00014215172024--12-31Q1false9100014215172024-01-012024-03-3100014215172024-04-25xbrli:shares00014215172024-03-31iso4217:USD00014215172023-12-3100014215172023-01-012023-03-31iso4217:USDxbrli:shares0001421517us-gaap:CommonStockMember2023-12-310001421517us-gaap:CommonStockMember2024-03-310001421517us-gaap:CommonStockMember2022-12-310001421517us-gaap:CommonStockMember2023-03-310001421517us-gaap:AdditionalPaidInCapitalMember2023-12-310001421517us-gaap:AdditionalPaidInCapitalMember2022-12-310001421517us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001421517us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001421517us-gaap:AdditionalPaidInCapitalMember2024-03-310001421517us-gaap:AdditionalPaidInCapitalMember2023-03-310001421517us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001421517us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001421517us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001421517us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001421517us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001421517us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001421517us-gaap:TreasuryStockCommonMember2024-03-310001421517us-gaap:TreasuryStockCommonMember2023-12-310001421517us-gaap:TreasuryStockCommonMember2023-03-310001421517us-gaap:TreasuryStockCommonMember2022-12-310001421517us-gaap:RetainedEarningsMember2023-12-310001421517us-gaap:RetainedEarningsMember2022-12-310001421517us-gaap:RetainedEarningsMember2024-01-012024-03-310001421517us-gaap:RetainedEarningsMember2023-01-012023-03-310001421517us-gaap:RetainedEarningsMember2024-03-310001421517us-gaap:RetainedEarningsMember2023-03-3100014215172023-03-310001421517us-gaap:CommonStockMember2024-01-012024-03-310001421517us-gaap:CommonStockMember2023-01-012023-03-3100014215172022-12-310001421517erii:WaterSegmentMembererii:MiddleEastAndAfricaMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembererii:MiddleEastAndAfricaMember2024-01-012024-03-310001421517erii:MiddleEastAndAfricaMember2024-01-012024-03-310001421517erii:WaterSegmentMembererii:MiddleEastAndAfricaMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembererii:MiddleEastAndAfricaMember2023-01-012023-03-310001421517erii:MiddleEastAndAfricaMember2023-01-012023-03-310001421517erii:WaterSegmentMembersrt:AmericasMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembersrt:AmericasMember2024-01-012024-03-310001421517srt:AmericasMember2024-01-012024-03-310001421517erii:WaterSegmentMembersrt:AmericasMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembersrt:AmericasMember2023-01-012023-03-310001421517srt:AmericasMember2023-01-012023-03-310001421517erii:WaterSegmentMembersrt:AsiaMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembersrt:AsiaMember2024-01-012024-03-310001421517srt:AsiaMember2024-01-012024-03-310001421517erii:WaterSegmentMembersrt:AsiaMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembersrt:AsiaMember2023-01-012023-03-310001421517srt:AsiaMember2023-01-012023-03-310001421517srt:EuropeMembererii:WaterSegmentMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembersrt:EuropeMember2024-01-012024-03-310001421517srt:EuropeMember2024-01-012024-03-310001421517srt:EuropeMembererii:WaterSegmentMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembersrt:EuropeMember2023-01-012023-03-310001421517srt:EuropeMember2023-01-012023-03-310001421517erii:WaterSegmentMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMember2024-01-012024-03-310001421517erii:WaterSegmentMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMember2023-01-012023-03-310001421517erii:WaterSegmentMembererii:AftermarketMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembererii:AftermarketMember2024-01-012024-03-310001421517erii:AftermarketMember2024-01-012024-03-310001421517erii:WaterSegmentMembererii:AftermarketMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembererii:AftermarketMember2023-01-012023-03-310001421517erii:AftermarketMember2023-01-012023-03-310001421517erii:MegaprojectMembererii:WaterSegmentMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembererii:MegaprojectMember2024-01-012024-03-310001421517erii:MegaprojectMember2024-01-012024-03-310001421517erii:MegaprojectMembererii:WaterSegmentMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembererii:MegaprojectMember2023-01-012023-03-310001421517erii:MegaprojectMember2023-01-012023-03-310001421517erii:WaterSegmentMembererii:OriginalEquipmentManufacturerMember2024-01-012024-03-310001421517erii:EmergingTechnologiesSegmentMembererii:OriginalEquipmentManufacturerMember2024-01-012024-03-310001421517erii:OriginalEquipmentManufacturerMember2024-01-012024-03-310001421517erii:WaterSegmentMembererii:OriginalEquipmentManufacturerMember2023-01-012023-03-310001421517erii:EmergingTechnologiesSegmentMembererii:OriginalEquipmentManufacturerMember2023-01-012023-03-310001421517erii:OriginalEquipmentManufacturerMember2023-01-012023-03-3100014215172023-01-012023-12-3100014215172024-04-012024-03-3100014215172025-01-012024-03-310001421517us-gaap:FairValueMeasurementsRecurringMember2023-12-310001421517us-gaap:FairValueMeasurementsRecurringMember2024-03-310001421517us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001421517us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001421517us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2024-03-310001421517us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2023-12-310001421517us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2024-03-310001421517us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001421517us-gaap:CorporateDebtSecuritiesMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2024-03-310001421517us-gaap:CorporateDebtSecuritiesMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001421517us-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Membererii:MunicipalNotesAndBondsMember2024-03-310001421517us-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Membererii:MunicipalNotesAndBondsMember2023-12-310001421517us-gaap:ShortTermInvestmentsMember2024-03-310001421517us-gaap:ShortTermInvestmentsMember2023-12-310001421517erii:LongtermInvestmentMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001421517erii:LongtermInvestmentMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001421517erii:LongtermInvestmentMemberus-gaap:FairValueInputsLevel2Membererii:MunicipalNotesAndBondsMember2024-03-310001421517erii:LongtermInvestmentMemberus-gaap:FairValueInputsLevel2Membererii:MunicipalNotesAndBondsMember2023-12-310001421517erii:LongtermInvestmentMember2024-03-310001421517erii:LongtermInvestmentMember2023-12-310001421517erii:ShortTermAndLongTermInvestmentsMember2024-03-310001421517erii:ShortTermAndLongTermInvestmentsMember2023-12-310001421517us-gaap:USTreasurySecuritiesMember2024-03-310001421517us-gaap:USTreasurySecuritiesMember2023-12-310001421517us-gaap:CorporateDebtSecuritiesMember2024-03-310001421517us-gaap:CorporateDebtSecuritiesMember2023-12-310001421517erii:MunicipalNotesAndBondsMember2024-03-310001421517erii:MunicipalNotesAndBondsMember2023-12-310001421517erii:JPMorganChaseBankNAMembererii:CommittedRevolvingCreditLineMemberus-gaap:LineOfCreditMember2021-12-220001421517us-gaap:RevolvingCreditFacilityMembererii:CommittedRevolvingCreditLineMemberus-gaap:LineOfCreditMember2024-03-310001421517erii:JPMorganChaseBankNAMemberus-gaap:LetterOfCreditMembererii:CommittedRevolvingCreditLineMemberus-gaap:LineOfCreditMember2024-03-310001421517erii:JPMorganChaseBankNAMemberus-gaap:LetterOfCreditMembererii:CommittedRevolvingCreditLineMember2024-03-310001421517us-gaap:StandbyLettersOfCreditMember2024-03-310001421517us-gaap:StandbyLettersOfCreditMember2023-12-31xbrli:pure0001421517us-gaap:OperatingSegmentsMembererii:WaterSegmentMember2024-01-012024-03-310001421517us-gaap:OperatingSegmentsMembererii:EmergingTechnologiesSegmentMember2024-01-012024-03-310001421517us-gaap:OperatingSegmentsMember2024-01-012024-03-310001421517us-gaap:OperatingSegmentsMembererii:WaterSegmentMember2023-01-012023-03-310001421517us-gaap:OperatingSegmentsMembererii:EmergingTechnologiesSegmentMember2023-01-012023-03-310001421517us-gaap:OperatingSegmentsMember2023-01-012023-03-310001421517us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001421517us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001421517erii:CustomerAMembererii:WaterSegmentMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-03-310001421517erii:CustomerBMembererii:WaterSegmentMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-03-310001421517erii:WaterSegmentMemberus-gaap:CustomerConcentrationRiskMembererii:CustomerCMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-03-310001421517erii:WaterSegmentMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembererii:CustomerDMember2023-01-012023-03-310001421517erii:JoshuaBallardMember2024-01-012024-03-310001421517erii:ArveHanstveitMember2024-01-012024-03-310001421517erii:JoshuaBallardMember2024-03-310001421517erii:ArveHanstveitMember2024-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission File Number: 001-34112
ER_Logo_Primary_Horiz_RGB-titlepage.jpg
Energy Recovery, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
01-0616867
(State or Other Jurisdiction of Incorporation)
(I.R.S. Employer Identification No.)
1717 Doolittle Drive, San Leandro, California  94577
                  (Address of Principal Executive Offices)                        (Zip Code)
(510483-7370
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.001 par value
ERII
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.  Yes þ  No ¨
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).  Yes þ  No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer  Non-accelerated filer  Smaller reporting company  Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).  Yes   No 
As of April 25, 2024, there were 57,330,153 shares of the registrant’s common stock outstanding.
ENERGY RECOVERY, INC.
TABLE OF CONTENTS
Page No.
Condensed Consolidated Balance Sheets — March 31, 2024 and December 31, 2023
Condensed Consolidated Statements of Operations — Three Months Ended March 31, 2024 and 2023
Condensed Consolidated Statements of Comprehensive Loss — Three Months Ended March 31, 2024 and 2023
Condensed Consolidated Statements of Stockholders’ Equity — Three Months Ended March 31, 2024 and 2023
Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2024 and 2023
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q
Forward-Looking Information
This Quarterly Report on Form 10-Q for the three months ended March 31, 2024, including Part I, Item 2, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” (the “MD&A”), contains forward-looking statements within the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements in this report include, but are not limited to,
statements about our expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future.
Forward-looking statements represent our current expectations about future events, are based on assumptions, and involve risks and
uncertainties.  If the risks or uncertainties occur or the assumptions prove incorrect, then our results may differ materially from those set forth
or implied by the forward-looking statements.  Our forward-looking statements are not guarantees of future performance or events.
Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “continue,” “could,”
“may,” “potential,” “should,” “will,” “would,” variations of such words and similar expressions are also intended to identify such forward-looking
statements.  These forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially and adversely from those expressed in any forward-looking statement.  Readers are directed to risks and
uncertainties identified under Part II, Item 1A, “Risk Factors,” and elsewhere in this report for factors that may cause actual results to be
different from those expressed in these forward-looking statements.  Except as required by law, we undertake no obligation to revise or
update publicly any forward-looking statement for any reason.
Forward-looking statements in this report include, without limitation, statements about the following:
our belief that our PX offers market-leading value with the highest technological and economic benefit;
our belief that leveraging our pressure exchanger technology will unlock new commercial opportunities in the future;
our belief that our PX G1300 can contribute to help make CO2-based refrigeration economically viable in a broader range of
climates;
our belief that our technology helps our customer achieve environmentally sustainable operations;
our expectation that sales outside of the U.S. will remain a significant portion of our revenue;
the scale of the environmental impact from the use of our solutions;
our belief that our sustainability goals are highly influential to our business success;
the timing of our receipt of payment for products or services from our customers;
our belief that our existing cash and cash equivalents, our short and/or long-term investments, and the ongoing cash generated
from our operations, will be sufficient to meet our anticipated liquidity needs for the foreseeable future, with the exception of a
decision to enter into an acquisition and/or fund investments in our latest technology arising from rapid market adoption that
could require us to seek additional equity or debt financing;
our expectations relating to the amount and timing of recognized revenue from our projects;
our expectations relating to expenses;
our expectation that we will continue to receive a tax benefit related to U.S. federal foreign-derived intangible income and
California research and development tax credit;
the outcome of proceedings, lawsuits, disputes and claims;
the impact of losses due to indemnification obligations;
other factors disclosed under the MD&A and Part I, Item 3, “Quantitative and Qualitative Disclosures about Market Risk,” and
elsewhere in this Form 10-Q.
You should not place undue reliance on these forward-looking statements.  These forward-looking statements reflect management’s
opinions only as of the date of the filing of this Quarterly Report on Form 10-Q.  All forward-looking statements included in this document are
subject to additional risks and uncertainties further discussed under Part II, Item 1A, “Risk Factors,” and are based on information available to
us as of May 1, 2024.  We assume no obligation to update any such forward-looking statements.  Certain risks and uncertainties could cause
actual results to differ materially from those projected in the forward-looking statements.  These forward-looking statements are disclosed
from time to time in our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q and Current Reports on Form 8‑K filed with, or
furnished to, the Securities and Exchange Commission (the “SEC”), as well as in Part II, Item 1A, “Risk Factors,” within this Quarterly Report
on Form 10-Q.
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | FLS 1
It is important to note that our actual results could differ materially from the results set forth or implied by our forward-looking
statements.  The factors that could cause our actual results to differ from those included in such forward-looking statements are set forth
under the heading Item 1A, “Risk Factors,” in our Quarterly Reports on Form 10-Q, in our Annual Reports on Form 10-K, and from time-to-
time, in our results disclosed in our Current Reports on Form 8-K.  In addition, when preparing the MD&A below, we presume the readers
have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of
Regulation S-K.
We provide our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, Proxy Statements on
Schedule 14A, Forms 3, 4 and 5 filed by, or on behalf of, directors, executive officers and certain large shareholders, and any amendments to
those documents filed or furnished pursuant to the Securities Exchange Act of 1934, free of charge on the Investor Relations section of our
website, www.energyrecovery.com.  These filings will become available as soon as reasonably practicable after such material is
electronically filed with or furnished to the SEC.  From time to time, we may use our website as a channel of distribution of material company
information.
We also make available in the Investor Relations section of our website our corporate governance documents including our code of
business conduct and ethics and the charters of the audit, compensation and nominating and governance committees.  These documents, as
well as the information on the website, are not intended to be part of this Quarterly Report on Form 10-Q.  We use the Investor Relations
section of our website as a means of complying with our disclosure obligations under Regulation FD.  Accordingly, you should monitor the
Investor Relations section of our website in addition to following our press releases, SEC filings and public conference calls and webcasts.
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | FLS 2
PART I — FINANCIAL INFORMATION
Item 1 — Financial Statements (unaudited)
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
2024
December 31,
2023
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents
$70,781
$68,098
Short-term investments
46,577
40,445
Accounts receivable, net
25,055
46,937
Inventories, net
31,671
26,149
Prepaid expenses and other assets
4,288
3,843
Total current assets
178,372
185,472
Long-term investments
12,137
13,832
Deferred tax assets, net
11,652
10,324
Property and equipment, net
17,889
18,699
Operating lease, right of use asset
11,038
11,469
Goodwill
12,790
12,790
Other assets, non-current
387
388
Total assets
$244,265
$252,974
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$3,492
$3,000
Accrued expenses and other liabilities
8,342
15,583
Lease liabilities
1,854
1,791
Contract liabilities
3,449
1,097
Total current liabilities
17,137
21,471
Lease liabilities, non-current
10,959
11,488
Other liabilities, non-current
132
207
Total liabilities
28,228
33,166
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock
65
65
Additional paid-in capital
222,122
217,617
Accumulated other comprehensive loss
(60)
(44)
Treasury stock
(80,486)
(80,486)
Retained earnings
74,396
82,656
Total stockholders’ equity
216,037
219,808
Total liabilities and stockholders’ equity
$244,265
$252,974
See Accompanying Notes to Condensed Consolidated Financial Statements
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 1
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2024
2023
 
(In thousands, except per share data)
Revenue
$12,090
$13,401
Cost of revenue
4,955
5,246
Gross profit
7,135
8,155
Operating expenses:
General and administrative
7,566
7,066
Sales and marketing
6,152
4,894
Research and development
4,351
4,306
Total operating expenses
18,069
16,266
Loss from operations
(10,934)
(8,111)
Other income (expense):
Interest income
1,442
621
Other non-operating income (expense), net
(53)
35
Total other income, net
1,389
656
Loss before income taxes
(9,545)
(7,455)
Benefit from income taxes
(1,285)
(1,159)
Net loss
$(8,260)
$(6,296)
Net loss per share:
Basic
$ (0.14)
$ (0.11)
Diluted
$ (0.14)
$ (0.11)
Number of shares used in per share calculations:
Basic
57,102
56,228
Diluted
57,102
56,228
See Accompanying Notes to Condensed Consolidated Financial Statements
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 2
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Three Months Ended March 31,
2024
2023
 
(In thousands)
Net loss
$(8,260)
$(6,296)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments
28
(17)
Unrealized gain (loss) on investments
(44)
95
Total other comprehensive income (loss), net of tax
(16)
78
Comprehensive loss
$(8,276)
$(6,218)
See Accompanying Notes to Condensed Consolidated Financial Statements
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 3
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 
Three Months Ended March 31,
 
2024
2023
 
(In thousands, except shares)
Common stock
Beginning and ending balance
$65
$64
Additional paid-in capital
Beginning balance
217,617
204,957
Issuance of common stock, net
1,190
165
Stock-based compensation
3,315
2,218
Ending balance
222,122
207,340
Accumulated other comprehensive loss
Beginning balance
(44)
(349)
Other comprehensive (loss) income
Foreign currency translation adjustments
28
(17)
Unrealized (loss) gain on investments
(44)
95
Total other comprehensive (loss) income, net
(16)
78
Ending balance
(60)
(271)
Treasury stock
Beginning and ending balance
(80,486)
(80,486)
Retained earnings
Beginning balance
82,656
61,152
Net loss
(8,260)
(6,296)
Ending balance
74,396
54,856
Total stockholders’ equity
$216,037
$181,503
Common stock issued (shares)
Beginning balance
65,029,459
64,225,391
Issuance of common stock, net
448,455
265,993
Ending balance
65,477,914
64,491,384
Treasury stock (shares)
Beginning and ending balance
8,148,512
8,148,512
Total common stock outstanding (shares)
57,329,402
56,342,872
See Accompanying Notes to Condensed Consolidated Financial Statements
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 4
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
2024
2023
(In thousands)
Cash flows from operating activities:
Net loss
$(8,260)
$(6,296)
Adjustments to reconcile net loss to cash provided by operating activities
Stock-based compensation
3,283
2,302
Depreciation and amortization
1,029
983
Right of use asset amortization
431
402
Accretion (amortization) of discounts (premiums) on investments
(231)
(89)
Deferred income taxes
(1,328)
(1,152)
Other non-cash adjustments
116
93
Changes in operating assets and liabilities:
Accounts receivable, net
21,882
22,509
Contract assets
593
Inventories, net
(5,723)
(4,855)
Prepaid and other assets
(545)
187
Accounts payable
1,140
920
Accrued expenses and other liabilities
(7,589)
(7,156)
Contract liabilities
2,292
216
Net cash provided by operating activities
6,497
8,657
Cash flows from investing activities:
Maturities of marketable securities
16,534
15,250
Purchases of marketable securities
(20,783)
(13,886)
Capital expenditures
(824)
(279)
Proceeds from sales of fixed assets
87
82
Net cash (used in) provided by investing activities
(4,986)
1,167
Cash flows from financing activities:
Net proceeds from issuance of common stock
1,190
165
Net cash provided by financing activities
1,190
165
Effect of exchange rate differences on cash and cash equivalents
(19)
8
Net change in cash, cash equivalents and restricted cash
2,682
9,997
Cash, cash equivalents and restricted cash, beginning of year
68,225
56,458
Cash, cash equivalents and restricted cash, end of period
$70,907
$66,455
See Accompanying Notes to Condensed Consolidated Financial Statements
Table of Contents
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 5
Note 1 Description of Business and Significant Accounting Policies
Energy Recovery, Inc. and its wholly-owned subsidiaries (the “Company” or “Energy Recovery”) designs and manufactures reliable,
high-performance solutions that provide cost savings through improved energy efficiency in commercial and industrial processes, with
applications across several industries.  Leveraging the Company’s pressure exchanger technology, which generates little to no emissions
when operating, the Company believes its solutions lower costs, save energy, reduce waste, and minimize emissions for companies across a
variety of commercial and industrial processesAs the world coalesces around the urgent need to address climate change and its impacts,
the Company is helping companies reduce their energy consumption in their industrial processes, which in turn, reduces their carbon
footprint.  The Company believes that its customers do not have to sacrifice quality and cost savings for sustainability and the Company is
committed to developing solutions that drive long-term value – both financial and environmental.  The Company’s solutions are marketed,
sold in, and developed for, the fluid-flow and gas markets, such as seawater and wastewater desalination, natural gas, chemical processing
and CO2-based refrigeration systems, under the trademarks ERI®, PX®, Pressure Exchanger®, PX® Pressure Exchanger® (“PX”), Ultra PX,
PX G, PX G1300, PX PowerTrain, AT, and Aquabold.  The Company owns, manufactures and/or develops its solutions, in whole or in
part, in the United States of America (the “U.S.”).
Basis of Presentation
The Condensed Consolidated Financial Statements include the accounts of Energy Recovery, Inc. and its wholly-owned subsidiaries. 
All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (the “SEC”).  Certain information and footnote disclosures normally included in the financial statements
prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules
and regulations.  The December 31, 2023 Condensed Consolidated Balance Sheet was derived from audited financial statements and may
not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information
presented not misleading.
The March 31, 2024 unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited
Consolidated Financial Statements and the notes thereto for the fiscal year ended December 31, 2023 included in the Company’s Annual
Report on Form 10-K filed with the SEC on February 21, 2024 (the “2023 Annual Report”).
All adjustments consisting of normal recurring adjustments that are necessary to present fairly the financial position, results of
operations and cash flows for the interim periods have been made.  The results of operations for the interim periods are not necessarily
indicative of the operating results for the full fiscal year or any future periods.
Use of Estimates
The preparation of Condensed Consolidated Financial Statements, in conformity with GAAP, requires the Company’s management to
make judgments, assumptions and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and
accompanying notes.
The accounting policies that reflect the Company’s significant estimates and judgments and that the Company believes are the most
critical to aid in fully understanding and evaluating its reported financial results are revenue recognition; granted equity award valuations;
equipment useful life and valuation; goodwill valuation and impairment; deferred taxes and valuation allowances on deferred tax assets; and
evaluation and measurement of contingencies. Those estimates could change, and as a result, actual results could differ materially from
those estimates.
The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a
revision of the carrying value of its assets or liabilities as of May 1, 2024, the date of issuance of this Quarterly Report on Form 10-Q.  These
estimates may change, as new events occur and additional information is obtained.  Actual results could differ materially from these
estimates under different assumptions or conditions.  The Company undertakes no obligation to publicly update these estimates for any
reason after the date of this Quarterly Report on Form 10-Q, except as required by law.
Table of Contents
ENERGY RECOVERY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 6
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies in Note 1, “Description of Business and
Significant Accounting Policies - Significant Accounting Policies,” of the 2023 Annual Report.
Recently Issued Accounting Pronouncement Not Yet Adopted
There have been no issued accounting pronouncements that have not yet been adopted during the three months ended March 31,
2024 that apply to the Company other than the pronouncements disclosed in Note 1, “Description of Business and Significant Accounting
Policies - Recently Issued Accounting Pronouncement Not Yet Adopted,” of the 2023 Annual Report.
Table of Contents
ENERGY RECOVERY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 7
Note 2Revenue
Disaggregation of Revenue
The following table presents the disaggregated revenues by segment, and within each segment, by geographical market based on the
customer “shipped to” address, and by channel customers.  Sales and usage-based taxes are excluded from revenues.  See Note 9,
Segment Reporting,” for further discussion related to the Company’s segments.
Three Months Ended March 31, 2024
Three Months Ended March 31, 2023
Water
Emerging
Technologies
Total
Water
Emerging
Technologies
Total
(In thousands)
Geographical market
Middle East and Africa
$4,785
$1
$4,786
$2,739
$
$2,739
Americas
3,939
3,939
3,208
30
3,238
Asia
1,979
1,979
6,114
6,114
Europe
1,386
1,386
1,235
75
1,310
Total revenue
$12,089
$1
$12,090
$13,296
$105
$13,401
Channel
Aftermarket
$4,643
$1
$4,644
$3,322
$
$3,322
Megaproject
4,100
4,100
3,243
3,243
Original equipment manufacturer
3,346
3,346
6,731
105
6,836
Total revenue
$12,089
$1
$12,090
$13,296
$105
$13,401
Contract Balances
The following table presents contract balances by category.
March 31,
2024
December 31,
2023
(In thousands)
Accounts receivable, net
$25,055
$46,937
Contract assets, current (included in prepaid expenses and other assets)
592
592
Contract liabilities:
Contract liabilities, current
$3,449
$1,097
Contract liabilities, non-current (included in other liabilities, non-current)
30
90
Total contract liabilities
$3,479
$1,187
Contract Liabilities
The Company records contract liabilities, which consist of customer deposits and deferred revenue, when cash payments are
received in advance of the Company’s performance.  The following table presents significant changes in contract liabilities during the period.
March 31,
2024
December 31,
2023
(In thousands)
Contract liabilities, beginning of year
$1,187
$1,316
Revenue recognized
(1,038)
(1,254)
Cash received, excluding amounts recognized as revenue during the period
3,330
1,125
Contract liabilities, end of period
$3,479
$1,187
Table of Contents
ENERGY RECOVERY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 8
Remaining Performance Obligations
As of March 31, 2024, the following table presents the  revenue that is expected to be recognized related to performance obligations
that are unsatisfied or partially unsatisfied.
Period
Remaining
Performance
Obligations
(In thousands)
2024 (remaining nine months)
$6,021
2025
840
Table of Contents
ENERGY RECOVERY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 9
Note 3Net Loss Per Share
Net loss for the reported period is divided by the weighted average number of basic and diluted common shares outstanding during
the reported period to calculate the basic and diluted net loss per common share, respectively. 
The following table presents the computation of basic and diluted net loss per common share.
Three Months Ended March 31,
2024
2023
(In thousands, except per share amounts)
Numerator
Net loss
$(8,260)
$(6,296)
Denominator (weighted average shares)
Basic and dilutive common shares outstanding
57,102
56,228
Net loss per share
Basic
$ (0.14)
$ (0.11)
Diluted
$ (0.14)
$ (0.11)
The following table presents the equity awards that are excluded from diluted net loss per share because their effect would have been
anti-dilutive.
 
Three Months Ended March 31,
 
2024
2023
(In thousands)
Anti-dilutive equity award shares
3,286
2,652
Table of Contents
ENERGY RECOVERY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 10
Note 4Other Financial Information
Cash, Cash Equivalents and Restricted Cash
The Condensed Consolidated Statements of Cash Flows explain the changes in the total of cash, cash equivalents and restricted
cash, such as cash amounts deposited in restricted cash accounts in connection with the Company’s credit cards.  The following table
presents a reconciliation of cash, cash equivalents and restricted cash, reported for each period within the Condensed Consolidated Balance
Sheets and the Condensed Consolidated Statements of Cash Flows that sum to the total of such amounts.
March 31,
2024
December 31,
2023
March 31,
2023
(In thousands)
Cash and cash equivalents
$70,781
$68,098
$66,332
Restricted cash, non-current (included in other assets, non-current)
126
127
123
Total cash, cash equivalents and restricted cash
$70,907
$68,225
$66,455
Accounts Receivable, net
 
March 31,
2024
December 31,
2023
(In thousands)
Accounts receivable, gross
$25,193
$47,075
Allowance for doubtful accounts
(138)
(138)
Accounts receivable, net
$25,055
$46,937
Inventories, net
Inventory amounts are stated at the lower of cost or net realizable value, using the first-in, first-out method.
 
March 31,
2024
December 31,
2023
(In thousands)
Raw materials
$8,883
$8,752
Work in process
7,507
5,234
Finished goods
16,579
13,319
Inventories, gross
32,969
27,305
Valuation adjustments for excess and obsolete inventory
(1,298)
(1,156)
Inventories, net
$31,671
$26,149
Accrued Expenses and Other Liabilities
 
March 31,
2024
December 31,
2023
(In thousands)
Current
Payroll, incentives and commissions payable
$4,577
$11,037
Warranty reserve
989
1,057
Income taxes payable
1,083
1,077
Other accrued expenses and other liabilities
1,693
2,412
Total accrued expenses and other liabilities
8,342
15,583
Other liabilities, non-current
132
207
Total accrued expenses, and current and non-current other liabilities
$8,474
$15,790
Table of Contents
ENERGY RECOVERY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Energy Recovery, Inc. | Q1'2024 Form 10-Q | 11
Note 5Investments and Fair Value Measurements
Fair Value of Financial Instruments
The following table presents the Company’s financial assets measured on a recurring basis by contractual maturity, including pricing
category, amortized cost, gross unrealized gains and losses, and fair value.  As of the dates reported in the table, the Company had no
financial liabilities and no Level 3 financial assets.
March 31, 2024
December 31, 2023
Pricing
Category
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(In thousands)
Cash equivalents
Money market
securities
Level 1
$25,233
$
$
$25,233
$18,767
$
$
$18,767
Short-term investments
U.S. treasury
securities
Level 2
6,406
(3)
6,403
4,900
1
(1)
4,900
Corporate notes and
bonds
Level 2
33,246
1
(40)
33,207
25,674
11
(18)
25,667
Municipal and agency
notes and bonds
Level 2
6,971
(4)
6,967
9,887
(9)
9,878
Total short-term investments
46,623
1
(47)
46,577
40,461
12
(28)
40,445
Long-term investments
Corporate notes and
bonds
Level 2
8,048
2
(5)
8,045
9,229
28
(3)
9,254
Municipal and agency
notes and bonds
Level 2
4,098
(6)
4,092
4,585
(7)
4,578
Total long-term investments
12,146
2
(11)
12,137
13,814
28
(10)
13,832
Total short and long-term
investments
58,769
3
(58)
58,714
54,275
40
(38)
54,277
Total
$84,002
$3
$(58)
$83,947
$73,042
$40
$(38)
$73,044