In This Article:
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Total Revenue: $38.6 million, achieving the upper end of guidance and setting a quarterly revenue record.
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Water Revenue: $38.3 million, a 4% increase compared to Q3 2023 and up 42% compared to Q2 2024.
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Gross Margin: 65.1%, above the guided range of 62% to 64% for Q3.
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Operating Expenses: $18.1 million, below the previously guided range of $21 to $22 million for the quarter.
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Net Income: $8.5 million, reflecting a substantial increase compared to the second quarter.
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Cash and Investments: $139.9 million at the end of Q3, compared to $138 million at the end of Q2.
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Full Year Revenue Guidance: Maintained at $140 to $150 million.
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Wastewater Revenue Guidance: Expected towards the lower end of $12 to $15 million.
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Operating Expense Guidance: Reduced to $76 to $78 million from the previous $78 to $80 million.
Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Energy Recovery Inc (NASDAQ:ERII) achieved a record third-quarter revenue of $38.6 million, reaching the upper end of their guidance.
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The company is on track to deliver its largest quarter in history in Q4, with a revenue guidance of $140 to $150 million for the full year.
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Water revenue increased by 4% compared to Q3 2023 and 42% compared to Q2 2024, driven by strong demand in the Middle East, North Africa, and India.
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The PX G technology showed better-than-expected results, improving energy efficiency by up to 30% and increasing cooling capacity by up to 15%.
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Energy Recovery Inc (NASDAQ:ERII) maintained a strong cash position with $139.9 million in cash and investments at the end of Q3 2024.
Negative Points
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The company faces potential risks of shipment delays in Q4, with five projects representing approximately 50% of the revenue.
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Operating expenses for the year are expected to include $7 million in one-time costs, impacting overall profitability.
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The wastewater revenue is expected to be at the lower end of the $12 million to $15 million guidance due to project delays.
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Energy Recovery Inc (NASDAQ:ERII) remains heavily reliant on the Middle East and Africa for revenue, with over 70% of Q3 revenue from these regions.
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The company is still in the early stages of commercializing its PX G technology, requiring further investment and development.
Q & A Highlights
Q: Can you discuss the competitive landscape in CO2 and if anyone else is attempting to do what you are doing with the PXG? A: No, there is no other pressure exchange competition that we see today. We compete against other technologies for applications in the space, but no one with the pressure exchange.