effective tax rates reflect the estimated annual effective tax rates for 2026 and 2025 applied to year-to-date pretax income (loss), adjusted for tax expense (benefit) associated with certain discrete items. The effective tax rates for the three months ended March 31, 2026 and 2025 were 22.3% and 23.6%, respectively.

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The effective tax rates were largely consistent for both the three months ended March 31, 2026 and 2025 as compared to the relative prior year periods.

12. Share-based Compensation

Share-based compensation to both employees and non-employees were as follows:


	Three Months Ended March 31,

(in thousands)		2026		2025
Employee - RSA		$	118	$	104
Employee - RSU		70		73
Total employee share-based compensation		188		177
Non-employee - RSA		58		58
Non-employee - RSU		(63)		(60)
Total non-employee share-based compensation		(5)		(2)
Total share-based compensation		$	183	$	175

13. Transactions With Related Parties

The Company provides medical benefits to employees through its participation in a pooled plan sponsored by an affiliate of a significant shareholder and director of the Company. Medical claims paid to the plan were approximately $0.6 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

Additionally, certain directors and/or their affiliates purchased an aggregate of 1,439,200 shares of common stock at the public offering price in the Company’s public offering of common stock in March 2025. Refer to Note 7 — “Equity,” for additional information.

14. Commitments and Contingencies

Commitments

On February 1, 2023, the Company acquired all of the equity of Farmers Water Co., an operator of a water utility with service area in Pima County, Arizona. Under the terms of the purchase agreement, the Company is obligated to pay the seller a growth premium equal to $1,000 (not in thousands) for each new account established within the specified growth premium areas, up to a maximum total aggregate growth premium of $3.5 million. The obligation period of the growth premium commenced on the closing date of the acquisition and ends (i) ten years after the first new account for residential purposes is established on land that was, at the time of the closing date of the acquisition, undeveloped or unplatted and owned by the seller within the service area; or (ii) ten years after the date of closing if a new account (as previously described) has not been established. As of March 31, 2026, no new account was established on land that was undeveloped or unplatted at the closing date of the acquisition. The fair value of the contingent consideration was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total new accounts per year, years to complete full build out, and discount rate. The estimated fair value of the remaining liability was $1.2 million as of both March 31, 2026 and December 31, 2025 and is included in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets (unaudited).

Within the service area of its GW-Saguaro utility, the Company is required to pay a growth premium equal to $750 (not in thousands) for each new account established within specified growth premium areas, commencing in each area on the date of the first meter installation and ending on the earlier of ten years after such first installation date, or twenty years from the acquisition date. As of March 31, 2026, no meters have been installed and no accounts have been established in any of the specified growth premium areas. The fair value of the contingent consideration was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total new accounts per year, years to complete full build out, and discount rate. The fair value of the remaining liability was $0.7 million as of both March 31, 2026 and December 31, 2025 and is included in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets (unaudited).

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The Company has previously received certain ICFA advances related to its CP Water utility, which the Company is obligated to repay in the form of specified future ICFA fee reductions when those ICFA fees are due. The liability was $0.9 million as of both March 31, 2026 and December 31, 2025 and is included in Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets (unaudited).

Contingencies

From time to time, in the ordinary course of business, the Company may be subject to pending or threatened lawsuits in which claims for monetary damages are asserted. The Company intends to continue to defend itself vigorously in such matters. The Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. An estimated loss contingency is accrued in its financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it currently does not have any amount accrued related to legal matters. Management is not aware of any legal proceeding of which the ultimate resolution could materially affect the Company’s financial position, results of operations, or cash flows.

15. Business Segment Information

At March 31, 2026, the Company is organized and operated as one operating and reportable segment as the Company is not organized around specific products and services, geographic regions, or regulatory environments. Further, the Company currently operates solely within the state of Arizona. Operating revenue is substantially derived from regulated water, wastewater, and recycled water service provided to customers based upon tariff rates approved by the ACC. Refer to Note 4 — “Revenue Recognition” for additional information on the Company’s sources of revenue, and refer to the Condensed Consolidated Financial Statements (unaudited) for measures of profit and loss, total assets, and capital expenditures of the Company.

The Company’s CODM is the Chief Executive Officer. While the Company reports revenue disaggregated by service type on the face of its Condensed Consolidated Financial Statements (unaudited), the Company does not manage the business based on any performance measure at the individual revenue stream level. The CODM uses consolidated financial information, as outlined below, to evaluate performance against budget and peers and to make all significant decisions regarding the allocation of the Company’s resources, and communicate results and performance to the Company’s board of directors.

The CODM regularly reviews the results of the Company based on GAAP net income (loss) as well as non-GAAP measures, EBITDA and Adjusted EBITDA. The CODM uses GAAP net income (loss) in the assessment of performance and to make strategic decisions regarding resource allocation predominantly in the annual budget.

The CODM reviews the following significant expense categories:


	Three Months Ended March 31,
(in thousands)		2026		2025
Segment Revenue		$	13,286	$	12,457
Segment Expenses
Personnel costs - operations and maintenance		1,483		1,340
Utilities, chemicals and repairs		1,172		1,032
Other operations and maintenance expenses		1,529		1,315

Personnel costs - general and administrative		2,357		2,195
Professional fees		389		467
Other general and administrative expenses		1,706		1,525

Depreciation, amortization and accretion		4,261		3,328


Other Income (Expense)
Buckeye growth premiums		498		618
Other segment income and expenses		(1,358)		(1,099)

Income tax benefit (expense)		105		(183)
Net Income (Loss)		$	(366)	$	591

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Other operations and maintenance and other general and administrative expenses include contract services, business development, board compensation, rent, insurance and taxes other than income taxes. Other segment income expenses include interest income, interest expense, AFUDC, and gains and losses on disposal of assets.

16. Other, Net

Other, net consisted of the following:


	Three Months Ended March 31,
(in thousands)		2026		2025
Buckeye growth premiums(1)		$	498	$	618
AFUDC-Equity		277		279

Other		(24)		1
Total Other, net		$	751	$	898

(1) The City of Buckeye is obligated to pay the Company a growth premium equal to $3,000 for each new water meter installed within Valencia’s prior service areas in the City of Buckeye, for a 20-year period ending December 31, 2034, subject to a maximum payout of $45.0 million over the term of the agreement. An aggregate of $16.6 million in growth premiums have been invoiced or received to date.

17. Supplemental Cash Flow Information

The following is supplemental cash flow information:


	Three Months Ended March 31,
(in thousands)	2026		2025
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	640	$	612
Cash paid for income taxes	—		100
Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	3,209		9,114
Utility Plant constructed by developers and conveyed	1,171		4,838
HUF transferred to CIAC	—		369
Asset retirement obligation additions	—		278

Finance lease additions	—		7
Operating lease additions	—		47
Operating cash flows used for finance leases	16		15
Operating cash flows used for operating leases	97		102
Financing cash flows used for finance leases	114		99

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis of Global Water Resources, Inc.’s financial condition and results of operations (“MD&A”) relate to the three months ended March 31, 2026 and should be read together with the consolidated financial statements and accompanying notes included in Part I, Item 1 of this report.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are forward-looking in nature and may constitute “forward-looking information” within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the words “believes”, “anticipates”, “plans”, “expects”, “intends”, “projects”, “estimates”, “objective”, “goal”, “focus”, “aim”, “should”, “could”, “may”, and similar expressions.

These forward-looking statements include future estimates described in “Business Outlook”, “Factors Affecting our Results of Operations”, and “Liquidity and Capital Resources”. These forward-looking statements include, but are not limited to, statements about our strategies; expectations about future business plans, prospective performance, growth, and opportunities, including the potential for new service connections; future financial performance; regulatory and ACC proceedings, decisions and approvals, such as the outcome, timing and other statements regarding our plans, expectations and estimates relating to our rate cases and other applications with the ACC and other regulatory bodies, including with respect to the Settlement Agreement; our plans relating to future filings of our rate cases and other regulatory applications; acquisition plans and strategies, including our ability to complete additional acquisitions, and our expectations about future benefits of our acquisitions, such as projected revenue from our acquisitions, as well as our plans relating to the integration and upgrade of acquired water systems; statements concerning Arizona’s Assured Water Supply “Ag-to-Urban” program and the State Route 347 Improvement Project, including anticipated benefits; population and growth projections; technologies, including expected benefits from implementing such technologies; revenue; metrics; operating expenses; trends relating to our industry, market, population and job growth, and housing permits; the adequacy of our water supply to service our current demand and growth for the foreseeable future; liquidity and capital resources; plans and expectations for capital expenditures; cash flows and uses of cash; dividends; depreciation and amortization; tax payments; our ability to repay indebtedness and invest in initiatives; the anticipated impact and resolutions of legal matters; the anticipated impact of new or proposed laws, including regulatory requirements, tax changes, and judicial decisions; the anticipated impact of accounting changes and other pronouncements; and other statements that are not historical facts.

Forward-looking statements should not be read as a guarantee of future performance or results. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results may vary materially from what is contained in a forward-looking statement. Investors are cautioned not to place undue reliance on forward-looking information. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks related to legal, regulatory, and legislative matters; risks related to our business and operations; risks related to market and financial matters; risks related to technology; and risks related to the ownership of our common stock, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

These and other factors are discussed in the risk factors described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) and in Part II, Item 1A “Risk Factors” in this report, as updated from time to time in our subsequent filings with the SEC. Any forward-looking statement speaks only as of the date of this report. Except as required by law, we undertake no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Overview

GWRI is a water resource management company that owns, operates, and manages thirty-nine water, wastewater, and recycled water public utility systems in strategically located communities, principally in metropolitan Phoenix and Tucson, Arizona. We seek to deploy an integrated approach, referred to as “Total Water Management.” Total Water Management is a comprehensive approach to water utility management that reduces demand on scarce non-renewable water sources and costly renewable water supplies, in a manner that ensures sustainability and greatly benefits communities both environmentally and economically. This approach employs a series of principles and practices that can be tailored to each community:

•Reuse of recycled water, either directly or to non-potable uses, through aquifer recharge, or possibly direct potable reuse in the future;

•Regional planning;

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•Use of advanced technology and data;

•Employing respected subject matter experts and retaining thought leaders;

•Leading outreach and educational initiatives to ensure all stakeholders including customers, development partners, municipalities, regulators, and utility staff are knowledgeable on the principles and practices of the Total Water Management approach; and

•Establishing partnerships with communities, developers, and industry stakeholders to gain support of the Total Water Management principles and practices.

Business Outlook

We continue to experience organic growth exhibited through our 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 predicts that the Phoenix metropolitan area will have a population of 5.8 million people by 2030 and 6.5 million by 2040.

Our 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 we believe will enhance safety, improve mobility and support the continued growth of the City of Maricopa and surrounding areas.

We continue to monitor potential effects on our operations due to changes in the macroeconomic environment, such as the impacts of tariffs on our operational costs and construction work in progress, as well as new home construction in our service areas. We continue 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.

The 2026 and 2027 residential permit forecasts, published by Arizona State University - W.P. Carey School of Business Greater Phoenix Blue Chip Real Estate Consensus Panel in January 2026, are presented in the table below:


	2026	2027
Phoenix MSA Consensus
Single family permits

SEC Form 10-Q filed by Global Water Resources Inc.