Share-Based Compensation

12 Months Ended

Dec. 31, 2025

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Share-Based Compensation

11. Share-Based Compensation

A summary of the Company’s aggregate share-based compensation expense (income) is shown below. Share-based compensation expense (income) related to NDB Incentive Units issued by NDB LLC and allocated to the Company is recognized as a deemed non-cash contribution to shareholders’ or member's equity on the consolidated balance sheets. Substantially all share-based compensation expense (income) is included in general and administrative expense on the consolidated statements of operations.

	Year Ended December 31,
	2025		2024		2023
Incentive units	$	3,387	$	9,529	$	(359	)
Restricted share units		1,951		-		-
Total share-based compensation expense (income)	$	5,338	$	9,529	$	(359	)
Tax benefit associated with share-based compensation expense	$	147	$	-	$	-

Prior to the Division, NDB Incentive Units were classified as liability awards resulting in periodic fair value remeasurement. In conjunction with the Division, NDB Incentive Units were modified and subsequently classified as equity awards and do not require periodic remeasurements. Refer to Note 2 – Summary of Significant Accounting Policies for additional information related to NDB Incentive Units. Any cash expense associated with Incentive Units will be borne solely by NDB LLC and not the Company. Such incentive units are not dilutive of public ownership.

NDB Incentive Units

Our management team and certain employees participate in an equity-based incentive unit plan consisting of time-based awards of profit interests in NDB LLC.

In conjunction with the Division, the change in award classification was considered a modification under ASC 718. There was no immediate incremental expense recognized associated with the modification as the fair value of the modified equity awards at the modification date was less than the fair value of the liability awards remeasured immediately prior to modification. As of the modification date, the Incentive Units had $2.9 million of unrecognized share-based compensation expense that will be recognized over a weighted average remaining term of 2.0 years.

NDB Incentive Units granted during the year ended December 31, 2025 were estimated using a Monte Carlo Simulation with the following inputs at the following grant dates:

	10/1/2025			3/21/2025
Share price / Estimated equity value	$	25.51		$	318,713
Expected life (in years)		3.3			1.7
Risk-free interest rate		3.5	%		3.9	%
Dividend yield		0	%		0	%
Volatility		40	%		40	%
Marketability discount	30% - 32%			19% - 32%

A summary of the NDB Incentive Units activity during the year ended December 31, 2025 is shown in the following table:

	Incentive Units		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)
Outstanding at December 31, 2024(1)		9,850	$	985
Granted		8,530		741
Forfeited		-		-
Outstanding at December 31, 2025		18,380	$	872		0.9

(1)The units outstanding as of December 31, 2024 reflect the effects of the Division which includes the weighted average per unit amount at the modification date of $987 per unit.

As of December 31, 2025, remaining unrecognized compensation expense for the NDB Incentive Units was $4.9 million which the Company expects to recognize over a weighted average remaining period of approximately 1.9 years.

Included in share-based compensation expense during the year ended December 31, 2024 is the reversal of an immaterial amount of expense related to employee departures.

Restricted Share Units

Under the LTIP, participants were granted RSUs which are subject to graded vesting generally ranging from one to three years. The fair value of the awards is based on our Class A share price on the date of grant with compensation expense recognized on a straight-line basis over the applicable vesting period.

A summary of RSU activity during the year ended December 31, 2025 is shown in the following table:

	RSUs		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2024		-	$	-
Granted		884,000		22.63
Forfeited		-		-
Vested		-		-
Nonvested at December 31, 2025		884,000	$	22.63

As of December 31, 2025, remaining unrecognized compensation expense for the RSUs was $18.1 million and the weighted average remaining vesting period was approximately 2.7 years.

Defined Contribution Plan

WaterBridge Management Company LLC, an affiliate of the Company, sponsors a defined contribution plan available to all eligible employees. Qualifying participants receive a matching contribution based on the amount participants contribute to the plan up to 7% of their qualifying compensation. Contributions of $1.3 million, $0.6 million and $0.5 million were made during the years ended December 31, 2025, 2024 and 2023, respectively.

WBEF

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Share-Based Compensation

11. Share-Based Compensation

The Company accounts for share-based compensation expense for Incentive Units granted in exchange for employee services. Our management and employees previously participated in two equity-based incentive plans during the applicable period, managed by WBR and WB II, both indirect parents of the Company. The Incentive Units consisted of time-based awards of profits interests in WBR and WB II. On September 18, 2025, the WBR and WB II Incentive Units were either cancelled or reclassified into common equity of the issuing entity and are no longer outstanding as of such date. Refer to Note 2 – Summary of Significant Accounting Policies – “Share-Based Compensation” for further discussion of the accounting treatment of the WBR and WB II Incentive Units.

WBR Incentive Units

Prior to September 18, 2025, the governing documents of WBR authorized the issuance of up to 10,000 Incentive Units (“WBR Incentive Units”), which represented profits interests in WBR.

The weighted average fair value of the WBR Incentive Units is estimated using a Monte Carlo simulation with the following inputs:

	December 31, 2024
Estimated equity value	$	229,354
Expected life (in years)		0.5
Risk-free interest rate		4.2	%
Dividend yield		0	%
Volatility		53.7	%
Marketability discount	9% - 32%

The number of WBR Incentive Units granted and forfeited during the period January 1, 2025 through September 16, 2025 is shown in the following table:

Outstanding at January 1, 2025	6,170
Granted	-
Forfeited	(17	)
Outstanding at September 16, 2025	6,153

The fair value of the WBR Incentive Units attributable to the Company as of September 16, 2025 was $5.9 million ($0 - $5,989 per unit) and as of December 31, 2024 was $19.3 million ($0 - $8,178 per unit).

The cumulative vested value of the liability for the WBR Incentive Units allocated to the Company was approximately $5.9 million and $19.3 million as of September 16, 2025 and December 31, 2024 respectively. The Company recognized income of $13.4 million, expense of $7.3 million, and income of $9.9 million respectively, in share-based compensation during the period January 1, 2025 through September 16, 2025 and years ended December 31, 2024 and 2023, respectively, which is included in general and administrative expense

on the statements of operations. For the period January 1, 2025 through September 16, 2025 and the year ended December 31, 2024 the WBR Incentive Units were fully vested.

There were no departures requiring accelerated vesting during the period January 1, 2025 through September 16, 2025 and year ended December 31, 2024.

On September 18, 2025, the WBR Incentive Units were either cancelled or reclassified into common equity of the issuing entity and are no longer outstanding as of such date.

WB II Incentive Units

Prior to September 18, 2025, the governing documents of WB II authorized the issuance of up to 10,000 Incentive Units (“WB II Incentive Units”) that represented profit interests in WB II.

The number of WB II Incentive Units granted and forfeited during the period January 1, 2025 through September 16, 2025 is shown in the following table:

Outstanding at January 1, 2025	6,152
Granted	-
Forfeited	(17	)
Outstanding at September 16, 2025	6,135

The weighted average estimated fair value of the time-based portion of WB II Incentive Units was valued using a Monte Carlo simulation with the following inputs:

	December 31, 2024
Estimated equity value	$	224,133
Expected life (in years)		0.5
Risk-free interest rate		4.2	%
Dividend yield		0	%
Volatility		53.7	%
Marketability discount	31% - 32%

The fair value of the WB II Incentive Units was zero as of September 16, 2025 and as of December 31, 2024 was $2.0 million ($0 - $543 per unit).

The cumulative vested value of the liability for the WB II Incentive Units allocated to the Company was zero and $2.0 million as of September 16, 2025 and December 31, 2024, respectively. The Company recognized income of $2.0 million, income of $0.5 million, and income of $2.1 million, in share-based compensation during the period January 1, 2025 through September 16, 2025 and years ended December 31, 2024 and 2023, respectively, which is included in general and administrative expense on the statements of operations. For the period January 1, 2025 through September 16, 2025 and the year ended December 31, 2024, the WB II Incentive Units were fully vested.

There were no departures requiring accelerated vesting during the period January 1, 2025 through September 16, 2025 and year ended December 31, 2024.

Changes in the allocated vested and unvested fair value of the Incentive Units for the year ended December 31, 2024 and period January 1, 2025 through September 16, 2025 were as follows:

Recurring:
Balance January 1, 2024	$	15,933
Remeasurements		5,330
Balance December 31, 2024	$	21,263
Remeasurements		(15,381	)
Balance Septembers 16, 2025	$	5,882

On September 18, 2025, the WB II Incentive Units were either cancelled or reclassified into common equity of the issuing entity and are no longer outstanding as of such date.

Defined Contribution Plan

WaterBridge Management Company LLC, a subsidiary of the Company, sponsors a defined contribution plan available to all eligible employees. Qualifying participants receive a matching contribution based on the amount participants contribute to the plan up to 7% of their qualifying compensation. Contributions of $1.9 million, $2.0 million, and $1.8 million were made during the period January 1, 2025 through September 16, 2025 and years ended December 31, 2024 and 2023, respectively.