Energy Recovery’s stock fell 6.4% after earnings. The call emphasized a recovering Megaproject pipeline, but investors may be weighing the uncertain conversion of that pipeline into revenue: management described $50 million of 2027 Megaproject revenue as visibility based on executed contracts and current negotiations, while calling the $17 million Q4 backlog a “floor expectation.”
- Megaproject backlog was over $60 million, and the pipeline reached a record approximately $525 million, up from $500 million last quarter.
- Management cited line of sight to at least $50 million of Megaproject revenue in 2027, based on contracts executed and in current negotiation; it also said more Q4 contracting could occur.
- The company signed more than $30 million of new Megaproject contracts in the prior 30 days. Construction has resumed on multiple large Middle East plants, and management said the pipeline is diversifying into other regions.
- Energy Recovery reported nearly $86 million of cash and investments, zero debt, and about $26 million of year-to-date free cash flow; quarterly operating expenses are down 17% year over year.
- The company said the PX Q650 has been specified at several large desalination sites and secured its first contract, for the Jubail plant.
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