NASDAQ$ERII

Energy Recovery Inc · Q4 2024 earnings

Q4 2024 earnings · · After market close · Investor relations

Briefing

Energy Recovery reported its financial results for the fourth quarter and year ended December 31, 2024.

Energy Recovery achieved a 17% increase in revenue to $67.1 million in Q4 2024, reaching the midpoint of its full-year guidance. The company also saw an improvement in gross margin to 70.2% and a 24.3% increase in income from operations, driven by higher revenue and gross margin.

  • Revenue increased by 17% to $67.1 million in Q4 2024 compared to Q4 2023.
  • Gross margin improved by 110 basis points to 70.2% in Q4 2024, primarily due to manufacturing transformation benefits.
  • Income from operations rose by 24.3% to $25.6 million in Q4 2024, driven by higher revenue and gross margin.
  • Net income for Q4 2024 was $23.5 million, with adjusted EBITDA reaching $31.3 million.

Headline financials

Total Revenue

$67.1M

Previous: $57.2M+17.3%
EPS (adj)

$0.50

Previous: $0.39+28.2%
Capital Expenditures

-$104K

Previous: -$1.39M+92.5%
Free Cash Flow

$8.9M

No prior period
Net Income

$23.5M

Previous: $19.8M+18.5%
Operating Income

$25.6M

Previous: $20.6M+24.3%
Gross Profit

$47.1M

Previous: $39.5M+19.3%
R&D Expense

$3.97M

Previous: $4.96M-19.9%

Revenue & EPS history

Energy Recovery · Revenue · Quarterly

$67.1M

Q4 2024+17.3%vs Q4 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

Management has released a letter to shareholders reviewing business and financial updates from the fourth quarter and discussing the outlook for 2025. This letter is located under “Financial Info” in the “Investors” section on the Energy Recovery website.

Tailwinds

  • Continued benefits from manufacturing transformation are expected to support gross margin.
  • Focus on operational efficiency and cost management.
  • Strong cash and investments position provides financial flexibility.
  • Anticipated growth in key revenue segments.
  • Commitment to delivering positive environmental impact through technology.

Headwinds

  • Restructuring costs related to workforce reduction and executive transition may impact short-term profitability.
  • Potential risks and uncertainties related to future demand for products.
  • Risks associated with performance by customers and third-party partners.
  • Uncertainties regarding the timing of revenue recognition.
  • General economic conditions and market fluctuations could affect financial results.

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 2024

Historical avgQ4 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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