Global Water Resources, Inc. (GWRS): Business Model Canvas [11-2024 Updated]

In an era where water scarcity and sustainability are pressing global issues, understanding the business model of Global Water Resources, Inc. (GWRS) is essential. This innovative company not only focuses on providing reliable water supply and wastewater services but also emphasizes sustainability and advanced technology in its operations. Explore how GWRS strategically partners with local governments and environmental organizations, manages resources effectively, and engages with various customer segments to create a robust and responsive business model.

Global Water Resources, Inc. (GWRS) - Business Model: Key Partnerships

Collaborations with Local Governments

Global Water Resources, Inc. (GWRS) actively collaborates with various local government entities to ensure compliance with regulatory requirements and to enhance service delivery. These partnerships often involve agreements for the development and maintenance of water infrastructure, which are crucial for community growth and sustainability.

As of September 30, 2024, GWRS has entered into agreements for the acquisition of seven isolated public water systems from the City of Tucson. This acquisition is projected to increase the active water service connections significantly, contributing to the overall expansion of GWRS's service capabilities .

Partnerships with Environmental Organizations

GWRS partners with environmental organizations to promote sustainable water management practices. These collaborations focus on water conservation initiatives, recycling programs, and ecological restoration efforts. For instance, GWRS has been involved in projects that enhance the quality of recycled water, which is vital for both environmental protection and resource optimization.

The company reported a 40.2% increase in the volume of recycled water delivered, reaching 882 million gallons for the nine months ended September 30, 2024, compared to 629 million gallons for the same period in 2023. This growth can be attributed, in part, to these partnerships that enhance operational efficiencies and community engagement in conservation efforts.

Agreements with Construction Developers

GWRS has established strategic agreements with construction developers to facilitate the provision of water and wastewater services to new developments. Under Infrastructure Contribution Agreements (ICFAs), developers pay GWRS to ensure that adequate infrastructure is in place to meet the needs of new housing projects.

As of September 30, 2024, deferred revenue from ICFAs stood at $20.3 million, reflecting ongoing commitments and future revenue streams associated with these agreements . The company’s ability to leverage these partnerships is critical for its growth strategy, enabling it to expand service areas efficiently and effectively.

Strategic Alliances with Technology Providers

To enhance operational efficiency and customer service, GWRS has formed strategic alliances with technology providers. These partnerships focus on implementing advanced metering infrastructure (AMI) and other technological solutions that improve service delivery and reduce operational costs.

In December 2023, GWRS was awarded a $1.6 million grant from the Water Infrastructure Finance Authority of Arizona (WIFA) to replace manual read meters with AMI smart meters. This project is expected to improve billing accuracy and customer satisfaction, and the company has received approximately $0.8 million in disbursements under this grant as of September 30, 2024 .

Partnership Type	Key Metrics
Local Governments	Agreements for acquisition of 7 public water systems
Environmental Organizations	882 million gallons of recycled water delivered (2024)
Construction Developers	$20.3 million in deferred revenue from ICFAs
Technology Providers	$1.6 million grant for AMI smart meters

Global Water Resources, Inc. (GWRS) - Business Model: Key Activities

Water Resource Management

Global Water Resources, Inc. (GWRS) focuses on efficient water resource management, ensuring sustainable supply and usage. For the nine months ended September 30, 2024, GWRS reported water service revenues of $19.4 million, an increase of 2.5% compared to $18.9 million in the same period of 2023. This growth is attributed to an increase in active water connections, which rose by 4.4% to 35,464 connections.

Infrastructure Development and Maintenance

Infrastructure is critical for GWRS's operations, with capital expenditures totaling $19.2 million for the nine months ended September 30, 2024. This was a slight increase from $18.6 million in the previous year. The company is committed to ongoing improvements and expansions, including completing the acquisition of seven isolated public water systems from the City of Tucson for $8.4 million, expected to enhance service capacity.

Activity	Details	Financial Impact
Capital Expenditures	Infrastructure improvements and expansions	$19.2 million (2024)
Acquisition	Purchase of seven public water systems	$8.4 million (expected completion 2025)

Customer Service and Support

GWRS prioritizes customer service, reflected in its operational strategies. The company reported total operating expenses of $31.4 million for the nine months ended September 30, 2024, with a focus on enhancing customer interactions and support systems. This includes investments in technology to improve customer service delivery, which is vital for maintaining customer satisfaction and loyalty.

Regulatory Compliance and Reporting

Compliance with regulatory standards is a key activity for GWRS. The company operates in a highly regulated environment, with significant oversight from the Arizona Corporation Commission (ACC). In June 2024, GWRS filed a rate case application requesting an increase of approximately $1.3 million in water rates. Regulatory compliance ensures that GWRS can recover costs while providing reliable service to its customers.

Regulatory Activity	Description	Financial Impact
Rate Case Application	Filed for increased water rates	$1.3 million (anticipated increase)
Annual Revenue Requirement Increase	Approved by ACC	$351,000 (effective July 1, 2024)

Global Water Resources, Inc. (GWRS) - Business Model: Key Resources

Water Treatment Facilities

The company operates multiple water treatment facilities that are critical for its service delivery. As of September 30, 2024, the total depreciable property, plant, and equipment amount to approximately $427.7 million, which includes significant investments in transmission and distribution plants valued at $301.5 million. This infrastructure is essential for the effective treatment and distribution of water services to their customer base.

Skilled Workforce in Utilities Management

GWRS employs a skilled workforce proficient in utilities management, crucial for maintaining operational efficiency and regulatory compliance. As of September 30, 2024, the total workforce consists of trained professionals capable of managing complex utility operations, ensuring quality service, and adhering to environmental standards. The training and expertise of employees are reflected in the company’s operational performance, contributing to a net income of $5.3 million for the nine months ended September 30, 2024.

Established Customer Base

As of September 30, 2024, GWRS has an established customer base with 35,464 active water connections, marking a 4.4% increase from the previous year. The revenue generated from water services for the nine months ended September 30, 2024, was approximately $19.4 million, demonstrating the company's ability to maintain and grow its customer relationships. The customer base is diversified across residential, commercial, and construction sectors, ensuring stable revenue streams.

Financial Resources for Capital Projects

GWRS maintains robust financial resources to support capital projects. For the nine months ended September 30, 2024, net cash provided by operating activities was approximately $15.8 million. Additionally, the company has secured a $20 million issuance of 6.91% Senior Secured Notes due in January 2034, which provides further financial flexibility. Capital expenditures for the same period totaled approximately $19.2 million, reflecting ongoing investments in infrastructure and system improvements.

Key Resource	Details
Water Treatment Facilities	Total depreciable property, plant, and equipment: $427.7 million
Skilled Workforce	Trained professionals managing utility operations
Established Customer Base	Active water connections: 35,464
Financial Resources	Net cash from operating activities: $15.8 million; Capital expenditures: $19.2 million

Global Water Resources, Inc. (GWRS) - Business Model: Value Propositions

Reliable water supply and wastewater services

Global Water Resources, Inc. (GWRS) provides essential water supply and wastewater services that are critical to the communities it serves. As of September 30, 2024, the company reported revenues of $19.4 million from water services and $20.1 million from wastewater and recycled water services for the nine months ended September 30, 2024. The active water connections increased by 4.4%, reaching 35,464 connections, contributing to a steady revenue stream.

Service Type	Revenue (in millions)	Active Connections
Water Service	$19.4	35,464
Wastewater and Recycled Water Service	$20.1	28,425

Commitment to sustainability and conservation

GWRS emphasizes sustainability and conservation in its operations. The company has initiated various projects aimed at reducing water waste and promoting responsible water usage among its customers. For instance, it received a $1.6 million grant from the Water Infrastructure Finance Authority (WIFA) to replace manual read meters with advanced metering infrastructure (AMI) smart meters, enhancing water conservation efforts.

Advanced technology for water management

The integration of advanced technologies is a cornerstone of GWRS's business model. The company has invested in smart metering systems and other innovative technologies to improve water management efficiency. In the nine months ended September 30, 2024, GWRS incurred capital expenditures of approximately $19.2 million, focusing on infrastructure improvements.

Investment Area	Capital Expenditures (in millions)
Infrastructure Improvements	$19.2

Responsive customer service and community engagement

GWRS prides itself on responsive customer service and active community engagement. The company has implemented various customer outreach programs to educate residents about water conservation and utility services. As part of its commitment to customer satisfaction, GWRS has reported a decrease in operating expenses by approximately $0.7 million, showcasing its ability to maintain service quality while managing costs.

Customer Service Metrics	Value
Operating Expenses (2024)	$31.4 million
Operating Income (2024)	$8.0 million

Global Water Resources, Inc. (GWRS) - Business Model: Customer Relationships

Regular communication and updates

Global Water Resources, Inc. (GWRS) emphasizes maintaining regular communication with its customers through various channels such as newsletters, emails, and community meetings. For the nine months ended September 30, 2024, the company reported a total revenue of $39.4 million, a decrease of 3.0% from the previous year, indicating a need for enhanced customer engagement strategies.

Active water connections increased by 4.4% to 35,464 as of September 30, 2024, demonstrating the effectiveness of their communication efforts in retaining and acquiring customers.

Customer education initiatives on water conservation

GWRS has implemented several customer education initiatives aimed at promoting water conservation. This includes workshops and informational materials distributed to customers. The company reported water consumption of 3.12 billion gallons for the nine months ended September 30, 2024, reflecting a slight increase of 0.7% compared to the prior year. These educational efforts are vital in managing demand and ensuring sustainable water usage.

Loyalty programs for long-term customers

To reward long-term customers, GWRS has developed loyalty programs that offer discounts and benefits for consistent usage and timely payments. In the nine months ended September 30, 2024, the company declared dividends of $0.23 per share, which reflects a commitment to returning value to its shareholders and loyal customers.

The company’s net income for the same period was $5.3 million, down from $6.8 million the previous year, highlighting the financial importance of retaining loyal customers in a competitive market.

Transparent billing and service options

GWRS ensures transparency in its billing processes, providing customers with detailed breakdowns of their charges. For the nine months ended September 30, 2024, total operating expenses were reported at $31.4 million, which includes general and administrative costs of $12.3 million. This transparency helps build trust and fosters long-term relationships with customers.

The company also offers flexible service options, allowing customers to choose plans that best fit their usage needs. This is part of a broader strategy to improve customer satisfaction and retention as they navigate an increasingly complex regulatory environment.

Financial Metric	2024	2023
Total Revenues	$39.4 million	$40.7 million
Net Income	$5.3 million	$6.8 million
Active Water Connections	35,464	33,976
Water Consumption	3.12 billion gallons	3.10 billion gallons
Dividends Declared per Share	$0.23	$0.22
General and Administrative Expenses	$12.3 million	$11.9 million

Global Water Resources, Inc. (GWRS) - Business Model: Channels

Direct service delivery to residential and commercial customers

Global Water Resources, Inc. (GWRS) provides direct water and wastewater services to a growing number of residential and commercial customers. As of September 30, 2024, the company reported a total of 63,889 active service connections, reflecting a 4.7% increase from the previous year. Active water connections specifically increased by 4.4% to 35,464 from 33,976. For the nine months ended September 30, 2024, GWRS generated $19.4 million in water service revenue, up by 2.5% compared to the previous year.

Online customer portal for account management

GWRS has developed an online customer portal that facilitates account management for its users. This portal allows customers to manage their accounts efficiently, pay bills, and track usage. The company continues to invest in enhancing digital interfaces to improve customer engagement and streamline operations, although specific usage statistics for the portal have not been disclosed in the available data.

Community outreach programs and events

As part of its commitment to community engagement, GWRS conducts outreach programs aimed at educating residents about water conservation and the importance of sustainable water management. These initiatives are designed to foster community relationships and promote responsible water usage. While precise metrics on the impact of these initiatives have not been provided, they are integral to the company's strategy for enhancing public awareness and customer loyalty.

Partnerships with local businesses for service promotions

GWRS actively seeks partnerships with local businesses to promote its services and enhance community ties. These collaborations often involve joint marketing efforts and promotional events to raise awareness about the services offered by GWRS. While specific financial outcomes from these partnerships have not been detailed, they are part of the overall strategy to boost customer acquisition and retention in a competitive market.

Channel	Details	Performance Metrics
Direct Service Delivery	Water and wastewater services to residential and commercial customers.	63,889 active service connections as of September 30, 2024.
Online Customer Portal	Portal for account management, bill payments, and usage tracking.	Usage statistics not disclosed.
Community Outreach	Programs focused on education about water conservation.	Impact metrics not provided.
Partnerships with Local Businesses	Collaborative marketing and promotional efforts.	Financial outcomes not detailed.

Global Water Resources, Inc. (GWRS) - Business Model: Customer Segments

Residential households in metropolitan areas

Global Water Resources, Inc. (GWRS) serves a significant number of residential households located primarily in metropolitan areas. As of September 30, 2024, the company reported an active water connection increase of 4.4%, bringing the total number of active water connections to 35,464, up from 33,976 in the previous year.

For the nine months ended September 30, 2024, residential water service revenue amounted to approximately $14.0 million, reflecting ongoing demand and stable pricing strategies within this segment.

Customer Segment	Active Connections	Water Service Revenue (9M 2024)
Residential Households	35,464	$14,003,000

Commercial businesses requiring water services

GWRS also caters to various commercial businesses, which contribute to its water service revenue. For the nine months ended September 30, 2024, commercial water service revenue reached approximately $1.4 million. The company has strategically positioned itself to meet the unique needs of commercial clients, including tailored billing and service options.

Customer Segment	Water Service Revenue (9M 2024)
Commercial Businesses	$1,389,000

Local governments and municipalities

Local governments and municipalities are crucial customers for GWRS, particularly for wastewater and recycled water services. In the nine months ending September 30, 2024, revenue from wastewater and recycled water services increased to approximately $20.1 million, largely driven by the growing number of active wastewater connections, which rose to 28,425, an increase of 5.0%.

Customer Segment	Active Wastewater Connections	Wastewater & Recycled Water Revenue (9M 2024)
Local Governments & Municipalities	28,425	$20,054,000

Developers needing infrastructure support

GWRS provides essential infrastructure support to developers through its Infrastructure Coordination and Financing Agreements (ICFAs). This segment has generated non-regulated revenues which, while fluctuating, amounted to $2.8 million in the previous year. As of September 30, 2024, the company has not recognized any unregulated revenues, indicating a shift in focus towards regulated services.

Customer Segment	Infrastructure Revenue (Previous Year)
Developers	$2,786,000

Global Water Resources, Inc. (GWRS) - Business Model: Cost Structure

Operating Expenses for Water and Wastewater Services

For the nine months ended September 30, 2024, the total operating expenses for Global Water Resources, Inc. (GWRS) amounted to $31.4 million, compared to $30.0 million for the same period in 2023. The breakdown is as follows:

Expense Category	2024 (in thousands)	2023 (in thousands)
Operations and Maintenance	$10,213	$9,557
General and Administrative	$12,317	$11,934
Depreciation and Amortization	$8,863	$8,545
Total Operating Expenses	$31,393	$30,036

Operations and maintenance costs increased by approximately $0.6 million, or 6.9%, primarily due to rising personnel costs, production costs (mainly chemicals and electrical power), and maintenance expenses.

Capital Expenditures for Infrastructure Upgrades

For the nine months ended September 30, 2024, GWRS reported capital expenditures totaling approximately $19.2 million, compared to $18.6 million in the prior year. These expenditures are primarily focused on upgrading and expanding water and wastewater infrastructure to meet growing demand.

Regulatory Compliance Costs

Regulatory compliance costs are essential for maintaining operational permits and adhering to environmental standards. Although specific figures for regulatory compliance costs for 2024 are not disclosed, they are typically included within the general and administrative expenses, which amounted to $12.3 million for the nine months ended September 30, 2024.

Marketing and Customer Engagement Expenses

Marketing and customer engagement expenses are critical for maintaining customer relationships and promoting service offerings. For the nine months ended September 30, 2024, these expenses were part of the general and administrative costs, which increased to $12.3 million from $11.9 million in 2023. Specific amounts allocated to marketing are not detailed but are integral to the overall strategy of customer retention and growth.

Global Water Resources, Inc. (GWRS) - Business Model: Revenue Streams

Fees for water and wastewater services

For the nine months ended September 30, 2024, GWRS generated $19.4 million from water service fees, an increase of 2.5% compared to $18.9 million for the same period in 2023. Wastewater and recycled water service fees totaled $20.1 million, up 5.8% from $19.0 million in the prior year.

The breakdown of water service revenue includes:

Category	Revenue (2024)	Revenue (2023)
Residential	$14.0 million	$13.3 million
Irrigation	$2.5 million	$2.7 million
Commercial	$1.4 million	$1.2 million
Construction	$0.9 million	$1.0 million
Other Water Revenues	$0.7 million	$0.7 million

Tariffs approved by regulatory bodies

GWRS operates under a rate-regulated environment where its revenue is derived from tariffs approved by the Arizona Corporation Commission (ACC). The collective annual revenue requirement increase of approximately $2.2 million was phased in over two years, effective January 1, 2024.

The regulatory revenue includes the following for the three months ended September 30, 2024:

Source	Revenue (2024)	Revenue (2023)
Water Service	$7.5 million	$7.5 million
Wastewater Service	$6.8 million	$6.5 million

Unregulated revenues from developer agreements

Unregulated revenues, primarily from developer agreements known as Infrastructure Coordination and Financing Agreements (ICFAs), amounted to $2.8 million in the nine months ended September 30, 2023, but no unregulated revenues were recognized in 2024. These agreements involve upfront payments from developers for the provision of water and wastewater infrastructure, typically recognized when performance obligations are met.

Government grants for sustainability initiatives

GWRS has secured various government grants aimed at enhancing sustainability initiatives. As of September 30, 2024, the company received approximately $0.7 million in grants under the Water Infrastructure Finance Authority of Arizona (WIFA) loan agreement, which includes a forgivable component. This funding supports improvements in utility infrastructure and environmental compliance.

The diverse revenue streams of GWRS illustrate its reliance on regulated utility services while gradually expanding its unregulated offerings through strategic agreements with developers and government partnerships.

Updated on 16 Nov 2024

Resources:

1. Global Water Resources, Inc. (GWRS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Global Water Resources, Inc. (GWRS)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Global Water Resources, Inc. (GWRS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.