Energy Recovery (Nasdaq: ERII) posts Q4 profit, exits CO2 retail grocery business

Rhea-AI Filing Summary

Energy Recovery, Inc. reported fourth quarter and full-year 2025 results and decided to wind down its CO2 retail grocery business within the Emerging Technologies segment. Management cited the long timeline, required investment, and risk for scaled adoption as no longer meeting capital allocation criteria.

For Q4 2025, revenue was $66.9 million, essentially flat year over year, while gross margin was 67.2% and operating margin improved to 46.8%. Net income was $26.9 million and adjusted EBITDA was $33.6 million. Full-year 2025 revenue was $135.0 million, down 7% from 2024, with net income of $23.0 million and adjusted net income of $31.2 million.

The CO2 retail grocery wind-down is expected to be substantially complete by the end of the first quarter of 2026 and to generate $4.5 million to $5.5 million in one-time costs, including $1.0 million to $2.0 million of cash severance and several non-cash charges such as inventory reserves and goodwill impairment. Cash, cash equivalents, and investments totaled $83.3 million at December 31, 2025.

Insights

Sell-side equity analyst

Solid profitability and cash, but modest revenue decline and exit costs.

Energy Recovery delivered strong profitability in 2025 despite a 7% revenue decline to $134.987 million. Operating margin expanded to 17.7% for the year and 46.8% in Q4 2025, helped by lower operating expenses, with net income at $23.0 million.

Non-GAAP metrics remained robust: 2025 adjusted operating margin was 23.9%, adjusted net income was $31.2 million, and adjusted EBITDA was $36.0 million. The balance sheet showed $83.283 million of cash, cash equivalents, and investments, against total liabilities of $25.322 million, indicating a net cash position.

The decision to wind down the CO2 retail grocery business, which generated only $285 thousand of 2025 revenue, will add one-time costs of $4.5 million to $5.5 million through the first quarter of 2026. Future disclosures in company filings may detail how resources are redeployed toward the core Water segment and other opportunities.

0001421517false00014215172026-02-252026-02-25

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 25, 2026

Energy Recovery, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

001-34112

01-0616867

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

1717 Doolittle Dr., San Leandro, CA 94577

(Address of Principal Executive Offices) (Zip Code)

510-483-7370

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.001 par value per share

ERII

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02    Results of Operations and Financial Condition

On February 25, 2026, Energy Recovery, Inc. (the “Company”) issued an earnings press release announcing its financial results for the fourth quarter and year ended December 31, 2025. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety.

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 2.05    Costs Associated with Exit or Disposal Activities

On February 25, 2026, the Company decided to wind down operations of the CO2 retail grocery business within its Emerging Technologies Segment. Recent discussions with original equipment manufacturers and end user customers have made it increasingly evident that scaled adoption would require significant time, investment, and risk. The Company believes this investment no longer meets capital allocation criteria and thus acted quickly in an effort to maximize shareholder value.

The Company expects to substantially complete the wind down by the end of the first quarter of the fiscal year ended December 31, 2026 and expects to incur approximately $4.5 million to $5.5 million in one-time costs. One-time costs are expected to consist of $1.0 million to $2.0 million in cash severance as well as non-cash expenses, primarily related to a reserve against inventory, impairment of goodwill and other miscellaneous non-cash expenses

Item 2.06    Material Impairments

The information included under Item 2.05 of this report is hereby incorporated herein by reference.

Item 9.01    Financial Statements and Exhibits

(d)    Exhibits

Exhibit Number						Description
99.1						Press release of Energy Recovery, Inc., dated February 25, 2026, to report its financial results for the fourth quarter and year ended December 31, 2025.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    February 25, 2026

			Energy Recovery, Inc.
			By:			/s/ William Yeung
						William Yeung
						Chief Legal Officer

Exhibit 99.1

Energy Recovery Reports its Fourth Quarter 2025 Financial Results

SAN LEANDRO, Calif. - February 25, 2026 – Energy Recovery, Inc. (Nasdaq:ERII) (“Energy Recovery” or the “Company”) today announced its financial results for the fourth quarter and year ended December 31, 2025.

Fourth Quarter Highlights

•Revenue of $66.9 million, a decrease of $0.2 million, as compared to Q4’2024, due to timing of revenue from contracted projects.

•Gross margin of 67.2%, a decrease of 300 bps, as compared to Q4’2024, due primarily to costs related to product mix and tariffs.

•Operating expenses of $13.6 million, a decrease of 36.5%, as compared to Q4’2024, due primarily to a decrease in employee costs, consulting costs and restructuring costs.

•Income from operations of $31.3 million, an increase of 22.3%, as compared to Q4’2024, mainly due to lower operating expenses.

•Net income of $26.9 million and adjusted EBITDA(1) of $33.6 million.

•Cash and investments of $83.3 million, which includes cash, cash equivalents, and short- and long-term investments.

In conjunction with these financial results, management has released a letter to shareholders reviewing business and financial updates from the fourth quarter and discussing our outlook for 2026. This letter is located under “News and Events” in the “Investors” section on the Energy Recovery website (https://ir.energyrecovery.com/news-events/shareholder-letters).

Financial Highlights

			Quarter-to-Date																					Year to Date
			Q4’2025						Q4’2024						vs. Q4’2024									2025						2024						2025 vs. 2024
			(In millions, except net income per share, percentages and basis points)
Revenue			$66.9						$67.1						down %									$135.0						$144.9						down 7%
Gross margin			67.2%						70.2%						down 300 bps									65.1%						66.9%						down 180 bps
Operating margin			46.8%						38.2%						up 860 bps									17.7%						13.6%						up 410 bps
Net income			$26.9						$23.5						up 15%									$23.0						$23.1						down 0%
Diluted net income per share			$0.50						$0.41						up $0.09									$0.42						$0.40						up $0.02
Effective tax rate																								16.8%						10.4%
Cash provided by operations			$7.1						$9.0															$18.8						$20.5

Non-GAAP Financial Highlights (1)

			Quarter-to-Date																					Year to Date
			Q4’2025						Q4’2024						vs. Q4’2024									2025						2024						2025 vs. 2024
			(In millions, except adjusted net income per share, percentages and basis points)
Adjusted operating margin			48.9%						45.2%						up 370 bps									23.9%						26.2%						down 230 bps
Adjusted net income			$28.2						$28.3						down 0%									$31.2						$40.7						down 23%
Adjusted net income per share			$0.53						$0.50						up $0.03									$0.58						$0.71						down $0.13
Adjusted EBITDA			$33.6						$31.3															$36.0						$42.0
Free cash flow			$6.4						$8.9															$17.4						$19.2

(1)Refer to the sections “Use of Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” for definitions of our non-GAAP financial measures and reconciliations of GAAP to non-GAAP amounts, respectively.

Forward-Looking Statements

Certain matters discussed in this press release and on the conference call are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information currently available to the Company and on management’s beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. Potential risks and uncertainties include risks relating to the future demand for the Company’s products, risks relating to performance by our customers and third-party partners, risks relating to the timing of revenue, and any other factors that may have been discussed herein regarding the risks and uncertainties of the Company’s business, and the risks discussed under “Risk Factors” in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended December 31, 2024, as well as other reports filed by the Company with the SEC from time to time. Because such forward-looking statements involve risks and uncertainties, the Company’s actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements.

Use of Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures, including adjusted operating margin, adjusted net income, adjusted net income per share, adjusted EBITDA and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions, and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Notes to the Financial Results

•Adjusted operating margin is a non-GAAP financial measure that the Company defines as income from operations which excludes i) stock-based compensation; ii) executive transition costs, such as executive search costs, retention costs, one-time severance costs and one-time corporate growth strategy costs; iii) restructuring charges1, and iv) impairment of long-lived assets, divided by revenues.

•Adjusted net income is a non-GAAP financial measure that the Company defines as net income which excludes i) stock-based compensation; ii) executive transition costs; iii) restructuring charges1; iv) impairment of long-lived assets; and v) the applicable tax effect of the excluded items including the stock-based compensation discrete tax item.

•Adjusted net income per share is a non-GAAP financial measure that the Company defines as net income, which excludes i) stock-based compensation; ii) executive transition costs; iii) restructuring charges1; iv) impairment of long-lived assets; and v) the applicable tax effect of the excluded items including the stock-based compensation discrete tax item, divided by basic shares outstanding.

•Adjusted EBITDA is a non-GAAP financial measure that the Company defines as net income which excludes i) depreciation and amortization; ii) stock-based compensation; iii) executive transition costs; iv) restructuring charges1; v) impairment of long-lived assets; vi) other income, net, such as interest income and other non-operating income (expense), net; and vii) provision for income taxes.

•Free cash flow is a non-GAAP financial measure that the Company defines as net cash provided by operating activities less capital expenditures.

1 Restructuring charges are presented net of adjustments

Conference Call to Discuss Financial Results

LIVE CONFERENCE Q&A CALL:

Wednesday, February 25, 2026, 2:00 PM PT / 5:00 PM ET

US / Canada Toll-Free: +1 (877) 709-8150

Local / International Toll: +1 (201) 689-8354

CONFERENCE Q&A CALL REPLAY:

Available approximately three hours after conclusion of the live call.

Expiration: Wednesday, March 25, 2026

US / Canada Toll-Free: +1 (877) 660-6853

Local / International Toll: +1 (201) 612-7415

Access code: 13758280

Investors may also access the live call and the replay over the internet on the “Events” page of the Company’s website located at https://ir.energyrecovery.com/news-events/ir-calendar.

Disclosure Information

Energy Recovery uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Energy Recovery’s investor relations website in addition to following Energy Recovery’s press releases, SEC filings, and public conference calls and webcasts.

About Energy Recovery

Energy Recovery (Nasdaq: ERII) designs and manufactures world-class energy-saving technology for critical infrastructure that communities rely on every day, driving a more resilient and sustainable future. Grounded in more than 30 years of leadership in the desalination industry, today we use our proprietary pressure exchanger technology to help customers in multiple industries improve their operations and lower their emissions. Headquartered in the San Francisco Bay Area, we operate manufacturing and R&D facilities throughout California, with sales and on-site technical support available globally. For more information, please visit www.energyrecovery.com

Contact

Investor Relations

ir@energyrecovery.com

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

			December 31, 2025						December 31, 2024
			(In thousands)
ASSETS
Cash, cash equivalents and investments			$	83,283					$	99,851
Accounts receivable and contract assets			78,286						66,842
Inventories, net			24,260						24,906
Prepaid expenses and other assets			3,416						3,889
Property, equipment and operating leases			20,635						25,119
Goodwill			12,790						12,790
Deferred tax assets and other assets			8,844						9,395
TOTAL ASSETS			$	231,514					$	242,792
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Accounts payable, accrued expenses, and other liabilities, current			$	13,784					$	20,837
Contract liabilities and other liabilities, non-current			2,109						628
Lease liabilities			9,429						11,317
Total liabilities			25,322						32,782
Stockholders’ equity			206,192						210,010
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	231,514					$	242,792

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

						Three Months Ended December 31,												Years Ended December 31,
						2025						2024						2025						2024
						(In thousands, except per share data)
Revenue						$	66,871					$	67,075					$	134,987					$	144,948
Cost of revenue						21,910						19,955						47,056						48,015
Gross profit						44,961						47,120						87,931						96,933
Operating expenses
General and administrative						6,012						8,303						29,769						33,074
Sales and marketing						4,946						6,754						20,926						25,423
Research and development						2,914						3,972						13,034						16,236
Restructuring charges						(226)						2,476						313						2,476
Total operating expenses						13,646						21,505						64,042						77,209
Income from operations						31,315						25,615						23,889						19,724
Other income, net						821						1,240						3,706						6,011
Income before income taxes						32,136						26,855						27,595						25,735
Provision for income taxes						5,222						3,384						4,633						2,685
Net income						$	26,914					$	23,471					$	22,962					$	23,050
Net income per share
Basic						$	0.51					$	0.41					$	0.43					$	0.40
Diluted						$	0.50					$	0.41					$	0.42					$	0.40
Number of shares used in per share calculations
Basic						52,915						56,629						53,802						57,213
Diluted						53,360						57,236						54,158						57,822

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

												Years Ended December 31,
																		2025						2024
												(In thousands)
Cash flows from operating activities:
Net income																		$	22,962					$	23,050
Non-cash adjustments																		11,945						16,214
Net cash used in operating assets and liabilities																		(16,137)						(18,742)
Net cash provided by operating activities																		18,770						20,522
Cash flows from investing activities:
Net investment in marketable securities																		35,305						(14,489)
Capital expenditures																		(1,330)						(1,298)
Proceeds from sales of fixed assets																		10						133
Net cash provided by (used in) investing activities																		33,985						(15,654)
Cash flows from financing activities:
Net proceeds from issuance of common stock																		1,796						7,100
Repurchase of common stock and payment of excise tax																		(36,330)						(50,384)
Net cash used in financing activities																		(34,534)						(43,284)
Effect of exchange rate differences																		98						(52)
Net change in cash, cash equivalents and restricted cash																		$	18,319					$	(38,468)
Cash, cash equivalents and restricted cash, end of year																		$	48,076					$	29,757

ENERGY RECOVERY, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited)

Channel Revenue

			Three Months Ended December 31,																		Years Ended December 31,
			2025						2024						vs. 2024						2025						2024						vs. 2024
			(In thousands, except percentages)
Megaproject			$	49,647					$	46,475					up 7%						$	82,885					$	95,399					down 13%
Original equipment manufacturer			10,620						16,315						down 35%						31,940						31,525						up 1%
Aftermarket			6,604						4,285						up 54%						20,162						18,024						up 12%
Total revenue			$	66,871					$	67,075					no change						$	134,987					$	144,948					down 7%

Segment Activity

						Three Months Ended December 31,
						2025																								2024
						Water						Emerging Technologies						Corporate						Total						Water						Emerging Technologies						Corporate						Total
						(In thousands)
Revenue						$	66,871					$	—					$	—					$	66,871					$	66,959					$	116					$	—					$	67,075
Cost of revenue						22,113						(203)						—						21,910						19,756						199						—						19,955
Gross profit (loss)						44,758						203						—						44,961						47,203						(83)						—						47,120
Operating expenses
General and administrative						1,372						355						4,285						6,012						2,490						913						4,900						8,303
Sales and marketing						3,535						1,053						358						4,946						4,324						1,856						574						6,754
Research and development						1,742						1,172						—						2,914						1,205						2,767						—						3,972
Restructuring charges						(105)						(76)						(45)						(226)						1,147						832						497						2,476
Total operating expenses						6,544						2,504						4,598						13,646						9,166						6,368						5,971						21,505
Operating income (loss)						$	38,214					$	(2,301)					$	(4,598)					31,315						$	38,037					$	(6,451)					$	(5,971)					25,615
Other income, net																								821																								1,240
Income before income taxes																								$	32,136																							$	26,855

						Years Ended December 31,
						2025																								2024
						Water						Emerging Technologies						Corporate						Total						Water						Emerging Technologies						Corporate						Total
						(In thousands)
Revenue						$	134,702					$	285					$	—					$	134,987					$	144,310					$	638					$	—					$	144,948
Cost of revenue						46,923						133						—						47,056						47,389						626						—						48,015
Gross profit						87,779						152						—						87,931						96,921						12						—						96,933
Operating expenses
General and administrative						5,686						2,350						21,733						29,769						8,127						3,821						21,126						33,074
Sales and marketing						13,664						5,449						1,813						20,926						15,683						7,340						2,400						25,423
Research and development						6,344						6,690						—						13,034						4,523						11,713						—						16,236
Restructuring charges						105						47						161						313						1,147						832						497						2,476
Total operating expenses						25,799						14,536						23,707						64,042						29,480						23,706						24,023						77,209
Operating income (loss)						$	61,980					$	(14,384)					$	(23,707)					23,889						$	67,441					$	(23,694)					$	(24,023)					19,724
Other income, net																								3,706																								6,011
Income before income taxes																								$	27,595																							$	25,735

Stock-based Compensation

			Three Months Ended December 31,												Years Ended December 31,
			2025						2024						2025						2024
			(In thousands)
Stock-based compensation expense charged to:
Cost of revenue			$	91					$	96					$	543					$	1,076
General and administrative			841						641						3,307						4,013
Sales and marketing			651						722						2,859						3,489
Research and development			30						351						1,010						1,744
Total stock-based compensation expense			$	1,613					$	1,810					$	7,719					$	10,322

ENERGY RECOVERY, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1)

(Unaudited)

This press release includes certain non-GAAP financial information because we plan and manage our business using such information. The following table reconciles the GAAP financial information to the non-GAAP financial information.

			Quarter-to-Date												Year to Date
			Q4'2025						Q4'2024												2025						2024
			(In millions, except shares, per share and percentages)
Operating margin			46.8		%				38.2		%										17.7		%				13.6		%
Stock-based compensation			2.4						2.7												5.7						7.1
Executive transition costs			—						0.7												—						3.7
Restructuring charges			(0.3)						3.7												0.2						1.7
Impairment of long-lived assets			—						—												0.3						—
Adjusted operating margin			48.9		%				45.2		%										23.9		%				26.2		%
Net income			$	26.9					$	23.5											$	23.0					$	23.1
Stock-based compensation			1.6						1.8												7.7						10.3
Executive transition costs (2)			—						0.4												—						4.8
Restructuring charges (2)			(0.2)						2.2												0.3						2.2
Impairment of long-lived assets (2)			—						—												0.3						—
Stock-based compensation discrete tax item			(0.2)						0.4												(0.1)						0.3
Adjusted net income			$	28.2					$	28.3											$	31.2					$	40.7
Net income per share			$	0.51					$	0.41											$	0.43					$	0.40
Adjustments to net income per share (3)			0.02						0.09												0.15						0.31
Adjusted net income per share			$	0.53					$	0.50											$	0.58					$	0.71
Net income			$	26.9					$	23.5											$	23.0					$	23.1
Stock-based compensation			1.6						1.8												7.7						10.3
Depreciation and amortization			0.9						1.0												3.8						4.0
Executive transition costs			—						0.4												—						5.4
Restructuring charges			(0.2)						2.5												0.3						2.5
Impairment of long-lived assets			—						—												0.4						—
Other income, net			(0.8)						(1.2)												(3.7)						(6.0)
Provision for income taxes			5.2						3.4												4.6						2.7
Adjusted EBITDA			$	33.6					$	31.3											$	36.0					$	42.0
Free cash flow
Net cash provided by operating activities			$	7.1					$	9.0											$	18.8					$	20.5
Capital expenditures			(0.7)						(0.1)												(1.3)						(1.3)
Free cash flow			$	6.4					$	8.9											$	17.4					$	19.2

(1)Amounts may not total due to rounding.

(2)Amounts presented are net of tax.

(3)Refer to the sections “Use of Non-GAAP Financial Measures” for description of items included in adjustments.

FAQ

How did Energy Recovery (ERII) perform financially in Q4 2025?

Energy Recovery reported Q4 2025 revenue of $66.9 million, essentially flat versus Q4 2024. Operating margin improved to 46.8%, with net income of $26.9 million and adjusted EBITDA of $33.6 million, reflecting strong cost control and profitability despite limited top-line growth.

What were Energy Recovery (ERII)'s full-year 2025 results?

For full-year 2025, Energy Recovery generated $134.987 million in revenue, down 7% from 2024. Net income was $23.0 million, while adjusted net income reached $31.2 million and adjusted EBITDA $36.0 million, showing healthy earnings even with lower sales volumes.

What strategic change did Energy Recovery (ERII) announce for its CO2 retail grocery business?

Energy Recovery decided to wind down its CO2 retail grocery business within the Emerging Technologies segment. Management cited extended timelines, higher required investment, and risk for scaled adoption, concluding the opportunity no longer fit capital allocation criteria for maximizing shareholder value.

How much will Energy Recovery (ERII) incur in one-time costs from the CO2 business wind-down?

The company expects one-time costs of approximately $4.5 million to $5.5 million tied to winding down the CO2 retail grocery business. These include $1.0 million to $2.0 million of cash severance and several non-cash items such as inventory reserves, goodwill impairment, and miscellaneous charges.

What is Energy Recovery (ERII)'s liquidity position at the end of 2025?

As of December 31, 2025, Energy Recovery held $83.3 million in cash, cash equivalents, and investments. Total assets were $231.5 million, with total liabilities of $25.3 million and stockholders’ equity of $206.2 million, supporting ongoing operations and strategic initiatives.

How did Energy Recovery (ERII)'s Water and Emerging Technologies segments perform in 2025?

In 2025, the Water segment produced $134.702 million in revenue and $61.980 million in operating income. Emerging Technologies delivered $285 thousand in revenue and a $14.384 million operating loss, highlighting the contrast between the core desalination-focused business and earlier-stage initiatives.

What were Energy Recovery (ERII)'s key non-GAAP performance metrics in Q4 2025?

In Q4 2025, adjusted operating margin was 48.9%, and adjusted net income was $28.2 million, or $0.53 per share. Adjusted EBITDA reached $33.6 million, supported by strong gross margins and significantly lower operating expenses compared with the prior-year quarter.

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