Energy Recovery, Inc. Q4 FY2025 earnings call

• Fully focused on water business, which is large, growing, and profitable but had project delays in 2025 - 2026. - Winding down CO2 retail grocery business. - Management team to focus on optimizing performance, capital allocation, innovation, growing wastewater business, cutting operating expenses, and buying back stock. - New product PXQ650, expected to start manufacturing in the second half of 2026. - Wastewater business hiring salespeople to build the business.

Water business is a large, growing, and profitable end market but faced delays in large desalination projects in 2025 - 2026; CO2 retail grocery business is being wound down.

• 2025 - 2026 affected by project delays, but confident in 2027 growth based on pipeline. - 2026 guidance with three projects likely slipping into 2027 and other projects at risk; capital expenditure guidance for 2026 is $3 - 6 million.

• Delays in large desalination projects. - Fewer EPCs bidding on desalination projects extending product tendering process. - Risks associated with winding down CO2 retail grocery business.

• Q: Larry Solo asked about Q4 shortfall, 2026 guidance and project delays.

A: Three projects likely slip into 2027, and other projects at risk; capital expenditure $3 - 6 million in 2026. - Q: Sondarya Iyer asked about PXQ650 pricing, manufacturing expansion timeline, revenue cadence, CO2 business other applications.

A: PXQ650 has higher effective ASP with gross margin expansion; manufacturing site selection to finalize by end of first half 2026, start phasing production in first quarter 2027; revenue cadence similar to 2025; no other CO2 product applications yet. - Q: Jeffrey Campbell asked about CO2 business裁员, product transition, manufacturing base, wastewater business, patent litigation.

A: About 20 heads cut in CO2 wind down; Q400 to ramp down in 2027 - 2028; Korea move was short-term, new facility for longer-term; wastewater business hiring salespeople; protecting IP in patent litigation.