Consolidated Water will hold a conference call at 11:00 a.m. Eastern time tomorrow to discuss the results (see dial-in information below).
First Quarter 2026 Financial Summary
Total revenue decreased 11% to $30.0 million.
Retail revenue decreased 9% to $8.6 million due to significantly greater rainfall on Grand Cayman during the quarter.
Bulk revenue increased 4% to $8.7 million primarily due to new revenue from the recently commissioned seawater desalination facility in Cat Island, The Bahamas.
Services revenue increased by 12% to $11.3 million.
Manufacturing revenue decreased by 76% to $1.4 million primarily due to a decrease in the total dollar amount of new purchase orders and, to a lesser extent, the timing of the receipt and the commencement of work on these new orders. Net income from continuing operations attributable to company stockholders totaled $3.8 million or $0.23 per diluted share, compared to $4.9 million or $0.31 per diluted share in the first quarter of 2025.
Including discontinued operations, net income attributable to company stockholders totaled $3.8 million or $0.23 per diluted share, compared to $4.8 million or $0.30 per diluted share in the first quarter of 2025.
Cash and cash equivalents increased to $126.3 million and working capital increased to $144.3 million as of March 31, 2026.
Management Commentary
"In Q1, consolidated revenue declined due to revenue declines in our manufacturing and retail segments," said Consolidated Water CEO Rick McTaggart. "Manufacturing revenue was lower due to the timing of receipt of new purchase orders for 2026 projects compared to last year. We had received a large purchase order in late 2024 which favorably impacted our first quarter revenue last year. Retail revenue was impacted by much wetter weather conditions this past quarter which reduced the water volume we sold in Grand Cayman by about 10%. However, revenue in our bulk and services segments continued to grow this past quarter, which partially offset the decline in our other two operating segments. Gross profit and operating income in our bulk and services segments also increased, underscoring the stable, recurring nature of our Caribbean-based bulk water business and the momentum in our operations and maintenance (O&M) services.
"Our bulk segment revenue increase reflects contributions from one of two new desalination plants on Cat Island, The Bahamas, which supply potable water to the Water and Sewerage Corporation of The Bahamas. The second plant is expected to be commissioned in the second quarter of this year. Our services segment revenue increase was mainly due to a 15% increase in revenue from O&M contracts. The O&M revenue increase was partially due to revenue from a new municipal client in southern California under a three-year contract that was awarded to PERC in November last year, which is expected to generate approximately $4.5 million in revenue over the three-year term.
"While our manufacturing segment revenue decreased compared to Q1 last year, based on current backlog, we expect manufacturing revenue for the rest of this year will improve. However, we also expect that manufacturing revenue for the full 2026 fiscal year will be less than the manufacturing revenue generated in 2025, which was a record year. Some of our production capacity this year will be used to manufacture seawater reverse osmosis units and piping for our Hawaii project. Accounting rules require that this Hawaii-related manufacturing revenue is eliminated in consolidation, although they will eventually be recognized through our services segment as the Hawaii project advances.
"We are seeing a very active market for our manufacturing segment products and services for the remainder of this year, particularly for municipal water projects in Florida. We believe that our extensive experience manufacturing large-scale membrane-based water treatment systems, as well as our location in Ft. Pierce, Florida, position us well to continue growing that part of our business in the Florida market. We believe this activity will positively impact 2026 and 2027 performance.
"As we previously announced last year, we were awarded two water treatment plant construction projects, including a $3.9 million drinking water plant expansion in Colorado and an $11.7 million wastewater recycling plant in California. The combined value of these projects totals approximately $15.6 million, and the remaining revenue of more than $13 million attributable to these projects is expected to be realized primarily in 2026.
"Our construction service segment revenue is anticipated to remain below the record achieved in 2023 until the initiation of construction of a 1.7 million gallon per day seawater desalination plant in Kalaeloa, Hawaii for the Honolulu Board of Water Supply. We continue to focus on the permitting process, respond to regulatory inquiries and coordinate with the Honolulu Board of Water Supply to mitigate project schedule impacts. Although we are still unable to provide a firm construction start date for the project, we made some progress to obtain a key permit for the project and are encouraged by recent meetings with the responsible governmental authority. The deferral of construction activities has shifted anticipated revenue recognition and associated cash flows related to the Hawaii project into future periods. We continue to anticipate that construction of the project will commence later this year and see the construction phase of this major project substantially adding to our revenue and earnings growth in later reporting periods.
"In 2026 and beyond, we expect our diversified business to continue to deliver strong year-over-year results for shareholders, supported by our Grand Cayman retail operations, stable recurring revenue from our Caribbean bulk water business, and growth opportunities in our U.S. manufacturing, design-build and O&M businesses. With global demand for clean water rising, our strong balance sheet positions us to act quickly on desalination and water infrastructure opportunities in the Caribbean and North America, as well as potential strategic acquisitions or partnerships."
First Quarter 2026 Financial Results
Revenue totaled $30.0 million, decreasing 11% from $33.7 million in the first quarter of 2025. The decrease was due to decreases of $4.4 million in the manufacturing segment and $834,000 in the retail segment. The decreases were partially offset by increases of $333,000 in the bulk segment and $1.2 million in the services segment.
Retail revenue decreased due to a 10.2% decrease in the volume of water sold. The decrease resulted from significantly greater rainfall on Grand Cayman during the quarter, as 2025 rainfall was well below historical norms.
The slight increase in bulk segment revenue was primarily due to new revenue from the CW-Bahamas Cat Island plant.
The increase in services segment revenue was primarily due to revenue generated under O&M contracts that totaled $8.9 million for the first quarter of 2026, an increase of 15% from the first quarter of 2025. A portion of the increase in O&M revenue was attributable to a new three-year contract for a California municipality obtained by PERC in November last year. About $500,000 of the O&M revenue increase was due to additional construction work and maintenance services completed in 2026 for an O&M contract that expired at the end of March 2026. Construction revenue remained relatively consistent at $2.1 million in the first quarter of 2026 as compared to $2.2 million in the same year-ago quarter.
Manufacturing segment revenue decreased by $4.4 million, or 76%, to $1.4 million, as compared to $5.8 million in the first quarter of 2025. The decrease was due to a decrease in the total dollar volume of new purchase orders and, to a lesser extent, the timing of the receipt and commencement of work on new purchase orders.
Gross profit for 2026 was $10.9 million (36% of total revenue), as compared to $12.3 million (37% of total revenue) in the first quarter of 2025. The decrease was due to the decline in retail and manufacturing revenue mentioned above.
Net income from continuing operations attributable to Consolidated Water stockholders for the first quarter of 2026 was $3.8 million, or $0.24 per diluted share, compared to net income of $4.9 million, or $0.31 per diluted share, in the first quarter of 2025.
Including discontinued operations, net income attributable to Consolidated Water stockholders for the first quarter of 2026 was $3.8 million or $0.23 per diluted share, compared to net income of $4.8 million, or $0.30 per diluted share, in the first quarter of 2025.
Cash and cash equivalents totaled $126.3 million as of March 31, 2026, with working capital of $144.3 million and stockholders' equity of $223.6 million.
First Quarter 2026 Segment Results
Three Months Ended March 31, 2026
Retail
Bulk
Services
Manufacturing
Corporate
Total
Revenue
$
8,577,058
$
8,744,769
$
11,251,344
$
1,400,529
$
—
$
29,973,700
Cost of revenue
3,642,157
5,735,986
8,427,156
1,252,388
—
19,057,687
Gross profit
4,934,901
3,008,783
2,824,188
148,141
—
10,916,013
General and administrative expenses
902,607
404,223
1,785,996
485,908
3,840,334
7,419,068
Gain (loss) on asset dispositions, net
(76,754
)
—
19,549
—
—
(57,205
)
Income (loss) from operations
3,955,540
2,604,560
1,057,741
(337,767
)
(3,840,334
)
3,439,740
Interest income
46,233
177,507
239,875
1
183,612
647,228
Interest expense
—
—
(2,736
)
—
—
(2,736
)
Income (loss) from affiliates
—
—
—
(8,634
)
60,243
51,609
Other
25,858
10,023
1
7,468
115
43,465
Other income (loss), net
72,091
187,530
237,140
(1,165
)
243,970
739,566
Income (loss) before income taxes
4,027,631
2,792,090
1,294,881
(338,932
)
(3,596,364
)
4,179,306
Provision for income taxes
—
—
316,049
(113,349
)
—
202,700
Net income (loss) from continuing operations
4,027,631
2,792,090
978,832
(225,583
)
(3,596,364
)
3,976,606
Income from continuing operations attributable to non-controlling interests
—
156,135
—
—
