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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2025

Significant Accounting Policies [Line Items]

Our consolidated financial statements (“Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All dollar amounts in the Financial Statements and tables in the notes are stated in thousands of dollars unless otherwise indicated.

In these Financial Statements, periods prior to the closing of the WaterBridge Combination on September 17, 2025, reflect the financial statements of NDB Operating and its subsidiaries. Periods subsequent to the closing of the WaterBridge Combination on September 17, 2025, reflect the financial statements of the consolidated Company, including WaterBridge, OpCo and its subsidiaries.

Consolidation

We have determined that the members with equity at risk in OpCo lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact OpCo’s economic performance; therefore, OpCo is considered a variable interest entity. As the managing member of OpCo, we operate and control all of the business and affairs of OpCo and also have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate OpCo for accounting purposes.

The Financial Statements include the accounts of the Company, OpCo and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.

On occasion, the Company enters into joint operating agreements (“JOA”) pursuant to which third parties receive non-operating undivided interests in one or more produced water handling facilities and related assets subject to the JOA. The undivided interest owners (i) receive their proportionate share of revenue and (ii) pay for their proportionate share of all costs and expenses incurred in drilling, equipping, installing, and operating the JOA assets. The JOAs are not separate legal entities; rather, each undivided interest received by the parties to the JOA is an undivided ownership interest in the applicable assets. The Company records its undivided interests related to these JOAs and records revenues and expenses related to these disposal activities on a net basis as part of revenues and costs and expenses. JOA revenues and costs and expenses are subject to audit by all non-operating parties, or such other entity that the non-operator authorizes to conduct the audit, generally limited to the preceding two years following the end of a calendar year.

When necessary, reclassifications are made to prior period financial information to conform with current year presentation.

Noncontrolling Interest

Our Financial Statements include a noncontrolling interest representing the percentage of OpCo Units not held by us. The noncontrolling interest is subject to change in connection with various equity transactions such as issuances of Class A shares, the redemption of OpCo Units (and corresponding cancellation of an equivalent number of Class B shares) for Class A shares, or the cancellation of OpCo Units (and corresponding cancellation of an equivalent number of Class B shares).

Segment Information

The Company operates in a single operating and reportable segment. All of our assets are located in the United States. Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, defines characteristics of operating segments as being components of an enterprise in which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions on how to allocate resources and assess performance. The Company is managed as a whole rather than through discrete operating segments. Our executive team is organized by function, rather than legal entity, with no business component manager reporting directly to the CODM. Allocation of resources is made on a project basis across the Company without regard to geographic area, and considers among other things, return on investment, current market conditions, including commodity prices and market supply, availability of services and human resources, and contractual commitments. The Company’s CODM is the Chief Executive Officer who allocates resources and assesses performance based upon financial information at the consolidated level. The financial measure regularly provided to the CODM that is most consistent with U.S. GAAP is net income (loss), as presented on our consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets. Total expenditures for additions to long-lived assets is reported on our consolidated statements of cash flows. The Company presents all of its significant segment expenses and other metrics which are regularly provided to the CODM and used by the CODM to make decisions regarding the Company’s business, including resource allocation and performance assessment in our consolidated statements of operations. The CODM does not receive additional expenses other than those presented within our consolidated statements of operations.

Use of Estimates

The preparation of the Financial Statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes.

The Company evaluates its estimates and related assumptions regularly, including those related to the fair value measurements of assets acquired and liabilities assumed in a business combination, the collectability of accounts receivable, the assessment of recoverability and useful lives of long-lived assets, including property, plant and equipment, goodwill and intangible assets, the valuation of share-based compensation and contract performance incentives and the fair value of asset retirement obligations. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from such estimates.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Whenever available, fair value is based on or derived from observable market prices or parameters. When observable market prices or inputs are not available, unobservable prices or inputs are used to estimate the fair value. The three levels of the fair value measurement hierarchy are as follows:

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Level 1: Quoted market prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs that are not corroborated by market data.

The carrying value of the Company’s cash and cash equivalents, accounts receivable, net of current expected credit losses, and accounts payable and accrued liabilities reported on the consolidated balance sheets approximate fair value due to their highly liquid nature or short-term maturity.

The Company adjusts the carrying amount of certain non-financial assets, property, plant and equipment and definite-lived intangible assets, to fair value on a non-recurring basis when they are impaired.

The fair value of the asset retirement obligation (“ARO”) liability is estimated using Level 3 inputs, including estimates of plugging, abandonment and remediation costs, inflation rates, the credit-adjusted risk-free rate, and expected abandonment dates.

Recurring fair value measurements were performed for Incentive Units prior to the Division (as defined below) and award modifications (when the Incentive Units were accounted for as liability awards). Refer to Note 11 – Share-Based Compensation.

There were no transfers between the fair value hierarchy levels for the years ended December 31, 2025 and 2024.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains cash balances that may at times exceed federally insured limits.

Accounts Receivable

The Company extends credit to customers and other parties in the normal course of business. Accounts receivable consists of trade receivables recorded at the invoiced amount, plus accrued revenue that is earned but not yet billed, less an estimated allowance for doubtful accounts. Account receivables are generally due within 45 days or less. An allowance for expected credit losses is determined based upon historical write-off experience, aging of accounts receivables, current macroeconomic industry conditions and customer collectability patterns. Accounts receivable are charged against the allowance when determined to be uncollectible. When the Company recovers amounts that were previously written off, those amounts are offset against the allowance and reduce expense in the year of recovery.

As of December 31, 2025 and 2024, we had allowance for doubtful accounts of $4.6 million and $2.4 million, respectively. We wrote off immaterial amounts during the years ended December 31, 2025 and 2024, and $0.1 million during the year ended December 31, 2023.

As of December 31, 2025, the Company had three customers that accounted for approximately 14%, 11%, and 10% of outstanding receivables, respectively. As of December 31, 2024, the Company had two customers that accounted for approximately 34% and 10% of outstanding receivables, respectively.

Property, Plant and Equipment

Property, plant, and equipment is stated at cost or, upon acquisition, at its fair value. Expenditures for construction activities, major improvements and betterments that extend the useful life of an asset are capitalized, while expenditures for maintenance and repairs are

generally expensed as incurred. Costs of abandoned projects are charged to operating expense upon abandonment. The cost of assets sold or disposed of, and the related accumulated depreciation are removed from the accounts in the period of sale or disposal, and the resulting gains or losses are recorded in earnings in the respective period. Refer to Note 5 – Property, Plant and Equipment.

Depreciation is computed using the straight-line method over the estimated useful lives for each asset group, as noted below:


Wells, Pipelines, Facilities, Ponds and Related Equipment		5 - 30 years
Brackish Water Wells, Facilities, Ponds and Related Equipment		3 - 15 years
Vehicles, Equipment, Furniture and Other		3 - 30 years
Crude and Gas Pipelines, Related Equipment and Other		5 - 30 years
Waste facilities and related equipment		3 - 10 years
Buildings		30 years

The Company capitalizes various costs that are incurred to make a landfill ready to accept waste, as applicable. These costs generally include expenditures for land and related airspace, engineering and permitting costs, cell construction costs and direct site improvement costs. The cost basis of the landfill assets also includes asset retirement costs, which represent future costs associated with landfill final capping, closure, and post-closure activities.

Depletion expense is recorded on a units-of-consumption basis, applying cost at a rate per cubic yard. The rate per cubic yard is calculated by dividing each component of the depletable basis of a landfill, net of accumulated depletion, by the number of cubic yards needed to fill the corresponding asset’s remaining permitted and expansion airspace.

Casualty Losses and Insurance Recoveries

Casualty losses, whether full or partial, are accounted for using a combination of impairment, insurance, and revenue recognition guidance prescribed by U.S. GAAP. Upon incurring a loss event, the Company evaluates for asset impairment under ASC 360, Property, Plant, and Equipment. To the extent that the assets are recoverable, determined utilizing undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition, the Company accounts for a full or partial casualty loss as operating and maintenance expense and evaluates whether all or a portion of the casualty loss can be offset by the recognition of insurance recoveries.

The Company follows the guidance in ASC 610-30, Other Income - Gains and Losses on Involuntary Conversions, for the conversion of nonmonetary assets (i.e., the property and equipment) to monetary assets (i.e., insurance recoveries). Under ASC 610-30, once receipt of the monetary assets is probable, the Company recognizes an insurance receivable in other receivables on the consolidated balance sheets, with a corresponding offset to operating and maintenance expense recognized on the consolidated statements of operations. If the insurance receivable is less than the carrying value of the assets, the Company will recognize a net loss on the consolidated statements of operations. If the insurance receivable is greater than the amount of loss recognized, the Company will only recognize a receivable up to the amount of loss recognized and will account for the excess as a gain contingency in accordance with ASC 450-30, Gain Contingencies. Gain contingencies are recognized when earned and realized, which typically will occur at the time of final settlement or when non-refundable cash payments are received. Refer to Note 5 – Property, Plant and Equipment.

Intangible Assets

Our intangible assets with definite useful lives include acquired customer contracts and customer relationships. Customer contract and customer relationship amounts are presented at the Company’s cost basis and are amortized to expense on a straight-line basis and assume no residual value. Refer to Note 6 – Intangible Assets for further information on estimated useful lives for such definite-lived intangibles.

Goodwill

Goodwill is the excess of acquisition cost of a business over the estimated fair value of net identifiable assets acquired. Goodwill is not amortized, however, we test goodwill for impairment at least annually as of October 31st, or more frequently when events or circumstances indicate goodwill is more likely than not impaired. When evaluating goodwill for impairment, we may either perform a qualitative assessment or a quantitative test. The qualitative assessment is an assessment of historical information and relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If we conclude that it is more likely than not that an impairment exists, a quantitative test is required which compares the estimated fair value of a reporting unit, based on Level 3 inputs, to its carrying value and measures any goodwill impairment as the

amount by which the carrying amount of the reporting unit exceeds its fair value. We may elect not to perform the qualitative assessment and instead perform a quantitative impairment test.

We completed our annual assessment of goodwill impairment in the current year by performing a qualitative assessment, which indicated it was not more likely than not that there was an impairment and therefore no quantitative test was required, and no impairment was recognized for the years ended December 31, 2025 and 2024. Significant judgments and assumptions are inherent in our estimate of future cash flows used to determine the estimate of the reporting unit’s fair value. Factors that could trigger a lower fair value estimate include significant negative industry or economic trends, cost increases, disruptions to our business, regulatory or political environment changes or other unanticipated events.

As of December 31, 2025 and 2024, the Company had a goodwill balance of $53.1 million and $9.1 million, respectively.

Acquisitions

To determine if a transaction should be accounted for as a business combination or an asset acquisition, we first calculate the relative fair value of the assets acquired and liabilities assumed. We first apply a screen to determine if substantially all of the relative fair value of the acquired gross assets is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. If this further determination does not meet the definition of a business the transaction is accounted for as an asset acquisition. We record asset acquisitions using the cost accumulation model. Under the cost accumulation model of accounting, the cost of the acquisition, including certain transaction costs, are allocated to the assets acquired using relative fair values. All other transactions are recorded as business combinations. We record the assets acquired and liabilities assumed in a business combination at their acquisition date fair values. Transactions in which we acquire control of a business are accounted for under the acquisition method. The identifiable assets, liabilities and any noncontrolling interests are recorded at the estimated fair value as of the acquisition date. The purchase price in excess of the fair value of assets acquired and liabilities assumed is recorded as goodwill.

Impairment of Long-Lived Assets

Management reviews the Company’s long-lived assets, which primarily includes property, plant and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets for purposes of assessing recoverability. Recoverability is determined by comparing the carrying value of the asset to the expected undiscounted future cash flows of the asset. If the carrying value of the asset is not recoverable, the amount of impairment loss is measured as the excess, if any, of the carrying value of the asset over its estimated fair value.

Accounts Payable

Accounts payable consists of vendor obligations due under normal trade terms for services rendered or products received by the Company during ongoing operations. In cases where the Company operates but owns an undivided interest of less than 100% in the asset or there is a royalty interest in the asset, accounts payable also consists of revenue payable, net of billings receivable for operating and capital expenditures attributable to the undivided interest property or royalties payable. Refer to Note 3 – Additional Financial Statement Information for further information.

Debt Issuance Costs

Debt issuance costs represent costs associated with long-term financing and are amortized over the term of the related debt using a method which approximates the effective interest method. The Company’s debt issuance costs associated with the senior unsecured notes and term loan are reflected as a reduction of long-term debt on the consolidated balance sheets. The Company’s debt issuance costs associated with the revolving credit facility are deferred and presented within prepaid expenses and other current assets, and other assets on the consolidated balance sheets. Refer to Note 8 – Debt for further information.

Asset Retirement Obligations

The fair value of a liability for an ARO is recognized in the period in which it is incurred. These obligations are those for which we have a legal obligation for settlement. The fair value of the liability is added to the carrying amount of the associated asset. This additional carrying amount is then depreciated over the period remaining to the expected abandonment date. The liability increases due to the passage of time based on the time value of money until the obligation is settled. Our AROs relates primarily to the dismantlement, removal, site reclamation and similar activities of our pipelines, water handling facilities, energy waste management facilities and

associated operations. Our AROs are included within other long-term liabilities on the consolidated balance sheets. Refer to Note 3 – Additional Financial Statement Information for further information.

Share-Based Compensation

Restricted Share Units

In connection with the IPO, the Board adopted the WaterBridge Infrastructure LLC Long Term Incentive Plan (the “LTIP”). The LTIP allows for the grant of options, share appreciation rights, restricted share units (“RSUs”), share awards, dividend equivalents, other share-based awards, cash awards, substitute awards, or any combination thereof.

There were 5,700,000 Class A shares reserved and available for delivery under the LTIP as of December 31, 2025, subject to increase on January 1 of each calendar year by a number of shares equal to the lesser of 5% of the total number of Class A shares and Class B shares outstanding as of December 31 of the immediately preceding calendar year; the number of shares required to bring the total shares available for issuance under the LTIP to 5% of the total number of Class A shares and Class B shares outstanding as of December 31 of the immediately preceding calendar year; or such smaller number of shares as determined by the Board.

RSUs issued to participants are recorded on grant date at fair value. Expense is recognized on a straight-line basis over the requisite service period (generally the vesting period of the award) as either direct operating costs or general and administrative expense in the consolidated statements of operations. We have elected to account for forfeitures as they occur. Therefore, compensation cost previously recognized for an award that is forfeited because of failure to satisfy a service condition will be reversed in the period of the forfeiture. RSUs include dividend equivalent rights that permit holders of granted but unvested RSUs to receive nonforfeitable distributions alongside common equity holders of the Company as if such RSUs were granted as of the applicable record date for such distribution.

NDB Incentive Units

The Company accounts for share-based compensation expense for incentive units granted in exchange for employee services. Incentive units are subject to time-based vesting, and vest to the participant over the course of the vesting period which is generally three years. Forfeitures are accounted for upon occurrence.

Our management and certain employees participate in an equity-based incentive unit plan consisting of time-based awards of profits interests (the “NDB Incentive Units”) in WaterBridge NDB LLC (“NDB LLC.”) The NDB Incentive Units represent a substantive class of equity are accounted for under Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Features of the NDB Incentive Units included the ability for NDB LLC to repurchase Incentive Units during a 180-day option period, whereby the fair value price was determined as of the termination date, not the repurchase date, which temporarily takes away the rights and risks and rewards of ownership from the Incentive Unit holder during the option period. Share-based compensation expense 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 is included in general and administrative expense on the consolidated statements of operations.

Under ASC 718, a feature for which the employee could bear the risks, but not gain the rewards, normally associated with equity ownership requires liability classification. NDB LLC classified the Incentive Units as liability awards. The liability related to the NDB Incentive Units was recognized at NDB LLC as the entity responsible for satisfying the obligation. Share-based compensation income or expense allocated to the Company was recognized as a deemed non-cash contribution to or distribution from member’s equity on the consolidated balance sheets. The share-based compensation income or expense was recognized consistent with NDB LLC’s classification of a liability award resulting in the initial measurement, and subsequent remeasurements, recognized ratably over the vesting period.

At each reporting period, NDB’s Incentive Units were remeasured at their fair value, consistent with liability award accounting, using a Monte Carlo Simulation. The Monte Carlo Simulation requires judgment in developing assumptions, which involve numerous variables. These variables include, but are not limited to, the expected unit price volatility over the term of the awards, the expected distribution yield and the expected life of NDB Incentive Units. The vested portion of NDB’s Incentive Unit liability was allocated pro rata to the Company, and other NDB LLC operating subsidiaries, as general and administrative income or expense on the consolidated statements of operations. The allocation was based on the Company’s share of the aggregate equity value derived in NDB LLC’s business enterprise valuation.

The Company updated its assumptions each reporting period based on new developments and adjusted such amounts to fair value based on revised assumptions, if applicable, over the vesting period. For the year ended December 31, 2025, the fair values of the NDB Incentive Units were estimated using various assumptions as discussed in Note 11 – Share-Based Compensation. The fair value measurement was based on significant inputs not observable in the market, and thus represents Level 3 inputs within the fair value hierarchy.

The risk-free rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of each award and updated at each balance sheet date for the time period approximating the expected term of such award. The expected distribution yield was based on no previously paid distributions and no intention of paying distributions on the NDB Incentive Units for the foreseeable future.

Due to the Company not having sufficient historical volatility, the Company used the historical volatilities of publicly traded companies that were similar to the Company in size, stage of life cycle and financial leverage.

NDB Incentive Units were classified as liability awards resulting in periodic fair value remeasurement prior to July 1, 2024. On July 1, 2024, NDB LLC was divided into two Delaware limited liability companies, LandBridge Holdings and NDB LLC (the “Division”). Following the Division, NDB Incentive Units are accounted for as a modification and have been transitioned to equity award accounting and, as such, do not require periodic remeasurements. The share-based compensation for the NDB Incentive Units is fully allocated to the noncontrolling interest as the contractual obligation to satisfy the NDB Incentive Units exists at NDB LLC, and any actual cash expense associated with such NDB Incentive Units is borne solely by NDB LLC and not the Company. Such NDB Incentive Units are not dilutive of public ownership.

On July 1, 2024, as a result of the Division described above, NDB Incentive Units are still recognized as a deemed non-cash contribution or distribution from member’s equity on the Company’s consolidated balance sheets.

Further, in connection with the Division, the repurchase feature of the NDB Incentive Units was amended such that the fair value price of the repurchased NDB Incentive Units is determined as of the repurchase date, which subjects the Incentive Unit holder to the normal rights, risks and rewards of ownership. The repurchase feature is a non-contingent call option as the call becomes effective upon (i) the employee’s termination of employment either by the Company (with or without cause) or (ii) voluntary resignation by the employee and it is assured that all employees will eventually terminate. Under ASC 718, a feature for which the employee could bear the risks and rewards normally associated with equity ownership and a non-contingent call option not probable to be exercised within six months requires equity classification. As such, beginning July 1, 2024, the Incentive Units are no longer required to be remeasured at fair value and no longer require liability award accounting, as the modifications noted above result in equity award classification and accounting. Refer to Note 11 – Share-Based Compensation for additional information related to the modification.

Distributions attributable to NDB Incentive Units are based on returns received by members of NDB LLC once certain return thresholds have been met. The share-based compensation for the NDB Incentive Units is fully allocated to the noncontrolling interest as the contractual obligation to satisfy the NDB Incentive Units exists at NDB LLC, and any actual cash expense associated with such NDB Incentive Units is borne solely by NDB LLC and not the Company. Such NDB Incentive Units are not dilutive of public ownership.

Refer to Note 11 – Share-Based Compensation for additional information.

Interest Capitalization

The Company capitalizes interest costs mainly during the construction period of its assets. Upon placing the underlying asset in service, these costs are depreciated over the estimated useful life of the corresponding assets for which interest costs were incurred.

Earnings (Loss) Per Share Attributable to WaterBridge

We use the two-class method in our computation of earnings per share. Our RSUs include dividend equivalent rights that permit holders of granted but unvested RSUs to receive a non-forfeitable cash amount equal in value to dividends paid with respect to an equal number of Class A shares and are contemplated as participating when the Company is in a net income position. These awards participate in dividend equivalents on a basis equivalent to other Class A shares but do not participate in losses. Class B shares do not have economic rights and are not entitled to participate in any dividends our Board may declare but are entitled to vote on the same basis as the Class A shares, except as otherwise required by applicable law or by the LLC Agreement.

Basic earnings (loss) per share (“EPS”) of our Class A shares is computed on the basis of the weighted average number of shares outstanding during each period. The diluted EPS of our Class A shares contemplates adjustments to the numerator and the denominator under the if-converted method for the convertible Class B shares. The Company uses the treasury stock method or two-class method

when evaluating dilution for RSUs. The more dilutive of the two methods is included in the calculation for diluted EPS. Refer to Note 12 – Earnings Per Share for additional information.

Revenue Recognition

Produced Water Handling

Produced water handling revenues consist of fees charged for produced water handling services, produced water gathering pipeline services, and sales of skim oil, which is recovered from produced water after taking custody of the water from customers.

For produced water handling services and produced water gathering pipeline services, revenues are recognized over time utilizing the output method based on the volume of water accepted from the customer. We have determined the performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits provided by the performance of these services, typically as customers’ water is accepted. We apply the ‘as-invoiced’ practical expedient to produced water service revenues, under which, revenues are recognized based on the invoiced amount which is equal to the value to the customer of the Company’s performance obligation completed to date. The produced water services are often combined as a system service fee where we typically charge customers a disposal and transportation fee on a per barrel basis according to the applicable contract.

As part of our produced water handling revenues, we aggregate and sell skim oil. Skim oil sales revenues are recognized at a point in time, based on when control of the product is transferred to the customer. Skim oil is generally sold at market rates, net of marketing costs. Refer to Note 3 – Additional Financial Statement Information for additional information.

Water Solutions

Water solutions revenues consist of sales of brackish water, recycled water, and produced water and are generally priced based on negotiated rates with the customer and structured as volume dependent arrangements. Water solutions revenues are recognized at a point in time, based on when control of the volumes are transferred to the customer, usually upon delivery.

Other Revenue

Other revenues consist primarily of fees charged for energy waste management, gas transport services and crude gathering services prior to the divestment of our crude assets in March 2025. Crude and gas gathering and transportation contracts are generally structured as volume dependent arrangements. Revenues are recognized over time utilizing the output method based on the volume of gas transferred. We have determined the performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits provided by the performance of the services. Additionally, we receive fees for providing energy waste management, consisting of solid waste management and reclamation services. Substantially all of the Company's energy waste management contracts contain one performance obligation, the allocation of contract transaction price to multiple performance obligations is generally not applicable.

Transaction Price Allocated to Future Performance Obligations

We recognize revenues based on the transfer of control or our customers’ ability to benefit from our services and products in an amount that reflects the consideration we expect to receive in exchange for those services and products. The Company’s sales arrangements do not include any significant post-delivery obligations. The Company accrues revenues as services are performed or products are delivered. The difference between estimated and actual amounts received are recorded in the period the payment is received. We allocate the consideration earned between the performance obligations based on the stand-alone selling price when multiple performance obligations are identified.

The Company applies the practical expedient exempting the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For contracts with terms greater than one year, the Company applies the practical expedient exempting the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under our contracts, each service or unit of product typically represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.

Contractual Customer Relationships

customer relationships are amortized as a reduction to produced water handling revenues within our consolidated statements of operations on a straight-line basis over the primary term of the underlying agreement. As of December 31, 2025 and 2024, the Company recorded $18.0 million and $19.9 million, respectively, in other assets on the consolidated balance sheets related to contractual customer relationships. We recognized amortization of $1.8 million, $1.7 million, and $1.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. The remaining weighted average amortization period for contractual customer relationships was 9.9 years and 10.8 years as of December 31, 2025 and 2024, respectively.

Contract Liabilities

Contract liabilities primarily relate to revenue agreements where the Company receives a reimbursement for infrastructure constructed on behalf of the customer, but owned by the Company, in advance of the related performance obligation being satisfied. Contract liabilities are recognized as earned over time or at a point in time based on the provisions set forth in the agreement, and presented in other current liabilities and other long-term liabilities on our consolidated balance sheets.

Income Taxes

The Company has elected to be treated as a corporation for U.S. federal income tax purposes and is subject to U.S. federal and state corporate income taxes. The Company had no activity or holdings prior to the IPO. U.S. federal income tax expense (benefit) included in the consolidated statements of operations is calculated primarily based on the Company's share of net income (loss) of OpCo, which is taxed as a partnership. State income tax expense (benefit) included in the consolidated statements of operations is primarily based on the Texas Franchise Tax liability applicable to the Company and OpCo on a consolidated basis.

Prior to the WaterBridge Combination, NDB Operating was a disregarded entity for U.S. federal income tax purposes, and therefore, has not been subject to U.S. federal income tax at an entity level. As a result, the consolidated net income (loss) in our historical financial statements does not reflect the tax expense (benefit) we would have incurred if we were subject to U.S. federal income tax at an entity level during the periods prior to the WaterBridge Combination. Subsequent to the WaterBridge Combination, OpCo is treated as a partnership for U.S. federal income tax purposes, and as such, is not subject to U.S. federal income tax. Instead, taxable income is allocated to members, including the Company, and taxable income (loss) of OpCo is reported in the respective tax returns of its members.

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the tax basis of assets and liabilities and their reported amounts in our Financial Statements. Deferred tax assets and liabilities are included in our Financial Statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the current period’s provision for income taxes.

The Company evaluates the realizability of our deferred tax assets as of each reporting date, weighing all positive and negative evidence. A valuation allowance is recorded to reduce the carrying value of our deferred tax assets when it is more likely than not that some or all of our deferred tax assets will not be realized. Refer to Note 7 – Income Taxes and Tax Receivable Agreement for additional information.

Concentration of Risk

Concentrations of Risk

In the normal course of business, we maintain cash balances in excess of federally insured limits. The Company regularly monitors these institutions’ financial condition. We have not experienced any losses in our accounts and believe we are not exposed to any significant credit risk on cash or cash equivalents.

Significant Customers

Customers that individually comprised more than 10% of the Company’s consolidated revenues were as follows:


	Year Ended December 31,
	2025			2024			2023
Customer A		18	%		27	%		24	%
Customer B		12	%	**			**
Customer C	**				10	%		15	%

**Less than 10%

Other Contingencies

The Company recognizes liabilities for other contingencies when there is exposure that indicates it is both probable and the amount of loss can be reasonably estimated. These types of liabilities may also arise from acquisition related transactions or other commercial agreements entered into from time to time by the Company. Refer to Note 14 – Commitments and Contingencies for additional information on specific contingent liabilities.

Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

In December of 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). This guidance further enhances income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU was effective for annual periods beginning after December 15, 2024. The adoption of ASU 2023-09 had no effect on the Company's financial position, results of operations or cash flows as it modified disclosure requirements only. The Company adopted the ASU retrospectively for the year ended December 31, 2025, with comparative period income tax disclosures adjusted to reflect the change in accounting guidance. Refer to Note 7 – Income Taxes and Tax Receivable Agreement for additional information.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). This guidance requires tabular disclosure of specified natural expenses in certain expense captions, a qualitative description of amounts that are not separately disaggregated, and disclosure of the Company's definition and total amount of selling expenses. We plan to adopt this guidance and conform with the disclosure requirements when it becomes mandatorily effective for annual periods beginning after December 15, 2026. The adoption of ASU 2024-03 is not expected to have any effect on the Company’s financial position, results of operations or cash flows as it modifies disclosure requirements only.

WBEF

Significant Accounting Policies [Line Items]

Basis of Presentation and Consolidation

The accompanying consolidated financial statements (“Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All dollar amounts in the Financial Statements are stated in thousands of dollars unless otherwise indicated.

The Company has presented the Financial Statements from the beginning of the year to September 16, 2025, the date immediately preceding the WaterBridge Combination.

All of the Company’s subsidiaries are wholly owned, either directly or indirectly through wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. There were no variable interest entities for any periods presented herein. Basic and diluted net income per common unit is not presented since the ownership structure of the Company is not a common unit of ownership.

On occasion, the Company, through its wholly owned subsidiaries, enters into joint operating agreements (“JOA”) pursuant to which third parties receive non-operating undivided interests in one or more produced water handling facilities and related assets subject to the JOA. The undivided interest owners (i) receive their proportionate share of revenue and (ii) pay for their proportionate share of all costs and expenses incurred in drilling, equipping, installing, and operating the JOA assets. The JOAs are not separate legal entities; rather, each undivided interest received by the parties to the JOA is an undivided ownership interest in the applicable assets. The Company

records its undivided interests related to these JOAs and records revenues and expenses related to these disposal activities on a net basis as part of revenues and costs and expenses. JOA revenues and costs and expenses are subject to audit by all non-operating parties, or such other entity that the non-operator authorizes to conduct the audit, generally limited to the preceding two years following the end of a calendar year.

When necessary, reclassifications are made to prior period financial information to conform with current year presentation.

Segment Information

The Company operates in a single operating and reportable segment. All of our assets are located in the United States. Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, defined characteristics of operating segments as being components of an enterprise in which separate discrete financial information is available for evaluation by the Chief Operating Decision Maker (“CODM”) in making decisions, on how to allocate resources and assess performance. The Company is managed as a whole rather than through discrete operating segments. Our executive team is organized by function, rather than legal entity, with no business component manager reporting directly to the CODM. Allocation of resources is made on a project basis across the Company without regard to geographic area, and considers among other things, return on investment, current market conditions, including commodity prices and market supply, availability of services and human resources, and contractual commitments. The Company’s Chief Executive Officer is the CODM who allocates resources and assesses performance based upon financial information at the consolidated level. The financial measure regularly provided to the CODM that is most consistent with U.S. GAAP is net income (loss), as presented on our consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheet as total assets. Total expenditures for additions to long-lived assets is reported on our consolidated statements of cash flows. The Company presents all of its significant segment expenses and other metrics which are regularly provided to the CODM and used by the CODM to make decisions regarding the Company’s business, including resource allocation and performance assessment in our consolidated statements of operations. The CODM does not receive additional expenses other than those presented within our consolidated statements of operations.

Use of Estimates

Fair Value Measurements

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Level 1: Quoted market prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs that are not corroborated by market data.

The carrying value of the Company’s cash and cash equivalents, accounts receivable, net of current expected credit losses, and accounts payable and accrued liabilities reported on the consolidated balance sheet approximate fair value due to their highly liquid nature or short-term maturity.

The fair value of debt is the estimated amount the Company would have to pay to transfer its debt, including any premium or discount attributable to the difference between the stated interest rate and market rate of interest at the balance sheet date. The estimated fair value of our debt approximates the principal amount outstanding because the interest rates applicable to such amounts are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty. Refer to Note 8 – Debt for additional information.

Cash and Cash Equivalents

Accounts Receivable

As of December 31, 2024, the Company had three customers that accounted for approximately 21%, 14%, and 11% of outstanding receivables, respectively.

Property, Plant and Equipment

Property, plant and equipment is stated at cost or, upon acquisition, at its fair value. Expenditures for construction activities, major improvements and betterments that extend the useful life of an asset are capitalized, while expenditures for maintenance and repairs are generally expensed as incurred. Costs of abandoned projects are charged to operating expense upon abandonment. The cost of assets sold or disposed of, and the related accumulated depreciation are removed from the accounts in the period of sale or disposal, and the resulting gains or losses are recorded in earnings in the respective period. Refer to Note 5 - Property, Plant and Equipment.

Depreciation is computed using the straight-line method over the estimated useful lives for each asset group, as noted below:


Wells, Pipelines, Facilities, Ponds and Related Equipment		5 - 30 years
Brackish Water Wells, Facilities, Ponds and Related Equipment		3 - 15 years
Buildings, Vehicles, Equipment, Furniture and Other		3 - 30 years
Land Improvements		30 years

Casualty Losses and Insurance Recoveries

The Company follows the guidance in ASC 610-30, Other Income - Gains and Losses on Involuntary Conversions, for the conversion of nonmonetary assets (i.e., the property and equipment) to monetary assets (i.e., insurance recoveries). Under ASC 610-30, once receipt of the monetary assets is probable, the Company recognizes an insurance receivable in other receivables on the consolidated balance sheet, with a corresponding offset to operating and maintenance expense recognized on the consolidated statements of operations. If the insurance receivable is less than the carrying value of the assets, the Company will recognize a net loss on the consolidated statements of operation. If the insurance receivable is greater than the amount of loss recognized, the Company will only recognize a receivable up to the amount of loss recognized and will account for the excess as a gain contingency in accordance with ASC 450-30, Gain Contingencies. Gain contingencies are recognized when earned and realized, which typically will occur at the time of final settlement or when non-refundable cash payments are received. Refer to Note 5 – Property, Plant and Equipment.

Intangible Assets

Our intangible assets with definite useful lives include acquired customer contracts. Customer contract amounts are presented at the Company's cost basis and are amortized to expense on a straight-line basis and assume no residual value. Refer to Note 6 - Intangible Assets for further information on estimated useful lives for such definite-lived intangibles.

Goodwill

Goodwill is the excess of acquisition cost of a business over the estimated fair value of net identifiable assets acquired. Goodwill is not amortized, however, we test goodwill for impairment at least annually as of October 31st, or more frequently when events or circumstances indicate goodwill is more likely than not impaired. When evaluating goodwill for impairment, we may either perform a qualitative assessment or a quantitative test. The qualitative assessment is an assessment of historical information and relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If we conclude that it is more-likely-than not that an impairment exists, a quantitative test is required which compares the estimated fair value of a reporting unit, based on Level 3 inputs, to its carrying value and measures any goodwill impairment as the amount by which the carrying amount of the reporting unit exceeds its fair value. We may elect not to perform the qualitative assessment and instead perform a quantitative impairment test.

For the period January 1, 2025 through September 16, 2025, and for the years ended December 31, 2024 and 2023, no goodwill impairment was recognized. Significant judgments and assumptions are inherent in our estimate of future cash flows used to determine the estimate of the reporting unit’s fair value. Factors that could trigger a lower fair value estimate include significant negative industry or economic trends, cost increases, disruptions to our business, regulatory or political environment changes or other unanticipated events.

The Company has two reporting units:

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The Southern Delaware Basin in west Texas; and

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The Arkoma Basin in Oklahoma.

As of December 31, 2024 the Company had a goodwill balance of $169.4 million. All goodwill is included within one reporting unit, the Southern Delaware Basin region in west Texas.

Acquisitions

Impairment of Long-Lived Assets

Accounts Payable

Debt Issuance Costs

Debt issuance costs represent costs associated with long-term financing and are amortized over the term of the related debt using a method which approximates the effective interest method. The Company’s debt issuance costs related to the term loan are reflected as a reduction of long-term debt on the consolidated balance sheet. Debt issuance costs associated with the Company’s revolving credit facility are deferred and presented within prepaid expenses and other current assets and other assets on the consolidated balance sheet. Refer to Note 8 – Debt for further information.

Asset Retirement Obligations

The fair value of a liability for an asset retirement obligation (“ARO”) is recognized in the period in which it is incurred. These obligations are those for which we have a legal obligation for settlement. The fair value of the liability is added to the carrying amount of the associated asset. The Level 3 inputs to this fair value measurement include estimates of plugging, abandonment and remediation costs, inflation rates, credit-adjusted risk-free rate, and expected abandonment dates. This additional carrying amount is then depreciated over the period remaining to the expected abandonment date. The liability increases due to the passage of time based on the time value of money until the obligation is settled. Our AROs relates primarily to the dismantlement, removal, site reclamation and similar activities of our pipelines, water handling facilities and associated operations. Our AROs are included within other long-term liabilities on the consolidated balance sheet. Refer to Note 3 – Additional Financial Statement Information for further information.

Derivatives

Derivative instruments are recorded on the consolidated balance sheet as either assets or liabilities measured at their fair values. Changes in the fair value of our derivative instruments are recorded in earnings, unless we elect to apply hedge accounting and meet specified criteria. The Company did not designate any derivative instruments as cash flow or fair value hedges as of December 31, 2024.

Embedded derivatives

The Company evaluates its contracts to determine whether embedded features exist that require bifurcation and separate accounting from the related host contract under ASC 815 – Derivatives and Hedging. All embedded derivatives identified are initially recorded at fair value and subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in earnings. The Series A-1 Preferred Units contained redemption features that required separate accounting as embedded derivatives. As discussed further in Note 10 – Mezzanine Equity, the Series A-1 Preferred Units were redeemed under an arrangement other than the terms of the embedded derivative, resulting in a final measurement of the embedded derivative of zero on the redemption date of the Series A-1 Preferred Units. As a result, the company recognized a gain on derivative instrument of $4.5 million for the year ended December 31, 2023. There were no gains or losses on derivative instrument for the year ended December 31, 2024. The derivative instruments were fully redeemed as of December 31, 2024.

Share-Based Compensation

The Company accounts for share-based compensation expense for incentive units granted in exchange for employee services. Our management and employees currently participate in two equity-based incentive plans, managed by WBR and WB II, both indirect parents of the Company. The WBR plan (“WBR Plan”) is governed by the Amended and Restated LLC Agreement of WBR, dated as of June 24, 2019 (the “WBR LLC Agreement”) and the WB II plan (“WaterBridge II Plan”) is governed by the Amended and Restated Limited Liability Company Agreement of WB II, dated as of June 24, 2019 (the “WB II LLC Agreement” and collectively with the WBR LLC Agreement, the “WBR and WB II LLC Agreements”). The management incentive units consist of time-based awards of profits interests in both WBR and WB II (the “Incentive Units”), and each of the WBR and WB II LLC Agreements authorizes the issuance of 10,000 Incentive Units.

The Incentive Units represent a substantive class of equity for WBR and WB II and are accounted for under FASB ASC 718, Compensation – Stock Compensation. Features of the Incentive Units include the ability for WBR and WB II to repurchase Incentive Units during a 180-day option period, whereby the fair value price is determined as of the termination date, not the repurchase date,

which temporarily takes away the rights and risks and rewards of ownership from the Incentive Unit holder during the option period. Under ASC 718, a feature for which the employee could bear the risks, but not gain the rewards, normally associated with equity ownership requires liability classification. WBR and WB II classifies the Incentive Units as liability awards. The liability related to the Incentive Units is recognized at WBR and WB II as the entity’s responsible for satisfying the obligations. Share-based compensation expense pushed down to the Company is recognized as a deemed non-cash contribution to members’ equity on the consolidated balance sheet. The share-based compensation expense is recognized consistent with WBR and WB II’s classification of a liability award resulting in the initial measurement, and subsequent remeasurements, recognized ratably over the vesting period.

The Incentive Units’ value is derived from a combination of its threshold value and the total value of the incentive pools. The value of the incentive pools are determined by taking the total value returned to WBR and WB II Series A unit holders and allocating such value between the Series A unit holders and the incentive pools based on a return-on-investment waterfall included in the WBR and WB II LLC Agreements. The total value returned constitutes any cash or property distributed by the Company or other WBR or WB II subsidiary to WBR and WB II Series A unit holders. The total incentive pools are determined by summing the discrete Incentive Unit burden of each Series A unit holder. Value allocation within the Incentive Unit pools is impacted by Incentive Unit threshold values but the aggregate value of each incentive pool is based solely on the return-on-investment waterfall. The Incentive Unit liability is only applicable to WBR and WB II Series A unit holders.

Value within each Incentive Unit pool is allocated among Incentive Unit holders via a distribution waterfall. The units with the lowest threshold value within the pool will be allocated value first. Once the value of the units with the lowest threshold value reaches the next lowest threshold value, the lowest threshold value units will cease earning value. The next lowest threshold value Incentive Units then receive value until its value is equal to its own threshold value (the “Catch-Up Mechanics”). At this point, both the lowest and second lowest threshold value units have a value equal to the second lowest threshold value. Both groups of units continue to earn value until this value is equal to the third lowest threshold value, when the Catch-Up Mechanics are applied. When all Incentive Units have earned value up to the highest threshold value, all Incentive Units will earn value pro rata based on the total number of units issued thereafter.

At each reporting period, WBR and WB II Incentive Units are remeasured at their fair value, consistent with liability award accounting, using a Monte Carlo Simulation. The Monte Carlo Simulation requires judgment in developing assumptions, which involve numerous variables. These variables include, but are not limited to, the expected unit price volatility over the term of the awards, the expected dividend yield and the expected life of Incentive Unit vesting. The vested portion of the WBR and WB II Incentive Unit liability is allocated to the Company as share-based compensation expense on the consolidated statements of operations.

The Company updates its assumptions each reporting period based on new developments and adjusts such amounts to fair value based on revised assumptions, if applicable, over the vesting period. For the period January 1, 2025 through September 16, 2025 and the years ended December 31, 2024 and 2023, the fair values of the Incentive Units were estimated using various assumptions as discussed in Note 11 – Share-Based Compensation. The fair value measurement is based on significant inputs not observable in the market, and thus represents Level 3 inputs within the fair value hierarchy.

Unvested Incentive Units are subject to accelerated vesting if there is a change in control (as defined in the award agreements). Unvested Incentive Units are also subject to accelerated vesting or forfeiture in certain circumstances as set forth in the award agreements and 1/3 of all vested Incentive Units are subject to forfeiture if an Incentive Unit holder is terminated for cause. Upon termination for any reason, WaterBridge I and WaterBridge II have the right to purchase all vested Incentive Units of the terminated Incentive Unit holder for a period of 180 days at the fair market value on the date the Incentive Unit holder’s employment ended. Forfeitures are accounted for upon occurrence. Forfeitures do not return equity value to the Company, rather value is returned to the Incentive Unit pool and allocated among remaining Incentive Unit holders.

All Incentive Units are subject to time-based vesting, and vest to the participant over the course of the vesting period at the fair value of the vested grants at each reporting date.

The risk-free rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of each award and updated at each balance sheet date for the time period approximating the expected term of such award. The expected distribution yield is based on no previously paid distributions and no intention of paying distributions on the Incentive Units for the foreseeable future.

Due to the Company not having sufficient historical volatility, the Company uses the historical volatilities of publicly traded companies that are similar to the Company in size, stage of life cycle and financial leverage. The Company will continue to use this peer group of companies unless a situation arises within the group that would require evaluation of which publicly traded companies are included or once sufficient data is available to use the Company’s own historical volatility. For criteria dependent upon a change in control, the Company will not recognize any incremental expense until the event occurs. Differences between actual results and such estimates could have a material effect on the Financial Statements.

Distributions attributable to WBR and WB II Incentive Units are based on returns received by investors of WBR and WB II, as applicable, once certain return thresholds have been met. WBR and WB II Incentive Units are solely a payment obligation of WBR and WB II, as applicable, and neither the Company nor its subsidiaries has any cash or other obligation to make payments in connection with the WBR or WB II Incentive Units.

Interest Capitalization

The Company capitalizes interest costs mainly during the construction period of our assets. Upon placing the underlying asset in service, these costs are depreciated over the estimated useful life of the corresponding assets for which interest costs were incurred.

Mezzanine Equity

The Company classifies certain equity instruments as mezzanine equity on the balance sheet when such instruments contain redemption features that are not solely within the control of the Company or its subsidiaries in accordance with ASC 480-10-S99-3A. As of December 31, 2024, the Company presented its Redeemable Series A Preferred Units and Redeemable Series B Preferred Units as mezzanine equity in the consolidated financial statements.

Redeemable equity securities are initially recognized at their fair value on the issuance date. Subsequent accounting is outlined below depending on whether the instrument is: (i) currently redeemable, (ii) probable of becoming redeemable, or (iii) not probable of becoming redeemable.

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Currently Redeemable: If the instrument is currently redeemable (e.g., at the option of the holder), it is subsequently remeasured to its maximum redemption amount at each reporting date.

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Probable of Becoming Redeemable: If the instrument is not currently redeemable but is probable of becoming redeemable (e.g., when redemption depends solely on the passage of time), the Company has the option to either a) adjust the carrying amount by accreting to the redemption value over time, using the effective interest method or b) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period.

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Not Probable of Becoming Redeemable: If the instrument is neither currently redeemable nor probable of becoming redeemable, no subsequent remeasurement is required.

Distributions declared but not yet paid increase the carrying value of the instrument and are recognized in members’ equity.

The Company evaluates mezzanine equity instruments at each reporting period to determine if reclassification to permanent equity or liability treatment is required under ASC 480 – Distinguishing Liabilities from Equity, or ASC 815 – Derivatives and Hedging. If a mezzanine classified equity instrument becomes mandatorily redeemable, it is reclassified as a liability and measured at fair value, and any changes in fair value are recorded through earnings. The fair value measurement is based on significant inputs not observable in the market, and thus represents Level 3 inputs within the fair value hierarchy.

Revenue Recognition

Produced Water Handling

As part of our produced water handling revenues, we aggregate and sell skim oil. Skim oil sales revenues are recognized at a point in time, based on when control of the product is transferred to the customer. Skim oil is generally sold at market rates, net of marketing costs. Refer to Note 3 - Additional Financial Statement Information for further information.

Water Solutions

Other Revenue

Other revenues consist primarily of fees charged for gas transportation services provided to customers. These contracts are generally structured as volume dependent arrangements. Revenues are recognized over time utilizing the output method based on the volume of gas transferred. We have determined the performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits provided by the performance of the services. We apply the as-invoiced practical expedient to gas transportation service revenues, under which, revenues are recognized based on the invoiced amount which is equal to the value to the customer of the Company’s performance obligation completed to date.

Transaction Price Allocated to Future Performance Obligations

Contract Liabilities

Contract liabilities primarily relate to revenue agreements where the Company receives a reimbursement for infrastructure constructed on behalf of the customer, but owned by the Company, in advance of the related performance obligation being satisfied. Contract liabilities are recognized as earned over time or at a point in time based on the provisions set forth in the agreement. The following table reflects the changes in our contract liabilities, which are included in other current liabilities and other long-term liabilities on our consolidated balance sheet:


	Contract Liabilities
Balance, December 31, 2023	$	1,274
Cash received but not yet recognized in revenue		1,513
Revenue recognized from prior period deferral		(133	)
Balance, December 31, 2024	$	2,654

Contractual Customer Relationships

Contractual customer relationships represent our right to future consideration related to up-front payments made associated with customer contract dedications where we typically do not receive a distinct good or service in exchange for these payments. Contractual customer relationships are amortized as a reduction to produced water handling revenues within our consolidated statements of operations on a straight-line basis over the primary term of the underlying agreement.

As of December 31, 2024, the Company recorded $15.7 million in other assets on the consolidated balance sheet related to contractual customer relationships. We recognized amortization of $1.0 million for the period January 1, 2025 through September 16, 2025 and $1.5 million for both the years ended December 31, 2024 and 2023. The remaining weighted average amortization period for contractual customer relationships was 11.8 years as of December 31, 2024.

Income Taxes

The Company is a limited liability company classified as a pass-through entity for federal income tax purposes. As a result, the net taxable income of the Company and any related tax credits, for federal income tax purposes, are deemed to pass to the members and are included in their tax returns even though such net taxable income or tax credits may not have actually been distributed.

The Company is subject to Texas margin taxes. We estimate our state tax liability utilizing management estimates related to the deductibility of certain expenses and other factors. We recorded $0.1 million in Texas margin tax liability as of December 31, 2024.

Concentration of Risk

Concentrations of Risk

In the normal course of business, we do not maintain cash balances in excess of federally insured limits due to the insured cash sweep service provided by our financial institution. The Company regularly monitors these institutions’ financial condition. We have not experienced any losses in our accounts and believe we are not exposed to any significant credit risk on cash or cash equivalents.

Significant Customers

Customers that individually comprised more than 10% of the Company’s consolidated revenues were as follows:


	For the Period January 1, 2025 through September 16, 2025			Year Ended December 31, 2024			Year Ended December 31, 2023
Customer A		25	%		24	%		23	%
Customer B		14	%		10	%		12	%
Customer C	**				10	%		11	%
Customer D	**				10	%	**
Customer E	**			**				10	%

**Less than 10%

Other Contingencies

The Company recognizes liabilities for other contingencies when there is exposure that indicates it is both probable and the amount of loss can be reasonably estimated. These types of liabilities may also arise from acquisition related transactions or other commercial agreements entered into from time to time by the Company. Refer to Note 13 – Commitments and Contingencies for further information on specific contingent liabilities.