Energy Recovery (NASDAQ:ERII) Releases Quarterly Earnings Results, Misses Estimates By $0.04 EPS

Key Points

• Energy Recovery reported a quarterly loss of $0.10 per share, missing estimates by $0.04, while revenue of $11.2 million also fell short of the $16.16 million consensus.
• Megaproject momentum is improving: the company signed more than $30 million in contracts recently, has a backlog above $60 million and a record $525 million pipeline. However, unpredictable shipment timing led management to leave guidance unchanged.
• Following its exit from the CO₂ business, Energy Recovery says it is a debt-free water-technology company with nearly $86 million in cash and investments; it also cited cost reductions and ongoing stock repurchases.

Energy Recovery (NASDAQ:ERII - Get Free Report) announced its quarterly earnings results on Wednesday. The industrial products company reported ($0.10) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.06) by ($0.04), FiscalAI reports. The company had revenue of $11.20 million for the quarter, compared to the consensus estimate of $16.16 million. Energy Recovery had a return on equity of 8.25% and a net margin of 12.72%.

Here are the key takeaways from Energy Recovery's conference call:

• Megaproject activity is recovering: Energy Recovery signed more than $30 million in contracts in the last 30 days, has a backlog above $60 million, and sees at least $50 million of Megaproject revenue in 2027. Its project pipeline reached a record $525 million and management says it is becoming more geographically diversified.
• Despite the improving pipeline, shipment timing remains difficult to predict, and the company did not restore guidance. Management said projects are progressing and it knows of no cancellations, but timing uncertainty could affect when revenue is recognized.
• The company highlighted its desalination technology position, saying it won every Megaproject above 100,000 cubic meters per day in 2026. Its new PX Q650 has secured an initial contract for the Jubail plant, and management said the product roadmap has been accelerated.
• After closing its CO2 business, Energy Recovery says it is a debt-free, pure-play water technology company with nearly $86 million in cash and investments and about $26 million in year-to-date free cash flow. Cost actions have reduced quarterly operating expenses 17% from last year, and the company has repurchased nearly $109 million of stock since Q4 2024.
• Management acknowledged wastewater performance was below expectations, though it expects a Q4 improvement following a sales-organization merger and renewed go-to-market focus. Aftermarket customers are also reducing spare-parts inventories amid constrained budgets.

Energy Recovery Stock Performance

ERII stock remained flat at $7.17 during mid-day trading on Wednesday. 1,137,938 shares of the company's stock traded hands, compared to its average volume of 773,329. The stock has a market cap of $369.54 million, a price-to-earnings ratio of 25.61 and a beta of 0.89. Energy Recovery has a twelve month low of $6.55 and a twelve month high of $17.36. The firm's 50 day moving average is $7.06 and its two-hundred day moving average is $9.52.

Analyst Upgrades and Downgrades

Several equities analysts have weighed in on the company. Weiss Ratings cut Energy Recovery from a "sell (d+)" rating to a "sell (d)" rating in a research note on Wednesday, September 16th. B. Riley Financial cut their price objective on shares of Energy Recovery from $10.00 to $8.00 and set a "neutral" rating on the stock in a report on Thursday, August 6th. Finally, Seaport Research Partners lowered shares of Energy Recovery from a "buy" rating to a "neutral" rating in a research note on Monday, September 14th. Three research analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Energy Recovery currently has an average rating of "Reduce" and an average price target of $11.67.

About Energy Recovery

Energy Recovery, Inc develops and manufactures energy-efficiency technologies for industrial fluid-flow applications. The company is best known for its pressure exchanger systems, which capture hydraulic energy from high-pressure fluid streams and transfer it to lower-pressure incoming fluids. This process can reduce energy consumption and operating costs in demanding industrial environments.

Energy Recovery's products are used extensively in seawater and brackish-water reverse-osmosis desalination, where its PX Pressure Exchanger technology helps recover energy from the high-pressure reject stream.

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