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Jun 30, 2025
Energy Recovery Q2 2025 Earnings Report
Energy Recovery reported its second quarter 2025 financial results, with revenue increasing due to contracted projects and improved operating income driven by higher revenue and reduced operating expenses.
Key Takeaways
Energy Recovery delivered a solid second quarter in 2025, with revenue reaching $28.1 million, a 3% increase year-over-year. The company achieved a net income of $2.1 million, a significant improvement from a net loss in the prior year, and reported strong adjusted EBITDA of $4.4 million. These results were primarily driven by higher revenue from contracted projects and effective management of operating expenses.
Revenue for Q2 2025 increased by $0.9 million to $28.1 million compared to Q2 2024, primarily due to the timing of revenue from contracted projects.
Gross margin was 64.0%, a slight decrease of 60 basis points from Q2 2024, attributed to product mix and tariffs.
Operating expenses decreased by 15.8% to $16.5 million, mainly due to lower employee and consulting costs.
Net income significantly improved to $2.1 million in Q2 2025 from a net loss of $0.6 million in Q2 2024, and adjusted EBITDA was $4.4 million.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Management has released a letter to shareholders discussing the outlook for 2025, which is available on the company's investor relations website.
Positive Outlook
- Q2 2025 financial results were in-line with internal expectations.
- Results were consistent with communicated expectations for quarterly revenue cadence in 2025.
- Revenue increased year-over-year due to timing of revenue from contracted projects.
- Operating expenses decreased significantly due to lower employee and consulting costs.
- Income from operations increased substantially due to higher revenue and lower operating expenses.
Challenges Ahead
- Gross margin decreased slightly due to product mix and tariffs.
- Adjusted operating margin decreased compared to the prior year.
- Adjusted net income decreased compared to the prior year.
- Adjusted EBITDA decreased compared to the prior year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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