Consolidated Water (NASDAQ:CWCO) reported second-quarter 2026 revenue of $32.9 million, down 2% from the second quarter of 2025, as lower manufacturing sales outweighed growth in its retail, bulk water and services businesses.
Net income from continuing operations attributable to stockholders was $4.0 million, or $0.25 per diluted share, compared with $5.2 million, or $0.32 per diluted share, a year earlier. Including discontinued operations, net income attributable to stockholders was $3.9 million, or $0.24 per diluted share, versus $5.1 million, or $0.32 per diluted share, in the prior-year quarter.
Segment Results Reflect Manufacturing Decline
Chief Accounting Officer Douglas Pizzini said retail revenue totaled $8.7 million and remained relatively steady despite a roughly 2% decline in water sales volume in Grand Cayman. Wetter weather reduced demand, but the effect was offset by a higher base rate charged to a major non-potable water customer after that customer’s concessionary water purchase agreement expired in May 2026.
Bulk water revenue rose 20% to $9.9 million, primarily because Consolidated Water’s Bahamas business recorded higher energy pass-through charges associated with increased energy costs. Bulk revenue also benefited from contributions from two new desalination plants on Cat Island that provide potable water to the Water and Sewerage Corporation of The Bahamas. The first plant was commissioned in December 2025 and the second in April 2026.
Services revenue increased 1% to $11.6 million. Construction revenue rose by $2.5 million from work on a $3.9 million drinking water plant expansion in Colorado and an $11.7 million wastewater recycling plant in California. Both projects are expected to be substantially completed this year.
Those gains were partially offset by lower operations and maintenance, or O&M, revenue after two customer contracts expired during the first quarter. The company said a new Southern California municipal O&M contract is expected to generate about $4.5 million over three years.
Manufacturing revenue fell 49% to $2.7 million as the total dollar amount of new purchase orders declined. Consolidated Water continues to expect full-year 2026 manufacturing revenue to be below the record level generated in 2025.
Gross profit was $11.0 million, representing 33% of revenue, compared with $12.8 million, or 38% of revenue, in the prior-year period. Pizzini attributed the decline primarily to lower manufacturing gross profit and a less favorable services revenue mix, with construction representing a greater share than higher-margin O&M, design and consulting work.
Grand Cayman License Provides Long-Term Framework
During the quarter, Consolidated Water completed negotiations with Cayman Islands utility regulator OfReg for a new retail water utility license in Grand Cayman. The 25-year license was received in mid-June and became effective Aug. 1.
McTaggart said the license preserves Cayman Water’s exclusive right to produce and distribute potable water within its licensed territory, which includes Seven Mile Beach and West Bay. The license includes reduced base water rates and an annual inflation-based adjustment mechanism similar to the previous framework. The company said the new rates are expected to reduce the average cost per gallon for customers by approximately 6.5% relative to the prior license.
The company also pointed to tourism as an important driver of Grand Cayman water demand. Stayover arrivals exceeded 288,000 during the first half of 2026, up 11.3% from the same period in 2025 and 2.8% above the comparable pre-pandemic 2019 level. McTaggart said the Cayman Islands National Weather Service has indicated a greater than 70% probability of below-average rainfall during the current wet season, which could support water demand if realized.
Hawaii and Florida Projects Support Outlook
In July, a Hawaii client issued a limited notice to proceed for Consolidated Water’s planned 1.7 million-gallon-per-day seawater desalination facility in Kalaeloa. The authorization permits procurement of long-lead equipment and materials with an approximate value of $6 million.
McTaggart said increased communications with permitting agencies support the company’s cautious expectation that construction could begin later this year. However, he told analysts that an archaeological permit remains a key prerequisite to applying for some additional permits and is not the final permit required for the project.
Separately, the company received approximately $10.1 million in purchase orders for municipal water-treatment equipment in Florida after the quarter ended. McTaggart described the orders as the company’s largest municipal membrane equipment order by dollar value and its largest horizontal cartridge filter order. Delivery is currently scheduled for November 2027.
Management said Florida remains an active market for membrane-based treatment systems as utilities seek alternative water sources, including brackish groundwater. The company is also evaluating opportunities in other states, including Texas and on the West Coast.
Consolidated Water ended June with $132.6 million in cash and cash equivalents, $144.6 million in working capital and no significant debt. The company said it expects approximately $4.8 million of capital expenditures for existing operations during the remainder of 2026. It paid about $2.3 million in dividends in July and said it continues to evaluate uses of its cash position, including water infrastructure opportunities, acquisitions and partnerships.
About Consolidated Water (NASDAQ:CWCO)
Consolidated Water Co Ltd. is a developer, operator and manufacturer of water treatment and desalination systems. The company designs, engineers, builds and operates reverse-osmosis desalination plants and water treatment facilities, offering both turnkey project delivery and ongoing operations and maintenance services. Its product portfolio includes modular desalination units, water distribution systems, filtration membranes and associated equipment for potable water production.
Consolidated Water serves municipalities, resorts, commercial enterprises and private customers in the Caribbean and the southeastern United States.
