Energy Recovery Inc (ERII) 2025 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Energy Recovery's second quarter 2025 earnings call.

女士們、先生們，大家好，歡迎參加 Energy Recovery 2025 年第二季財報電話會議。

During today's call, Energy Recovery may make projections and other forward-looking statements under the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the company.

在今天的電話會議中，Energy Recovery 可能會根據 1995 年《私人證券訴訟改革法案》中的安全港條款對未來事件或公司未來財務表現做出預測和其他前瞻性陳述。

These statements may discuss our business, economic and market outlook, growth expectations, new products and their performance, cost structure and business strategy. Forward-looking statements are based on information currently available to the company and on management's beliefs, assumptions, estimates and projections.

這些聲明可能會討論我們的業務、經濟和市場前景、成長預期、新產品及其性能、成本結構和業務策略。前瞻性陳述是基於公司目前掌握的資訊以及管理階層的信念、假設、估計和預測。

Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. We refer you to documents the company files from time to time with the SEC, specifically the company's annual Form 10-K and quarterly Form 10-Q. These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.

前瞻性陳述並非對未來績效的保證，並且受某些風險、不確定性和其他因素的影響。我們向您推薦本公司不時向美國證券交易委員會提交的文件，特別是公司的年度 10-K 表格和季度 10-Q 表格。這些文件確定了可能導致實際結果與我們的預測或前瞻性陳述中的結果大不相同的重要因素。

All statements made during this call are made only as of today, August 6, 2025, and the company expressly disclaims any intent or obligation to update any forward-looking statements made during this call to reflect subsequent events or circumstances unless otherwise required by law.

本次電話會議期間所作的所有陳述僅截至今天（2025 年 8 月 6 日）有效，本公司明確表示不打算或有義務更新本次電話會議期間所作的任何前瞻性陳述，以反映後續事件或情況，除非法律另有要求。

Our hosts for today's call are David Moon, President and Chief Executive Officer of Energy Recovery; and Mike Mancini, Chief Financial Officer. I would now like to turn the call over to Mr. Moon.

今天電話會議的主持人是 Energy Recovery 總裁兼執行長 David Moon 和財務長 Mike Mancini。現在我想把電話轉給文在寅先生。

Thank you, operator, and good afternoon, everyone. Earlier today, we released a letter to shareholders on the Investor Relations section of our website that reviews business and financial performance during the quarter. Prior to opening the line for questions and answers, I'd like to highlight a few important takeaways from that letter.

謝謝接線員，大家下午好。今天早些時候，我們在網站的投資者關係部分發布了一封給股東的信，回顧了本季的業務和財務表現。在開始問答環節之前，我想先強調這封信中的幾個重要要點。

First, we are reiterating our 2025 guidance on all metrics and reinstating our wastewater guidance. Our core desalination business is proving resilient to the macro environment. We signed multiple large deals in the period, and we have line of sight to full year revenue based on our contracts and pipeline. In wastewater, the tariff impacts are expected to be better than we initially indicated in Q1, and we are comfortable issuing guidance despite remaining tariff uncertainty.

首先，我們重申 2025 年所有指標的指導方針，並恢復廢水指導方針。我們的核心海水淡化業務已證明能夠抵禦宏觀環境的影響。我們在此期間簽署了多項大額交易，根據我們的合約和管道，我們可以預計全年收入。在廢水處理方面，關稅影響預計將比我們在第一季最初預測的要好，儘管關稅仍存在不確定性，但我們仍願意發布指引。

Second, today, we announced an additional share repurchase program. In the past 10 months, we've announced three share repurchase authorizations totaling $105 million. We believe these programs will enable us to repurchase over 10% of our outstanding shares in aggregate while still executing our playbook and reinvesting for growth.

第二，今天我們宣布了一項額外的股票回購計畫。在過去的 10 個月中，我們宣布了三次股票回購授權，總額達 1.05 億美元。我們相信，這些計劃將使我們能夠回購總計超過 10% 的流通股，同時仍執行我們的計劃並進行再投資以實現成長。

And lastly, our conviction in the long-term trends driving our business is increasing. Contracted desalination capacity, water reuse capacity and CO2 refrigeration installations are all growing at high rates. We are poised to capture the upside of these trends as we march toward our 2029 goals.

最後，我們對推動我們業務發展的長期趨勢的信心正在增強。合約海水淡化能力、中水回用能力和二氧化碳冷凍裝置均在高速成長。在邁向 2029 年目標的過程中，我們已準備好抓住這些趨勢的優勢。

I'd also like to say thank you to our employees here at Energy Recovery. The team was creative and decisive this quarter in executing during an environment of high volatility.

我也要向 Energy Recovery 的員工表示感謝。本季度，在高度波動的環境中，該團隊的執行富有創意且果斷。

With that, we will now move to the question-and-answer portion of our conference call. Operator, please open the line for questions.

有了這些，我們現在將進入電話會議的問答部分。接線員，請打開熱線以回答問題。

(Operator Instructions)

（操作員指示）

Ryan Pfingst, B. Riley.

Ryan Pfingst、B. Riley。

Congrats on the strong update here. Appreciate the color around annual desalination contracted capacity in the shareholder letter just now, David. Does that kind of expected capacity growth in addition to your recent awards give you confidence perhaps in achieving the higher end of the longer-term ranges you set in November for desal revenue, particularly if we're thinking about 2026?

祝賀這裡的強勁更新。大衛，我很欣賞剛才股東信中關於年度海水淡化合約產能的描述。除了您最近獲得的獎項之外，這種預期的產能增長是否會讓您有信心實現您在 11 月為海水淡化收入設定的長期範圍的高端，特別是如果我們考慮 2026 年的話？

Yes. I think -- so that's a good question. I think it's too early to tell. And just a reminder, that contracted capacity, those are projects that are, we believe will be tendered during that time period, but making water could be two- or three years out in terms of when the projects are ready. So we're still getting clarity around the content of that $550 million pipeline.

是的。我認為——這是個好問題。我認為現在下結論還為時過早。需要提醒的是，我們認為合約產能是那些將在這段時間內招標的項目，但就項目準備就緒而言，制水可能還需要兩到三年的時間。因此，我們仍在弄清楚這條價值 5.5 億美元的管道的具體內容。

But I think with the water that we saw this quarter and what we're seeing early in '26, we're feeling confident about '26. And we'll be able to give you some guidance around 2026 as we get into the third quarter earnings call.

但我認為，根據本季看到的水位以及 26 年初看到的情況，我們對 26 年充滿信心。在進入第三季財報電話會議時，我們將能夠為您提供 2026 年左右的一些指導。

Yes. And Ryan, just to add there, I think it's more indicative of the increasing pace of desalination that the water scarcity trends are driving action, and that is really good for our long-term growth. It's hard to pinpoint that and make that any specific annual growth, but it is just a coming wave.

是的。瑞安，我補充一下，我認為海水淡化速度的加速更能說明水資源短缺趨勢正在推動行動，這對我們的長期發展非常有利。很難準確地指出這一點，也很難確定具體的年度成長，但這只是一股即將到來的浪潮。

And I think that's a coming wave for desal, and I also think it bodes well for wastewater as well.

我認為這是海水淡化即將迎來的浪潮，而且我也認為這對廢水處理來說也是一個好兆頭。

Great. Yes. Makes sense. I appreciate all that. And then for the next-gen PX, it sounds like you expect some meaningful improvement compared to the Q400, which already appears to be performing extremely well. Do you expect this new product to carry a higher selling price? Or is the key here to maintain or even increase market share to the extent you're able to?

偉大的。是的。有道理。我對此表示感謝。對於下一代 PX，聽起來您期望它與 Q400 相比會有一些有意義的改進，而 Q400 的表現似乎已經非常出色。您預計這款新產品的售價會更高嗎？或者關鍵在於盡可能維持甚至增加市場佔有率？

Yes. Ryan, this is Mike. So yes, I'd say the general trend here and what we saw from going from Q300 to Q400 and then Q400 to something greater than 500 is that we typically price on a capacity basis, so cubic meters per day basis. So you can have an increasing price per unit as we try to price per capacity. So that is a trend that we have seen in the past and I think we'll continue to see. Exactly how much is still TBD. But in general, yes, you'll need fewer units to fill a plant, but we will charge based on capacity, not unit, if that makes sense.

是的。瑞安，這是麥克。所以是的，我想說這裡的總體趨勢以及我們從 Q300 到 Q400 再到 Q400 到 500 以上的趨勢是，我們通常根據容量定價，即按立方米/天計算。因此，當我們嘗試按容量定價時，您可以提高每單位的價格。這是我們過去看到的趨勢，我認為我們將繼續看到這種趨勢。確切金額仍有待確定。但一般來說，是的，你需要更少的單位來填充一個工廠，但我們會根據容量而不是單位來收費，如果這有意義的話。

Yes, that does. Appreciate that, Mike. And then on CO2, do you have a broader update on your work with Hillphoenix or some of the other OEMs that you're working with today?

是的，確實如此。非常感謝，麥克。那麼關於二氧化碳，您是否可以更廣泛地介紹一下您與 Hillphoenix 或目前合作的其他一些 OEM 的合作情況？

So Hillphoenix, the discussions around the commercial agreement are ongoing. So I'd say we continue to make progress there. We're in the middle of our summer testing season, and we continue to add new sites. We added seven new sites in the quarter, in the second quarter. We will add new sites in the third quarter as well. So I'd say the summer testing season is going as expected, and engagement with OEMs remains high as we move through this testing season.

因此，Hillphoenix 圍繞商業協議的討論仍在進行中。所以我想說我們會繼續取得進展。我們正處於夏季測試季節，我們將繼續添加新的站點。我們在第二季增加了七個新站點。我們還將在第三季增加新的站點。所以我想說夏季測試季節進展如預期，隨著我們度過這個測試季節，與 OEM 的互動仍然很高。

Got it. Great. And then last one for me. It might still be early days, but you talked about potentially developing a business case for data center markets. Curious if that has progressed at all.

知道了。偉大的。這是我的最後一個。雖然可能還處於早期階段，但您談到了為資料中心市場開發商業案例的可能性。好奇這是否有任何進展。

Yes. So we've been working on a business case for data centers and for heat pumps, both. I'd say the early read on data centers is that CO2 is still a very nascent, sort of very small part of that market. So unless that is going to grow at some sort of an increased pace, then it's looking like data centers is not going to be an opportunity for us. We'll finalize that view here over the next few months, but that's the early read on data centers. Now heat pumps is looking promising, but more to come over the next couple of months.

是的。因此，我們一直在研究資料中心和熱泵的商業案例。我想說，對資料中心的早期解讀是，二氧化碳仍然是一個非常新興的市場，只佔該市場的一小部分。因此，除非這一成長速度加快，否則資料中心對我們來說似乎不是一個機會。我們將在接下來的幾個月內最終確定這一觀點，但這是對資料中心的早期解讀。目前，熱泵看起來很有前景，但未來幾個月還會有更多發展。

(Operator Instructions)

（操作員指示）

Jeffrey Campbell, Seaport Research Partners.

傑弗裡·坎貝爾，海港研究合作夥伴。

Congratulations on a pretty strong quarter, all things considered. David, the letter described a much better result in China than the worst-case scenario that was provided last quarter. Is this because the tariffs have touched your work less than anticipated? Or has it emerged that there's more commitment to your product at a higher price than you anticipated or some combination of the two?

從各方面來看，恭喜您本季業績表現相當強勁。大衛，這封信描述的中國業績比上個季度提供的最壞情況要好得多。這是因為關稅對您的工作影響沒有預期那麼大嗎？或者，是否出現了比您預期的更高的價格而吸引到更多顧客的情況，或者兩者兼而有之？

Yes. So I'd say that pause in tariffs back in May really opened up projects that were sitting there on the board that we have been working on through that period where there were 100%-plus tariffs for products going into China. Our team continued to work on -- continued to nurse those projects along.

是的。所以我想說，五月暫停徵收關稅確實開啟了我們一直在努力的那些項目，當時對進入中國的產品徵收 100% 以上的關稅。我們的團隊繼續致力於—繼續推進這些專案。

And as soon as tariff rates dropped, we were able to execute on those projects and ship more than $2 million in the quarter. We continue to ship now. And so I just -- I chalk that up to a very focused sales team in China who never stopped pushing, and the pause in tariffs really helped our -- really helped us. Would you add anything, Mike?

一旦關稅下降，我們就能執行這些項目，並在本季交付超過 200 萬美元的貨物。我們現在繼續發貨。所以我認為這要歸功於中國非常專注的銷售團隊，他們從未停止努力，而關稅暫停確實幫助了我們——確實幫助了我們。麥克，你還有什麼要補充嗎？

No, I'd say at 125% tariffs, it's difficult to do business in China. And so I think the reduction of 10% was a big deal.

不，我想說，在 125% 的關稅下，在中國做生意很困難。所以我認為減少 10% 是一件大事。

Okay. It seems like that you've broadened your wastewater footprint meaningfully in the last quarter when I look at some of the other countries that you cited. Did that meet your expectations? Or did it exceed them?

好的。當我查看您引用的其他一些國家時，似乎您在上個季度已經顯著擴大了廢水足跡。這符合你的期望嗎？或者說已經超越了它們？

No, I think -- look, we set ourselves a goal. So there are five verticals, right? There are five verticals in wastewater that we're focused on, right? It's municipal, it's chemical, it's textile, it's manufacturing and it's mining. So those are the five -- out of the 20-or-so wastewater verticals that we could be focused on, those are the -- those were the five with the largest share of market size and where we think we have the right to win. And so we've been ultra-focused on those five over the last 18 months or so.

不，我認為——看，我們為自己設定了一個目標。那麼有五個垂直方向，對嗎？我們關注的廢水處理領域有五個垂直領域，對嗎？它是市政業、化學工業、紡織業、製造業和採礦業。因此，在我們可以重點關注的 20 個左右的廢水垂直行業中，這五個是市場份額最大的五個，我們認為我們有權在這些行業中獲勝。因此，在過去 18 個月左右的時間裡，我們一直高度關注這五個面向。

And so the fact that we've really broadened our reference case list over the second -- the first and second quarter, that's just a great -- that's a great effort by the sales team to really go after those five verticals. And so it was expected maybe not as soon as we got the reference cases, but we've been working hard to focus on those five verticals. And there's more to come.

因此，事實上，我們在第二季（第一季和第二季）確實擴大了參考案例列表，這真是太棒了——這是銷售團隊為真正追求這五個垂直領域所做的巨大努力。因此，我們可能不會在獲得參考案例後立即採取行動，但我們一直在努力專注於這五個垂直領域。未來還會有更多。

So we gave ourselves a goal. We said back in November, two reference cases in each of those five verticals by the end of the year. And so we're well on track to be able to do that.

所以我們給自己設定了一個目標。我們在 11 月就說過，到今年年底，這五個垂直領域將分別有兩個參考案例。因此，我們正順利實現這一目標。

Okay. You mentioned that reliability is a key issue for the PX G related to current testing. I just wondered how much time on task do you think is likely required to convince testers to become dedicated users?

好的。您提到可靠性是 PX G 在當前測試中面臨的關鍵問題。我只是想知道，您認為需要花多少時間才能說服測試人員成為專門的用戶？

Yes. So last season was about proving the value proposition, right? And so our -- the white paper that we published in September of last year laid out the value proposition. We got good response from OEMs. And so OEMs told us, great. Now let's move on to another testing season.

是的。所以上個賽季是為了證明價值主張，對嗎？因此，我們去年 9 月發布的白皮書闡述了價值主張。我們得到了原始設備製造商的良好回饋。所以 OEM 告訴我們，這太棒了。現在讓我們進入另一個測試季節。

And this season, we're going to focus on reliability, right? And so that's what we're in the middle of now. We've got a couple -- we've got the rest of August and September in terms of testing time. And so, so far, so good.

本賽季，我們將重點放在可靠性，對嗎？這就是我們現在所處的狀態。我們有幾個——就測試時間而言，我們有八月和九月的剩餘時間。所以，到目前為止，一切都很好。

And so I think what will happen is we'll get through this summer testing season. OEMs and the select number of end users that we've been working with will then step back and take a look and understand whether has that been enough or whether they're going to want to see an increased sample size next time around for the following summer. And so that's TBD. And we'll know a lot more about this as we get into the end of September, beginning of October.

所以我認為我們會順利度過這個夏季測試季。然後，原始設備製造商 (OEM) 和與我們合作的少數最終用戶將回顧一下，看看這是否足夠，或者他們是否希望在下次夏天看到更大的樣本量。所以這還有待確定。進入九月底和十月初，我們將對此有更多了解。

And my last question, I'll go back to wastewater. In the shareholder letter, it said increasing water reuse across industries and geographies, which is a trend you called out. Do you see this as more of a push for industrial reuse of their water or trying to treat it all the way to being potable water?

我的最後一個問題是關於廢水的問題。在致股東的信中，我們提到要增加跨行業和跨地區的水再利用，這是您所提到的趨勢。您是否認為這更像是在推動工業用水的再利用，還是試圖將其完全處理成飲用水？

I just ask because potables presumably would require more treatment than industrial effluent. Just sort of trying to get an idea of what's going on. And also, is the motivation here more economic or is it environmental regulations or environmental stewardship?

我之所以問這個問題，是因為飲用水可能比工業廢水需要更多的處理。只是想了解到底發生了什麼事。而且，這裡的動機更多的是經濟因素還是環境法規或環境管理？

Yes. This is Mike, Jeff. So I'd say that it's all of the above. So especially with our -- some of our new products we came out, especially the low-pressure PX, when we say the municipal end market, that is really tertiary treatment for potable reuse. I think that's kind of going to increasing the geography as well that as we expand municipalities that those reference cases can then expand to other geographies.

是的。這是麥克，傑夫。所以我想說，以上都是。因此，特別是我們推出的一些新產品，特別是低壓 PX，當我們說市政終端市場時，這實際上是飲用水再利用的三級處理。我認為這也將擴大地理範圍，隨著我們擴大城市範圍，這些參考案例可以擴展到其他地區。

So I think it's sort of all of the above for wastewater that we have a broad product portfolio that can reach lots of things. And the main driver typically is regulatory, but what's driving the regulatory is a serious water scarcity issue. And so I think it really -- it's hard to say -- it's regulatory driven, but it's for economic and growth reasons and water scarcity reasons. So we're encouraged with the long-term trend.

所以我認為對於廢水處理來說，我們擁有廣泛的產品組合，可以解決很多問題。主要驅動力通常是監管，但推動監管的卻是嚴重的水資源短缺問題。所以我認為這真的——很難說——這是由監管驅動的，但這是出於經濟和成長的原因以及水資源短缺的原因。因此我們對長期趨勢感到鼓舞。

At this time, there are no further questions in queue. I'd like to turn the call back to our presenters for any further remarks.

目前，隊列中沒有其他問題。我想將電話轉回給我們的主持人，以便他們可以發表進一步的評論。

So thank you, operator. So thank you to all of our stakeholders for joining us today on the call. We appreciate all of you very much. We look forward to updating you on our next call after the Q3. Thank you, operator.

所以謝謝你，接線生。因此，感謝所有利害關係人今天參加我們的電話會議。我們非常感謝你們所有人。我們期待在第三季後的下次電話會議上向您通報最新情況。謝謝您，接線生。

This concludes today's call. Thank you for attending and have a wonderful rest of your day.

今天的電話會議到此結束。感謝您的出席，祝您有美好的一天。