Energy Recovery reported third quarter 2026 financial results that significantly trailed analyst expectations, with the top line suffering a 65% year-over-year decline. The company's performance was severely hindered by geopolitical conflict in the Middle East, which disrupted core desalination megaprojects.
Key Highlights
- Revenue of $11.2 million missed the analyst estimate of $16.15 million, largely due to a 95% collapse in megaproject channel sales.
- GAAP diluted loss per share was $0.12, wider than the projected $0.04 loss, as operating expenses outpaced sharply lower gross profit.
- Gross margin contracted significantly to 37.5% from 64.2% in the prior-year period, driven by lower production volumes and unfavorable product mix.
- The company ended the quarter with $85.6 million in cash and investments, despite using $9.8 million in cash for operations during the period.