Energy Recovery (NASDAQ:ERII) Reports Sales Below Analyst Estimates In Q1 Earnings, Stock Drops 18.2%
Energy recovery device manufacturer Energy Recovery (NASDAQ:ERII) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 33.3% year on year to $8.07 million. Its non-GAAP loss of $0.13 per share was significantly below analysts' consensus estimates.
Is now the time to buy Energy Recovery? Find out in our full research report.
Energy Recovery (ERII) Q1 CY2025 Highlights:
Revenue: $8.07 million vs analyst estimates of $21.97 million (33.3% year-on-year decline, 63.3% miss)
Adjusted EPS: -$0.13 vs analyst estimates of $0 (significant miss)
Operating Margin: -156%, down from -90.4% in the same quarter last year
Free Cash Flow Margin: 130%, up from 46.9% in the same quarter last year
Market Capitalization: $814.8 million
Company Overview
Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ:ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.
Sales Growth
A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Energy Recovery grew its sales at a solid 9.7% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Energy Recovery Quarterly Revenue
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Energy Recovery's annualized revenue growth of 15.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.
Energy Recovery Year-On-Year Revenue Growth
This quarter, Energy Recovery missed Wall Street's estimates and reported a rather uninspiring 33.3% year-on-year revenue decline, generating $8.07 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 17.4% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will spur better top-line performance.
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