Energy Recovery, Inc.
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001421517-25-000134
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001421517-26-000041
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 19 previous paragraphs and 57 current paragraphs.
2 unchanged; 1 reworded; 54 added; 16 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (54)
Current report
Our Water segment revenues largely depend on the construction of new large-scale desalination plants and the retrofit of
Current report
existing desalination plants, and as a result, our operating results have historically experienced, and may continue to experience,
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significant variability due to volatility in capital spending, availability of project financing, project timing, execution, war or other
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hostilities and other factors affecting the broader water desalination industry.
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We currently derive the majority of our Water segment revenues from sales of energy recovery products and services used in newly
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constructed, large-scale desalination plants and the retrofit of existing desalination plants, particularly in dry or drought-ridden regions of the
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world. The demand for our products used in the Water segment may decrease if the construction of these large-scale desalination plants or
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the retrofit of existing plants declines for any reason, including, any global or regional economic downturns, worsening global or regional
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political conflicts, war or other hostilities, such as the 2026 conflict in Iran and escalating tensions in the Middle East, worsening regional
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conditions, changing government priorities, or the impact of any global or regional conflicts.
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Other factors that could affect the number and capacity of large-scale desalination plants built or the timing of their completion,
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include the availability of required engineering and design resources; availability of credit and other forms of financing; the health of the global
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economy; inflation rates; changes in government regulation, permitting requirements, or priorities; and reduced capital spending for water
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desalination solutions. Each of these factors could result in reduced or uneven demand for our products. Pronounced variability, complete
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cancellations or delays in the construction of such plants or reductions in spending for desalination in general could negatively impact our
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Water segment sales, which in turn could have an adverse effect on our entire business, financial condition, or results of operations, and
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make it difficult for us to accurately forecast our future sales.
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A sustained downturn in the economy or global unrest could impact the future of new, and the retrofit of existing,
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desalination plants, and the treatment of various wastewater verticals, which could result in decreased demand for our water
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The demand for our water products and services depends primarily on the continued construction of new large-scale desalination
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plants, the retrofit of existing plants, and the construction of wastewater treatment facilities, particularly in the countries that are part of the
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Gulf Cooperation Council, China, Taiwan and India. Weak economic conditions, global uncertainty including the continuing conflicts in
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Ukraine, the 2026 conflict in Iran and escalating conflicts in the Middle East, as well as the impact of increased inflation resulting from such
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conflicts may have a negative economic impact on these and other countries, which may impact the levels of spending on, timing of, delays
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to, and availability of, project financing for new desalination and retrofit plant projects. The inability of our customers to secure credit or
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financing for these projects, may result in the postponement or cancellation of these projects. In addition, the change in government priorities
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and/or their reduction in spending for water treatment projects could result in decreased demand for our products and services, which could
Current report
Uncertainty in the global geopolitical landscape and macro-economic environment may impact our operations outside the
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U.S., including in the Middle East where many of our water megaprojects are planned.
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We conduct our business on a global basis. Our products are sold in numerous countries worldwide, with a large percentage of our
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sales generated outside the U.S., specifically in the Middle East and Africa, and Asian markets which provide a significant portion of our total
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revenue. Therefore, we are exposed to, and impacted by, global macroeconomic factors, U.S. and foreign government policies, and foreign
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exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S. and globally characterized by the supply chain
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environment, inflationary pressure, rising interest rates, and labor shortages. These global macroeconomic factors, coupled with the U.S.
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political climate, political unrest internationally, and conflicts in Europe and the Middle East, such as the 2026 conflict in Iran and Iran’s
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response to attacks by the United States and Israel, have created global economic and political uncertainty, and have impacted demand for
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certain of our products. While the impact and longevity of these factors remain uncertain, we are constantly evaluating the extent to which
Current report
these factors will impact our business, financial condition, or results of operations. Over the long-term, demand for our energy recovery
Showing the first 40 of 54 passages. Open the source sections for the rest.
Removed paragraphs (16)
Previous report
Changes in U.S. policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any
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resulting changes in international trade relations, such as reciprocal tariffs or trade wars, particularly with regard to China, may
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have a material adverse impact on impact on our business, results of operations, or financial condition.
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In January 2025, the global tariff landscape began to quickly change with the U.S. implementing new and/or increased tariffs on
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various foreign countries, either generally or with respect to certain products. Certain foreign countries, including China have, and may
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continue to, change their tariff policies in response to changes in the U.S. tariff policy.
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These recent tariffs and the subsequent retaliatory tariffs could increase the cost of goods for our products or reduce our ability to sell
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products globally, particularly in China, which may adversely affect our operating results and financial condition. So far, these new tariffs and
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trade policies have not had a significant impact on our business operations and financial results, primarily due to our prior efforts to
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accumulate and maintain inventories at favorable cost levels. However, there is no guarantee that we can avoid the impact of tariff and
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related economic effects in the future, and these trade measures and retaliations may directly impact our business by increasing trade-related
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costs or affecting the demand for our products globally, and specifically in China.
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Any further unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our
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products and services, impact the competitive position of our products or prevent us from selling products in certain countries. If any new
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tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government
Reworded paragraphs (1)
Previous wording
takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business,
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have an adverse effect on our business, financial condition or results of operations.