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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-40955

Aris Water Solutions, Inc.

(Exact name of registrant as specified in its charter)


Delaware	87-1022110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9651 Katy Freeway, Suite 400

Houston, Texas

77024

(Address of principal executive offices)

(Zip Code)

(832) 304-7003

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	ARIS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 8, 2025, the registrant had 32,709,033 shares of Class A common stock, $0.01 par value per share, and 26,467,109 shares of Class B common stock, $0.01 par value per share, outstanding.

Table of Contents

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Cautionary Note Regarding Forward-Looking Statements		3
Item 1.	Financial Statements (unaudited)	6
Condensed Consolidated Balance Sheets		6
Condensed Consolidated Statements of Operations		7
Condensed Consolidated Statements of Cash Flows		8
Condensed Consolidated Statements of Stockholders’ Equity		9
Notes to Unaudited Condensed Consolidated Financial Statements		10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 4.	Controls and Procedures	47
PART II. OTHER INFORMATION		48
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	52
Signatures		54

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report, including, without limitation, statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “guidance,” “preliminary,” “project,” “estimate,” “outlook,” “expect,” “continue,” “will,” “intend,” “plan,” “targets,” “believe,” “forecast,” “future,” “potential,” “should,” “may,” “possible,” “could” and variations of such words or similar expressions.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “2024 Annual Report”) and found elsewhere in this Quarterly Report, including, but not limited to, the following:

●

the impact of the ongoing Russia-Ukraine and Middle Eastern conflicts on the global economy, including its impacts on financial markets and the energy industry;

●

the level of capital spending and development by oil and gas companies, including potential reductions in capital expenditures by oil and gas producers in response to commodity price volatility and/or reduced demand;

●

our reliance on a limited number of customers and a particular region for substantially all of our revenues;

●

the risk that the Merger (as defined below) between the Company and WES (as defined below) may not be completed on the anticipated terms and expected timing, or at all, including obtaining required regulatory approvals and stockholder approval;

●

the possibility that any of the anticipated benefits of the Merger will not be realized or will not be realized within the expected time period;

●

the risk that disruptions from the Merger will harm our business, including current plans and operations and that management's time and attention will be diverted on Merger-related issues;

●

potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the Merger;

●

potential litigation relating to the Merger that could be instituted against us or our directors or officers;

●

our ability to successfully implement our business plan;

●

regional impacts to our business, including our infrastructure assets within the Delaware Basin and Midland Basin formations of the Permian Basin;

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●

our access to capital to fund expansions, acquisitions and our working capital needs and our ability to obtain debt or equity financing on satisfactory terms;

●

the impact of competition on our operations, including our ability to renew or replace expiring contracts on acceptable terms;

●

the degree to which our exploration and production customers may elect to operate their water-management services in-house rather than outsource these services to companies like us;

●

changes in general economic conditions and commodity prices;

●

our customers’ ability to complete and produce new wells;

●

our ability to comply with covenants contained in our debt instruments;

●

risks related to acquisitions, organic growth projects and other commercial opportunities that we may pursue, such as using treated produced water for industrial purposes or mineral extraction from produced water, including our ability to realize their expected benefits;

●

capacity constraints on regional oil, natural gas and water gathering, processing and pipeline systems that result in a slowdown or delay in drilling and completion activity, and thus a slowdown or delay in the demand for our services;

●

the degree to which consolidation among our customers may affect spending on U.S. drilling and completions in the near-term;

●

the potential deterioration of our customers’ financial condition, including defaults resulting from actual or potential insolvencies;

●

our ability to retain key management and employees and to hire and retain skilled labor;

●

our health, safety and environmental performance;

●

the impact of current and future laws, rulings and federal and state governmental regulations, including those related to hydraulic fracturing, accessing water, handling of produced water, carbon pricing, taxation of emissions, seismic activity, drilling and right-of-way access on federal and state lands and various other matters;

●

delays or restrictions in obtaining, utilizing or maintaining permits and/or rights-of-way by us or our customers;

●

advances in technologies or practices that reduce the amount of water used or produced in the oil and gas production process, thereby reducing demand for our services;

●

changes in global political or economic conditions, both generally, and in the specific markets we serve, such as economic slowdown or recession, or uncertainty regarding the timing, pace and extent of an economic recovery;

●

trade policy of domestic and foreign governments, including the imposition of tariffs or other levies on cross-border movement of goods and services;

●

physical, electronic and cybersecurity breaches;

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●

accidents, weather, seasonality or other events affecting our business;

●

changes in laws, regulations or policies;

●

the effects of litigation or other disputes;

●

plans, objectives, expectations and intentions contained in this report that are not historical; and

●

the other risks described in our 2024 Annual Report filed with the United States Securities and Exchange Commission (“SEC”).

Many of the factors that will determine our future results are beyond the ability of management to control or predict. Should one or more of the risks or uncertainties described in this Quarterly Report or in our 2024 Annual Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement.

The forward-looking statements in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

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PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

Aris Water Solutions, Inc.

Condensed Consolidated Balance Sheets

(unaudited)


(in thousands, except for share and per share amounts)	June 30,		December 31,
	2025		2024
Assets
Cash	$	57,359	$	28,673
Accounts Receivable, Net		66,878		63,016
Accounts Receivable from Affiliate		24,418		12,016
Other Receivables		13,222		13,829
Other Current Assets		8,728		10,418
Total Current Assets		170,605		127,952
Fixed Assets
Property, Plant and Equipment		1,245,013		1,188,781
Accumulated Depreciation		(180,435)		(160,176)
Total Property, Plant and Equipment, Net		1,064,578		1,028,605
Intangible Assets, Net		180,709		195,223
Goodwill		34,585		34,585
Deferred Income Tax Assets, Net		7,199		1,735
Operating Lease Right-of-Use Assets, Net		15,714		15,016
Other Assets		3,485		5,284
Total Assets	$	1,476,875	$	1,408,400
Liabilities and Stockholders' Equity
Accounts Payable	$	22,627	$	20,182
Payables to Affiliate		3,567		941
Insurance Premium Financing Liability		2,281		6,725
Accrued and Other Current Liabilities		70,386		77,339
Total Current Liabilities		98,861		105,187
Long-Term Debt, Net of Debt Issuance Costs		490,522		441,662
Asset Retirement Obligations		22,930		21,865
Tax Receivable Agreement Liability		58,700		49,844
Other Long-Term Liabilities		18,200		17,335
Total Liabilities		689,213		635,893
Commitments and Contingencies (see Note 11)
Stockholders' Equity
Preferred Stock $0.01 par value, 50,000,000 authorized. None issued or outstanding as of June 30, 2025 and December 31, 2024		—		—
Class A Common Stock $0.01 par value, 600,000,000 authorized, 33,636,716 issued and 32,650,610 outstanding as of June 30, 2025; 31,516,468 issued and 30,857,526 outstanding as of December 31, 2024		335		314
Class B Common Stock $0.01 par value, 180,000,000 authorized, 26,493,565 issued and outstanding as of June 30, 2025; 27,493,565 issued and outstanding as of December 31, 2024		264		274
Treasury Stock (at Cost), 986,106 shares as of June 30, 2025; 658,492 shares as of December 31, 2024		(19,037)		(8,988)
Additional Paid-in-Capital		411,779		380,565
Retained Earnings		19,522		13,676
Total Stockholders' Equity Attributable to Aris Water Solutions, Inc.		412,863		385,841
Noncontrolling Interest		374,799		386,666
Total Stockholders' Equity		787,662		772,507
Total Liabilities and Stockholders' Equity	$	1,476,875	$	1,408,400

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended				Six Months Ended
(in thousands, except for share and per share amounts)	June 30,				June 30,
	2025		2024		2025		2024
Revenue
Produced Water Handling	$	62,243	$	54,815	$	119,549	$	113,921
Produced Water Handling — Affiliate		35,964		28,614		70,836		55,441
Water Solutions		19,397		13,795		40,053		25,497
Water Solutions — Affiliate		5,762		3,453		12,521		8,695
Other Revenue		726		440		1,624		969
Total Revenue		124,092		101,117		244,583		204,523
Cost of Revenue
Direct Operating Costs		58,227		40,194		108,415		79,840
Cost of Goods Sold		127		—		127		—
Depreciation, Amortization and Accretion		19,972		19,707		39,728		39,128
Total Cost of Revenue		78,326		59,901		148,270		118,968
Operating Costs and Expenses
Abandoned Well Costs		998		(25)		1,460		310
General and Administrative		17,699		16,037		37,709		30,538
Research and Development Expense		946		1,128		2,074		2,193
Other Operating (Income) Expense, Net		(208)		157		904		737
Total Operating Expenses		19,435		17,297		42,147		33,778
Operating Income		26,331		23,919		54,166		51,777
Other Expense
Interest Expense, Net		9,567		8,813		18,797		17,251
Other		—		—		2,535		1
Total Other Expense		9,567		8,813		21,332		17,252
Income Before Income Taxes		16,764		15,106		32,834		34,525
Income Tax Expense		2,680		1,994		2,750		4,583
Net Income		14,084		13,112		30,084		29,942
Net Income Attributable to Noncontrolling Interest		7,433		7,147		14,822		16,354
Net Income Attributable to Aris Water Solutions, Inc.	$	6,651	$	5,965	$	15,262	$	13,588

Net Income Per Share of Class A Common Stock
Basic	$	0.19	$	0.18	$	0.45	$	0.41
Diluted	$	0.19	$	0.18	$	0.44	$	0.41
Weighted Average Shares of Class A Common Stock Outstanding
Basic		32,702,834		30,549,092		32,048,183		30,451,553
Diluted		33,494,725		30,589,997		32,880,189		30,472,005

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


(in thousands)	Six Months Ended June 30,
	2025		2024
Cash Flow from Operating Activities
Net Income	$	30,084	$	29,942
Adjustments to reconcile Net Income to Net Cash Provided by Operating Activities:
Deferred Income Tax Expense		4,397		3,770
Depreciation, Amortization and Accretion		39,728		39,128
Stock-Based Compensation		11,937		8,214
Abandoned Well Costs		1,460		310
Loss on Disposal of Assets, Net		219		114
Abandoned Projects		237		745
Amortization of Debt Issuance Costs, Net		1,306		1,436
Loss on Debt Extinguishment		2,535		—
Other		177		735
Changes in Operating Assets and Liabilities:
Accounts Receivable		(3,862)		(5,524)
Accounts Receivable from Affiliate		(12,402)		(6,169)
Other Receivables		1,482		(665)
Other Current Assets		2,355		2,975
Accounts Payable		2,686		1,818
Payables to Affiliate		(1,024)		(215)
Accrued Liabilities and Other		(15,158)		(18,467)
Net Cash Provided by Operating Activities		66,157		58,147

Cash Flow from Investing Activities
Property, Plant and Equipment Expenditures		(40,814)		(56,879)
Cash Paid for Acquisitions		(15,231)		—
Proceeds from the Sale of Property, Plant and Equipment		4,629		94
Net Cash Used in Investing Activities		(51,416)		(56,785)

Cash Flow from Financing Activities
Dividends and Distributions Paid		(17,108)		(11,817)
Repurchase of Shares for the Payment of Withholding Taxes		(10,049)		(1,326)
Repayment of Credit Facility		(89,000)		(15,000)
Proceeds from Credit Facility		45,000		37,000
Proceeds from 2030 Notes		500,000		—
Satisfaction and Discharge of 2026 Notes		(400,000)		—
Payment of Debt Issuance Costs Related to 2030 Notes		(9,914)		—
Payment of Insurance Premium Financing		(4,615)		(3,756)
Payment of Finance Leases		(369)		—
Net Cash Provided by Financing Activities		13,945		5,101

Net Increase in Cash		28,686		6,463
Cash, Beginning of Period		28,673		5,063
Cash, End of Period	$	57,359	$	11,526

Supplementary Cash Flow Data
Cash Paid for Interest	$	16,154	$	16,805
Cash Paid for Income Taxes	$	1,755	$	561

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)


	Three and Six Months Ended June 30, 2025
(in thousands, except for share and per share amounts)	Class A			Class B			Additional								Non-			Total
	Common Stock			Common Stock			Paid-in		Treasury Stock			Retained		controlling			Stockholders'
	Amount		Shares	Amount		Shares	Capital		Amount		Shares	Earnings			Interest			Equity
Balance at January 1, 2025	$	314	31,516,468	$	274	27,493,565	$	380,565	$	(8,988)	658,942	$	13,676		$	386,666		$	772,507
Redemption of Class B Shares for Class A Shares		10	1,000,000		(10)	(1,000,000)		13,843		-	-		-			(13,843)			-
Stock-Based Compensation Expense		11	1,093,838		-	-		12,778		-	-		-			(7,099)			5,690
Increase in TRA Liability Related to Share Redemption		-	-		-	-		(8,887)		-	-		-			-			(8,887)
Deferred Tax Assets Acquired		-	-		-	-		10,579		-	-		-			-			10,579
Dividends and Distributions ($0.14 per share or unit)		-	-		-	-		-		-	-		(4,634)			(4,028)			(8,662)
Purchase of Treasury Stock		-	-		-	-		-		(10,023)	326,025		-			-			(10,023)
Net Income		-	-		-	-		-		-	-		8,611			7,389			16,000
Balance at March 31, 2025	$	335	33,610,306	$	264	26,493,565	$	408,878	$	(19,011)	984,967	$	17,653		$	369,085		$	777,204
Stock-Based Compensation Expense		-	26,410		-	-		3,619		-	-		-			2,628			6,247
Deferred Tax Liabilities Acquired		-	-		-	-		(718)		-	-		-			-			(718)
Tax-Related Partnership Distribution Payable		-	-		-	-		-		-	-		-			(467)			(467)
Dividends and Distributions ($0.14 per share or unit)		-	-		-	-		-		-	-		(4,782)			(3,880)			(8,662)
Purchase of Treasury Stock		-	-		-	-		-		(26)	1,139		-			-			(26)
Net Income		-	-		-	-		-		-	-		6,651			7,433			14,084
Balance at June 30, 2025	$	335	33,636,716	$	264	26,493,565	$	411,779	$	(19,037)	986,106	$	19,522		$	374,799		$	787,662


	Three and Six Months Ended June 30, 2024
(in thousands, except for share and per share amounts)	Class A			Class B			Additional					Retained Earnings			Non-			Total
	Common Stock			Common Stock			Paid-in		Treasury Stock			(Accumulated		controlling			Stockholders'
	Amount		Shares	Amount		Shares	Capital		Amount		Shares	Deficit)			Interest			Equity
Balance at January 1, 2024	$	306	30,669,932	$	275	27,543,565	$	365,766	$	(5,133)	418,319	$	(87)		$	363,989		$	725,116
Stock-Based Compensation Expense		4	428,044		-	-		4,503		-	-		-			(986)			3,521
Deferred Tax Assets Acquired		-	-		-	-		224		-	-		-			-			224
Dividends and Distributions ($0.09 per share or unit)		-	-		-	-		-		-	-		(2,884)			(2,601)			(5,485)
Purchase of Treasury Stock		-	-		-	-		(18)		(1,581)	131,921		-			18			(1,581)
Net Income		-	-		-	-		-		-	-		7,623			9,207			16,830
Balance at March 31, 2024	$	310	31,097,976	$	275	27,543,565	$	370,475	$	(6,714)	550,240	$	4,652		$	369,627		$	738,625
Stock-Based Compensation Expense		-	6,250		-	-		2,509		-	-		-			2,184			4,693
Deferred Tax Liabilities Acquired		-	-		-	-		(578)		-	-		-			-			(578)
Dividends and Distributions ($0.105 per share or unit)		-	-		-	-		-		-	-		(3,382)			(3,051)			(6,433)
Purchase of Treasury Stock		-	-		-	-		-		(16)	1,048		-			-			(16)
Net Income		-	-		-	-		-		-	-		5,965			7,147			13,112
Balance at June 30, 2024	$	310	31,104,226	$	275	27,543,565	$	372,406	$	(6,730)	551,288	$	7,235		$	375,907		$	749,403

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(unaudited)

1.Organization and Background of Business

Aris Water Solutions, Inc. (“Aris Inc.,” the “Company,” “we,” “our,” or “us”) is an independent, environmentally-focused company headquartered in Houston, Texas, that, through its controlling interest in Aris Water Holdings, LLC (formerly known as Solaris Midstream Holdings, LLC), a Delaware limited liability company (“Aris LLC”), provides sustainability-enhancing services to oil and natural gas operators. We strive to build long-term value through the development, construction and operation of integrated produced water handling and recycling infrastructure that provides high-capacity, comprehensive produced water management, recycling and supply solutions for operators in the Permian Basin.

We are the parent holding company of Aris LLC. As the sole managing member of Aris LLC, we operate and control the business and affairs of Aris LLC, and through Aris LLC and its subsidiaries, conduct our business. We consolidate the financial results of Aris LLC and report a noncontrolling interest related to the portion of Aris LLC units not owned by us.

These unaudited condensed consolidated financial statements reflect the financial statements of the consolidated Company including Aris Inc., Aris LLC and Aris LLC’s subsidiaries.

Planned Merger of the Company with Western Midstream Partners, LP

On August 6, 2025, Aris Inc. and Aris LLC entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Western Midstream Partners, LP, a Delaware limited partnership (“WES”) and wholly-owned subsidiaries of WES, pursuant to which, and upon the terms and subject to the conditions set forth therein, Aris Inc. and Aris LLC will be acquired and continue as wholly-owned subsidiaries of WES (the “Merger”). Upon the terms and subject to the conditions of the Merger Agreement, each unit of Aris LLC and corresponding share of Class B common stock together and each share of Class A common stock will be converted into the right to receive, pursuant to an election, one of the following forms of consideration: (i) a combination of 0.450 common units representing limited partner interests in WES (the “WES Common Units”), and $7.00 in cash, (ii) $25.00 in cash (the “Cash Election Consideration”), provided that the Cash Election Consideration is subject to proration to ensure that the aggregate amount of cash paid in the Merger does not exceed $415 million, (iii) 0.625 WES Common Units, or (iv) in the event of a failure to deliver an election, 0.625 WES Common Units.

The Merger Agreement contains certain termination rights for the Company and WES, including, among other customary termination rights: (i) by either the Company or WES, if (A) the closing is not consummated on or prior to February 6, 2026, subject to a 90-day extension in certain circumstances for the sole purpose of obtaining regulatory clearances or (B) the Company stockholder approval is not obtained at the stockholder meeting; (ii) by WES, prior to the receipt of the Company stockholder approval, in the event of a change of recommendation by the Company board, or (iii) by the Company, prior to the receipt of the Company stockholder approval and if the Company has complied in all material respects with its obligations under the non-solicitation covenant of the Merger Agreement, in order to enter into a definitive agreement with respect to a superior offer, subject to the obligation of the Company to pay WES the termination fee described below.

The Merger Agreement further provides that, if the Merger Agreement is terminated (i) by WES in the event of a change of recommendation by the Company board or (ii) by the Company to enter into a definitive agreement providing for a superior offer, the Company would be required to pay WES a termination fee of $57 million.

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Simultaneously with the execution of the Merger Agreement, the Company, WES and stockholders representing a majority in interest of the TRA Holders (as defined in footnote 6 below) entered into an amendment to the Tax Receivable Agreement, dated as of October 26, 2021 (the “TRA” and such amendment, the “TRA Amendment”). The consummation of the transactions contemplated by the Merger Agreement would constitute a change of control (as defined in the TRA), which would trigger the obligation to make an early termination payment (as defined in the TRA) to the TRA Holders under the TRA estimated to be approximately $183.4 million. Pursuant to the TRA Amendment, upon the closing of the Merger, the TRA will be terminated in its entirety and the Company, WES and their respective affiliates will not have any further obligations under the TRA other than those obligations set forth in the TRA Amendment. On the closing date of the Merger, the Company will make aggregate payments of $80 million in cash to the TRA Holders. The TRA Amendment will terminate and be of no force and effect upon (i) the termination of the Merger Agreement, (ii) an amendment to the Merger Agreement that changes the form or reduces the amount of the merger consideration or (iii) the occurrence of a change of control other than the one contemplated by the Merger Agreement.

The above description of the Merger Agreement, the TRA Amendment and the transactions contemplated thereby, including certain referenced terms, is a summary of certain principal terms and conditions contained in the Merger Agreement or the TRA Amendment.

2.Basis of Presentation and Significant Accounting Policies

Basis of Presentation

All dollar amounts, except per share/unit amounts, in the condensed consolidated financial statements and tables in the notes are stated in thousands of dollars unless otherwise indicated.

Revision of Previously Issued Financial Statements

As previously disclosed in our Quarterly Report for the three months ended March 31, 2025, we have revised the Tax Receivable Agreement liability and the related Deferred Income Tax Assets, Net and Additional Paid-in-Capital balances to correct immaterial misstatements. The amounts as of June 30, 2024 in these financial statements have been revised and are presented as “As Revised” in the table below:


(in thousands)		Balance at June 30, 2024
Ending Additional Paid-in-Capital and Total Stockholders' Equity		As Previously Reported		Revision		As Revised
Additional Paid-in-Capital	$	335,183	$	37,223	$	372,406
Total Stockholders' Equity		712,180		37,223		749,403

The error had no impact on the results of operations in our previously reported consolidated statements of operations, including net income or net income per share, or to cash flows in our previously reported consolidated statements of cash flows.

Interim Financial Statements

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These financial statements have not been audited by our independent registered public accounting firm.

These condensed consolidated financial statements include the adjustments and accruals, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial

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statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Consolidation

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

Noncontrolling Interest

As of June 30, 2025, we own approximately 55% of Aris LLC. Our condensed consolidated financial statements include a noncontrolling interest representing the percentage of Aris LLC units not held by us.

Use of Estimates

Management has made certain estimates and assumptions that affect reported amounts in these condensed consolidated financial statements and disclosures of contingencies. These estimates include, among others, determining the fair values of assets acquired, liabilities assumed, and/or contingent consideration paid in acquisitions or nonmonetary exchanges or disposed of through sale, determining the fair value and related impairment of long-lived assets, determining the fair value of performance-based restricted stock units (“PSUs”), useful lives of property, plant and equipment and amortizable intangible assets, goodwill impairment testing, the fair value of asset retirement obligations, accruals for environmental matters, the income tax provision, valuation allowances for deferred tax assets and our Tax Receivable Agreement (“TRA”) liability.

Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including current economic and industry conditions. Actual results could differ from management’s estimates as additional information or actual results become available in the future, and those differences could be material.

Business Combinations

We account for business combinations under Accounting Standards Codification 805 – Business Combinations, which, among other things, requires the allocation of the company’s purchase price to the various assets and liabilities of the acquired business at their respective fair values at the date of acquisition. Any excess of the acquisition price over the fair values of the identifiable assets and liabilities is recorded as goodwill, provided that the criteria for defining a business are met.

We perform valuations of assets acquired and liabilities assumed and allocate the purchase price to the respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies. Transaction costs associated with business combinations are expensed as incurred and are in included in “Other Operating (Income) Expense, Net” in the condensed consolidated statements of operations.

Reclassification of Prior Year Presentation

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

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Significant Accounting Policies

See Note 2. Significant Accounting Policies to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for the discussion of our significant accounting policies. There were no significant updates or revisions to our accounting policies during the six months ended June 30, 2025.

Fair Value Information

The fair value of our 7.250% Senior Notes due 2030 (the “2030 Notes”) and 7.625% Senior Sustainability-Linked Notes due 2026 (the “2026 Notes”), which are both fixed-rate debt, is estimated based on the published market prices for the same or similar issues. Management has designated this measurement as a Level 2 fair value measurement. The fair value of our Credit Facility (as defined below) approximates carrying value as the debt bears interest at a variable rate which is reflective of current rates otherwise available to us. Management has designated this measurement as Level 3. Fair value information regarding our debt is as follows:


(in thousands)	June 30, 2025				December 31, 2024
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
2030 Notes	$	500,000	$	511,875	$	—	$	—
2026 Notes	$	—	$	—	$	400,000	$	400,516
Credit Facility	$	—	$	—	$	44,000	$	44,000

See Note 7. Debt for additional information regarding our debt as of June 30, 2025.

The carrying values of our other financial instruments, consisting of cash, accounts receivable, financing receivable, accounts payable and our insurance premium financing liability, approximate their fair values due to the short maturity of such instruments.

Intangible Assets

Intangible assets are net of accumulated amortization of $189.1 million and $171.5 million at June 30, 2025 and December 31, 2024, respectively.

Related Parties

We and ConocoPhillips, a significant stockholder, and/or its affiliates are parties to long-term water gathering and handling and water supply agreements. Under the water gathering and handling agreements, ConocoPhillips and/or its affiliates have dedicated to us all of the produced water generated from acreage in certain defined areas in the Permian Basin. Under the water supply agreement, which was amended and restated in 2024, we have the first right to supply recycled water and groundwater to ConocoPhillips and its affiliates for their operations in New Mexico within the dedicated acreage.

In July 2025, we extended our water gathering and handing agreement with ConocoPhillips from May 31, 2033 to May 31, 2040.

As of June 30, 2025 and December 31, 2024, we had receivables of $24.4 million and $12.0 million, respectively, from ConocoPhillips that were recorded in “Accounts Receivable from Affiliate” on the condensed consolidated balance sheet. As of June 30, 2025 and December 31, 2024, we had payables of $3.5 million and $0.7 million, respectively, to ConocoPhillips that were recorded in “Payables to Affiliate” on the condensed consolidated balance sheet. Revenues related to ConocoPhillips were $41.7 million and $32.0 million, respectively, for the three months ended June 30, 2025 and 2024. Revenues related to ConocoPhillips were $83.4 million and $64.1 million, respectively, for the six months ended June 30, 2025 and 2024.

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In January 2025, we entered into an agreement with ConocoPhillips to purchase three water ponds for $3.7 million which will be paid for through a $0.04 per barrel credit applied to certain of ConocoPhillips’ monthly revenue billings. During the three and six months ended June 30, 2025, we applied $0.3 million and $0.8 million, respectively, in credits to ConocoPhillips’ revenue billings related to repayment of these water ponds.

Collaborative Arrangements

We have a beneficial reuse strategic agreement (the “Joint Industry Project” or “JIP”) with Chevron U.S.A. Inc., ConocoPhillips, Exxon Mobil Corporation and Coterra Energy Inc. (collectively with us, the “alliance members”) to develop and pilot technologies and processes to treat produced water for potential beneficial reuse opportunities. We account for reimbursements of research and development costs under the JIP as contra-expenses in the period such expenses are incurred. This reflects the joint risk sharing nature of these activities within the collaborative arrangement. We classify advance billings or receivables recorded as “Accrued and Other Current Liabilities” or “Other Receivables,” respectively, on our condensed consolidated balance sheet. See Note 3. Additional Financial Statement Information.

Total research and development expense related to the JIP, which is split equally among alliance members, was $1.0 million and $2.6 million, respectively, for the three months ended June 30, 2025 and 2024. Total research and development expense related to the JIP was $3.2 million and $5.2 million, respectively, for the six months ended June 30, 2025 and 2024.

Financing Receivable

We have an agreement with a third party to construct and operate a water separation facility on their behalf. The amount due for the construction costs is treated as a financing receivable and is reported on our condensed consolidated balance sheet at its amortized cost. As of June 30, 2025, the remaining discounted balance due from the third party was $1.7 million and is included in “Other Receivables” on the condensed consolidated balance sheet. Income related to services performed to operate the facility is recorded in “Other Revenues.”

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The amendments in this ASU require public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory, employee compensation and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. Additionally, the amendments also require more granular disclosure regarding total selling expenses and an entity's definition of those expenses. This ASU was updated in January 2025, under ASU 2025-01, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” to clarify that this ASU is effective for annual periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027 and may be applied prospectively or retrospectively. We are currently assessing the impact of this standard on our condensed consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this ASU primarily relate to the rate reconciliation and income taxes paid disclosures and improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and may be applied prospectively or retrospectively. We do not expect a material impact on our condensed consolidated financial statements and related disclosures upon adoption.

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3.Additional Financial Statement Information

Balance Sheet

Other balance sheet information is as follows:


(in thousands)	June 30,		December 31,
	2025		2024
Other Receivables
Insurance and Third-Party Receivables for Remediation Expenses	$	6,812	$	5,149
Reimbursable Research and Development Receivable		705		207
Property Insurance Receivable		2,337		2,337
Financing Receivable		1,668		3,242
Reimbursable Projects		1,700		2,894
Total Other Receivables	$	13,222	$	13,829

Other Current Assets
Prepaid Insurance	$	2,707	$	7,257
Income Tax Receivable		2,340		—
Prepaids and Deposits		3,681		3,161
Total Other Current Assets	$	8,728	$	10,418

Accrued and Other Current Liabilities
Accrued Operating Expense	$	30,749	$	28,897
Accrued Capital Costs		8,225		4,023
Accrued Interest		9,688		8,067
Accrued Compensation		5,811		12,651
Accrued General and Administrative Expense		2,574		2,244
Sales Tax Payable		1,887		12,721
Operating Lease Liabilities		1,657		1,568
Finance Lease Liabilities		777		571
Contingent Consideration Liability		1,956		1,024
Advance Billings for Reimbursable Research and Development Expense		225		431
Tax-Related Partnership Distribution Payable		1,807		1,340
Indemnity Holdback Liability		1,450		—
Other		3,580		3,802
Total Accrued and Other Current Liabilities	$	70,386	$	77,339

Other Long-Term Liabilities
Noncurrent Operating Lease Liabilities	$	15,065	$	14,040
Noncurrent Finance Lease Liabilities		2,012		1,747
Contingent Consideration Liability		1,123		1,548
Total Other Long-Term Liabilities	$	18,200	$	17,335

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Statement of Operations

Other statement of operations information is as follows:


(in thousands)	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Depreciation, Amortization and Accretion Expense
Depreciation of Property, Plant and Equipment	$	10,474	$	10,105	$	20,844	$	19,944
Amortization of Intangible Assets		8,880		9,264		17,684		18,527
Accretion of Asset Retirement Obligations		375		338		742		657
Amortization of Finance Right-of-Use Assets		243		—		458		—
Total Depreciation, Amortization and Accretion Expense	$	19,972	$	19,707	$	39,728	$	39,128

Other Operating (Income) Expense, Net
Loss on Disposal of Assets, Net	$	128	$	168	$	219	$	114
Transaction Costs		42		89		926		96
Abandoned Projects		—		16		237		745
Other		(378)		(116)		(478)		(218)
Other Operating (Income) Expense, Net	$	(208)	$	157	$	904	$	737

Interest Expense
Interest on Debt Instruments	$	9,076	$	8,596	$	17,863	$	16,897
Amortization of Debt Issuance Costs		705		763		1,340		1,529
Interest on Finance Lease Obligations		52		—		100		—
Total Interest Expense		9,833		9,359		19,303		18,426
Less: Capitalized Interest		(266)		(546)		(506)		(1,175)
Total Interest Expense, Net	$	9,567	$	8,813	$	18,797	$	17,251

4.Property, Plant and Equipment

Property, plant and equipment (“PP&E”) is stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful service life of the asset.

PP&E consists of the following:


(in thousands)	June 30,		December 31,
	2025		2024
Wells, Facilities, Water Ponds and Related Equipment	$	651,213	$	626,182
Pipelines		478,223		460,455
Vehicles, Equipment, Site Improvements and Other		30,308		30,375
Assets Subject to Depreciation		1,159,744		1,117,012
Land		43,654		43,618
Projects and Construction in Progress		41,615		28,151
Total Property, Plant and Equipment		1,245,013		1,188,781
Accumulated Depreciation		(180,435)		(160,176)
Total Property, Plant and Equipment, Net	$	1,064,578	$	1,028,605

Accrued PP&E additions totaled $16.6 million and $14.2 million, respectively, at June 30, 2025 and December 31, 2024.

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Abandoned Assets

During the three and six months ended June 30, 2025, we recognized $1.0 million and $1.5 million, respectively, in plugging and abandonment expense related to two stand-alone produced water handling facilities that were no longer economically beneficial to the operations of the Company and a portion of a pipeline that was above ground and no longer in service. This expense is included in “Abandoned Well Costs” in the condensed consolidated statements of operations.

During the six months ended June 30, 2024, we recognized $0.3 million in plugging and abandonment expense related to a stand-alone produced water handling facility that was no longer economically beneficial to the operations of the Company. This expense is included in “Abandoned Well Costs” in the condensed consolidated statements of operations.

Abandoned Projects

During the six months ended June 30, 2025 and 2024, we recorded $0.2 million and $0.7 million, respectively, in abandoned project expense related to the write-off of permits for water handling facilities and right-of-way easements that either expired prior to use or that we no longer planned to use for future projects. Abandoned project expense is recorded in “Other Operating (Income) Expense, Net” in the condensed consolidated statements of operations.

5. Acquisitions

Reeves County Asset Acquisition

In the second quarter of 2025, we completed the purchase of five produced water handling facilities and approximately 787 acres of land (unaudited) in Reeves County, Texas from a third party (the “Reeves County Acquisition”) for total cash consideration of $13.2 million, inclusive of transaction costs, and subject to an additional $1.5 million indemnity holdback liability. This purchase was considered an asset acquisition, and the allocation of consideration conveyed consisted of $10.1 million to produced water handling facilities, which is recorded in “Property, Plant and Equipment,” $0.4 million allocated to a power contract, which is recorded in “Intangible Assets, Net,” $1.5 million related to an indemnity holdback liability, which is recorded in “Accrued and Other Current Liabilities” and $0.4 million related to an asset retirement obligation, which is recorded in “Asset Retirement Obligations” on the condensed consolidated balance sheet.

At the time of purchase, we allocated $4.6 million to the 787 acres of land (unaudited) acquired. Concurrent with the purchase, we sold the land to a third party for $4.5 million and recorded a $0.1 million loss which is included in “Other Operating (Income) Expense, Net” in the condensed consolidated statements of operations and “Loss on Disposal of Assets, Net” in the condensed consolidated statements of cash flows.

Crosstek Business Acquisition

In February 2025, we acquired intellectual property rights, a skilled workforce and assets from Crosstek Membrane Technology LLC (“Crosstek”) (the “Crosstek Acquisition”) to help us accelerate our entry into broader industrial markets, including industrial water and wastewater treatment. Crosstek provides high recovery water treatment solutions for numerous water and wastewater markets. Crosstek operates across multiple states in the United States and develops projects which apply reverse osmosis technology for industrial customers to improve water recycling efficiency. Total consideration for the acquisition was $2.9 million, which consisted of $2.0 million in cash paid to the seller and a sales-based contingent consideration of up to $1.0 million to be paid over a four-year contractual period, which amount

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was discounted based on expected cash payments. The contingent consideration of $0.9 million is included in “Accrued and Other Current Liabilities.”

We allocated $2.8 million of the purchase price to “Intangible Assets, Net,” which primarily consists of patents, processes and technologies, customer relationships and trademarks. The remaining $0.1 million of the purchase price was allocated to “Property, Plant and Equipment.”

6.Tax Receivable Agreement Liability

Our tax receivable agreement (“TRA”) with certain of the legacy owners of Aris LLC units (each such person, a “TRA Holder,” and together, the “TRA Holders”) generally provides for the payment by us to each TRA Holder of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that we actually realize (computed by simplifying assumptions to address the impact of state and local taxes) or, are deemed to realize in certain circumstances, in periods after our initial public offering (the “IPO”) as a result of certain increases in tax basis that occur as a result of our acquisition or Aris LLC’s redemption, respectively, of all or a portion of such TRA Holder’s Aris LLC units in connection with the IPO or pursuant to the exercise of a redemption right or call right. We retain the remaining 15% of these cash savings. The future benefit of these cash savings is included, alongside other tax attributes, in our total deferred income tax asset balance at June 30, 2025.

As of June 30, 2025 and December 31, 2024, the estimated TRA liability totaled $58.9 million and $49.9 million, respectively, of which $0.2 million and $0.1 million, respectively, was recorded in “Accrued and Other Current Liabilities.”

If we experience a change of control (as defined under the TRA, which includes certain mergers, asset sales and other forms of business combinations and change of control events) or the TRA terminates early (at our election or as a result of our breach), we could be required to make an immediate lump-sum payment (or “early termination payment”) under the terms of the TRA, which can be significantly impacted by the closing price of our Class A shares on the applicable termination date or change in control date.

On August 6, 2025, the Company entered into an amendment to the TRA. See the discussion of the TRA Amendment in Note 1. Organization and Background of Business.

7.Debt

Our debt consists of the following:


(in thousands)	June 30,		December 31,
	2025		2024
7.250% Senior Notesdue 2030	$	500,000	$	—
7.625% Senior Sustainability-Linked Notesdue 2026		—		400,000
Credit Facility⁽¹⁾		—		44,000
Total Long-Term Debt		500,000		444,000
Less: Unamortized Debt Issuance Costs		(9,478)		(2,338)
Total Long-Term Debt, Net of Debt Issuance Costs		490,522		441,662
Insurance Premium Financing Liability		2,281		6,725
Total Debt	$	492,803	$	448,387

(1)	We had no outstanding borrowings under our Credit Facility as of June 30, 2025. Any future borrowings are subject to the terms described below. Our Credit Facility borrowings bore a weighted average interest rate of 7.408% at December 31, 2024.

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7.250% Senior Notes due 2030

On March 25, 2025, we issued $500.0 million aggregate principal amount of the 2030 Notes, which mature on April 1, 2030. A portion of the proceeds was used as payment for the satisfaction and discharge of the 2026 Notes, the full repayment of borrowings under the Credit Facility and for general corporate purposes.

The 2030 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility (see below). The 2030 Notes are guaranteed on a senior unsecured basis by our wholly-owned subsidiaries. Interest on the 2030 Notes is payable on April 15 and October 15 of each year.

We may redeem all or part of the 2030 Notes at any time on or after April 15, 2027 at redemption prices ranging from 103.625% of the principal amount of the 2030 Notes on or after April 15, 2027 to 100% on or after April 15, 2029, plus accrued and unpaid interest, if any. In addition, prior to April 15, 2027, we may redeem up to 40% of the aggregate principal amount of the 2030 Notes, if certain conditions are met, at a redemption price of 107.250% of the principal amount of the 2030 Notes, plus accrued and unpaid interest, if any. At any time prior to April 15, 2027, we may also redeem the 2030 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2030 Notes plus a “make-whole” premium and accrued and unpaid interest, if any. If we undergo a change of control, we may be required to repurchase all or a portion of the 2030 Notes at a price equal to 101% of the principal amount of the 2030 Notes, plus accrued and unpaid interest, if any.

Satisfaction and Discharge of 7.625% Senior Sustainability-Linked Notes due 2026

Our 2026 Notes were due on April 1, 2026. In March 2025, pursuant to the terms of the indentures governing the 2026 Notes, Aris LLC issued a notice of full redemption and used a portion of the proceeds from the 2030 Notes as an irrevocable deposit with the trustee to fund the payment of the $400.0 million outstanding principal amount and the $15.3 million of accrued and unpaid interest associated with the 2026 Notes on the scheduled redemption date of April 1, 2025. The $400.0 million cash we deposited with the trustee is reported within financing activities in our condensed consolidated statements of cash flows for the six months ended June 30, 2025 as “Satisfaction and Discharge of 2026 Notes,” and the $15.3 million of accrued and unpaid interest is included in the operating activities in our condensed consolidated statements of cash flows for the six months ended June 30, 2025.

After the irrevocable deposit with the trustee, our obligations under the indentures were satisfied and discharged, and the transactions were accounted for as debt extinguishments. Upon extinguishment of the 2026 Notes, we derecognized the $415.3 million aggregate outstanding principal and related accrued and unpaid interest obligations associated with the 2026 Notes and $2.0 million of unamortized debt issuance costs associated with the 2026 Notes. Accordingly, we recorded a loss of $2.5 million on the extinguishment of the 2026 Notes during the six months ended June 30, 2025, which is included in “Other” expense in our condensed consolidated statements of operations.

Credit Facility

Our amended and restated credit agreement (as it may be amended and/or restated from time to time, the “Credit Agreement”) provides for, among other things, (i) commitments of $350.0 million, (ii) a maturity date of October 12, 2027, (iii) loans made under our revolving credit facility (the “Credit Facility”) and unused commitment fees to be determined based on a leverage ratio ranging from 3.00:1.00 to 4.50:1.00, (iv) an accordion feature permitting the Company to seek an increase of the Credit Facility of up to $150.0 million, subject to certain conditions, (v) a leverage ratio covenant which comprises a maximum total funded debt to EBITDA ratio, net of $40.0 million of unrestricted cash and cash equivalents if the facility is

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drawn, and net of all unrestricted cash and cash equivalents if the facility is undrawn, (vi) a leverage ratio covenant test level which is currently 4.50 to 1.00 and (vii) a secured leverage covenant of 2.50 to 1.00.

The Credit Facility provides for:

Base rate borrowings that bear interest at the highest of (a) the prime rate, (b) the federal funds effective rate plus 0.50% and (c) Term SOFR for an interest period of one month plus 1.00%; plus a margin that ranges from 175 basis points to 275 basis points, depending upon our leverage ratio; or

ii.

SOFR borrowings that bear interest at Term SOFR plus SOFR Adjustment of 0.10% plus a margin that ranges from 275 basis points to 375 basis points, depending upon our leverage ratio.

In addition, the Credit Facility provides for commitment fee rates that range from 37.5 basis points to 50.0 basis points, depending upon our leverage ratio.

We used a portion of the proceeds from the issuance of the 2030 Notes to fully repay the then outstanding borrowings under the Credit Facility. As of June 30, 2025, we had $3.3 million in letters of credit outstanding and $346.7 million in revolving commitments available.

The Credit Facility is secured by all the real and material personal property owned by Aris LLC or any of its subsidiaries, other than certain excluded assets. As of June 30, 2025, we were in compliance with all covenants contained in the Credit Facility.

Insurance Premium Financing

In the fourth quarter of 2024, we entered into a short-term agreement with a third-party to finance certain insurance premiums for an aggregate amount of $8.8 million. The insurance premium financing is repayable in monthly installments of principal and interest through September 2025. As of June 30, 2025, the remaining balance was $2.3 million and is included in “Insurance Premium Financing Liability” on the condensed consolidated balance sheet.

8.Leases

In the normal course of business, we enter into lease agreements to support our operations. Our operating leased assets include right-of-way easements for our wells and facilities, office space and other assets. Our finance leases include field vehicles.

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Balance Sheet Information

The following table shows the classification and location of our right-of-use assets and lease liabilities on our condensed consolidated balance sheet:


(in thousands)	June 30,		December 31,
	2025		2024
Operating Leases
Assets
Operating Lease Right-of-Use Assets, Net	$	15,714	$	15,016
Liabilities
Accrued and Other Current Liabilities		1,657		1,568
Other Long-Term Liabilities		15,065		14,040

Finance Leases
Assets
Property, Plant and Equipment	$	3,886	$	2,902
Less: Accumulated Depreciation		(629)		(171)
Total Property, Plant and Equipment, Net		3,257		2,731
Liabilities
Accrued and Other Current Liabilities		777		571
Other Long-Term Liabilities		2,012		1,747

Statement of Operations Information

The following table provides the components of lease costs recognized in our condensed consolidated statements of operations for the periods indicated:


(in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
		2025		2024		2025		2024
Operating Lease Costs
Direct Operating Costs⁽¹⁾	$	397	$	340	$	725	$	676
General and Administrative⁽¹⁾		485		517		1,025		1,034
Research and Development Expense ⁽¹⁾		12		—		12		—
Finance Lease Costs
Amortization of Right-of-Use Assets ⁽²⁾		243		—		458		—
Interest on Lease Obligations ⁽³⁾		52		—		100		—
Total Lease Cost	$	1,189	$	857	$	2,320	$	1,710

(1)	Does not include short-term lease costs.

(2)	Included in “Depreciation, Amortization and Accretion” in our condensed consolidated statements of operations.

(3)	Included in “Interest Expense, Net” in our condensed consolidated statements of operations.

During the third quarter of 2024, we entered into an agreement to begin leasing a portion of our field vehicles, which are accounted for as finance leases and primarily have an initial term of 48 months. As of June 30, 2025, we had 71 vehicle leases.

Short-term Leases

Our short-term lease costs, consisting primarily of field equipment rentals, totaled $3.6 million and $3.7 million, respectively, for the three months ended June 30, 2025 and 2024 and $6.3 million and $6.8 million, respectively, for the six months ended June 30, 2025 and 2024.

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Cash Flow Information

The following table summarizes supplemental cash flow information related to our leases:


	Six Months Ended June 30,
		2025		2024
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating Cash Flows from Operating Leases	$	1,346	$	1,209
Operating Cash Flows from Finance Leases		97		—
Financing Cash Flows from Finance Leases		369		—
Right-of-Use Assets Obtained in Exchange for Lease Liabilities, Net
Operating Leases	$	1,988	$	333
Finance Leases		984		—

Lease Terms and Discount Rates

The following table provides lease terms and discount rates related to our leases:


	June 30, 2025		December 31, 2024
Weighted Average Remaining Lease Term (Years)
Operating Leases		6.4		6.9
Finance Leases		3.3		3.7
Weighted Average Discount Rate
Operating Leases		6.50%		6.42%
Finance Leases		7.44%		7.45%

Annual Lease Maturities

The following table provides maturities of our lease liabilities at June 30, 2025:


(in thousands)	Operating Leases		Finance Leases		Total
Remainder of 2025	$	1,191	$	479	$	1,670
2026		2,192		958		3,150
2027		3,748		936		4,684
2028		3,228		742		3,970
2029		2,783		44		2,827
Thereafter		7,519		—		7,519
Total Lease Payments		20,661		3,159		23,820
Less: Interest		(3,939)		(370)		(4,309)
Present Value of Lease Liabilities	$	16,722	$	2,789	$	19,511

Subleases

We have two subleases related to our previous office space in Houston, Texas. The subtenants are responsible for monthly fixed rent and certain operating expenses associated with the office building, including utilities, which are considered variable lease payments. The sublease income is recorded as a reduction of rent expense under our head lease and is included in “General and Administrative” expense in the condensed consolidated statements of operations. During the three months ended June 30, 2025 and 2024, we recognized total sublease income, including variable lease payments, of $0.2 million and

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$0.1 million, respectively. We recognized total sublease income, including variable lease payments, of $0.3 million during each of the six months ended June 30, 2025 and 2024.

9.Income Taxes

Our predecessor, Aris LLC, is a Delaware limited liability company treated as a partnership for 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 periods prior to the IPO. Aris LLC continues to be 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 Aris Inc., and except for Texas franchise tax, any taxable income of Aris LLC is reported in the respective tax returns of its members.

Income Tax Expense

We recorded income tax expense of $2.7 million and $2.8 million for the three and six months ended June 30, 2025, respectively, of which $0.5 million was a current expense for the three months ended June 30, 2025, and $1.6 million was a current tax benefit for the six months ended June 30, 2025. Deferred income tax expense for the three and six months ended June 30, 2025 was $2.2 million and $4.4 million, respectively. We recorded income tax expense of $2.0 million and $4.6 million for the three and six months ended June 30, 2024, respectively, of which $0.3 million and $0.8 million was current, respectively, and the remainder was deferred.

Effective Tax Rate

We record our income tax expense using an estimated annual effective tax rate (“ETR”) and recognize specific events discretely as they occur. The ETR for the six months ended June 30, 2025 and 2024 was 8.4% and 13.3%, respectively. The difference between the federal statutory rate and our ETR for the six months ended June 30, 2025 is primarily due to the impact of the noncontrolling interest and windfall tax benefit from stock-based compensation vesting. The difference between the federal statutory rate and our ETR for six months ended June 30, 2024 is primarily due to the impact of the noncontrolling interest.

Deferred Tax Assets

We regularly evaluate the realizable tax benefits of deferred tax assets and record a valuation allowance, if required, based on an estimate of the amount of deferred tax assets that we believe does not meet the more-likely-than-not criteria of being realized. The balance of our “Deferred Income Tax Assets, Net” on the condensed consolidated balance sheet increased $5.5 million during the six months ended June 30, 2025, as a result of deferred tax benefits from the redemption of Class B shares for Class A shares and stock-based compensation vesting that occurred during the period, offset partially by a deferred tax expense for income during the period.

Tax Examinations

Aris LLC files income tax returns in the U.S. federal jurisdiction and various states. There are currently no federal or state income tax examinations underway for these jurisdictions. Its federal and state returns remain open to examination for tax years 2020 through 2024.

Update on Tax Legislation

On July 4, 2025, the United States Congress enacted H.R. 1, referred to as the One Big Beautiful Bill (“OBBB”). The OBBB contains several changes to corporate taxation including allowing for immediate

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expensing of research and development expenses and the expensing of unamortized, previously capitalized, qualified research and development expenses, a less restrictive limitation on the business interest deduction and the extension of 100% bonus depreciation for qualified properties. We are still in the process of evaluating the OBBB and an estimate of the financial impact cannot be made at this time.

10.Stockholders’ Equity

Redemptions

During the six months ended June 30, 2025 and 2024, 1,000,000 and zero Aris LLC units, respectively, together with an equal number of shares of our Class B common stock, were redeemed for shares of our Class A common stock on a one-for-one basis.

Dividends and Distributions

Our Board of Directors (the “Board”) declared a dividend of $0.14 per share for the first and second quarters of 2025 on our Class A common stock. In conjunction with the dividend payments, a distribution of $0.14 per unit was paid to unit holders of Aris LLC for the first and second quarters of 2025, subject to the same payment and record dates.

Our Board declared a dividend on our Class A common stock for the third quarter of 2025 of $0.14 per share. In conjunction with the dividend payment, a distribution of $0.14 per unit will be paid to unit holders of Aris LLC. The dividend will be paid on September 18, 2025 to holders of record of our Class A common stock as of the close of business on September 4, 2025. The distribution to unit holders of Aris LLC will be subject to the same payment and record dates.

The Merger Agreement provides certain restrictions on future dividends and distributions, including a cap on quarterly dividends and distributions in excess of $0.14 per share.

Treasury Stock

During the six months ended June 30, 2025 and 2024, 327,164 shares and 109,862 shares, respectively, of our Class A common stock were withheld for the payment of taxes due on shares of common stock issued to employees under our 2021 Equity Incentive Plan.

In connection with an asset acquisition in 2022, certain shares of our Class A common stock issued to the seller were held in escrow and could be released to the Company under certain conditions, including for the reimbursement of certain post-acquisition workover costs pursuant to the terms of the asset purchase agreement. During the first quarter of 2024, 23,107 of these escrow shares were released and returned to the Company for reimbursement of such workover costs and are included in “Treasury Stock” at a value of $0.3 million, which was their fair market value at the date of receipt. The receipt of these shares was recorded as a non-cash treasury stock transaction, with an allocation of the difference between the contractually ascribed value of the shares per the asset purchase agreement and the cost of the shares at the date of receipt recorded against the workover costs in the amount of $0.1 million. As of March 31, 2024, there were no remaining shares left in escrow.

With limited exceptions, the Merger Agreement precludes the Company from future repurchases or acquisition of the Company’s common stock.

11.Commitments and Contingencies

In the normal course of business, we are subject to various claims, legal actions, contract negotiations and disputes. We provide for losses, if any, in the period in which they become probable and can be

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reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying condensed consolidated financial statements.

Delivery Commitment

We have an agreement with an unaffiliated water disposal company to dispose of a minimum volume of produced water through June 2030. As of June 30, 2025, the remaining minimum commitment was $17.8 million, undiscounted.

Purchase Obligations

In the normal course of business, we enter into short-term purchase obligations for products and services, primarily related to purchases of pipe, pumps and other components. As of June 30, 2025, we had purchase obligations and commitments of approximately $13.1 million due in the next twelve months.

Environmental

We are also subject to various federal, state and local laws and regulations relating to the protection of the environment. For the three months ended June 30, 2025 and 2024, we recognized a de minimis amount and $0.3 million of expense, respectively, related to environmental matters that were recorded in “Direct Operating Costs” in the condensed consolidated statements of operations. For the six months ended June 30, 2025 and 2024, we recognized $1.1 million and $0.7 million of expense, respectively, related to environmental matters.

As of June 30, 2025, we accrued insurance proceeds and third-party receivables of $6.8 million, which is included in “Other Receivables.” As of December 31, 2024, we accrued insurance proceeds and third-party receivables of $6.0 million, of which $5.1 million are included in “Other Receivables” and $0.9 million are included in “Other Assets.” We believe these proceeds are probable to collect and are reasonably estimable. Although we believe these estimates are reasonable, actual results could differ from these estimates.

12.Earnings Per Share

Net Income Per Share

Basic and diluted net income per share attributable to our Class A common stock is computed by dividing net income attributable to Aris Water Solutions, Inc. by the weighted average number of shares of Class A common stock outstanding for the same period, including shares of restricted stock and restricted stock units (“RSUs”), which receive nonforfeitable dividends. Shares issued during the period are weighted for the portion of the period in which the shares were outstanding.

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The following table sets forth the computation of basic and diluted net income per share attributable to our Class A common stock for the periods indicated:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except for share and per share amounts)		2025		2024		2025		2024
Net Income Attributable to Stockholders' Equity	$	14,084	$	13,112	$	30,084	$	29,942
Less: Net Income Attributable to Noncontrolling Interest		7,433		7,147		14,822		16,354
Net Income Attributable to Aris Water Solutions, Inc.		6,651		5,965		15,262		13,588
Participating Basic Earnings ⁽¹⁾		(372)		(460)		(884)		(991)
Basic Net Income Attributable to Aris Water Solutions, Inc.	$	6,279	$	5,505	$	14,378	$	12,597
Reallocation of Participating Net Income		2		-		8		-
Diluted Net Income Attributable to Aris Water Solutions, Inc.	$	6,281	$	5,505	$	14,386	$	12,597

Basic Weighted Average Shares Outstanding		32,702,834		30,549,092		32,048,183		30,451,553
Dilutive Performance-Based Stock Units		791,891		40,905		832,006		20,452
Dilutive Weighted Average Shares Outstanding		33,494,725		30,589,997		32,880,189		30,472,005

Basic Net Income Per Share of Class A Common Stock	$	0.19	$	0.18	$	0.45	$	0.41
Diluted Net Income Per Share of Class A Common Stock	$	0.19	$	0.18	$	0.44	$	0.41

(1)

Unvested shares of restricted stock and RSUs represent participating securities because they participate in nonforfeitable dividends or distributions with the common equity holders of the Company. Participating basic earnings represent the distributed and undistributed earnings of the Company attributable to participating securities. Unvested RSUs and vested but unissued RSUs do not participate in undistributed net losses as they are not contractually obligated to do so.

Shares of Class B common stock are considered potentially dilutive shares of Class A common stock because they may be redeemed for shares of Class A common stock on a one-for-one basis. A total of 26,493,565 and 26,921,343 weighted average shares of Class B common stock outstanding, respectively, were determined to be antidilutive for the three and six months ended June 30, 2025 and were excluded from the computation of diluted earnings per share of Class A common stock. No PSUs outstanding were determined to be antidilutive and were excluded from the computation of diluted earnings per share for each of the three and six months ended June 30, 2025.

A total of 27,543,565 weighted average shares of Class B common stock outstanding for each of the three and six months ended June 30, 2024 were determined to be antidilutive and were excluded from the computation of diluted earnings per share of Class A common stock. In addition, zero and 11,525 PSUs were determined to be antidilutive for the three and six months ended June 30, 2024, respectively, and were excluded from the computation of diluted earnings per share for those periods.

13.Stock-Based Compensation

Our 2021 Equity Incentive Plan allows for the grant of, among other types of awards, stock options; restricted stock; RSUs; and PSUs.

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Restricted Stock Units

RSU activity during the period was as follows:


	RSUs	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2024	2,175,931	$	11.94
Granted	713,731		28.84
Forfeited	(65,365)		13.90
Vested	(945,699)		12.82
Outstanding at June 30, 2025	1,878,598	$	18.34

The RSUs generally vest in the following installments: (i) one-third at the first anniversary of the award date, (ii) one-third at the second anniversary of the award date, and (iii) one-third at the third anniversary of the award date. As of June 30, 2025, approximately $28.2 million of compensation cost related to unvested RSUs remained to be recognized over a weighted-average period of 1.2 years.

Performance-Based Restricted Stock Units

PSU activity during the period was as follows:


	PSUs	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2024	569,338	$	18.79
Granted	220,076		39.27
Vested	(5,807)		26.73
Outstanding at June 30, 2025	783,607	$	24.62

On December 31, 2024, the performance period ended for 107,225 PSUs previously issued. Each PSU was converted into 1.57 shares representing a total of 168,742 shares of Class A common stock that were issued in February 2025.

The PSUs granted in 2025 were granted to management under the 2021 Equity Incentive Plan and have the following performance criteria:

●

Relative PSUs: 50% of the PSUs are based on total shareholder return relative to the total shareholder return of a predetermined group of peer companies. This relative total shareholder return is calculated at the end of the performance periods stipulated in the PSU agreement.

●

Absolute PSUs: 50% of the PSUs have a performance criteria of absolute total shareholder return calculated at the end of the performance period stipulated in the PSU agreement.

The vesting and payout of the PSUs occur when the related service condition is completed, which is approximately three years after the beginning of the first performance period. The PSUs can be paid out in either Class A common stock or cash, at our election. Dividends accrue on PSUs and are paid upon vesting. As of June 30, 2025, approximately $12.8 million of compensation cost related to unvested PSUs remained to be recognized over a weighted-average period of 1.4 years.

The grant date fair value was determined using the Monte Carlo simulation method and is expensed ratably over the service period. Expected volatilities used in the fair value simulation were estimated using historical periods consistent with the remaining performance periods. The risk-free rate was based on the U.S. Treasury rate for a term commensurate with the expected life of the grant.

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We used the following assumptions to estimate the fair value of PSUs granted during the six months ended June 30, 2025:


	Assumptions
Risk-free Interest Rate		3.94%
Volatility Range	15.93% - 195.34%

14. Segment Information

Operating segments are identified as components of an enterprise about which separate, discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) or decision-making group, in making decisions on how to allocate resources and assess performance. Our CODM is the Chief Executive Officer.

Prior to the completion of the Crosstek Acquisition in February 2025, as discussed in Note 5. Acquisitions, we operated as a single reportable segment, which reflected how our business was managed and the nature of our services. Following the Crosstek Acquisition, we re-evaluated our reportable segments and determined that we operate under two reportable segments as discussed below. Prior period information has been adjusted to reflect the new segment structure.

Our reportable segments include:

●

Water Gathering and Processing – The Water Gathering and Processing segment is comprised of two primary revenue streams, Produced Water Handling and Water Solutions. Our Produced Water Handling revenue is driven by the volumes of produced water we gather from our customers, and our Water Solutions revenue is driven by the quantities of recycled produced water and groundwater delivered to our customers to support their well completion activities in the Permian Basin.

●

Corporate and Other – The Corporate and Other segment is comprised of our Beneficial Reuse operations, Industrial Water operations (including the Crosstek Acquisition) and other business operations that are not material to be presented separately. Our corporate operations are also included in this reportable segment.

Our CODM assesses the performance of our business and decides how to allocate resources based on segment net income. The CODM also uses results based on segment net income to evaluate income generated from segment assets in deciding how to allocate resources. Results based on segment net income are used to monitor budget versus actual results. We do not have intra-entity sales or transfers.

All of our assets reside in the United States. Assets are reviewed by the CODM at a consolidated level, using total consolidated assets on the balance sheet, and no measure of segment assets is provided to the CODM. Significant expenses provided to and reviewed by the CODM primarily include “Direct Operating Costs” and “General and Administrative” expenses, which are included in the condensed consolidated statements of operations.

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Summarized financial information by business segment were as follows for the three-month periods ended June 30, 2025 and 2024:


(in thousands)	Three Months Ended June 30, 2025
	Water Gathering and Processing		Corporate and Other		Consolidated
Revenue	$	123,748	$	344	$	124,092
Cost of Revenue
Direct Operating Costs		58,224		3		58,227
Cost of Goods Sold		—		127		127
Depreciation, Amortization and Accretion		19,410		562		19,972
Total Cost of Revenue		77,634		692		78,326
Operating Costs and Expenses
Abandoned Well Costs		998		—		998
General and Administrative		—		17,699		17,699
Research and Development Expense		—		946		946
Other Operating Income, Net		—		(208)		(208)
Total Operating Expenses		998		18,437		19,435
Operating Income (Expense)		45,116		(18,785)		26,331
Other Expense
Interest Expense, Net		—		9,567		9,567
Income (Loss) Before Income Taxes		45,116		(28,352)		16,764
Income Tax Expense		—		2,680		2,680
Net Income (Loss)		45,116		(31,032)		14,084
Net Income Attributable to Noncontrolling Interest		—		7,433		7,433
Net Income (Loss) Attributable to Aris Water Solutions, Inc.	$	45,116	$	(38,465)	$	6,651


(in thousands)	Three Months Ended June 30, 2024
	Water Gathering and Processing		Corporate and Other		Consolidated
Revenue	$	101,117	$	—	$	101,117
Cost of Revenue
Direct Operating Costs		40,194		—		40,194
Depreciation, Amortization and Accretion		19,091		616		19,707
Total Cost of Revenue		59,285		616		59,901
Operating Costs and Expenses
Abandoned Well Costs		(25)		—		(25)
General and Administrative		—		16,037		16,037
Research and Development Expense		—		1,128		1,128
Other Operating Expense, Net		16		141		157
Total Operating (Income) Expenses		(9)		17,306		17,297
Operating Income (Expense)		41,841		(17,922)		23,919
Other Expense
Interest Expense, Net		—		8,813		8,813
Income (Loss) Before Income Taxes		41,841		(26,735)		15,106
Income Tax Expense		—		1,994		1,994
Net Income (Loss)		41,841		(28,729)		13,112
Net Income Attributable to Noncontrolling Interest		—		7,147		7,147
Net Income (Loss) Attributable to Aris Water Solutions, Inc.	$	41,841	$	(35,876)	$	5,965

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Summarized financial information by business segment were as follows for the six-month periods ended June 30, 2025 and 2024:


(in thousands)	Six Months Ended June 30, 2025
	Water Gathering and Processing		Corporate and Other		Total
Revenue	$	243,999	$	584	$	244,583
Cost of Revenue
Direct Operating Costs		108,409		6		108,415
Cost of Goods Sold		—		127		127
Depreciation, Amortization and Accretion		38,538		1,190		39,728
Total Cost of Revenue		146,947		1,323		148,270
Operating Costs and Expenses
Abandoned Well Costs		1,460		—		1,460
General and Administrative		—		37,709		37,709
Research and Development Expense		—		2,074		2,074
Other Operating Expense, Net		237		667		904
Total Operating Expenses		1,697		40,450		42,147
Operating Income (Expense)		95,355		(41,189)		54,166
Other Expense
Interest Expense, Net		—		18,797		18,797
Other		—		2,535		2,535
Total Other Expense		—		21,332		21,332
Income (Loss) Before Income Taxes		95,355		(62,521)		32,834
Income Tax Expense		—		2,750		2,750
Net Income (Loss)		95,355

Aris Water Solutions, Inc. 10-Q