ERII

Energy Recovery, Inc.

NASDAQ · INDUSTRIALS · SPECIAL INDUSTRY MACHINERY, NEC

6.79

+0.11 +1.65%

USD · close Oct 26

A free account adds a watchlist, alerts when insiders, Congress or short sellers move on your tickers, and a morning brief. Sign up

Work order

WATCH · shorts 56

Insiders, 90 days

no open-market filings in 90 days

Congress, 90 days

0 / 0

no disclosures naming it

Big money

0 / 15

none of the tracked funds disclose it

Calls on record

nobody we score has called it yet

MKT CAP $346.6MP/E 25.1DIV YIELD —FCF YIELD 11.14%REV TTM $120.6M −15.0%NET INCOME $15.3M −36.4%NET CASH $61.4M52W 6.64 – 17.59SEC XBRL · TTM TO Invalid Date

How ERII rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

81%

of sentences unchanged

Added

new sentences

Dropped

sentences removed

Length

−153

words, now 10,478

New in FY2025

Pronounced variability, complete cancellations or delays in the construction of such plants or reductions in spending for desalination in general could negatively impact our Water segment sales, which in turn could have an adverse effect on our entire business, financial condition, or results of operations, and make it difficult for us to accurately forecast our future sales.
Our customers may also encourage competition by purchasing our competitors products.
The performance and pricing pressure of such products could cause us to adjust the prices of certain products to remain competitive, or we may not be able to continue to win large contracts, which could adversely affect our market share, competitive position and margins.
Risks Related to our Emerging Technologies Segment We have decided to wind down operations of our CO 2 retail grocery business, a nd we expect to incur costs associated with the wind down, which will have an adverse effect on our Emerging Technologies segment financial condition and results of operations.
We introduced the PX G1300 energy recovery device for use in CO 2 -based refrigeration systems in 2021.
While interest in the PX G1300 had been positive, in February 2026, as a result of discussions with OEM and end user customers, we decided to wind down operations in the CO 2 business within our Emerging Technologies segment due to a fundamental change in the business’ outlook.
We expect to substantially complete the wind down in the first quarter of 2026, and we will incur costs associated with the wind down which will have an adverse effect on our Emerging Technologies segment financial condition and results of operations.
Additionally, as a result of the wind down, we will not generate revenues in the CO 2 -based refrigeration market.
In addition, profitability, if any, in new industrial verticals may be lower than in our Water segment, and we may not be sufficiently successful in our diversification efforts to recoup investments.
Risks Related to our General Business Our operating results may fluctuate significantly, making our future operating results difficult to predict and causing our operating results to fall below expectations.
If we experience unforeseen fourth quarter delivery cancellations, postponements or other delays due to project cancellations, project delays, transportation or other shipping delays, or other adverse events would have prevented delivery in the fourth quarter, it is unlikely we will have sufficient time to make up such revenue shortfall .
For example, in our Water segment, the average Water segment sales cycle for our international MPD customers, which are involved with larger desalination plants, can be up to 36 months , and may exceed 36 months from time-to-time, and the average sales cycle for our OEM customers, which are involved with smaller desalination plants, ranges from one to 16 months , and may exceed 16 months from time-to-time.
In the future, we may further expand the international reach of our operations, including new offices and manufacturing facilities.
As a result, we are exposed to several political, economic and other uncertainties, including increased risks of social unrest, strikes, terrorism, war, the high cost of investment to establish a presence in a new market, changes in economic, political or other location conditions.
In addition, we face risks inherent in compliance with international and U.S. laws and regulations that apply to our international operations.
This uncertainty, together with other recent key global events, such as currency control regulations and tariff regimes, ongoing terrorist activity, and hostilities in the Middle East, may adversely impact (i) the ability or willingness of non- U.S. companies to transact business with U.S. companies, including with us; (ii) our ability to transact business in other countries, including the Middle East, where many of the water megaprojects are planned; (iii) regulation and trade agreements affecting U.S. companies; (iv) global stock markets (including The NASDAQ Global Select Market Composite on which our common shares are traded); and (v) general global economic conditions.
We have implemented additional enhanced security features and monitoring procedures and continue to closely monitor our cybersecurity risks.
R isks Related to Tax and Governmental Regulations The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or changes in tax legislation or policies could materially impact our financial position and results of operations.
For example, on July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted, which, among other things, allows domestic research and development expenditures to be expensed for tax years beginning on or after January 1, 2025, with retroactive elections for such expenditures paid or incurred in the two prior years, the restoration of 100% bonus depreciation for certain qualified property, modifications to international tax provisions, including provisions addressing the global intangible low-taxed income, foreign-derived intangible income, base erosion anti-abuse tax and controlled foreign corporation rules, and permanently extends certain expiring provisions of the Tax Act described below.
Tax Cuts and Jobs Act (“ Tax Act ”) enacted in 2017, made significant changes to the taxation of U.S. business entities including a reduction to the federal corporate income tax rate, the current taxation of certain foreign earnings, the imposition of base-erosion prevention measures which may limit the deduction of certain transfer pricing payments, foreign derived intangible income deductions, and possible limitations on the deductibility of net interest expense or corporate debt obligations.
Department of the Treasury may continue to issue regulations that affect various components of the OBBB and the Tax Act .
Our future effective tax rate may be impacted by changes in interpretation of the regulations, as well as additional legislation and guidance regarding the OBBB and the Tax Act .
For example, the OBBB, the Tax Act , the Coronavirus Aid, Relief, and Economic Security Act, and the Inflation Reduction Act, enacted many significant changes to the U.S. tax laws.
Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one- time charges, and could increase our future U.S. tax expense.
As a result , changes in tax laws or tax rates, and the ability to utilize our deferred tax assets could materially affect our tax provision, net income and cash flows in future periods.
Changes in U.S. policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any resulting changes in international trade relations, such as reciprocal tariffs or trade wars may have a material adverse impact on impact on our business, results of operations, or financial condition.
Throughout 2025, the U.S. has increased, expanded, or imposed new tariffs on goods imported from various countries.
Several countries have increased or imposed additional tariffs in response to U.S. tariffs.
The tariff environment has been dynamic in 2025, with changes occurring on an ongoing basis, and it is possible that additional developments will occur in the future, including as a result of negotiations between the U.S. and trade partners and legal challenges to the tariffs.
These recent tariffs and the subsequent retaliatory tariffs could increase the cost of goods for our products or reduce our ability to sell products globally, particularly for our Wastewater business in China, which may adversely affect our operating results and financial condition.
In addition, there is no guarantee that we can avoid any impact of tariff and related economic effects in the future, and these trade measures and retaliations may directly impact our business by increasing trade-related costs or affecting the demand for our products globally.
Any further unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact the competitive position of our products or prevent us from selling products in certain countries.
If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated, such changes could have an adverse effect on our business, financial condition and results of operations.
For example, the Board authorized two share repurchase programs in fiscal year 2025 to repurchase up to 30.0 million and 25.0 million aggregate value of the Company’s common stock, respectively.

Gone since FY2024

Pronounced variability or delays in the construction of such plants or reductions in spending for desalination in general could negatively impact our Water segment sales, which in turn could have an adverse effect on our entire business, financial condition, or results of operations, and make it difficult for us to accurately forecast our future sales.
The performance and pricing pressure of such new products could cause us to adjust the prices of certain products to remain competitive, or we may not be able to continue to win large contracts, which could adversely affect our market share, competitive position and margins.
Risks Related to our Emerging Technologies Segment We may not be able to successfully compete in the CO 2 -based refrigeration system market.
We introduced the PX G1300 energy recovery device for use in CO 2 -based refrigeration systems in 2021 and continue to work on developing market adoption of this new technology.
W hile interest in the PX G1300 has been positive , there is no guarantee that we will ultimately be successful in generating sustained interest and, more importantly, adoption of our technology on a timeline necessary to meet our goals, or at all.
The global commercial and industrial refrigeration industry can be slow to adopt new technologies and alternative technologies or new refrigerants may emerge, which may slow the adoption of the PX G1300 .
In addition, we may encounter new technological challenges that we will need to solve in order to achieve adoption of the technology.
The global commercial and industrial refrigeration industry is also saturated with very large, established companies who have greater experience and resources and may provide cost saving methods that utilize novel system architectures, new and improved equipment or materials, ejectors and/or other energy recovery devices, all or some of which could improve energy efficiency that compete against the PX G1300 .
If we are unable to solve any technological challenges, generate and sustain sufficient interest for our CO 2 -based refrigeration technology, we may not be able to successfully compete in the CO 2 -based refrigeration market, which could have an adverse effect on our CO 2 business, and our Emerging Technologies segment financial condition or results of operation.
In addition, profitability, if any, in new industrial verticals may be lower than in our Water segmen t, and we may not be sufficiently successful in our diversification efforts to recoup investments.
Risks Related to our General Business Our o perating results may fluctuate significantly, making our future operating results difficult to predict and causing our operating results to fall below expectations.
For example, in fiscal year 2024 , we forecasted over 40% of our annual net revenue to be realized in the fourth quarter.
Had we experienced unforeseen delivery cancellations, postponements or other delays due to project cancellations, project delays, transportation or other shipping delays, or other adverse events would have prevented delivery in the fourth quarter, it is unlikely we would have had sufficient time to make up such revenue shortfall.
For example, in our Water segment, the average Water segment sales cycle for our international MPD customers, which are involved with larger desalination plants, typically ranges from 16 to 36 months , and may exceed 36 months from time-to-time, and the average sales cycle for our OEM customers, which are involved with smaller desalination plants, ranges from one to 16 months , and may exceed 16 months from time-to-time.
We face risks inherent in conducting business internationally, including compliance with international and U.S. laws and regulations that apply to our international operations.
We face risks arising from the restructuring of our operations and uncertainty with respect to our ability to achieve any anticipated cost savings associated with such restructuring.
During the fourth quarter of fiscal year 2024 , we implemented a restructuring plan which included reductions in workforce in all functions of the organization, primarily in our San Leandro location, in order to lower our operating cost structure, and to position us for profitable growth .
Charges related to such actions may harm our profitability in the periods incurred.
Restructuring program actions, which include a reduction in workforce, may present a number of significant risks that could have a material adverse effect on our operations, financial condition, results of operations, cash flow, or business reputation, including: • incurrence of additional costs in the short-term, including workforce reduction costs, training of employees or third-party resources, and charges relating to consolidation of excess facilities; • actual or perceived disruption of service or reduction in service levels to our customers; • potential disruption of manufacturing of product to satisfy our contractual commitments; • potential adverse effects on our internal control environment and inability to preserve adequate internal controls relating to our general and administrative functions; • actual or perceived disruption to customers, suppliers, distribution networks and other important operational relationships and the inability to resolve potential conflicts in a timely manner; • diversion of management’s attention from ongoing business activities and strategic objectives; • failure to maintain employee morale, damage to company culture and an increase in employment claims; • employee attrition beyond planned reductions and workforce transitions, including inadequate transfers of knowledge; and • damage to our reputation as an employer, which could make it more difficult for us to hire new employees in the future.
Because of these and other factors, some of which may not be entirely within our control, we may not fully realize the purpose and anticipated operational benefits, efficiencies or cost savings of any productivity actions in the expected timelines, or at all, and, if we do not, our business and results of operations may be adversely affected.
This uncertainty, together with other recent key global events, such as recently enacted currency control regulations and tariff regimes in or against China, Mexico and Canada, ongoing terrorist activity, and hostilities in the Middle East, may adversely impact (i) the ability or willingness of non- U.S. companies to transact business with U.S. companies, including with us; (ii) our ability to transact business in other countries, including the Middle East, where many of the water megaprojects are planned; (iii) regulation and trade agreements affecting U.S. companies; (iv) global stock markets (including The NASDAQ Global Select Market Composite on which our common shares are traded); and (v) general global economic conditions.
W e have implemented additional enhanced security features and monitoring procedures and continue to closely monitor our cybersecurity risks.
Risks Related to Tax and Governmental Regulations The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or changes in tax legislation or policies could materially impact our financial position and results of operations.
Tax Cuts and Jobs Act (“ Tax Act ”) enacted in 2017, made significant changes to the taxation of U.S. business entities that may have a meaningful impact to our provision for income taxes.
These changes included a reduction to the federal corporate income tax rate, the current taxation of certain foreign earnings, the imposition of base-erosion prevention measures which may limit the deduction of certain transfer pricing payments, foreign derived intangible income deductions, capitalization of R&D expenses beginning in the 2022 tax year, and possible limitations on the deductibility of net interest expense or corporate debt obligations.
Department of the Treasury continues to issue regulations that affect various components of the Tax Act .
Our future effective tax rate may be impacted by changes in interpretation of the regulations, as well as additional legislation and guidance regarding the Tax Act .
For example, the Tax Act , the Coronavirus Aid, Relief, and Economic Security Act, and the Inflation Reduction Act, enacted many significant changes to the U.S. tax laws.
Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.
For example, we are under a federal income tax audit by the IRS , for fiscal year 2021 (the “ 2021 Tax Audit ”).
The 2021 Tax Audit is ongoing with no proposed adjustments by the IRS to date.
We do not expect a preliminary resolution of the 2021 Tax Audit to be reached during the next six months.
While we regularly assess the likely outcome of the 2021 Tax Audit in order to determine the appropriateness of our tax provision, tax audits are inherently uncertain and an unfavorable outcome could occur.
As a result, the ultimate resolution of the 2021 Tax Audit , changes in tax laws or tax rates, and the ability to utilize our deferred tax assets could materially affect our tax provision, net income and cash flows in future periods.
For example, the Board authorized a share repurchase program in the fourth quarter of fiscal year 2024 to repurchase up to $50.0 million aggregate value of the Company’s common stock.
This program began and was completed in the fourth quarter of fiscal year 2024.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch ERII. Know when insiders buy.

One email the day a filing lands. Free.