NASDAQ$ERII

Energy Recovery Inc · Q2 2024 earnings

Q2 2024 earnings · · Investor relations

Briefing

Reported revenue of $27.2 million, exceeding guidance, with a net loss of $0.6 million and adjusted EBITDA of $5.2 million.

Energy Recovery reported strong second-quarter results, with revenue exceeding the upper end of guidance at $27.2 million. The company experienced a slight decrease in gross margin due to higher manufacturing costs and an increase in operating expenses due to strategic investments. Despite a net loss of $0.6 million, the adjusted EBITDA was $5.2 million.

  • Revenue reached $27.2 million, surpassing the guidance range of $20 - $25 million.
  • Gross margin was 64.6%, a slight decrease of 80 bps compared to Q2 2023.
  • Operating expenses increased by 21.4% to $19.6 million due to strategic growth initiatives and executive transition costs.
  • Net loss was $0.6 million, while adjusted EBITDA reached $5.2 million.

Headline financials

Total Revenue

$27.2M

Previous: $20.7M+31.3%
EPS

-$0.01

Previous: -$0.03+66.7%
Gross Margin

64.6%

Previous: 65.4%-1.2%
Operating Margin

-7.4%

Previous: -12.5%+40.8%
Adjusted Operating Margin

15.3%

Previous: -4.2%+464.3%
Adjusted Net Income

$5M

No prior period
Adjusted EBITDA

$5.2M

No prior period
Effective Tax Rate

10.5%

Previous: 15.2%-30.9%
Capital Expenditures

-$1.03M

Previous: $570K-279.8%
Free Cash Flow

-$1.67M

Previous: -$1.67M-0.1%
Net Income

-$642K

Previous: -$1.67M+61.4%
Operating Income

-$2.01M

Previous: -$2.59M+22.1%
Gross Profit

$17.6M

Previous: $13.5M+29.7%
R&D Expense

$3.94M

No prior period
Stock-Based Comp

$2.82M

Previous: $1.72M+64.0%

Revenue & EPS history

Energy Recovery · Revenue · Quarterly

$27.2M

Q2 2024+31.3%vs Q2 2023
Beat estimate in 5 of 14 quarters(36%)
ActualEstimate

Revenue by segment

Energy Recovery · $33.6M total across 3 segments · Q4 2021

  • Megaproject
    $25.1M+28.1%
  • OEM
    $5.7M+39.0%
  • Aftermarket
    $2.8M+3.7%

Forward guidance

Energy Recovery reaffirms its full-year revenue guidance of $140–$150 million, expecting revenue cadence to be heavily weighted to the third and fourth quarters. The company believes that the summer runtime data is crucial to the commercial adoption of the PX G1300.

Tailwinds

  • Reaffirms full-year revenue guidance of $140–$150 million.
  • Expects revenue cadence to be heavily weighted to the third and fourth quarters.
  • Commissioned nine second-generation PX G1300 deployments at both existing and new customer sites.
  • A tenth site to be commissioned by the end of August.
  • Summer runtime data is crucial to the commercial adoption of the PX G1300.

Headwinds

  • 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
  • Risks and uncertainties of the Company’s business
  • Risks discussed under “Risk Factors” in the Company’s Form 10-K

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2024

Historical avgQ2 2024

-1.2%

Avg return

Earnings day

-1.0%

Avg return

5 days after

+0.1%

Avg return

30 days after

49%

32 / 65 earnings

Positive

+34.9%

Q4 2013

Best reaction

-35.4%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.7%-23.1%-29.3%
Q4 2025-35.4%-36.6%-38.8%
Q3 2025-16.0%-18.6%-14.7%
Q1 2025-18.5%-18.5%-16.0%
Q4 2024+2.5%+3.7%+8.7%
Q3 2024+1.6%+5.3%-11.5%
Q2 2024+21.6%+10.8%+12.2%
Q1 2024-12.5%-9.9%-9.4%
Q4 2023-3.6%-2.4%-2.4%
Q3 2023+16.5%+19.1%+24.2%
Q2 2023-15.0%-9.5%-17.0%
Q1 2023+4.7%+6.0%+13.8%
Q4 2022+3.4%+2.8%+2.7%
Q3 2022-30.1%-28.5%-11.5%
Q2 2022+2.8%+2.3%+3.1%
Q1 2022-2.7%-6.1%+14.0%
Q4 2021+4.5%+1.4%+7.2%
Q3 2021+5.5%+7.8%-0.6%
Q2 2021-2.1%-3.0%+17.6%
Q1 2021-0.8%-15.4%-3.5%
Q4 2020+6.8%+0.2%+3.2%
Q3 2020+9.9%+11.0%+23.4%
Q2 2020-4.3%-3.2%+6.7%
Q1 2020-6.9%-6.1%-8.0%
Q4 2019+6.3%-8.9%-29.8%
Q3 2019+2.1%+0.2%-7.0%
Q2 2019+1.6%-9.7%-11.9%
Q1 2019+10.7%+6.0%-2.1%
Q4 2018+11.6%+3.8%+16.3%
Q3 2018+22.4%+21.9%+8.9%
Q2 2018+13.8%+20.8%+20.2%
Q1 2018+2.6%+9.7%+7.0%
Q4 2017+13.3%+26.3%+19.3%
Q3 2017+12.3%+27.9%+42.4%
Q2 2017-10.7%-12.3%-14.0%
Q1 2017-10.3%-9.2%-11.9%
Q4 2016-7.3%-10.4%-7.0%
Q3 2016-24.8%-16.8%-14.5%
Q2 2016+12.5%+22.1%+15.7%
Q1 2016-6.3%
Q4 2015-5.7%
Q3 2015+15.1%
Q2 2015+1.9%
Q1 2015+0.0%
Q4 2014-14.7%
Q3 2014-7.5%
Q2 2014+0.5%
Q1 2014-8.7%
Q4 2013+34.9%
Q3 2013-19.1%
Q2 2013+4.0%
Q1 2013-3.4%
Q4 2012+2.0%
Q3 2012-1.7%
Q2 2012+0.0%
Q1 2011+1.4%
Q1 2012-3.0%
Q4 2009-7.6%
Q4 2011-7.6%
Q3 2011-11.0%
Q2 2011-10.1%
Q4 2010-10.1%
Q3 2010+0.8%
Q2 2010+0.7%
Q1 2010-14.5%

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