Energy Recovery (NASDAQ: ERII) experienced a dramatic 24-hour plunge of 20.94% following the release of its disappointing first-quarter 2025 financial results. The company's performance fell significantly short of analyst expectations, raising concerns about its operational efficiency and market position.

The pressure equipment manufacturer reported a quarterly loss of $0.18 per share, with an adjusted loss of $0.13 per share. This marked a substantial decline from the $0.08 loss per share in the same period last year and missed the analyst consensus estimate of a $0.03 loss by a staggering 333.33%. Revenue for the quarter came in at $8.06 million, falling well below the analyst consensus estimate of $21.91 million by 63.19% and representing a 33.29% decrease compared to the $12.09 million in sales reported for the same quarter in the previous year.

Further exacerbating investor concerns, Energy Recovery posted an alarming EBIT margin of -155.8% and a net loss of $9.9 million for the quarter. The company's adjusted EBITDA stood at -$8.7 million, underscoring the significant challenges faced during this period. Despite these disappointing results, Energy Recovery maintained a gross margin of 55.3%, suggesting some resilience in its core operations amidst the overall financial downturn. As investors digest these results, questions arise about the company's strategy to reverse this negative trend and return to profitability.