Group 1 - Energy Recovery, Inc. (NASDAQ: ERII) reported strong performance in Q3 2024, particularly in delivering products for mega-projects and generating revenues [1] - The company is optimistic about achieving $150 million in revenues for FY24, contingent on performance in Q4 [1] Group 2 - The investment approach focuses on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The strategy emphasizes holding companies for the long term, with a preference for a small fraction of companies being rated as buys [1]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $38.6 million, achieving the upper end of guidance and setting a quarterly revenue record [12] - Gross margin improved to 65.1%, exceeding the previously guided range of 62% to 64% [34] - Net income for the quarter was $8.5 million, a substantial increase compared to the previous quarter [38] Business Line Data and Key Metrics Changes - Water revenue reached $38.3 million, a 4% increase year-over-year and a 42% increase compared to Q2 2024 [14] - Wastewater contracts increased by almost 46% compared to the same period last year, with expected revenue towards the lower end of the $12 million to $15 million range [22] - CO2 business made progress with 11 sites installed year-to-date, on track to meet the target of 30 to 50 sites by year-end [29] Market Data and Key Metrics Changes - Over 70% of Q3 revenue came from the Middle East and Africa, indicating continued reliance on these markets [46] - Strong demand for desalination projects in India and North Africa, with significant contracts awarded [17][18] Company Strategy and Development Direction - The company is focusing on strategic planning, referred to as the "Playbook," which will be detailed in an upcoming investor webinar [10] - Emphasis on growth in desalination, wastewater, and CO2 markets, with a commitment to maintaining revenue guidance of $140 million to $150 million for the year [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the largest quarter in company history in Q4 2024, marking the 11th consecutive year of revenue growth [13] - Economic and geopolitical concerns are acknowledged, but long-term trends for fresh water demand remain intact [23] Other Important Information - The company maintained a cash balance of $140 million at the end of Q3, with expectations to end the year between $140 million and $150 million [39] - The upcoming investor webinar on November 18th will provide further insights into growth strategies and capital allocation [11] Q&A Session Summary Question: Competitive landscape in CO2 - Management noted no other pressure exchanger competition exists, although they compete against other technologies [43] Question: Capital allocation strategy and share repurchases - Management indicated that details on capital allocation and growth strategy will be discussed in the upcoming webinar [44] Question: Geographic diversification of customer mix in desalination - Management confirmed that the concentration remains heavily in the Middle East and Africa, with over 70% of revenue from these regions [46] Question: Performance consistency of PX G across monitored sites - Management confirmed consistent energy savings and capacity increases across different locations, with variations based on temperature [51] Question: Thoughts on competition between HFO and CO2 refrigeration - Management believes CO2 remains the preferred choice, with strong support from OEM customers for CO2 technology [59]

Core Insights - Energy Recovery (ERII) reported quarterly earnings of $0.21 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and showing a year-over-year increase from $0.20 per share [1] - The company achieved revenues of $38.58 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.24% and up from $37.04 million a year ago [2] - Energy Recovery has outperformed consensus EPS estimates three times over the last four quarters and has topped revenue estimates twice in the same period [2] Earnings Performance - The quarterly earnings surprise was 50%, and the company previously exceeded expectations by 550% when it reported earnings of $0.09 per share against an expected loss of $0.02 [1] - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $70.25 million, and for the current fiscal year, it is $0.63 on revenues of $147.28 million [7] Market Position - Energy Recovery shares have declined approximately 6.7% since the beginning of the year, contrasting with the S&P 500's gain of 22.3% [3] - The Zacks Rank for Energy Recovery is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Pollution Control industry, to which Energy Recovery belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Energy Recovery's stock performance [5]

Revenue Performance - Revenue for Q3 2024 was $38,584,000, an increase from $37,036,000 in Q3 2023, representing a growth of approximately 4.2%[14] - Total revenue for the three months ended September 30, 2024, was $38,344,000, an increase from $36,812,000 in the same period last year, representing a growth of 4.1%[28] - Revenue for the three months ended September 30, 2024, was $38,584 thousand, a 4% increase from $37,036 thousand in the same period of 2023[71] - For the nine months ended September 30, 2024, total revenue was $224,351 thousand, a 9% increase from $205,622 thousand in the same period of 2023[70] - Revenue from the Middle East and Africa for the three months ended September 30, 2024, was $28,043,000, compared to $24,543,000 in the same period last year, reflecting a growth of 14.1%[29] - Revenue from the Water segment for the three months ended September 30, 2024, was $38,344,000, while Emerging Technologies contributed $240,000[58] - Megaproject channel revenue increased by 8% to $29,009 thousand, accounting for 75% of total revenue for the three months ended September 30, 2024[67] - Aftermarket channel revenue grew by 14% to $13,739 thousand, while Original Equipment Manufacturer (OEM) channel revenue decreased by 7% to $4,919 thousand[68] Profitability Metrics - Gross profit for Q3 2024 was $25,112,000, compared to $25,882,000 in Q3 2023, indicating a decrease of about 3%[14] - Gross profit for the three months ended September 30, 2024, was $25,112 thousand, with a gross margin of 65.1%, down from 69.9% in the prior year[76] - The company reported a net income of $8,481,000 for the three months ended September 30, 2024, compared to $9,660,000 in the same period last year, indicating a decrease of 12.2%[36] - Basic net income per share for the three months ended September 30, 2024, was $0.15, down from $0.17 in the same period last year, a decline of 11.8%[37] - Operating income for the nine months ended September 30, 2024, was $18,052,000, compared to a loss of $5,891,000 for the same period in 2023[58] Expenses and Liabilities - Operating expenses for Q3 2024 were $18,055,000, up from $16,749,000 in Q3 2023, indicating an increase of approximately 7.8%[14] - Total operating expenses for the three months ended September 30, 2024, were $18,055 thousand, an increase of 7.8% compared to $16,749 thousand in the same period of 2023[78] - Total operating expenses for the nine months ended September 30, 2024, were $55,704,000, compared to $49,144,000 for the same period in 2023[58] - Total liabilities decreased to $28,832,000 from $33,166,000, a reduction of about 13.0%[13] - Total accrued expenses and other liabilities decreased from $15.8 million on December 31, 2023, to $10.6 million on September 30, 2024, representing a reduction of approximately 32.5%[43] Cash and Investments - Cash and cash equivalents decreased to $63,261,000 from $68,098,000, a decline of approximately 7.5%[12] - Cash, cash equivalents, and restricted cash at the end of the period were $63,393 million, an increase from $51,566 million at the end of Q3 2023[18] - The investment portfolio was valued at $808.1 million, primarily in investment-grade marketable debt instruments, as of September 30, 2024[101] - The total fair value of short and long-term investments was $76.7 million as of September 30, 2024, with gross unrealized losses of $324,000[47] - The company reported total available-for-sale investments with unrealized loss positions of $8.1 million as of September 30, 2024, compared to $31.2 million on December 31, 2023[49] Equity and Stock Performance - Total stockholders' equity increased to $233.873 million in Q3 2024, up from $194.029 million in Q3 2023, representing a growth of 20.5%[17] - The company issued 459,312 shares of common stock in Q3 2024, compared to 99,091 shares in Q3 2023, marking a significant increase in equity financing[17] - The beginning balance of retained earnings was $73.754 million, with an ending balance of $82.235 million, reflecting an increase of 11.9%[17] - Stock-based compensation for the nine months ended September 30, 2024, was $8.512 million, up from $5.811 million in the same period of 2023, indicating a rise of 46.5%[18] Future Outlook and Strategic Focus - The company expects sales outside the U.S. to remain a significant portion of its revenue in the future[7] - The company believes that leveraging its pressure exchanger technology will unlock new commercial opportunities moving forward[7] - The company is focused on developing high-performance solutions aimed at improving energy efficiency and reducing emissions across various industrial processes[19] - The company is committed to developing new technologies and expanding into emerging markets, particularly in wastewater filtration and energy recovery applications[63] Tax and Legal Matters - The effective tax rate for the three months ended September 30, 2024, was 3.9%, compared to 5.1% for the same period in 2023[56] - The company recorded no material losses from litigation that would have a material effect on its financial position as of September 30, 2024[55] - The company is not currently involved in any legal proceedings that are likely to have a material adverse effect on its financial condition or operating results[105]

Exhibit 99.1 Energy Recovery Reports its Third Quarter 2024 Financial Results SAN LEANDRO, Calif. - October 30, 2024 – Energy Recovery, Inc. (Nasdaq:ERII) ("Energy Recovery" or the "Company") today announced its financial results for the third quarter and nine months ended September 30, 2024. Third Quarter Highlights • Revenue of $38.6 million, reaching the upper end of our guidance of $35 - $39 million. • Gross margin of 65.1%, a decrease of 480 bps, as compared to Q3'2023, due primarily to higher manufact ...

Energy Recovery (ERII) came out with quarterly earnings of $0.09 per share, beating the Zacks Consensus Estimate of a loss of $0.02 per share. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 550%. A quarter ago, it was expected that this maker of energy recovery devices would post a loss of $0.11 per share when it actually produced a loss of $0.08, delivering a surprise of 27.27%. Over the ...

Exhibit 99.1 Energy Recovery Reports its Second Quarter 2024 Financial Results SAN LEANDRO, Calif. - July 31, 2024 – Energy Recovery, Inc. (Nasdaq:ERII) ("Energy Recovery" or the "Company") today announced its financial results for the second quarter and six months ended June 30, 2024. Second Quarter Highlights • Revenue of $27.2 million, exceeding the upper end of our guidance of $20 - $25 million. • Gross margin of 64.6%, a decrease of 80 bps, as compared to Q2'2023, due primarily to higher manufacturing ...

Energy Recovery (ERII) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.11. This compares to loss of $0.08 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 27.27%. A quarter ago, it was expected that this maker of energy recovery devices would post earnings of $0.40 per share when it actually produced earnings of $0.39, delivering a surprise of -2.50%.Over the last four quart ...

WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193 For the quarterly period endMedarch 31, 2024 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Energy Recovery, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 01-0616867 (State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification No.) 1717 Doolittle Dri,vSan Leandr e ,oCalifornia94577 (Address of Principal Executive Of ices) (Zip Code ...

Exhibit 99.1 Energy Recovery Reports its First Quarter 2024 Financial Results SAN LEANDRO, Calif. - May 1, 2024 – Energy Recovery, Inc. (Nasdaq:ERII) ("Energy Recovery" or the "Company") today announced its financial results for the first quarter ended March 31, 2024. First Quarter Highlights David Moon, President and CEO, commented on the financial results: "The first quarter was a busy one for us and played out as we expected. Q1 revenue of $12.1 million was in line with our guidance of $10-$13 million, a ...