Energy Recovery, Inc. Q2 FY26 Results

Summary

Energy Recovery, Inc. reported second quarter 2026 revenue of $12.0 million, a significant decrease of 57% year-over-year. Despite lower revenue, the gross margin improved to 74.7% from 64.0% in the prior year's quarter, driven by manufacturing cost efficiencies and channel mix, though partially offset by lower volume. Operating expenses were reduced by 10.0% to $14.8 million. The company incurred a net loss of $3.2 million and an adjusted EBITDA loss of $2.6 million for the quarter. Management cited the war in Iran as a primary factor for the revenue decline.

Key Highlights

1. 1

   Revenue for the second quarter of 2026 was $12.0 million, a decrease of $16.1 million compared to Q2 2025.

2. 2

   Gross margin improved to 74.7% in Q2 2026 from 64.0% in Q2 2025, primarily due to indirect manufacturing costs and channel mix, partially offset by lower volume.

3. 3

   Operating expenses decreased by 10.0% to $14.8 million in Q2 2026 compared to Q2 2025, mainly due to lower employee compensation costs and consulting costs.

4. 4

   The company reported a loss from operations of $5.9 million in Q2 2026, a decrease of $7.4 million compared to an income from operations of $1.5 million in Q2 2025, largely attributed to lower revenue due to the war in Iran.

5. 5

   Net loss for Q2 2026 was $3.2 million, and adjusted EBITDA loss was $2.6 million.

6. 6

   Cash and investments stood at $98.1 million as of June 30, 2026.