NASDAQ$ERII

Energy Recovery Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported record Q4 revenue and significant annual earnings per share growth.

Energy Recovery reported a record revenue quarter in Q4 2022, driven by the core desalination business and industrial wastewater growth. The company's annual revenue grew by 21%, with a significant increase in net income and earnings per share.

  • Achieved the highest revenue quarter in the company’s history with $42.3 million.
  • Gross margin increased by 180 basis points to 70.7% compared to Q4 2021.
  • Net income grew by 161% to $13.7 million compared to Q4 2021.
  • Earnings per share increased by 167% to $0.24 compared to Q4 2021.

Headline financials

Total Revenue

$42.3M

Previous: $33.6M+26.0%
EPS (adj)

$0.26

Previous: $0.09+188.9%
Gross Margin

70.7%

No prior period
Operating Margin

34.5%

No prior period
Adjusted Operating Margin

37.9%

No prior period
Effective Tax Rate

10.7%

No prior period
Capital Expenditures

$1.23M

Previous: $1.78M-30.7%
Free Cash Flow

$5.1M

Previous: $4.45M+14.6%
Net Income

$13.7M

Previous: $5.3M+159.0%
Operating Income

$14.6M

Previous: $5.97M+144.5%
Gross Profit

$29.9M

Previous: $23.2M+29.1%
Cash & Equivalents

$92.9M

Previous: $74.5M+24.8%
Total Assets

$217M

Previous: $214M+1.6%
Stock-Based Comp

$1.41M

Previous: $1.48M-4.9%

Revenue & EPS history

Energy Recovery · Revenue · Quarterly

$42.3M

Q4 2022+26%vs Q4 2021
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 press release contains forward-looking statements regarding full year revenue and gross margin guidance, the strength of the core desalination business, the timing of new hires to support the CO2 business, the timing of CO2 deployments, the ability to finalize regional distribution agreements, and the belief that the CO2 business will create significant value for shareholders.

Tailwinds

  • Expectations on full year revenue and gross margin guidance
  • Belief that the Company’s core desalination business has never been stronger
  • Timing of any new hires to support our CO2 business
  • Timing of any CO2 deployments
  • Belief that the Company’s CO2 business will create significant value for our shareholders

Headwinds

  • Potential risks and uncertainties related to the Company’s business
  • Risks discussed under “Risk Factors” in the Company’s Form 10-K filed with the SEC
  • Other reports filed by the Company with the SEC from time to time
  • The Company’s actual results may differ materially from the predictions in forward-looking statements
  • No obligation to update forward-looking statements

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 Q4 2022

Historical avgQ4 2022

-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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