Energy Recovery 2025 Q2 Earnings Returns to Profitability with 419.9% Net Income Surge

Energy Recovery reported fiscal 2025 Q2 earnings on August 7, 2025, returning to profitability with a significant 419.9% increase in net income. The company delivered better-than-expected results, demonstrating strong operational performance and cash generation. Management expressed confidence in the long-term strategy and reiterated its commitment to capital-efficient returns, including recent share repurchase activities.

Revenue
Driven by robust performance in the Water segment, Energy Recovery generated $27.84 million, which accounted for the bulk of total revenue. The Emerging Technologies segment added $212,000, while the Corporate segment reported $0. Together, these segments contributed to total revenue of $28.05 million, reflecting a 3.1% increase compared to the same period in 2024.

Earnings/Net Income
Energy Recovery returned to profitability in 2025 Q2, with EPS rising to $0.04 from a loss of $0.01 per share in the prior-year period, representing a 500.0% positive change. The company achieved a net income of $2.05 million, compared to a net loss of $642,000 in 2024 Q2. This marked a significant 419.9% positive swing in profitability, signaling a strong operational turnaround.

Price Action
The stock price of Energy Recovery edged down 0.29% on the latest trading day and 0.15% for the most recent full trading week. However, it posted a 5.75% gain month-to-date, showing positive momentum despite post-earnings volatility.

Post-Earnings Price Action Review
The strategy of buying ERII following the earnings report and holding for 30 days yielded a 72.29% return, although this fell short of the 86.19% benchmark return, resulting in an excess return of -13.91%. The performance was characterized by a maximum drawdown of 0.00% and a Sharpe ratio of 0.26, indicating a relatively low-risk strategy with moderate returns.

CEO Commentary
David Moon, President and CEO of Energy Recovery, highlighted the company’s strong cash generation and emphasized its long-term growth strategy. He noted the completion of recent share repurchase programs as a testament to the company’s commitment to capital-efficient returns and shareholder value.

Guidance
The company expects to continue generating cash flows above capital expenditures and growth capital requirements in 2025. While no specific financial guidance was provided, Energy Recovery expressed confidence in margin improvement and cost reduction, contingent on market conditions and customer demand.

Additional News
On August 7, 2025, Energy Recovery announced a new $25 million share repurchase program, signaling its commitment to returning capital to shareholders. This move follows recent completions of share repurchase initiatives and reflects the company’s strong financial position and confidence in its long-term value proposition. The share repurchase authorization underscores Energy Recovery’s focus on optimizing capital structure and enhancing shareholder returns.