Energy Recovery : November 2023 Investor Presentation

NASDAQ:ERII

Energy Recovery

Southwest IDEAS Conference

James Siccardi, VP Investor Relations

November 15, 2023

Forward-Looking Statement

This presentation contains forward-looking statements within the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report include, but are not limited to, statements about our expectations, objectives, anticipations, plans, hopes, beliefs, intentions, or strategies regarding the future. Forward- looking statements that represent our current expectations about future events are based on assumptions and involve risks and uncertainties. If the risks or uncertainties occur or the assumptions prove incorrect, then our results may differ materially from those set forth or implied by the forward-looking statements. Our forward-looking statements are not guarantees of future performance or events. Words such as "expects," "anticipates," "believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements.

These forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. You should not place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this presentation. All forward-looking statements included in this presentation are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in the forward-looking statements, as disclosed from time to time in our reports on Forms 10-K,10-Q, and 8-K as well as in our Annual Reports to Stockholders and, if necessary, updated in our quarterly reports on Form 10 Q or in other filings. We assume no obligation to update any such forward-looking statements. It is important to note that our actual results could differ materially from the results set forth or implied by our forward-looking statements.

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Product Revenue1: 2015 - 2023E

Rapid Growth	16%	Average Product Revenue Growth
2015-2022

140

130

120

110

100

90

80

70

60

50

40

$135M

$126M

$104M

$92M

$73M

$58M $61M

$50M

$44M

2015

2016

2017

2018

2019

2020

2021

2022

2023E

(1) Excludes reported License and Development Revenue 2015 through 2020.

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Operating Margin1: 2015 - 2022

Turnaround in Profitability

30%
20%
							20%
10%						13%
0%					7%
	-9%	-3%	-6%	-5%
-10%
-20%
-29%
-30%
2015	2016	2017	2018	2019	2020	2021	2022

1. Calculation excludes reported License and Development Revenue in 2015 through 2020 and the one-time impairment of VorTeq related assets in 2021.

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Other Strong Fundamentals

High Margin

Flexible Balance Sheet

70%	Average Gross Margin
2022

$106M	Cash & Securities and NO
DEBT1

1. As of 3Q 2023

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What Is Driving This Value?

The PX Technology Platform

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The PX Pressure Exchanger

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Unique Value Proposition: Reduce Emissions & Save Customers Money

$3.9B

98%+

annual customer energy savings1

product revenue from energy- efficiency related sources

14.5M

30TWh

metric tons emissions avoided annually - roughly equivalent to 3M vehicles1

saved in electricity consumption1

(1) Energy Recovery estimates. Assumes all deployed devices are in operation.

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Our PX Technology Revolutionized the Desalination Industry

1

2

Reduces energy costs by up to 60%

Transfers energy at up to 98% efficiency

3

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Designed for a 25-year life

Needs no maintenance

Significant Customer Value Proposition Translates into ERII Profitability

70% ERII Gross Margin1

25% Russell 2000 Industrials

(1) 2022 FY Reported Avg. Gross Margin

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PX In Action: Desalination

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