Energy Recovery Soars 12.56% on Earnings Beat

Energy Recovery's stock surged by 12.56% in pre-market trading on August 7, 2025, driven by strong second-quarter financial results that exceeded market expectations.

Energy Recovery reported earnings per share of $0.07 for the second quarter of 2025, significantly surpassing the forecasted -$0.01. This marked an 800% surprise, indicating a strong performance that exceeded analyst predictions. The company's revenue also exceeded expectations, contributing to the positive market sentiment.

The company's financial results for the second quarter of 2025 were in line with internal expectations, with revenue increasing by 3% year-over-year to $28.1 million. This growth was primarily due to the timing of revenue from contracted projects. The gross margin for the quarter was 64.0%, a slight decrease of 60 basis points compared to the same period in 2024, attributed to costs related to product mix and tariffs.

Operating expenses decreased by 15.8% to $16.5 million, driven by reductions in employee and consulting costs. This led to an increase in income from operations by 173.2% to $1.5 million. The company reported a net income of $2.1 million and adjusted EBITDA of $4.4 million for the quarter. Cash and investments stood at $93.7 million, providing a solid financial foundation for future operations.