Fluence Corporation Limited delivered a standout Q4 2024 with $21.2 million revenue and $1 million EBITDA, driven by a strategic shift to higher-margin Smart Product Solutions. The company’s robust $88 million backlog and $50 million in new orders set the stage for ambitious growth in 2025.
- Q4 2024 revenue surged to $21.2M with $1.0M EBITDA, more than doubling prior quarters
- FY 2024 revenue reached $51.5M, with a strategic pivot to Smart Product Solutions and recurring revenue
- New orders hit $50M in FY 2024, up 5.8% year-on-year excluding Ivory Coast project delays
- Backlog stands strong at $88M, with $58.1M expected to convert to revenue in FY 2025
- FY 2025 guidance projects revenue between $80M and $95M and EBITDA of $3M to $5M
Strategic Leadership and Market Repositioning
Fluence Corporation Limited has marked a pivotal moment in its corporate trajectory with a strong finish to FY 2024, underpinned by a leadership team boasting over a century of combined water treatment industry experience. The recent appointments of the Chairman, CEO, CFO, and CCO within the last two to three years have catalyzed a strategic realignment focused on higher-margin, capital-efficient Smart Product Solutions (SPS) and recurring revenue streams.
This leadership-driven transformation has seen Fluence pivot away from its traditional Custom Engineered Solutions (CES), which, while historically significant, carried higher risks and lower margins. The company’s restructuring efforts have also yielded operational efficiencies, reducing overheads and fostering greater cross-selling opportunities.
Financial Performance Highlights
Q4 2024 was a standout quarter, with revenue reaching $21.2 million, more than double any other quarter in the fiscal year, and EBITDA turning positive at $1.0 million. This performance underscores the profitability potential when quarterly revenues exceed the $20 million threshold. For the full year, Fluence reported $51.5 million in revenue, a figure tempered by delays in the Ivory Coast Addendum project and softness in the Southeast Asia and China markets.
Excluding these regional impacts, revenue growth was a healthy 18.8% year-on-year. The company also improved gross margins to 30.1%, up 2 percentage points from the previous year, while cutting SG&A and R&D expenses by 11.4%, reflecting disciplined cost management.
Order Book and Backlog Strength
Fluence secured $50 million in new orders during FY 2024, representing a 5.8% increase year-on-year when excluding the Ivory Coast project. Notably, orders from Municipal Water & Wastewater (MWW), Industrial Water Reuse (IWR), and Industrial Water & Biogas (IWB) segments grew by 23.3%, signaling strong market acceptance of the company’s SPS offerings.
The backlog at the end of FY 2024 stood at $88 million, with $58.1 million expected to be recognised as revenue in FY 2025. This backlog coverage represents 61-73% of the company’s revenue guidance for the coming year, providing a solid foundation for growth. Additionally, the sales pipeline expanded by 33% since the end of 2024, driven largely by North American opportunities, where the MWW pipeline now accounts for nearly 75% of total prospects.
Market Position and ESG Impact
Fluence’s proprietary Membrane Aerated Biofilm Reactor (MABR) technology remains a market leader, offering the lowest cost solution for meeting increasingly stringent effluent standards globally. The company’s focus on energy-efficient wastewater-to-energy projects aligns well with major decarbonization initiatives in North America and Europe, enhancing its ESG credentials.
Industrial water reuse markets, including lithium mining and semiconductor manufacturing, represent high-growth end markets that Fluence is targeting aggressively. The company’s technologies not only reduce operational costs but also lower CO2 emissions and other harmful contaminants, positioning Fluence as a key player in sustainable water solutions.
Outlook and Guidance
Looking ahead, Fluence has set FY 2025 revenue guidance between $80 million and $95 million, with EBITDA expected to be in the $3 million to $5 million range. This outlook reflects confidence in the ongoing transition to SPS and recurring revenue models, as well as the anticipated conversion of backlog into revenue.
Recent contract wins, including projects in California, Spain, Argentina, Brazil, Hawaii, Italy, Missouri, and China, demonstrate the company’s expanding geographic footprint and diversified end-market exposure. The initial milestone payment of $8.5 million from the Ivory Coast Addendum project received in January 2025 further bolsters near-term cash flow visibility.
Bottom Line?
Fluence’s strategic pivot and robust backlog set the stage for a transformative 2025, but execution risks in key markets remain a watchpoint.
Questions in the middle?
- How will Fluence manage ongoing project delays in Ivory Coast and Southeast Asia to meet 2025 revenue targets?
- What is the timeline and scale for SPS revenue to surpass CES in the company’s overall mix?
- Can Fluence sustain margin improvements amid expanding operations and competitive pressures?