Fluence Accelerates Growth with 64.5% Revenue Surge and Strategic Shift in Q1 2025

Strong Q1 Performance Signals Strategic Success

Fluence Corporation Limited (ASX: FLC) has delivered a compelling start to FY2025, posting a 64.5% increase in revenue to $16.6 million for the first quarter compared to the same period last year. This growth is underpinned by the company’s deliberate shift towards higher-margin Smart Product Solutions (SPS) and Recurring Revenue (RR) segments, which are rapidly gaining traction in key markets.

Notably, Fluence achieved a positive EBITDA of $0.1 million in Q1 2025, a marked turnaround from the $1.6 million loss recorded in Q1 2024. This improvement reflects disciplined cost management, including a 14.6% reduction in SG&A and R&D expenses, alongside operational efficiencies stemming from recent restructuring efforts.

Strategic Realignment to High-Growth, High-Margin Markets

The company’s strategic pivot focuses on leveraging its proprietary Membrane Aerated Biofilm Reactor (MABR) technology and expanding its footprint in large, high-growth end markets such as municipal water and wastewater upgrades, industrial wastewater, and wastewater-to-energy projects. Fluence’s technology is well positioned to benefit from the US Environmental Protection Agency’s estimated $200 billion investment in municipal water infrastructure over the next two decades.

Fluence’s SPS and RR segments are becoming increasingly significant contributors to revenue, with SPS revenue showing notable growth as a percentage of total sales. The company is transitioning away from lower-margin Custom Engineered Solutions (CES), which historically carried higher risks and lower profitability.

Robust Backlog and Pipeline Support FY2025 Outlook

As of March 31, 2025, Fluence’s backlog stood at $83.5 million, a slight reduction from the previous quarter due to progress on the Ivory Coast Addendum project. However, the broader sales pipeline has expanded by 35% since Q4 2023, now encompassing over 368 opportunities with an average project size of approximately $1.6 million. This healthy pipeline underpins the company’s confidence in meeting its FY2025 revenue guidance of $80-95 million and EBITDA target of $3-5 million.

New orders in Q1 2025 totaled $12.1 million, a 21.8% increase over Q1 2024, with significant wins across multiple geographies including the United States, Italy, Argentina, and China. These orders span a variety of projects, from anaerobic digesters and MABR water reuse systems to operations and maintenance contract renewals.

Technology Leadership and ESG Credentials

Fluence’s MABR technology remains a cornerstone of its competitive advantage, offering energy-efficient wastewater treatment solutions that align with global decarbonization initiatives. The company has executed over 40 wastewater-to-energy projects, reinforcing its position in this growing market segment. Its solutions also contribute to significant reductions in CO2 emissions and other harmful contaminants, enhancing its appeal amid rising ESG considerations.

With a cash balance of $8.5 million and additional security deposits, Fluence is financially positioned to capitalize on its expanding market opportunities while maintaining operational flexibility.