Energy Recovery, Inc.

good day ladies and gentlemen and welcome to energy recovery's first quarter 2025 earnings call during today's call energy recovery may make projections and other forward-looking statements under the safe harbor provisions contained in the private securities litigation reform act of 1995 regarding future events or the future financial performance of the company these statements may discuss our business economic and market outlook growth expectations new products and their performance, cost structure, and business strategy. Forward-looking statements are based on information currently available to the company and on management's beliefs, assumptions, estimates, and projections. Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors. We refer you to documents the company files from time to time with the SEC, specifically the company's Annual Form 10-K, and quarterly form 10Q. These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. All statements made during this call are made only as of today, May 7, 2025, and the company expressly disclaims any intent or obligation to update any forward-looking statements made during this call to reflect subsequent events or circumstances unless otherwise required by law. Our hosts for today's call are David Moon, President and Chief Executive Officer of Energy Recovery, and Mike Mancini, Chief Financial Officer. I would like to now turn the call over to Mr. Moon.

Thank you, Operator, and good afternoon, everyone. Earlier today, we released a letter to shareholders on the investor relations section of our website that reviews business and financial performance during the quarter. I encourage all of you to read the letter in full. In addition, and in response to investor feedback, I'll make a few opening comments to highlight important takeaways from that letter. The first highlight is that Q1 was in line with our expectations regarding revenue and profitability and consistent with another heavily back-end-weighted year. Our desalination business remains strong and on track for the year. Turning to tariffs. As we noted during our Q4 earnings call, we are directly affected by tariffs. As tariffs have increased in scope and magnitude during the last two months, so too have our initiatives to offset them. We believe we'll be able to offset the majority of the net tariff impact with manageable impact to our financial results for 2025. Our CO2 business remains on track, and we're making clear progress towards full commercialization. We now have three OEMs working to integrate the PX into their rack, designs and expect all these OEMs to have at least one pilot test site running for the summer season. We're also excited to be able to speak publicly about our work with Hill Phoenix for the first time as noted in our shareholder letter. I'd also like to take this time to reiterate my appreciation for the team here at Energy Recovery. We've experienced a lot of change in the past few quarters and I'm proud of the resiliency and dedication they've shown. With that, we'll now move to the question and answer portion of our conference call. Operator, please open the line for questions.

If you would like to ask a question at this time, please press star then the number one on your telephone keypad. Please be prepared to state your question when prompted. Once again, please press star then the number one on your telephone keypad to ask a question at this time. Your first question comes from Ryan Finkst with B. Riley. Your line is open.