RevenueDisaggregation of Revenue

The Company classifies its channel customers as follows:

•Megaproject (“MPD”). MPD customers are major firms that develop, design, build, own and/or operate large-scale desalination

plants or projects. Revenues from projects generally exceed $1.0 million and the MPD project timeline between project tender

and shipment are generally up to 36 months; however, from time-to-time, may exceed 36 months.

•Original Equipment Manufacturer (“OEM”). In addition to the type of customers listed below, revenues from projects generally

are $1.0 million or less and the OEM project timeline from project tender to shipment generally ranges from one to 16 months;

however, from time-to-time, may exceed 16 months.

◦Water: OEM customers are companies that supply equipment, packaged systems, and various operating and

maintenance solutions for small to medium-sized desalination plants, utilized by commercial and industrial

entities, as well as national, state and local municipalities worldwide.

◦Emerging Technologies: OEM customers include direct sales to commercial or industrial customers, such as

supermarket chains, cold storage facilities, and other industrial users. Also, included are sales to

intermediaries, such as refrigeration system installers or refrigeration original equipment manufacturers.

•Aftermarket (“AM”). AM customers are desalination plant owners and/or operators who can utilize the Company’s technology to

upgrade or keep their plant running. AM revenue includes sales of spare parts, repair services, field services and various

commissioning activities.

The following table presents the disaggregated revenues by segment, and within each segment, by geographical market based on the

customer “shipped to” address, and by channel customers. Sales and usage-based taxes are excluded from revenues. See Note 9,

“Segment Reporting,” for further discussion related to the Company’s segments.


	Years Ended December 31,
	2025			2024			2023
	Water	Emerging Technologies	Total	Water	Emerging Technologies	Total	Water		Emerging Technologies	Total
(In thousands)
Geographical market
Middle East	$68,084	$92	$68,176	$59,538	$399	$59,937	$49,501		$177	$49,678
Africa	15,010	—	15,010	30,731	—	30,731	26,936	0	—	26,936
Other	51,608	193	51,801	54,041	239	54,280	51,288		447	51,735
Total revenue	$134,702	$285	$134,987	$144,310	$638	$144,948	$127,725		$624	$128,349

Channel
Megaproject	$82,885	$—	$82,885	$95,399	$—	$95,399	$83,665		$—	$83,665
Original equipment manufacturer	31,748	192	31,940	31,337	188	31,525	25,548		447	25,995
Aftermarket	20,069	93	20,162	17,574	450	18,024	18,512		177	18,689
Total revenue	$134,702	$285	$134,987	$144,310	$638	$144,948	$127,725		$624	$128,349

Contract Assets

The Company records unbilled receivables as contract assets, which are included in prepaid expenses and other assets on the

Consolidated Balance Sheets. The following table presents the change in contract asset balances during the reported periods.


	Years Ended December 31,
	2025	2024
	(In thousands)
Contract assets balance, beginning of year	$2,776	$592
Transferred to trade receivables	(2,776)	(592)
Additions to contract assets, excluding amounts transferred to trade receivables during the year	1,647	2,776
Contract assets balance, end of year	$1,647	$2,776

Contract Liabilities

The Company records contract liabilities, which consist of customer deposits and deferred revenue, when cash payments are

received in advance of the Company’s performance. The following table presents the change in contract liability balances during the reported

periods.


	Years Ended December 31,
	2025	2024
(In thousands)
Contract liabilities, beginning of year	$571	$1,187
Revenue recognized	(297)	(1,085)
Cash received, excluding amounts recognized as revenue during the year	765	469
Contract liabilities, end of year	$1,039	$571

Remaining Performance Obligations

As of December 31, 2025, the following table presents the revenue that is expected to be recognized related to performance

obligations that are unsatisfied or partially unsatisfied.


Period		Remaining Performance Obligations
		(In thousands)
2026		10,374
2027		6,587
Total		$16,961

Historical Timeline

Fiscal Year	Filed
2025	Feb 25, 2026	Showing above
2024	Feb 26, 2025

2023	Feb 21, 2024

2022	Feb 22, 2023

2021	Feb 24, 2022

2020	Mar 12, 2021

2019	Mar 6, 2020

2018	Mar 7, 2019

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.

Energy Recovery, Inc. Revenue Disclosure

Historical Timeline

About Revenue Disclosures

Other Available Disclosures