Second Quarter 2018 Earnings Call. August 8, 2018

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Lillian Harmon
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1 Second Quarter 2018 Earnings Call August 8, 2018

2 Safe Harbor Statement Statements in this presentation regarding management s future expectations, beliefs, intentions, goals, strategies, plans or prospects, include, without limitation, statements relating to AquaVenture s strategic focus; its forecast of full-year 2018 financial results; expectations regarding future business development and acquisition activities; its expectations regarding performance, growth, cash flows and margins from recently completed and pending acquisitions; and the impacts on operating results of the timing, size and accounting treatment of acquisitions, constitute forward-looking statements. Forward-looking statements can be identified by terminology such as anticipate, believe, could, could increase the likelihood, estimate, expect, intend, is planned, may, should, will, will enable, would be expected, look forward, may provide, would or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors detailed in AquaVenture s filings with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, AquaVenture s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. AquaVenture is providing the information in this presentation as of this date and assumes no obligations to update the information included in this presentation or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

3 Second Quarter Highlights Continued Strong Financial Performance in Q Revenues grew 15.4% over Q including increases of 26.5% in Quench and 4.1% in Seven Seas Water Quench completed two acquisitions during the second quarter Seven Seas Water had solid operating performance Adjusted EBITDA 17.0% higher than Q Adjusted EBITDA Margin improvement of 40 bps Revenues $ % $34.4 $ % $67.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $- Adjusted EBITDA (1) % $9.6 $ % $18.4 $21.6 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $- Adjusted EBITDA plus principal collected on the Peru construction contract (2) % $10.7 $12.4 $ % $ % Adj. EBITDA Margin % 32.6% 31.3% 32.2% (1) See appendix for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure. (2) See appendix for a description of the principal collected on the Peru construction contract. 3

Operational Highlights and Recent Developments Quench Continues Execution of M&A Strategy Closed two acquisitions during Q2 2018 - Aqua

the largest independent POU water filtration dealers in the US Above acquisitions added over 5,000 customers and 19,000 units for an

by Solid Production Volumes Production volumes of the hurricane-impacted islands remain consistent with prior year period 390 380 370

4 Operational Highlights and Recent Developments Quench Continues Execution of M&A Strategy Closed two acquisitions during Q Aqua Coolers in Chicago, IL (Apr) and Avalon Water in Atlanta, GA (Jun) On August 6, acquired Alpine Water Systems in Las Vegas, NV, one of the largest independent POU water filtration dealers in the US Above acquisitions added over 5,000 customers and 19,000 units for an aggregate purchase price of ~$23 million Quench s installed asset base now exceeds 125,000 companyowned units SSW Performance Supported by Solid Production Volumes Production volumes of the hurricane-impacted islands remain consistent with prior year period Average Monthly Production Volumes of Hurricane-Impacted Islands (million gallons) + 0.7% Q'2017 2Q'2018 4

5 Seven Seas Water Financial Overview Q Financial Highlights Revenues of $15.4M Gross margin of 56.1% Net loss of $1.6M Adjusted EBITDA of $7.3M and Adjusted EBITDA Margin of 47.7% (1) Adjusted EBITDA plus principal on the Peru construction contract of $8.5M (2) Revenue + 4.1% $14.8 $ % $28.9 $30.1 $20.0 $15.0 $10.0 $5.0 $- Adjusted EBITDA (1) % $6.4 $ % $12.2 $14.5 Adjusted EBITDA plus principal collected on the Peru construction contract (2) $ % $15.0 $10.0 $5.0 $ % $7.5 $8.5 $14.4 $ % Adj. EBITDA Margin % 47.7% 42.3% 48.2% (1) See appendix for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure. (2) See appendix for a description of the principal collected on the Peru construction contract. 5

6 Quench Financial Overview Q Financial Highlights Revenues of $19.1M Rental revenue growth of 14.0% Other revenue increase of $2.2M driven by Wellsys acquisition Gross margin of 50.2% Net Loss of $2.3M Adjusted EBITDA of $4.7M was 12.9% higher than Q (1) $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 Revenue $ % $19.1 $ % $36.8 $10.0 $8.0 $6.0 $4.0 $2.0 Adjusted EBITDA (1) % $4.1 $ % $7.9 $8.8 $- $- 27.3% Adj. EBITDA Margin % 24.4% 26.6% 23.8% (1) See appendix for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure. 6

7 Select Balance Sheet and Cash Flow Items Select Balance Sheet Items (in USD thousands) June 30, December 31, Cash and cash equivalents $ 107,402 $ 118,090 Corporate credit agreement 150, ,000 BVI loan 23,179 26,090 Vehicle financing 1,406 1,491 Total face value of debt 174, ,581 Less: unamortized debt discounts and deferred financing fees (2,873) (3,326) Total debt $ 171,712 $ 174,255 Total Net Debt (1) $ 64,310 $ 56,165 Select Cash Flow Statement Items (in USD thousands) Three Months Ended June 30, June 30, Six Months Ended June 30, June 30, Cash flow provided by operating activities $ 8,687 $ 6,217 $ 13,771 $ 12,380 Capital expenditures (4,368) (4,014) (7,215) (7,188) Principal collected on the Peru construction contract reclassified to cash provided by operating activities for all periods presented Capital expenditures include both growth and maintenance components (1) Total Net Debt, a non-gaap financial measure, is defined as total debt less cash and cash equivalents as reported on the Consolidated Balance Sheets. 7

8 2018 Outlook Company affirms previously provided full-year 2018 outlook, which is targeting: FY 2018 Outlook Revenue $131M - $136M Adjusted EBITDA $42M - $47M Principal Collected on the Peru Construction Contract Adjusted EBITDA plus Principal Collected on the Peru Construction Contract $4.9M $47M - $52M Due to the recently completed Quench acquisitions, we expect full year 2018 results to be at the upper end of the provided ranges Outlook does not include the purchase of a majority interest in the desalination plant in Ghana due to the pending conditions precedent The above statements are based on current targets. These statements are forward-looking and actual results may differ materially. AquaVenture does not provide GAAP financial measures on a forward-looking basis because we are unable to predict with reasonable certainty the ultimate outcome of unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments, among other factors, without unreasonable effort. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP. 8

9 Appendix: Supplemental Information and Reconciliations 9

10 Income Statement AquaVenture Holdings Limited and Subsidiaries Unaudited Condensed Consolidated Statements of Operations (In Thousands) Three Months Ended June 30, Six Months Ended June 30, Revenues: Bulk water $ 14,360 $ 13,614 $ 28,056 $ 26,579 Rental 14,821 13,006 28,780 25,810 Financing 1,015 1,150 2,063 2,333 Other 4,249 2,070 8,060 4,059 Total revenues 34,445 29,840 66,959 58,781 Cost of revenues: Bulk water 6,743 7,394 13,250 14,440 Rental 6,654 5,671 13,110 11,425 Other 2,842 1,171 5,368 2,307 Total cost of revenues 16,239 14,236 31,728 28,172 Gross profit 18,206 15,604 35,231 30,609 Selling, general and administrative expenses 19,289 17,424 38,863 34,610 Loss from operations (1,083) (1,820) (3,632) (4,001) Other expense: Interest expense, net (3,354) (2,613) (6,604) (5,361) Other expense, net (152) (93) (292) (275) Loss before income tax expense (4,589) (4,526) (10,528) (9,637) Income tax expense ,654 Net loss (4,921) (5,290) (11,267) (11,291) Other comprehensive income: Foreign currency translation adjustment (107) (190) Comprehensive loss $ (5,028) $ (5,290) $ (11,457) $ (11,291) Loss per share basic and diluted $ (0.19) (0.20) $ (0.42) $ (0.43) Weighted-average shares outstanding basic and diluted 26,550 26,415 26,521 26,401 10

11 Non-GAAP Financial Data Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Seven Seas Corporate Seven Seas Corporate Water Quench & Other Total Water Quench Net loss $ (1,573) $ (2,266) $ (1,082) $ (4,921) $ (1,944) $ (2,607) $ (739) $ (5,290) Depreciation and amortization 3,675 4,516-8,191 3,533 3,669-7,202 Interest expense (income), net 2, ,354 1,933 1,003 (323) 2,613 Income tax expense (benefit) 472 (140) Share-based compensation expense 2, ,366 2, ,056 Loss on disposal of assets Acquisition-related expenses Changes in deferred revenue related to our bulk water business (55) - - (55) ERP implementation charges for a SAAS solution Adjusted EBITDA $ 7,333 $ 4,654 $ (752) $ 11,235 $ 6,367 $ 4,122 $ (885) $ 9,604 Adjusted EBITDA Margin 47.7 % 24.4 % % 32.6 % 43.1 % 27.3 % % 32.2 % Adjusted EBITDA, a non-gaap financial measure, is defined as earnings (loss) before net interest expense, income taxes, depreciation and amortization as well as adjusting for the following items: share-based compensation expense, gain or loss on disposal of assets, acquisition-related expenses, changes in deferred revenue related to our bulk water business, and enterprise resource planning ( ERP ) system implementation charges for a software-as-a-service ( SAAS ) solution. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Management believes that the use of Adjusted EBITDA, which is used by management as a key metric to assess performance, provides consistency and comparability with our past financial performance, and facilitates period-to-period comparisons of operations. Management believes that it is useful to exclude certain charges, such as depreciation and amortization, and non-core operational charges, from Adjusted EBITDA because (1) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (2) such expenses can vary significantly between periods as a result of the timing of acquisitions or restructurings. Adjusted EBITDA Margin, a non-gaap financial measure, is defined as Adjusted EBITDA as a percentage of revenue. 11 & Other Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Seven Seas Corporate Seven Seas Corporate Water Quench & Other Total Water Quench Net loss $ (3,927) $ (4,875) $ (2,465) $ (11,267) $ (4,699) $ (5,224) $ (1,368) $ (11,291) Depreciation and amortization 7,239 8,812-16,051 7,127 7,204-14,331 Interest expense (income), net 4,803 1, ,604 3,942 2,036 (617) 5,361 Income tax expense (benefit) 966 (227) , ,654 Share-based compensation expense 4,263 1, ,649 4,036 1, ,910 Loss on disposal of assets Acquisition-related expenses Changes in deferred revenue related to our bulk water business ERP implementation charges for a SAAS solution ,447-1,447 Adjusted EBITDA $ 14,528 $ 8,751 $ (1,726) $ 21,553 $ 12,228 $ 7,943 $ (1,784) $ 18,387 Adjusted EBITDA Margin 48.2 % 23.8 % % 32.2 % 42.3 % 26.6 % % 31.3 % & Other Total Total

12 Key Metrics Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Seven Seas Corporate Seven Seas Corporate Water Quench & Other Total Water Quench & Other Total Principal collected on Peru construction contract $ 1,212 $ - $ - $ 1,212 $ 1,116 $ - $ - $ 1,116 Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Seven Seas Corporate Seven Seas Corporate Water Quench & Other Total Water Quench & Other Total Principal collected on Peru construction contract $ 2,400 $ - $ - $ 2,400 $ 2,210 $ - $ - $ 2,210 Adjusted EBITDA plus principal collected on Peru construction contract Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Seven Seas Corporate Seven Seas Corporate Water Quench & Other Total Water Quench & Other Total $ 8,545 $ 4,654 $ (752) $ 12,447 $ 7,483 $ 4,122 $ (885) $ 10,720 Adjusted EBITDA plus principal collected on Peru construction contract Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Seven Seas Corporate Seven Seas Corporate Water Quench & Other Total Water Quench & Other Total $ 16,928 $ 8,751 $ (1,726) $ 23,953 $ 14,438 $ 7,943 $ (1,784) $ 20,597 Cash collected on Peru construction contract. In our Peru Acquisition, we acquired the rights to a design and construction contract that includes monthly installment payments for the construction of the related desalination plant and related infrastructure, which continue until These payments are guaranteed by a major shareholder of our customer and accounted for as a long-term receivable as a result of the structure of the contractual arrangement, which differs from existing contracts in our Seven Seas Water business. We understand that many in the investment community present the combination of our Adjusted EBITDA and the principal we collect from the Peru construction contract acquired in our Peru Acquisition, which was not accounted for as revenue in the consolidated financial statements. We also use this combination in evaluating our performance (including in measuring performance for a portion of the compensation of our executive officers). In this regard, and for the sake of convenience, the combination of our Adjusted EBITDA and the principal collected on the Peru construction contract is presented above. 12

Third Quarter 2018 Earnings Call. November 7, 2018

Third Quarter 2018 Earnings Call November 7, 2018 Safe Harbor Statement Statements in this presentation regarding management s future expectations, beliefs, intentions, goals, strategies, plans or prospects,