Shares of Select Water Solutions Inc (WTTR) plummeted 10.38% in pre-market trading on Wednesday following the release of its second-quarter 2025 earnings report. The company, which provides water management solutions to the energy sector, disappointed investors with lower-than-expected earnings and a cautious outlook for the upcoming quarter.

Select Water Solutions reported diluted earnings per share of $0.10 for Q2 2025, falling short of the $0.13 analyst estimate and marking a 23.1% decrease from the same period last year. Revenue also slightly missed expectations, coming in at $364.2 million compared to the anticipated $366.74 million and showing a marginal year-over-year decline of 0.2%.

The company's financial performance was further marred by a significant drop in free cash flow, which decreased to $10.8 million from $37.4 million in Q2 2024. This decline was primarily attributed to increased infrastructure capital spending. While the Water Infrastructure segment showed growth, the Water Services and Chemical Technologies segments faced challenges, with revenue declines and mixed margin performance. Looking ahead, management expects flat to modestly down results from the infrastructure segment and a substantial 25% decline in Water Services revenue due to recent divestitures. The company's adjusted EBITDA guidance of $55-$60 million for the next quarter, compared to $72.6 million in the current quarter, suggests continued pressure on profitability in the near term.