Energy Recovery, Inc. Q3 FY2025 earnings call

• Strong quarter of sales execution with mega-project shipments improving and wastewater revenue rebounding, reiterating full year revenue guidance.
• Team controlled costs, reducing full year OpEx guidance further while investing in wastewater business and driving efficiency.
• CO2 business had summer testing, OEM engagement strong but early in commercialization, focused on 2026 traction.

• Reiterated full year revenue guidance.
• Reduced full year OpEx guidance further.
• Expect growth in Q4 and next year with modest operating expense increases.
• Focused on CO2 commercialization traction in 2026.

Q: What were the main takeaways from the recent CO2 white paper?

A: Three main takeaways: energy savings up to 15% at peak, water savings in certain regions, increased performance during high heat load days.

Q: What's the progress with OEMs for CO2 commercialization?

A: Need another summer testing season, likely a year away from commercial agreement with large OEM, signed MOU with Hillphoenix, likely 2026.

Q: Possibility of water front efforts like desalination?

A: Long-term trends positive, but cautious on near-term results as infrastructure takes time.

Q: Data center opportunity updates?

A: Monitoring closely, CO2 still small in data center refrigeration, nothing near term in refrigeration, water reuse/treatment for data centers being monitored.

Q: Operating cost reduction and international footprint?

A: Cost reductions unrelated to international footprint, acted quickly on costs after tariffs, continued investing in wastewater and manufacturing.

Q: Lithium project progress?

A: Lithium project in Argentina, $350k project, first in Argentina, more projects in China.

Q: Wastewater hires criteria?

A: Look for track record in wastewater space and experience in 1-2 verticals.

Q: Retailer tests for CO2?

A: Likely skid installations.

Q: Desalination visibility for 2026?

A: Backlog expected to build in 2026, slow first half, heavy second half.