NASDAQ$ERII

Energy Recovery Inc · Q3 2024 earnings

Q3 2024 earnings · · Investor relations

Briefing

Announced financial results for the third quarter and nine months ended September 30, 2024.

Energy Recovery reported strong third-quarter results, hitting the upper end of their revenue guidance. The core desalination business showed continued growth, the wastewater business expanded, and progress was made in the CO2 refrigeration business. The company also completed their strategic work on a five-year plan for growth.

  • Revenue reached $38.6 million, hitting the upper end of guidance of $35 - $39 million.
  • Gross margin was 65.1%, a decrease of 480 bps compared to Q3 2023.
  • Operating expenses were $18.1 million, an increase of 7.8% compared to Q3 2023.
  • Net income was $8.5 million, and adjusted EBITDA was $11.6 million.

Headline financials

Total Revenue

$38.6M

Previous: $37M+4.2%
EPS

$0.15

Previous: $0.20-25.0%
Gross Margin

65.1%

Previous: 69.9%-6.9%
Operating Margin

18.3%

Previous: 24.7%-25.9%
Adjusted Operating Margin

27.5%

Previous: 29.5%-6.8%
Adjusted Net Income

$12M

No prior period
Adjusted EBITDA

$11.6M

No prior period
Effective Tax Rate

62.4%

Previous: -114.2%+154.6%
Capital Expenditures

-$1.19M

Previous: -$1.18M-1.3%
Free Cash Flow

$7.29M

Previous: $8.48M-14.1%
Net Income

$8.48M

Previous: $9.66M-12.2%
Operating Income

$7.06M

Previous: $9.13M-22.7%
Gross Profit

$25.1M

Previous: $25.9M-3.0%
R&D Expense

$3.97M

Previous: $3.97M+0.0%
Stock-Based Comp

$2.41M

Previous: $1.79M+34.7%

Revenue & EPS history

Energy Recovery · Revenue · Quarterly

$38.6M

Q3 2024+4.2%vs Q3 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

The company believes they are well-positioned in the fourth quarter to deliver on their guidance for the full year and that the Company’s Playbook is an achievable blueprint for growth.

Tailwinds

  • Company is well-positioned in the fourth quarter to deliver on our guidance for the full year
  • Company is making real progress this year in its CO2 refrigeration business
  • Company’s recently published white paper is an important next step to getting the PX G1300 integrated into original equipment manufacturers’ systems designs and ultimately specified by supermarkets
  • Company’s Playbook is an achievable blueprint for growth

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 Q3 2024

Historical avgQ3 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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