ERII Energy Recovery, Inc.

Overview and Growth

In fiscal 2025, Energy Recovery, Inc. recorded $134.99M of revenue, net income of $22.96M, and an operating cash inflow of $18.77M. The $134.99M revenue base provides substantial context for the company’s earnings, cash generation, and capital requirements. The top line contracted 6.9% from $144.95M in fiscal 2024; this top-line contraction left the company with a smaller revenue base. On a per-share basis, diluted EPS was $0.42, which connects the reported earnings outcome with the company’s diluted share count. Diluted EPS increased by 5.0% from $0.40 in fiscal 2024, showing how the earnings change reached shareholders on a per-share basis. Asset turnover was 0.58x, relating the company’s annual revenue directly to the total assets reported at the period end.

Profitability

After reported cost of revenue, the company retained $87.93M as gross profit before recognizing operating expenses and other items. Gross margin was 65.1%, so that share of each revenue unit remained after the cost of revenue reported for the period. Operating income was $23.89M, the earnings remaining from reported operations after the company’s recognized operating cost structure. The operating result equaled 17.7% of revenue, placing the absolute operating-income figure in the context of the company’s sales base. Net income came to $22.96M, completing the progression from revenue through gross and operating profitability to the final reported result. Net margin was 17.0%, meaning that this portion of revenue remained as net income after all recognized expenses. The earnings statement records $27.59M of pretax income, the profit base against which the reported tax provision can be assessed. Pretax income represented 20.4% of revenue, placing earnings before tax in the context of the company’s operating scale. Income tax expense totaled $4.63M, providing the reported tax component that separates pretax and after-tax earnings. The effective relationship between income tax and positive pretax income was 16.8%, without assuming a statutory-rate comparison. The relationship between net income and period-end equity was 11.1%, indicating the profitability achieved on book capital.

Liquidity and Capital Structure

At period end, the $231.51M asset base was financed through $25.32M of liabilities and $206.19M of equity. At period end, current assets of $181.21M compared with current liabilities of $17.35M, defining the company’s short-term resource position. At 10.44x, the current ratio shows that short-term assets were greater than short-term liabilities at period end. Cash and equivalents totaled $48.08M, identifying the most liquid reported component available within the broader current-asset balance. Measured only with cash and equivalents, coverage of current liabilities was 277.0%, excluding receivables and other current assets. The liabilities-to-assets relationship was 10.9%, placing reported obligations against the full positive asset balance. Cash and equivalents equaled 20.8% of total assets, showing the liquid cash component within the company’s broader resource base. The asset base changed 4.6% from $242.79M in fiscal 2024, leaving current total assets lower year over year.

Cash Flow and Earnings Quality

Operating activities produced a cash inflow of $18.77M, giving the cash-flow counterpart to the accrual-based profit measures reported for the year. Against net income, operating cash flow measured 0.82x, showing the relationship between accrual earnings and operating cash. Capital expenditures used $1.33M, identifying the reported investment outflow deducted from operating cash flow in the free-cash-flow calculation. Capital expenditures represented 7.1% of operating cash flow, leaving the remainder available as free cash flow. The combination of operating cash flow and capital spending produced $17.44M of positive free cash flow for the period. The free-cash-flow margin was 12.9%, measuring cash remaining after capital spending against revenue. Free cash flow equaled 7.5% of total assets, relating post-investment cash generation to the company’s resource base.

Based on the annual report for the fiscal year ending Dec 31, 2025. Analysis generated Oct 21, 2026.