Financial Data and Key Metrics Changes - The company reported a strong quarter of sales execution with improved mega project shipments and a rebound in wastewater revenue, reiterating its four-year revenue guidance [3] - Operating expenses (OPEX) guidance has been reduced further due to effective cost control measures [3] Business Line Data and Key Metrics Changes - The CO2 business had a successful summer testing season, with strong OEM engagement, although commercialization is still in early stages [4] - The lithium extraction project in Argentina, valued at $350,000, is expected to contribute to revenue this quarter, indicating growth in the wastewater treatment niche [31] Market Data and Key Metrics Changes - The company is optimistic about long-term trends in desalination and water treatment, although it cautions against expecting near-term results due to the lengthy infrastructure build-out [12] Company Strategy and Development Direction - The company is focused on driving efficiency and lowering costs while continuing to invest in its growing wastewater business [3] - There is a strategic shift towards a top-down approach with OEMs to facilitate customer adoption of new technologies [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing interest from OEMs and the potential for commercialization in 2027, following another summer testing season [23] - The company anticipates a similar backlog pattern for 2026, with a slow start and a heavier second half [26] Other Important Information - The company has signed a Memorandum of Understanding (MOU) with Hillphoenix, indicating progress towards a commercial agreement [11] Q&A Session Summary Question: Key takeaways from the recent white paper on CO2 - The white paper validated energy savings of up to 15% at peak times and significant water savings in specific regions [7][8] Question: Progress with OEMs and commercial agreements - OEMs are beginning discussions with large end users, but commercial agreements are likely a year away [10][11] Question: Visibility for 2026 - The company expects to see backlog building for 2026, although it will be relatively small [26] Question: Cost reductions and international footprint - Cost reductions were achieved independently of international expansion efforts [30] Question: Hiring for wastewater efforts - The company seeks candidates with a track record in wastewater and relevant industry relationships [33] Question: Retailer tests for CO2 technology - Most installations for retailer tests are expected to be skid installations [34]

Financial Data and Key Metrics Changes - Q1 performance was in line with expectations regarding revenue and profitability, consistent with a heavily back-end weighted year [4] - A small order of approximately $2 million was shipped but not recognized as revenue in Q1, impacting revenue and gross margin [12] Business Line Data and Key Metrics Changes - The desalination business remains strong and on track for the year, with a robust pipeline and active contracted projects [5][11] - The CO2 business is progressing towards full commercialization, with three OEMs working to integrate the PX into their designs [5][6] Market Data and Key Metrics Changes - The company remains bullish on the desalination market, particularly in the Middle East and North Africa, despite a tougher macro backdrop [11][25] - There is a small presence in India, with plans to double resources, and North America is seen as a significant market opportunity, especially in water reuse [27][28] Company Strategy and Development Direction - The company prefers to establish a 100% owned and operated energy recovery facility, but is open to partnerships for short-term solutions [13] - The focus is on mitigating tariff impacts and rightsizing the cost structure while aiming for margin expansion in 2025 [37] Management Comments on Operating Environment and Future Outlook - Management is confident in desalination and CO2 revenue guidance, with visibility into more than 80% of expected 2025 revenue from contracted projects and high-probability pipeline [37] - The company is actively working on additional options to mitigate tariff impacts [37] Other Important Information - The collaboration with Hill Phoenix is seen as a positive development, with potential for multifaceted customer relationships in both retail and industrial spaces [32] Q&A Session Summary Question: Insights on the desalination market and geographical enthusiasm - Management remains optimistic about the desalination market, particularly in the Middle East and North Africa, with a strong pipeline and active projects [11] Question: Revenue impact from a mega project order not recognized in Q1 - The order was approximately $2 million, which provides context for Q1 revenue and gross margin [12] Question: International footprint strategy regarding manufacturing - The preference is to establish a fully owned facility, but partnerships may be considered to navigate tariffs [13] Question: Opportunities to offset lost revenue from China - Management believes there are opportunities to offset some of the $9 million lost revenue from China through sales in other geographies [14] Question: Progress with Hill Phoenix and future milestones - Key milestones include finalizing a commercial agreement and establishing a test site for the PXG integrated into Hill Phoenix systems [16][17] Question: Long-term advantages of developing an international production presence - Closer proximity to customers in key regions like the Middle East and North Africa could enhance service and support [25][26] Question: Alternative markets for ERI Solutions beyond China - India and North America are identified as markets with significant upside potential, with plans to increase resources in both regions [27][28] Question: Gross margin guidance amidst various factors - Management is comfortable with the gross margin guidance and remains focused on both gross and EBITDA margins [30] Question: Potential upside from collaborations with Hill Phoenix - Hill Phoenix is viewed as a diverse customer with opportunities in both retail and industrial applications, potentially leading to increased activity by the end of 2025 [32]