Exhibit 99.1

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Energy Recovery Achieves Record-Breaking First Quarter 2022 Revenue


SAN LEANDRO, Calif. - May 4, 2022 - Energy Recovery, Inc. (Nasdaq:ERII) (“Energy Recovery” or the “Company”) today announced its financial results for the first quarter ended March 31, 2022.

News Summary
•Revenue of $32.5 million, an increase of 12% year-over-year (“YoY”).
•Income from operations of $8.2 million, an increase of 34% YoY, and adjusted income from operations(1) of $10.1 million, or an increase of 25% YoY.
•Net income per share of $0.14, an increase of 17% YoY; adjusted net income per share(1) of $0.16, an increase of 23% YoY.
•Adjusted EBITDA(1) grew 22% YoY to $11.1 million.
•Share repurchases of $8.1 million, or 0.4 million shares, for cumulative repurchases under the March 2021 Authorization of $31.4 million, or 1.7 million shares.
•Cash and investments of $96.6 million, which include cash, cash equivalents, and short-term and long-term investments.
•Our MSCI ESG rating was upgraded for the second year in a row to “AA” in April.
•Full year revenue guidance of up to $130 million reaffirmed.

“We not only delivered record first quarter revenue, but also grew our quarterly operating income 34% year-on-year despite the inflationary environment as we execute on our disciplined growth path,” said Robert Mao, Chairman, President and Chief Executive Officer of Energy Recovery.

“Our Q1 results included industrial wastewater sales equivalent to nearly 50% of 2021’s total sales in this market. In addition, we are preparing for the installation of a CO2 refrigeration rack fully integrated with our PX G1300 for Vallarta Supermarkets in California,” said Mr. Mao.

“The transformation of Energy Recovery the past two years is significant, but is just the beginning.” Mr. Mao continued, “Our disciplined approach to sustainable growth and commitment to transparency and accountability will continue to guide us as we innovate and create value for our customers and shareholders.”

First Quarter Financial Highlights
GAAP
Non-GAAP(1)
Q1 2022
Q1 2021
vs. Q1 2021
Q1 2022
Q1 2021
vs. Q1 2021
(In millions except for percentages, basis points and per share amounts)
Revenue$32.5$28.9up 12%$32.5$28.9up 12%
Gross margin70.8 %69.0 %up 185 bps71.3 %69.4 %up 183 bps
Operating margin25.3 %21.2 %up 403 bps31.0 %27.8 %up 312 bps
Net income$7.9$6.9up 15%$9.1$7.2up 28%
Net income per share$0.14$0.12up 17%$0.16$0.13up 23%
Effective tax rate5.3 %(10.3 %)up 1560 bps10.2 %12.1 %down 193 bps
Adjusted EBITDA$11.1$9.1up 22%
Free cash flow($3.6)($0.6)up 530%

(1) “Adjusted income from operations,” “Adjusted net income per share,” “Free cash flow” and “Adjusted EBITDA” are non-GAAP financial measures. Refer to the sections “Use of Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures.”


Forward-Looking Statements
Certain matters discussed in this press release and on the conference call are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the timing of the installation of the Company’s PX G1300, and the Company’s belief that it will be able to continue to innovate and create value for its customers and shareholders. These forward-looking statements are based on information currently available to us and on management’s beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. Potential risks and uncertainties include any other factors that may have been discussed herein regarding the risks and uncertainties of the Company’s business, and the risks discussed under “Risk Factors” in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended December 31, 2021, as well as other reports filed by the Company with the SEC from time to time. Because such forward-looking statements involve risks and uncertainties, the Company’s actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements.

Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including adjusted income from operations, adjusted net income per share, free cash flow and adjusted EBITDA. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions, and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Notes to the First Quarter 2022 Financial Results
•Adjusted EBITDA is a non-GAAP financial measure that the Company defines as income from operations which excludes depreciation, amortization, share-based compensation, and non-recurring and extraordinary items.
•Adjusted net income per share is a non-GAAP financial measure that the Company defines as adjusted net income, which excludes share-based compensation and non-recurring and extraordinary items and the applicable tax effect, divided by basic shares outstanding.
•Free cash flow is a non-GAAP financial measure that the Company defines as net cash (used in) provided by operating activities less capital expenditures.


Conference Call to Discuss First Quarter 2022 Financial Results
LIVE CONFERENCE CALL:
Wednesday, May 4, 2022, 2:00 PM PT / 5:00 PM ET
Listen-only, US / Canada Toll-Free: +1 (877) 709-8150
Listen-only, Local / International Toll: +1 (201) 689-8354

CONFERENCE CALL REPLAY:
Expiration: Saturday, June 4, 2022
US / Canada Toll-Free: +1 (877) 660-6853
Local / International Toll: +1 (201) 612-7415
Access code: 13727335

Investors may also access the live call or the replay over the internet at ir.energyrecovery.com/websites/energyrecover/English/2200/calendar.html. The replay will be available approximately three hours after the live call concludes.



Disclosure Information
Energy Recovery uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Energy Recovery’s investor relations website in addition to following Energy Recovery’s press releases, SEC filings, and public conference calls and webcasts.

About Energy Recovery
Energy Recovery creates technologies that solve complex challenges for industrial fluid-flow markets worldwide. Building on our pressure exchanger technology platform, we design and manufacture solutions that make industrial processes more efficient and sustainable. What began as a game-changing invention for desalination has grown into a global business accelerating the environmental sustainability of customers’ operations in multiple industries. Headquartered in the San Francisco Bay Area, Energy Recovery has manufacturing, research and development facilities across California and Texas with sales and on-site technical support available globally. For more information, please visit www.energyrecovery.com.

Contact
Investor Relations
ir@energyrecovery.com
+1 (281) 962-8105



ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31,
2022		December 31,
2021
(In thousands)
ASSETS
Cash, cash equivalents and investments$96,556 $107,988 
Accounts receivable and contract assets27,466 21,108 
Inventories, net23,482 20,383 
Prepaid expenses and other assets5,802 4,582 
Property, equipment and operating leases34,211 35,014 
Goodwill and other intangible assets12,824 12,827 
Deferred tax assets and other assets11,435 11,788 
TOTAL ASSETS$211,776 $213,690 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Accounts payable and accrued expenses$12,453 $14,903 
Contract liabilities2,124 3,406 
Lease liabilities16,074 16,443 
Other liabilities, non-current159 159 
Total liabilities30,810 34,911 
Stockholders’ equity
Common stock and additional paid-in capital198,275 195,657 
Accumulated other comprehensive loss(418)(149)
Treasury stock(61,888)(53,832)
Retained earnings44,997 37,103 
Total stockholders’ equity180,966 178,779 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$211,776 $213,690 




ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended March 31,
 20222021
 (In thousands, except per share data)
Revenue$32,546 $28,940 
Cost of revenue9,498 8,981 
Gross profit23,048 19,959 
Operating expenses
General and administrative6,551 6,610 
Sales and marketing3,364 2,703 
Research and development4,911 4,502 
Total operating expenses14,826 13,815 
Income from operations8,222 6,144 
Other income, net117 82 
Income before income taxes8,339 6,226 
Provision for (benefit from) income taxes445 (640)
Net income$7,894 $6,866 
Net income per share
Basic$ 0.14 $ 0.12 
Diluted$ 0.14 $ 0.12 
Number of shares used in per share calculations
Basic56,783 56,877 
Diluted58,181 58,597 




ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
20222021
(In thousands)
Cash flows from operating activities:
Net income$7,894 $6,866 
Non-cash adjustments3,964 2,650 
Net cash used in operating assets and liabilities(13,460)(9,462)
Net cash (used in) provided by operating activities(1,602)54 
Cash flows from investing activities:
Net investment in marketable securities(18,956)5,710 
Capital expenditures(1,976)(622)
Net cash (used in) provided by investing activities(20,932)5,088 
Cash flows from financing activities:
Net proceeds from issuance of common stock763 6,059 
Repurchase of common stock(8,056)— 
Net cash (used in) provided by financing activities(7,293)6,059 
Effect of exchange rate differences(11)(25)
Net change in cash, cash equivalents and restricted cash(29,838)11,176 
Cash, cash equivalents and restricted cash, end of period$44,623 $105,534 



ENERGY RECOVERY, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)

Channel Revenue
Three Months Ended March 31,
20222021vs. 2021
(In thousands, except percentages)
Megaproject$23,840$23,757no change
Original equipment manufacturer4,6712,791up 67%
Aftermarket4,0352,392up 69%
Total Revenues$32,546$28,940up 12%


Segment Activity
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
WaterEmerging TechnologiesCorporateTotalWaterEmerging TechnologiesCorporateTotal
(In thousands)
Revenue$32,516 $30 $— $32,546 $28,940 $— $— $28,940 
Cost of revenue9,480 18 — 9,498 8,981 — — 8,981 
Gross profit23,036 12 — 23,048 19,959 — — 19,959 
Operating expenses
General and administrative1,464 908 4,179 6,551 1,561 1,166 3,883 6,610 
Sales and marketing2,301 527 536 3,364 2,164 179 360 2,703 
Research and development800 4,111 — 4,911 501 4,001 — 4,502 
Total operating expenses4,565 5,546 4,715 14,826 4,226 5,346 4,243 13,815 
Operating income (loss)$18,471 $(5,534)$(4,715)$8,222 $15,733 $(5,346)$(4,243)$6,144 


Share-based Compensation
 Three Months Ended March 31,
 20222021
(In thousands)
Stock-based compensation expense charged to:
Cost of revenue$146 $138 
General and administrative968 896 
Sales and marketing433 444 
Research and development335 436 
Total stock-based compensation expense$1,882 $1,914 




ENERGY RECOVERY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1)
(Unaudited)

This press release includes certain non-GAAP financial information because we plan and manage our business using such information. The following table reconciles the GAAP financial information to the non-GAAP financial information.

Q1'2022Q1'2021
(In millions, except per share and percentages)
Gross margin70.8%69.0%
Share-based compensation as a percent of revenue0.5%0.5%
Adjusted gross margin71.3%69.4%
Income from operations$8.2 $6.1 
Share-based compensation1.9 1.9 
Adjusted income from operations$10.1 $8.1 
Operating margin25.3 %21.2 %
Share-based compensation as a percent of revenue5.7 %6.6 %
Adjusted operating margin31.0 %27.8 %
Net income$7.9 $6.9 
Share-based compensation1.9 1.9 
Share-based compensation discrete tax item(0.6)(1.6)
Adjusted net income$9.1 $7.2 
Net income per share$0.14 $0.12 
Adjustments to net income per share (2)
0.02 0.01 
Adjusted net income per share$0.16 $0.13 
Diluted shares used in calculating net income per diluted share56,783 56,877 
Effective tax rate5.3%(10.3%)
Adjustments to effective tax rate (3)
4.9%22.4%
Adjusted effective tax rate10.2%12.1%
Income from operations$8.2 $6.1 
Share-based compensation1.9 1.9 
Depreciation and amortization1.0 1.0 
Adjusted EBITDA$11.1 $9.1 
Net cash (used in) provided by operating activities$(1.6)$0.1 
Capital expenditures(2.0)(0.6)
Free cash flow (non-GAAP)$(3.6)$(0.6)
(1)Amounts may not total due to rounding.
(2)Adjustments to net income per share reflects the adjustments for share-based compensation and share-based compensation discrete tax item on a per share basis.
(3)Adjustments to effective tax rate reflects adjustments for share-based compensation and share-based compensation discrete tax item.