CWCO's Core Business Solidifies Amidst Revenue Dip, Strong Cash Growth

TL;DR

**CWCO's core business is holding strong with impressive cash growth, but overall revenue is down due to one-time gains from last year, so don't expect a repeat of 2024's earnings surge.**

AI Summary

Consolidated Water Co. Ltd. (CWCO) reported a mixed financial performance for the nine months ended September 30, 2025. Revenue decreased by 2.97% to $102,425,170 from $105,559,105 in the prior year, primarily due to a significant decline in discontinued operations. However, net income from continuing operations attributable to stockholders saw a slight decrease of 2.91% to $15,672,435 from $16,141,143. Gross profit for the nine months increased by 2.56% to $38,084,181, up from $37,132,895, indicating improved operational efficiency in its core business. Cash and cash equivalents significantly increased to $123,554,648 as of September 30, 2025, from $99,350,121 at December 31, 2024, demonstrating strong liquidity. The company's total assets grew to $257,234,652 from $243,313,181, while total liabilities increased to $31,033,818 from $28,003,534. A key change was the substantial decrease in net income attributable to stockholders, plummeting by 42.49% to $15,419,578 from $26,779,069, largely due to the absence of the $12,134,766 gain on sale of land and project documentation and the $33,261,664 proceeds from the Mexico settlement agreement recorded in the prior year. Dividends declared per common and redeemable preferred shares increased to $0.39 for the nine months ended September 30, 2025, from $0.30 in the same period of 2024.

Why It Matters

For investors, CWCO's strong cash position of $123.55 million and increased dividends of $0.39 per share signal financial stability and a commitment to shareholder returns, despite a revenue dip. The improved gross profit in continuing operations suggests that the company's core water and wastewater services remain robust and efficient, which is crucial in a competitive utility sector. Employees benefit from a stable company with growing assets, potentially indicating job security and future expansion opportunities. Customers can expect continued reliable service from a financially sound utility provider. The broader market sees a resilient player in the essential water infrastructure space, a sector often viewed as defensive during economic uncertainties, especially given the company's international footprint in the Cayman Islands, Bahamas, and US.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant decline in net income attributable to stockholders by 42.49% to $15,419,578, largely driven by the absence of one-time gains from the prior year, such as the $33,261,664 Mexico settlement. While cash and gross profit are up, the overall revenue decrease of 2.97% to $102,425,170 indicates a challenge in top-line growth without these extraordinary items.

Analyst Insight

Investors should closely monitor CWCO's revenue growth in continuing operations and future project pipeline to assess its ability to generate sustainable earnings without one-time gains. The strong cash position and increased dividends make it an attractive income play, but future capital allocation for growth initiatives will be key.

Financial Highlights

debt To Equity

0.14

revenue

$102,425,170

total Assets

$257,234,652

total Debt

$31,068,571

net Income

$15,419,578

gross Margin

37.2%

cash Position

$123,554,648

revenue Growth

-3.0%

Revenue Breakdown

Key Numbers

• $102.4M — Revenue (Decreased by 2.97% for the nine months ended September 30, 2025, compared to $105.6M in 2024.)
• $15.4M — Net Income Attributable to Stockholders (Decreased by 42.49% for the nine months ended September 30, 2025, compared to $26.8M in 2024, largely due to one-time gains in 2024.)
• $123.6M — Cash and Cash Equivalents (Increased significantly from $99.4M at December 31, 2024, demonstrating strong liquidity.)
• $38.1M — Gross Profit (Increased by 2.56% for the nine months ended September 30, 2025, compared to $37.1M in 2024, indicating improved core operational efficiency.)
• $0.39 — Dividends Declared Per Share (Increased for the nine months ended September 30, 2025, from $0.30 in the prior year.)
• $257.2M — Total Assets (Increased from $243.3M at December 31, 2024, reflecting overall company growth.)
• $31.0M — Total Liabilities (Increased from $28.0M at December 31, 2024.)
• 2.97% — Revenue Decrease (Percentage decrease in revenue for the nine months ended September 30, 2025.)
• 42.49% — Net Income Decrease (Percentage decrease in net income attributable to stockholders for the nine months ended September 30, 2025.)
• 2.56% — Gross Profit Increase (Percentage increase in gross profit for the nine months ended September 30, 2025.)

Key Players & Entities

• Consolidated Water Co. Ltd. (company) — registrant
• SEC (regulator) — United States Securities and Exchange Commission
• $102,425,170 (dollar_amount) — revenue for nine months ended September 30, 2025
• $105,559,105 (dollar_amount) — revenue for nine months ended September 30, 2024
• $15,419,578 (dollar_amount) — net income attributable to Consolidated Water Co. Ltd. stockholders for nine months ended September 30, 2025
• $26,779,069 (dollar_amount) — net income attributable to Consolidated Water Co. Ltd. stockholders for nine months ended September 30, 2024
• $123,554,648 (dollar_amount) — cash and cash equivalents as of September 30, 2025
• $99,350,121 (dollar_amount) — cash and cash equivalents as of December 31, 2024
• $38,084,181 (dollar_amount) — gross profit for nine months ended September 30, 2025
• $37,132,895 (dollar_amount) — gross profit for nine months ended September 30, 2024

FAQ

Risk Factors

• Government Regulations and Permitting [medium — regulatory]: The company's operations are subject to extensive government regulations and require various permits and licenses. Changes in these regulations or the inability to obtain or renew permits could adversely affect operations and profitability. For example, the company operates in multiple jurisdictions, each with its own regulatory framework for water and wastewater services.
• Economic Conditions in Operating Jurisdictions [medium — market]: The company's financial performance is significantly influenced by the economic conditions in the specific geographic regions where it operates, such as the Bahamas, the Cayman Islands, and the US Virgin Islands. Downturns in these local economies, changes in tourism, or shifts in consumer spending can impact demand for water and wastewater services.
• Infrastructure and Maintenance [medium — operational]: Maintaining and upgrading water and wastewater infrastructure is critical. Unexpected failures, the need for significant capital expenditures for repairs or replacements, or disruptions in service due to natural disasters could lead to increased costs and reputational damage.
• Interest Rate Fluctuations [low — financial]: The company has outstanding debt, and changes in interest rates could affect its borrowing costs and profitability. While long-term debt is relatively low ($34,753 noncurrent as of Sept 30, 2025), any future financing needs would be sensitive to market interest rates.
• Litigation and Legal Proceedings [medium — legal]: The company may be involved in various legal proceedings from time to time. Adverse outcomes in litigation, such as the previously settled Mexico case, could result in significant financial liabilities and impact operations.
• Dependence on Key Personnel [low — operational]: The company's success depends on its ability to attract and retain qualified management and technical personnel. The loss of key individuals could disrupt operations and strategic initiatives.
• Competition [low — market]: While operating in regulated utility markets, the company may face competition from alternative water sources or private solutions in certain areas, or from other utility providers if regulations change.
• Discontinued Operations Impact [medium — financial]: The significant decrease in revenue and net income is partly due to the wind-down of discontinued operations. While this removes certain liabilities, it also eliminates revenue streams and requires careful management of the transition.

Industry Context

Consolidated Water operates in the essential utilities sector, specifically focusing on water production and distribution, and wastewater treatment. The industry is characterized by significant capital investment in infrastructure, long-term contracts, and heavy regulation. Companies in this sector often operate in specific geographic monopolies or oligopolies, with demand for services being relatively inelastic. Trends include increasing focus on water scarcity, aging infrastructure requiring upgrades, and the adoption of new technologies for efficiency and sustainability.

Regulatory Implications

The company's operations are heavily reliant on obtaining and maintaining permits and licenses from various governmental bodies in its operating jurisdictions. Changes in environmental regulations, water quality standards, or pricing structures set by regulatory authorities could materially impact profitability and operational costs. Compliance with these regulations is a continuous and critical aspect of the business.

What Investors Should Do

1. Monitor impact of discontinued operations
2. Analyze gross profit trends
3. Assess liquidity and cash generation
4. Evaluate dividend growth
5. Review asset and liability growth

Glossary

Discontinued Operations

A component of a business that the reporting entity has disposed of or classified as held for sale. Its results are reported separately from continuing operations. (The decline in Consolidated Water's overall revenue and net income is significantly impacted by the absence of gains and revenue from discontinued operations in the current period compared to the prior year.)

Contract Assets

Represents the entity's right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditional on something other than the passage of time. (An increase in contract assets from $4,470,243 to $6,731,861 suggests the company has performed services or delivered goods for which it has not yet billed the customer, or the billing is contingent on future events.)

Contract Liabilities

Represents the entity's obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. (An increase in contract liabilities from $9,126,654 to $11,682,006 indicates a rise in deferred revenue or advance payments received from customers for services not yet rendered.)

Redeemable Preferred Stock

Preferred stock that has a provision allowing the issuer or the holder to redeem (buy back) the shares at a specified price and date. (The decrease in redeemable preferred stock from $26,402 to $23,876 suggests some shares were redeemed during the period.)

Non-controlling Interests

The portion of equity in a subsidiary that is not attributable to the parent company. (An increase in non-controlling interests from $5,348,952 to $5,819,693 indicates that the equity attributable to minority shareholders in consolidated subsidiaries has grown.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net assets. (The company has $12,861,404 in goodwill, unchanged from the prior year, indicating no new acquisitions or impairments recognized in this period.)

Operating Lease Right-of-Use Assets

An asset recognized under accounting standards for leases, representing the lessee's right to use an underlying asset for the lease term. (The slight decrease in these assets from $3,232,786 to $3,095,156 reflects ongoing lease payments and amortization.)

Class A Common Stock

A class of common stock issued by the company, with specific rights and privileges outlined in the company's charter. (The number of outstanding Class A common shares increased slightly from 15,846,345 to 15,931,336, likely due to stock-based compensation or other issuances.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Consolidated Water Co. Ltd. experienced a 2.97% decrease in revenue, largely attributable to the cessation of discontinued operations. While net income attributable to stockholders saw a significant 42.49% decline, this was primarily due to the absence of substantial one-time gains recorded in the previous year, such as the gain on sale of land and the Mexico settlement. However, the company demonstrated improved operational efficiency, with gross profit increasing by 2.56%. Liquidity remains robust, evidenced by a significant rise in cash and cash equivalents, and total assets have grown, though liabilities have also increased modestly.

Key Financial Figures

• $0.60 — hich registered Class A Common Stock , $0.60 par value CWCO The Nasdaq Global Se
• $ — n of Cayman Island dollars (CI$) into US$, as determined by the Cayman Islands Mo
• $1.20 — y, has been fixed since April 1974 at US$1.20 per CI$1.00. The exchange rate for con
• $1.00 — fixed since April 1974 at US$1.20 per CI$1.00. The exchange rate for conversion of B

Filing Documents

• cwco-20250930x10q.htm (10-Q) — 2595KB
• cwco-20250930xex31d1.htm (EX-31.1) — 11KB
• cwco-20250930xex31d2.htm (EX-31.2) — 11KB
• cwco-20250930xex32d1.htm (EX-32.1) — 6KB
• cwco-20250930xex32d2.htm (EX-32.2) — 6KB
• 0001104659-25-109130.txt ( ) — 11564KB
• cwco-20250930.xsd (EX-101.SCH) — 40KB
• cwco-20250930_cal.xml (EX-101.CAL) — 75KB
• cwco-20250930_def.xml (EX-101.DEF) — 163KB
• cwco-20250930_lab.xml (EX-101.LAB) — 322KB
• cwco-20250930_pre.xml (EX-101.PRE) — 264KB
• cwco-20250930x10q_htm.xml (XML) — 3249KB

Financial Statements

Financial Statements 4 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 4 Condensed Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024 5 Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024 6 Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2025 and 2024 8 Notes to Condensed Consolidated Financial Statements (Unaudited) 9 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 37 Item 4

Controls and Procedures

Controls and Procedures 37 PART II OTHER INFORMATION 38 Item 1A

Risk Factors

Risk Factors 38 Ite m 2 Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 5 Other Information 40 Item 6 Exhibits 41

SIGNATURES

SIGNATURES 42 2 Table of Contents Note Regarding Currency and Exchange Rates Unless otherwise indicated, all references to "

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED WATER CO. LTD. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 123,554,648 $ 99,350,121 Accounts receivable, net 28,996,834 39,580,982 Inventory 4,564,029 8,960,350 Prepaid expenses and other current assets 5,965,382 5,112,183 Contract assets 6,731,861 4,470,243 Current assets of discontinued operations 136,928 272,485 Total current assets 169,949,682 157,746,364 Property, plant and equipment, net 55,553,056 52,432,282 Construction in progress 5,210,534 5,143,717 Inventory, noncurrent 5,597,052 5,338,961 Investment in affiliates 1,122,030 1,504,363 Goodwill 12,861,404 12,861,404 Intangible assets, net 2,204,536 2,696,815 Operating lease right-of-use assets 3,095,156 3,232,786 Other assets 1,641,202 2,356,489 Total assets $ 257,234,652 $ 243,313,181 LIABILITIES AND EQUITY Current liabilities Accounts payable, accrued expenses and other current liabilities $ 9,530,167 $ 9,057,179 Accrued compensation 3,569,948 3,336,946 Dividends payable 2,272,907 1,780,841 Current maturities of operating leases 667,074 634,947 Current portion of long-term debt 62,458 126,318 Contract liabilities 11,682,006 9,126,654 Deferred revenue 149,675 365,879 Current liabilities of discontinued operations 271,143 509,745 Total current liabilities 28,205,378 24,938,509 Long-term debt, noncurrent 34,753 70,320 Deferred tax liabilities 183,536 210,893 Noncurrent operating leases 2,457,151 2,630,812 Other liabilities 153,000 153,000 Total liabilities 31,033,818 28,003,534 Commitments and contingencies Equity Consolidated Water Co. Ltd. stockholders' equity Redeemable preferred stock, $ 0.60 par value. Authorized 200,000 shares; issued and outstanding 39,794 and 44,004 shares, respectivel

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