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Energy Recovery (ERII) investor relations material

Energy Recovery Q2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Logotype for Energy Recovery Inc
Q2 2025 earnings summary6 Aug, 2025

Executive summary

  • 2025 guidance reiterated on all metrics, with wastewater guidance reinstated due to improved tariff outlook.

  • Q2 2025 revenue was $28.1 million, with net income of $2.1 million, and gross margin at 64.0%, reflecting a decrease due to product mix and tariffs.

  • Operating expenses decreased 15.8% year-over-year, mainly from lower employee and consulting costs.

  • Core desalination business remains resilient, supported by large deals and a strong contract pipeline.

  • Long-term business trends in desalination, water reuse, and CO2 refrigeration installations are accelerating.

Financial highlights

  • Q2 2025 net income was $2.1 million, or $0.04 per diluted share, compared to a net loss of $0.6 million in Q2 2024.

  • Six-month revenue was $36.1 million, down 8% from the prior year period.

  • Cash and investments at quarter end totaled $93.7 million, up from $29.6 million at year-end 2024.

  • Operating cash flow for the first half of 2025 was $14.8 million.

  • Adjusted EBITDA for Q2 2025 was $4.4 million.

Outlook and guidance

  • Full-year revenue visibility is strong based on current contracts and pipeline.

  • Wastewater tariff impacts are less severe than initially expected, supporting renewed guidance.

  • Management expects existing cash, investments, and operating cash flow to meet liquidity needs for at least the next 12 months.

  • Guidance for 2026 will be provided in the next quarterly call as clarity improves.

  • Management reaffirmed expectations for quarterly revenue cadence in 2025.

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Frequently asked questions

Energy Recovery, Inc. designs, develops and commercializes of energy recovery devices that help make industrial fluid flow more efficient. We believe our proprietary high-pressure, turbine-based PX Pressure Exchanger® devices deliver proven performance, robustness, durability and reliability in the most demanding applications. We also believe Energy Recovery is a leader in innovation with a large and growing intellectual property portfolio that spans developing markets for almost all of its key product lines. The company's products are used in several industries including water desalinization, oil and gas production, petrochemical processing and chemical processing. ERII sells its products globally to various corporations in the energy sector by direct sales force in the United States and through a combination of distributors/licensees in other regions.

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