Energy Recovery, Inc. (ERII) is a global technology firm that engineers, manufactures, and distributes cutting-edge solutions predominantly for the seawater reverse osmosis ...
Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer
Est. EPS $-0.06 · Revenue $16.11M · 2 analysts
Est. EPS $0.16 · Revenue $35.76M · 2 analysts
Est. EPS $-0.17 · Revenue $73.57M · 2 analysts
Est. EPS $-0.17 · Revenue $7.50M · 1 analysts
| Metric | Latest | YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength. | QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes. |
|---|---|---|---|
| RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three). | $134.7M | -7.1% | +23.6% |
| Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day. | $23.0M | -0.4% | +73.9% |
| Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials. | +65.2% | -2.6% | +67.2% |
| Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on). | +18.2% | +34.0% | +52.5% |
| Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales. | +17.0% | +7.2% | +78.9% |
| Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock. | $17.4M | -9.3% | -23.7% |
| FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine. | +12.9% | -2.4% | -38.3% |
| Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe. | 4.6% | -15.1% | -0.5% |
| Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking. | 10.44x | +40.9% | -13.3% |
| Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground. | $231.5M | -4.6% | -5.4% |
| Metric | Annual (A vs E) | Annual Surprise | Quarter (A vs E) | Quarter Surprise |
|---|---|---|---|---|
| EPS Surprise | 0.42 vs 0.56 | -24.7% | -0.06 vs -0.01 | -337.7% |
| Revenue Surprise | $134.7M vs $150.7M | -10.6% | $12.0M vs $18.4M | -34.7% |
| Date | Executive | Title | Security | Side | Shares | Price |
|---|---|---|---|---|---|---|
| Jul 28, 2026 | Clemente Rodney | officer: SVP, Water | Common Stock | D | 5,387 | $8.56 |
| Jul 28, 2026 | Yeung William | officer: Chief Legal Officer | Common Stock | D | 2,048 | $8.56 |
| Jul 27, 2026 | Clemente Rodney | officer: SVP, Water | Common Stock | D | 2,320 | $8.42 |
| Jul 27, 2026 | Yeung William | officer: Chief Legal Officer | Common Stock | D | 2,828 | $8.42 |
| Jul 9, 2026 | Mitchell John Joseph | director | Common Stock | A | 16,797 | — |
Operator: Good day, ladies and gentlemen, and welcome to Energy Recovery's Second Quarter 2026 Earnings Call. During today's call, Energy Recovery may make projections and other forward-looking statements under the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the company. These statements may discuss our business, economic and market outlook, growth expectations, new products and their performance, cost structure and business strategy. Forward-looking statements are based on information currently available to the company and on management's beliefs, assumptions, estimates and projections. Forward-looking statements are not guarantees of future performance and are subject to certain risk, uncertainties and other factors. We refer you to documents the company files from time to time with the SEC, specifically the company's annual Form 10-K and quarterly Form 10-Q. These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. All statements made during this call are made only as of today, August 5, 2026, and the company expressly disclaims any intent or obligation to update any forward-looking statements made during this call to reflect subsequent events or circumstances unless otherwise required by law. Our host for today's call are Alex Buehler, Interim President and Chief Executive Officer of Energy Recovery; and Aidan Ryan, Interim Chief Financial Officer. I would now like to turn the call over to Mr. Buehler. Alexander J. Buehler: Thank you, operator, and good afternoon, everyone. Earlier today, we released a letter to shareholders on the Investor Relations section of our website that reviews business and financial performance during the quarter. Prior to opening the line for questions and answers, I'd like to highlight a few important takeaways from that letter. We are focused on bringing our CEO search to a close and have been impressed with the breadth and the quality of the candidate pool. The combination of Energy Recovery's long-term tailwinds, technology leadership and platform strength have allowed us to attract accomplished leaders who are ready to lead our next chapter of growth. We look forward to updating you further as this search progresses. As Interim CEO, I'm focused on ensuring the successful execution of our business initiatives and continuity with our customers and employees during this search process. In addition to my past career across water, energy and infrastructure services; I have also had the privilege of serving on Energy Recovery's Board for over a decade. With this background, I am ensuring that we keep pace on growth, innovation, manufacturing transformation and capital discipline. Moving now to our outlook. We sit in attractive end markets with durable structural growth in the high single digits. While …
| Name | Title | Compensation | Gender | Year Born | Status |
|---|---|---|---|---|---|
Aidan Ryan | Chief Financial Officer | USD 530,912 | Male | — | Active |
Rodney Clemente | Senior Vice President of Water | USD 519,886 | Male | 1980 | Active |
William W. Yeung | Chief Legal Officer & Secretary to the Board | USD 459,721 | Male | 1972 | Active |
Natarajan Ramanan | Chief Technology Officer | USD 371,873 | Male | 1961 | Active |
Chris Hartlage | Vice President of Operations | USD 358,376 | Male | — | Active |
Alexander J. Buehler | Interim President, CEO & Director | USD 65,000 | Male | 1976 | Active |
Matt Hostetler | Chief Human Resources Officer | — | Male | — | Active |
Kelley Vendeland | Vice President of Marketing & Sustainability | — | Female | — | Active |
Diamond Hill Small-Mid Cap Strategy increased 9.73% (net of fees) compared to a 20.26% increase for the Russell 2500 Index. Shares of electrical product manufacturer Regal Rexnord rose in 2Q26 after reporting solid results on strong data center demand. Given the fundamental headwinds Wix.com is facing, we exited our position to deploy capital to more attractive opportunities.
Energy Recovery (ERII) reported a 60% revenue collapse in 2Q26, with Desalination down 80% and significant weakness beyond the Middle East. Unexplained revenue declines in Europe and Asia raise concerns about potential structural or competitive issues beyond the Iran conflict. ERII's balance sheet strength is overstated due to depleted receivables; much of current cash will be needed to rebuild working capital if business recovers.
The Fund increased 9.71% compared to a 20.26% increase for the Russell 2500 Index. We initiated a position in managed care provider Centene. Shares of website design software provider Wix.com were sold as the company's core business has experienced slowing growth due to AI-driven vibe coding.
Energy Recovery, Inc. (ERII) Q2 2026 Earnings Call Transcript
Energy Recovery (ERII) came out with a quarterly loss of $0.03 per share versus the Zacks Consensus Estimate of a loss of $0.04. This compares to earnings of $0.07 per share a year ago.
