AI Earnings Predictions for Energy Recovery Inc. (ERII)

EX-99.1

2 ex991earningsrelease2026-q3.htm

EX-99.1

Document

Exhibit 99.1

Energy Recovery Reports its Third Quarter 2026 Financial Results

SAN LEANDRO, Calif. - November 4, 2026 – Energy Recovery, Inc. (Nasdaq: ERII) (“Energy Recovery”, “Company”, “we”, and “our”) today announced its financial results for the third quarter and nine months ended September 30, 2026. Management has released a letter to shareholders reviewing business and financial updates from the third 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).

Third Quarter Highlights

•Revenue of $11.2 million, a decrease of $20.8 million, as compared to Q3’2025.

•Gross margin of 37.5%, as compared to gross margin of 64.2% in Q3’2025 primarily due to lower volume as well as product mix and indirect manufacturing costs, partially offset by channel mix.

•Operating expenses of $14.0 million, a decrease of 17.2%, as compared to Q3’2025, primarily due to lower employee compensation costs, including stock-based compensation expense, and lower consulting costs.

•Loss from operations of $9.8 million, declined $13.5 million as compared to income from operations of $3.7 million during Q3’2025, due primarily to lower revenue due to the war in Iran.

•Net loss of $6.3 million and adjusted EBITDA(1) loss of $7.8 million.

•Cash and investments of $85.6 million, which includes cash, cash equivalents, and short- and long-term investments.

Financial Highlights

Quarter to DateYear to Date

Q3’2026

Q3’2025

vs. Q3’2025202620252026 vs. 2025

(In millions, except net income (loss) per share, percentages and basis points)

Revenue$11.2$32.0down 65%$32.9$68.1down 52%

Gross margin37.5%64.2%down 2670 bps48.2%63.1%down 1490 bps

Operating margin(87.5%)11.4%NM(92.8%)(10.9%)NM

Net income (loss)($6.3)$3.9down 263%($21.8)($4.0)down 451%

Diluted earnings (loss) per share($0.12)$0.07down $0.19($0.42)($0.07)down $0.35

Effective tax rate23.1%13.0%

Cash provided by (used for) operations($9.8)($3.1)$28.1$11.7

Non-GAAP Financial Highlights (1)

Quarter to DateYear to Date

Q3’2026

Q3’2025

vs. Q3’2025202620252026 vs. 2025

(In millions, except adjusted net income (loss) per share, percentages and basis points)

Adjusted operating margin(78.7%)18.3%down 9700 bps(62.4%)(0.6%)NM

Adjusted net income (loss)($5.0)$6.3down 179%($12.2)$3.0NM

Adjusted earnings (loss) per share($0.10)$0.12down $0.22($0.24)$0.06down $0.30

Adjusted EBITDA($7.8)$6.8($17.5)$2.4

Free cash flow($10.1)($3.5)$25.9$11.0

(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.

NM    Not Meaningful

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, 2025, 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 (loss), adjusted earnings (loss) 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 meas

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