Gentrack’s Expansion Drive Faces Execution and Market Risks Despite Solid HY25 Results
Gentrack reported a solid 9.8% revenue increase to NZ$112 million in HY25, driven by recurring revenue growth and international expansion, while net profit after tax surged 34.7%. The company’s outlook remains optimistic as it targets FY25 revenue above NZ$230 million and deeper market penetration across Asia, Europe, and the Middle East.
- HY25 revenue up 9.8% to NZ$112 million
- Recurring revenues grow 17%, Veovo segment up 24%
- NPAT rises 34.7% to NZ$7.2 million aided by tax benefits and forex gains
- Strong cash position at NZ$70.7 million
- FY25 guidance targets revenue above NZ$230 million and EBITDA margin over 12%
Robust Financial Performance in HY25
Gentrack, the energy and water sector software specialist, has delivered a commendable half-year performance for 2025, with revenue climbing 9.8% to NZ$112 million. This growth was underpinned by a 17% increase in recurring revenues, reflecting the company’s success in securing and expanding contracts with utilities globally. The Veovo segment, focused on airport operations software, outperformed with a 24% revenue jump, fueled by new customer wins and upgrades across the UK, Middle East, and Asia-Pacific regions.
Profitability also improved markedly, with net profit after tax (NPAT) soaring 34.7% to NZ$7.2 million. This uplift was supported by a lower effective tax rate, stemming from favourable income tax treatment of long-term incentives, and foreign exchange gains related to intercompany loans. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased modestly by 5.1% to NZ$13 million, despite higher investments in sales and product development to sustain growth momentum.
Strategic Investments and Cash Strength
Gentrack’s commitment to innovation is evident in its increased R&D spend, which rose to approximately 16% of Utilities revenue, up from 14% in the prior period. The company also boosted sales and marketing efforts to capitalize on a strong sales pipeline. These investments, while tempering EBITDA margin slightly to 17% before long-term incentive costs, position Gentrack well for future expansion.
Cash reserves remain robust, with a closing balance of NZ$70.7 million, up from NZ$39.3 million a year earlier. The company continues to generate positive cash flow, supported by stable working capital management and foreign exchange benefits. This strong balance sheet provides flexibility to pursue strategic acquisitions as opportunities arise.
Global Expansion and Market Leadership
Looking ahead, Gentrack projects FY25 revenue at or above NZ$230 million, with an EBITDA margin exceeding 12%. The company is actively expanding its footprint in Asia, the Middle East, and Europe, leveraging early wins and a maturing pipeline. Its flagship technology platform, G2, is touted as a best-in-class billing and customer relationship management system, driving operational efficiencies and superior customer satisfaction across multiple countries.
Additionally, Gentrack holds a 10% stake in Amber, a market leader in battery automation and vehicle-to-grid technology in Australia. Amber’s recent partnerships with UK utilities such as E.ON Next and Ecotricity underscore Gentrack’s strategic positioning in emerging energy technologies and green innovation.
Navigating Industry Transformation
As utilities worldwide modernize their infrastructure, Gentrack’s solutions are increasingly critical in enabling energy and water retailers to meet regulatory compliance and customer service excellence. The company’s strong customer retention and low regulatory fines compared to competitors highlight its competitive advantage in a sector undergoing rapid transformation toward net zero emissions.
While the global economic environment remains uncertain, Gentrack’s diversified revenue streams, technological leadership, and expanding international presence provide a resilient platform for sustained growth.
Bottom Line?
Gentrack’s HY25 results set the stage for ambitious global expansion, but execution risks and market volatility remain key watchpoints.
Questions in the middle?
- How will Gentrack’s increased R&D and sales investments translate into new contract wins in H2 FY25?
- What are the prospects and timelines for Amber’s vehicle-to-grid technology scaling internationally?
- How might foreign exchange fluctuations and non-recurring revenue variability impact FY25 financial outcomes?