In its Q4 2025 earnings call, Energy Recovery outlined a major shift away from its traditional oil and gas pressure-recovery units toward developing and marketing modular water treatment and desalination systems. Management highlighted growing demand in municipal and industrial water markets as the rationale for reallocating R&D and sales resources.

The company revealed that two key desalination projects, with a combined contract value of about $15 million, have been pushed out from Q4 into fiscal Q1 2026. Executives attributed the delays to extended component lead times and logistics challenges affecting delivery schedules.

While Q4 revenue guidance was maintained at the lower end of the prior range, the postponement of these projects is expected to shift approximately $15 million of revenue into the next quarter. Management reiterated full-year targets but warned that continued supply-chain disruptions could introduce further timing risks.