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CADIZ INC

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Business Summary

Cadiz Inc. is a water solutions provider operating in Southern California, leveraging a unique portfolio of land, water, pipeline, and water filtration assets to address water scarcity and affordability challenges . The company's core business model revolves around developing and monetizing its extensive water resources, including 2.5 million acre-feet of permitted water supply , 1 million acre-feet of groundwater storage capacity , 220 miles of existing underground pipeline , and 43 miles of right-of-way entitlements for pipeline construction . Additionally, Cadiz Inc. generates revenue through its water filtration technology and agricultural operations. The company's primary customer segments include public and private water systems, government agencies, and commercial businesses.

The company operates in two reportable segments: Land and Water Resources, and Water Filtration Technology. The Land and Water Resources segment encompasses all activities related to its 46,000 acres of landholdings in the Mojave Desert , including the pre-revenue development of the Mojave Groundwater Bank (water supply, storage, and conveyance) and agricultural operations. This segment generated revenues of $1.835 million in 2025 , primarily from farming approximately 1,000 acres of grain crops and leasing 2,100 acres for farming activities . The Water Filtration Technology segment, operated through its wholly-owned subsidiary ATEC Water Systems, LLC ("ATEC"), provides innovative water treatment solutions for impaired or contaminated water sources.

ATEC manufactures and sells modular vertical steel tanks with filter media to remove contaminants like iron, manganese, arsenic, Chromium-6, nitrates, and PFAS . ATEC's systems can serve communities with treatment capacities up to 60 million gallons per day (MGD) . This segment experienced record revenue growth in 2025, reaching $14.478 million , a significant increase from $7.900 million in 2024 . The growth was driven by the shipment of 441 filters in 2025, compared to 286 filters in 2024 . ATEC also expanded its geographic and marketing channel reach, achieving 74% growth in business orders during the year .

For the fiscal year ended December 31, 2025, Cadiz Inc. reported total revenues of $16.313 million , an increase from $9.608 million in 2024 . The company incurred a total cost of sales of $11.163 million in 2025, resulting in a gross margin for ATEC of 48.4% , up from 45.5% in 2024 . Total costs and expenses amounted to $41.911 million , leading to an operating loss of $25.598 million . Net loss and comprehensive loss for the year was $34.151 million , compared to $31.140 million in 2024 . Basic and diluted net loss per common share was $(0.48) in 2025, an improvement from $(0.53) in 2024 . Cash and cash equivalents stood at $8.599 million as of December 31, 2025, down from $17.292 million in 2024 . Total outstanding long-term debt was $72.756 million in 2025, compared to $56.828 million in 2024 . Cash used in operating activities was $18.930 million in 2025, a decrease from $21.532 million in 2024 .

Year-over-year, total revenues increased by $6.705 million [15, 16], primarily driven by the Water Filtration Technology segment, which saw revenue growth of $6.578 million [11, 12]. The Land and Water Resources segment also experienced a modest revenue increase of $0.127 million . ATEC's gross margin improved from 45.5% in 2024 to 48.4% in 2025 [18, 19]. General and administrative expenses increased to $29.484 million in 2025 from $24.345 million in 2024 , mainly due to higher legal and consulting fees for the Mojave Groundwater Bank development and increased marketing and sales expenses for ATEC. Interest expense, net, rose to $8.580 million in 2025 from $7.880 million in 2024 , largely due to increased borrowing under the Lytton Credit Agreement.

Significant operational developments during the period include the entry into agreements with multiple public water systems in 2024 for the purchase of 21,275 acre-feet per year (AFY) of annual water supply from the Mojave Groundwater Bank, to be delivered via the Northern Pipeline . In October 2025, the company entered into a definitive agreement with Lytton Rancheria of California for an unsecured loan facility of up to $51 million , convertible into a majority interest in the storage cash flows from the Mojave Groundwater Bank, representing the first tranche of up to approximately $451 million in total equity capital being raised through MWI . The company also made an initial draw of $15 million in November 2025 under the Lytton Credit Agreement . In 2025, Cadiz Inc. entered into an agreement with Stantec Inc. to oversee engineering, procurement, and construction management for the Mojave Groundwater Bank, and selected W.M. Lyles as CMAR for the Northern Pipeline . The company also converted three diesel-operated agricultural wells to natural gas in 2025 to reduce emissions .

Business Outlook

In the short-term, Cadiz Inc. anticipates that proceeds from draws under the Lytton Credit Agreement, including a $15 million draw made in March 2026 , combined with existing cash on hand, will provide sufficient funds to meet its short-term working capital needs. The ATEC operations are expected to be funded using existing capital and cash profits generated from operations during 2026 .

For the longer term, the company may need to raise additional capital to finance working capital needs and capital expenditures. Future working capital requirements will depend on the specific measures pursued in the entitlement and development of its water supply, storage, and conveyance resources, as well as other developments. Future capital expenditures will be influenced by the progress of the Mojave Groundwater Bank, including the funding of MWI, ATEC operational needs, and any further expansion of agricultural assets. The timing of reimbursement for advanced development costs related to the Mojave Groundwater Bank and the receipt of funds for the anticipated transfer of assets into MWI will also impact the need for additional capital .

A major growth area for the company is the development of the Mojave Groundwater Bank, which includes the conservation of an average of 50,000 acre-feet per year (AFY) of water from the aquifer system for 50 years (2.5 million acre-feet in total) and the storage of up to 1 million acre-feet of imported water . The company has already secured agreements for the purchase of 21,275 AFY of annual water supply to be delivered via the Northern Pipeline . The remaining approximately 30,000 AFY of water supply under its current permit is expected to be contracted for delivery via the Southern Pipeline, with approximately 15,000 AFY already under option or conditional definitive agreements . The estimated net price for water supply at the wellhead is approximately $850/AFY (2024 dollars), subject to annual inflation adjustment . The total cost to participating water providers is estimated to be between $1,450 - $1,950/AFY (2024 dollars) , without applying expected grant funding or low-interest government loans.

Another significant growth area is the water storage component of the Mojave Groundwater Bank, which offers capacity for up to one million acre-feet of fresh water to be imported and stored underground, as well as up to 150,000 acre-feet of carryover storage . The company entered into option agreements in 2010 that reserved storage capacity for $1,500 per AF of carryover storage , a rate expected to have escalated to as much as $3,000 per AF . Agencies with water storage contracts are also expected to pay annual maintenance fees up to approximately $35 per AF , subject to annual inflation adjustments. The Mojave Groundwater Bank is expected to interconnect Southern California’s primary water delivery systems for the first time, enabling more flexible trading among participants .

The operational outlook includes an estimated cost to construct all required facilities for the Mojave Groundwater Bank, including conversion of the Northern Pipeline and construction of the Southern Pipeline, wellfield, and power facilities, of between $1.25 billion and $1.5 billion . This is an increase from a previous estimate of approximately $800 million , attributed to higher anticipated labor and installation costs, increased power generation costs to meet air quality requirements, increased costs for remote work, and overall inflationary increases in construction costs . These costs are expected to be capped under Guaranteed Maximum Prices (GMPs) in construction contracts and recovered through fees from agencies contracting for water supply and storage . The company anticipates updating the CMAR contract to include a GMP for the Northern Pipeline during the second quarter of 2026 and expects a GMP for the Southern Pipeline during the second half of 2026 .

Planned capital allocation includes a target capital structure for the Mojave Groundwater Bank of approximately $451 million of equity, supplemented by municipal and government debt financing and grant funding, to fund total expected capital infrastructure costs of between approximately $1.25 billion to $1.5 billion . In February 2026, the company qualified to receive an invitation from the U.S. Environmental Protection Agency (EPA) to apply for up to $194 million under the Water Infrastructure Finance and Innovation Act (WIFIA) program to support Northern Pipeline conversion costs . The company is also evaluating the potential issuance of other debt financing, including revenue bonds or municipal debt instruments through a to-be-formed Joint Powers Authority .

Management has explicitly flagged that the development of the company's properties is heavily regulated, requiring governmental approvals and permits that could be denied, and may have competing governmental interests and objectives . While the company holds agreements for 21,275 AFY of water supply, any contracts are subject to financial and regulatory conditions precedent, which may not be satisfied in a timely manner . Opposition from third parties can cause delays and increase costs or preclude development entirely . The company may not be able to execute its plans for the construction, ownership, and operation of the Mojave Groundwater Bank and obtain the requisite funding, as agreements with potential private equity investors for up to a targeted $400 million in equity commitment to MWI are not binding .

Risk Factors

The company faces material risks, including the fact that its development activities have not generated significant revenues to date, leading to ongoing net losses from operations . There is no certainty when, if ever, sufficient operating revenues will be generated to offset development costs . The successful implementation of asset development programs, particularly the Mojave Groundwater Bank, is subject to significant uncertainties, including variable water supplies, changing water allocation priorities, the ability to fulfill contractual conditions, and the completion of necessary construction for water delivery . Regulatory risks are substantial, as development activities are heavily regulated and require governmental approvals and permits that could be denied or granted with unfavorable conditions, potentially delaying or precluding development entirely . Litigation from community, environmental, or other groups can cause delays and increase costs . The company's ability to obtain the requisite total funding of approximately $1.25 billion to $1.5 billion for the Mojave Groundwater Bank is not guaranteed, as agreements with private equity investors for up to $400 million are non-binding, and additional funding may not be available on satisfactory terms or in sufficient amounts . The company had total indebtedness of approximately $78.3 million as of December 31, 2025, of which $63.3 million is secured by assets , and failure to make timely payments or obtain additional financing will impact asset development programs . The issuance of equity securities and management equity incentive plans will cause dilution to current stockholders . Information technology failures and data security breaches, including sophisticated cyber-attacks, pose a risk to systems, networks, products, solutions, services, and data, potentially leading to litigation, regulatory action, and significant costs .

Management Priorities

Management's message to shareholders emphasizes the company's strategic positioning as a water solutions provider with a unique combination of land, water, pipeline, and water filtration assets in Southern California, aimed at addressing urgent challenges of climate change and water scarcity. They highlight the progress in advancing contract negotiations for water supply with public water systems and the establishment of Mojave Water Infrastructure Company LLC (MWI) to finance the Mojave Groundwater Bank project, which is currently estimated at $1.5 billion . Management explicitly states that proceeds from draws under the Lytton Credit Agreement, including the $15 million draw made in March 2026 , together with cash on hand, provide sufficient funds for short-term working capital needs, and ATEC operations are expected to be funded by existing capital and cash profits in 2026 . The three strategic priorities emphasized for the period ahead are the continued development and funding of the Mojave Groundwater Bank, including securing the remaining equity capital and debt financing; the expansion of the ATEC water filtration technology business, particularly in PFAS and Chromium-6 treatment markets; and the commitment to sustainable stewardship of land, water, pipeline, and water filtration technology assets, focusing on delivering clean, reliable, and affordable water to disadvantaged communities and partnering with Native American Tribes for infrastructure ownership.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business Overview
  2. [2] Item 1, Business Overview
  3. [3] Item 1, Business Overview
  4. [4] Item 1, Business Overview
  5. [5] Item 1, Business Overview
  6. [6] Item 1, Description of Assets — Land
  7. [7] Item 7, MD&A — Results of Operations
  8. [8] Item 1, Description of Assets — Land
  9. [9] Item 1, Water Filtration Technology
  10. [10] Item 1, Water Filtration Technology
  11. [11] Item 7, MD&A — Results of Operations
  12. [12] Item 7, MD&A — Results of Operations
  13. [13] Item 7, MD&A — Revenues
  14. [14] Item 1, Water Filtration Technology
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Cost of Sales
  19. [19] Item 7, MD&A — Cost of Sales
  20. [20] Item 7, MD&A — Results of Operations
  21. [21] Item 7, MD&A — Results of Operations
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 7, MD&A — Results of Operations
  26. [26] Item 8, Consolidated Balance Sheets
  27. [27] Item 8, Consolidated Balance Sheets
  28. [28] Item 7, MD&A — Liquidity and Capital Resources
  29. [29] Item 7, MD&A — Liquidity and Capital Resources
  30. [30] Item 7, MD&A — Cash Used for Operating Activities
  31. [31] Item 7, MD&A — Cash Used for Operating Activities
  32. [32] Item 7, MD&A — General and Administrative Expenses
  33. [33] Item 7, MD&A — Interest Expense, Net
  34. [34] Item 1, Business Overview
  35. [35] Item 1, Business Overview
  36. [36] Item 1, Business Overview
  37. [37] Item 1, Business Overview
  38. [38] Item 1, Engineering, Procurement & Construction
  39. [39] Item 1, Equity, Sustainability and Environmental Justice
  40. [40] Item 7, MD&A — Outlook
  41. [41] Item 7, MD&A — Outlook
  42. [42] Item 7, MD&A — Outlook
  43. [43] Item 1, Water Supply
  44. [44] Item 1, Water Storage
  45. [45] Item 1, Water Supply
  46. [46] Item 1, Water Supply
  47. [47] Item 1, Water Supply
  48. [48] Item 1, Water Storage
  49. [49] Item 1, Water Storage
  50. [50] Item 1, Water Storage
  51. [51] Item 1, Water Storage
  52. [52] Item 1, Water Conveyance
  53. [53] Item 1, Engineering, Procurement & Construction
  54. [54] Item 1, Engineering, Procurement & Construction
  55. [55] Item 1, Engineering, Procurement & Construction
  56. [56] Item 1, Engineering, Procurement & Construction
  57. [57] Item 1, Engineering, Procurement & Construction
  58. [58] Item 1, Engineering, Procurement & Construction
  59. [59] Item 1, Project Infrastructure Finance
  60. [60] Item 1, Project Infrastructure Finance
  61. [61] Item 1, Project Infrastructure Finance
  62. [62] Item 1A, Risk Factors
  63. [63] Item 1A, Risk Factors
  64. [64] Item 1A, Risk Factors
  65. [65] Item 1A, Risk Factors
  66. [66] Item 1A, Risk Factors
  67. [67] Item 1A, Risk Factors
  68. [68] Item 1A, Risk Factors
  69. [69] Item 1A, Risk Factors
  70. [70] Item 1A, Risk Factors
  71. [71] Item 1A, Risk Factors
  72. [72] Item 1A, Risk Factors
  73. [73] Item 1A, Risk Factors
  74. [74] Item 1A, Risk Factors
  75. [75] Item 1A, Risk Factors
  76. [76] Item 7, MD&A — Current Financing Arrangements

Analysis on 5/20/2026