Energy Recovery Inc (NASDAQ:ERII) Exceeds Q2 2025 Earnings and Revenue Estimates, Stock Surges 6%

Last update: Aug 6, 2025

Energy Recovery Inc (NASDAQ:ERII) reported its second-quarter 2025 financial results, delivering revenue and earnings that exceeded analyst expectations. The company posted revenue of $28.1 million, up 3% year-over-year, surpassing the consensus estimate of $25.9 million. Adjusted earnings per share (EPS) came in at $0.07, significantly higher than the estimated $0.0034.

Key Financial Highlights

Revenue Growth: Q2 revenue increased to $28.1 million from $27.2 million in Q2 2024, driven by timing differences in contracted projects.
Profitability Improvement: Net income rose to $2.1 million, a 420% increase from a net loss of $0.6 million in the prior-year quarter. Operating income also improved to $1.5 million, up 173% year-over-year.
Gross Margin Slight Dip: Gross margin declined slightly to 64.0% from 64.6% due to product mix and tariff-related costs.
Strong Cash Position: The company maintained a solid liquidity position with $93.7 million in cash and investments.

Market Reaction

Following the earnings release, Energy Recovery’s stock surged 6.09% in after-hours trading, reflecting investor optimism over the earnings beat. The strong EPS performance—significantly above estimates—likely drove this positive reaction, as it suggests improved profitability despite a modest revenue increase.

Outlook vs. Analyst Estimates

While the press release did not provide explicit forward guidance, analysts currently expect:

Q3 2025 Revenue: $43.7 million
Full-Year 2025 Revenue: $151.9 million
Full-Year 2025 EPS: $0.55

Given that Q2 results exceeded expectations, investors may be anticipating upward revisions to full-year estimates if the company maintains its momentum.

Press Release Summary

The earnings report highlighted:

Improved operational efficiency, with operating expenses declining by 15.8% year-over-year.
Continued strength in the company’s core water and emerging technologies segments.
A shareholder letter detailing business updates and 2025 outlook, available on the company’s investor relations site.

For a deeper dive into Energy Recovery’s earnings and future estimates, visit the earnings estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making any financial decisions.