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Mar 31, 2023
Energy Recovery Q1 2023 Earnings Report
Reported financial results for the first quarter ended March 31, 2023.
Key Takeaways
Energy Recovery reported a challenging first quarter with revenue of $13.4 million, aligning with guidance. The company faced a net loss of $6.3 million due to lower gross margin and the timing of megaproject shipments. Despite the loss, operating cash flow was positive at $8.7 million, driven by strong collections.
Revenue reached $13.4 million, meeting the February 2023 guidance.
Gross margin decreased to 60.9%, impacted by changes in revenue mix across different channels.
Operating expenses increased by 6% compared to Q4 2022, driven by sales and marketing investments.
Net loss amounted to $6.3 million, primarily due to lower revenue and gross margin from timing of megaproject shipments.
Revenue by Geographic Location
Forward Guidance
Desalination revenue for 2023 will be heavily weighted to the second half of this year due to the expected timing of megaproject shipments. Desalination business is expected to grow between 3-7% this year. Wastewater business to double in 2023 and 2024.
Positive Outlook
- Desalination revenue expected to be strong in the second half of 2023.
- Desalination business projected to grow between 3-7% this year.
- Increasing demand for wastewater products.
- Expanding sales and marketing capabilities to address wastewater opportunities.
- First deployment in a food manufacturing plant this summer.
Challenges Ahead
- Timing of megaproject shipments is causing revenue to be heavily weighted to the second half of the year.
- Lower gross margin due to an increase in pump and hydraulic turbocharger revenue and a decrease in PX® Pressure Exchanger® revenue.
- Loss from operations primarily attributable to lower revenue and gross margin.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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