Energy Recovery, Inc.ERII

Energy Recovery, Inc. Earnings Per Share Disclosure

10-KFiled Feb 25, 20262 min read
Net Income Per Share Net income for the reported period is divided by the weighted average number of basic and diluted common shares outstanding
during the reported period to calculate the basic and diluted net income per share, respectively.  Outstanding stock options to purchase
common shares, unvested RSUs, and unvested performance restricted stock units (“PRSUs”) are collectively referred to as “equity awards.”
•Basic net income per share is computed using the weighted average number of common shares outstanding during the period.
•Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares
outstanding during the period, using the treasury stock method.  Any anti-dilutive effect of equity awards outstanding is not
included in the computation of diluted net income per share.
The following table presents the computation of basic and diluted net income per share.
Years Ended December 31,
2025
2024
2023
(In thousands, except per share amounts)
Numerator
Net income
$22,962
$23,050
$21,504
Denominator (weighted average shares)
Basic common shares outstanding
53,802
57,213
56,444
Stock options
189
380
1,051
RSUs
167
229
245
Diluted common shares outstanding
54,158
57,822
57,740
Net income per share
Basic
$ 0.43
$ 0.40
$ 0.38
Diluted
$ 0.42
$ 0.40
$ 0.37
The following table presents the equity awards that are excluded from diluted net income per share because (i) their effect would have
been anti-dilutive, or (ii) the equity awards were contingent upon conditions for issuance which were not satisfied as of December 31, 2025.
See Note 12, “Stock-based Compensation” for additional information.
 
Years Ended December 31,
 
2025
2024
2023
(In thousands)
Anti-dilutive equity award shares
1,285
1,054
399

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Feb 24, 2022
2020Mar 12, 2021
2019Mar 6, 2020

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

Income TaxesRevenueFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew Standards