Energy Recovery(NASDAQ) ERII

Energy Recovery, Inc. makes machines that save energy in industrial plants. These tools help desalination plants turn seawater into drinking water cheaply. The technology also cleans dirty water from factories and mines.

Saving Energy and Water

• Desalination Solutions: Equipment like the Pressure Exchanger that lowers energy costs for water production; accounted for roughly 94% of revenue in the six months ended June 30, 2026.
• Wastewater Technology: Filtration solutions for battery makers, mining operations, and manufacturing plants; accounted for approximately 5% of revenue in the six months ended June 30, 2026.
• Pumps and Turbochargers: High-pressure feed pumps and hydraulic boosters that complement primary energy recovery devices.
• Support Services: Essential technical assistance including spare parts, repairs, and field commissioning for industrial clients.

Focusing the Business

• Wound down the CO2 retail grocery business in the first quarter of 2026 to focus on core water segments.
• Completed a restructuring plan in Dec. 2025 that reduced the total workforce by approximately 15% to lower operating costs.
• Authorized a $25 million share repurchase program in May 2026 following the completion of a previous $25 million buyback.
• Amended a credit agreement in Jan. 2026 to extend the expiration date of its $50 million revolving credit line to Jan. 2031.

The Power of Pressure

The company uses its pressure exchanger technology as a platform to create products for different high-pressure fluid systems. Its engineering expertise focuses on reducing energy consumption and carbon footprints for industrial customers without sacrificing cost savings.

The Financial Scorecard

• Total revenue was $12.0 million for the three months ended June 30, 2026, down 57% year over year.
• Gross margin reached 74.7% for the three months ended June 30, 2026, an increase from 64.0% in the prior-year period.
• Overall operating expenditures decreased 10% to $14.8 million for the three months ended June 30, 2026.
• Unrestricted cash and cash equivalents totaled $61.4 million as of June 30, 2026.

Bottom Line

Energy Recovery has transitioned from a desalination-focused firm to a broader industrial technology provider. By refining its pressure exchanger platform and streamlining operations, the company maintains its focus on energy efficiency across global water markets.