Fluence H1 Revenue Climbs to $33.1M, EBITDA Up $3.6M Despite Margin Pressure
Fluence Corporation reported a robust 64.7% revenue increase in the first half of 2025, driven by strong project execution in Ivory Coast and growth in key business units. Despite tariff uncertainties and a cautious China outlook, the company maintains its full-year guidance and eyes further backlog expansion.
- H1 2025 revenue up 64.7% to $33.1 million
- EBITDA improved by $3.6 million despite margin pressure from Ivory Coast project
- Backlog remains strong at $79.5 million with new orders rebounding in July
- US tariff impacts largely mitigated through alternative manufacturing strategies
- Ongoing progress and milestone payments on Ivory Coast Addendum project
Strong Revenue Growth Anchored by Ivory Coast Project
Fluence Corporation Limited (ASX – FLC) has delivered a compelling first half of 2025, with revenue soaring 64.7% year-on-year to $33.1 million. This surge was primarily fueled by the Ivory Coast Addendum project, which contributed an additional $12 million compared to the same period last year. The company’s strategic focus on high-margin Smart Product Solutions and recurring revenue streams also supported a 6.7% growth in these segments, underscoring a successful realignment of its business units.
EBITDA and Margins – Gains Amidst Cost Pressures
EBITDA for the half-year improved by $3.6 million to $0.1 million, reflecting both revenue growth and a $1 million reduction in selling, general and administrative (SG&A) and research and development (R&D) expenses. However, gross margins dipped by 4.1% to 26.5%, primarily due to the lower margin profile of the Ivory Coast Addendum. Encouragingly, margins in other key units such as Industrial Water & Biogas and Industrial Water & Reuse improved, while Municipal Water & Wastewater maintained strong margins above 36%, validating the company’s focus on profitable product lines.
Order Book and Backlog Signal Momentum Despite Regional Challenges
While new orders in H1 2025 were down 9.1% compared to the previous year, a rebound in July with over $8 million in new bookings has lifted the year-to-date total to more than $30 million. Growth was particularly notable in North America and Southeast Asia, with combined order increases of 21.6% across several business units. The backlog remains robust at $79.5 million, providing a solid revenue foundation for the remainder of the year. However, the company flagged ongoing risks in the China market, where demand remains subdued.
Navigating Tariff Uncertainties and Operational Cash Flow
Fluence continues to manage the impact of evolving US tariff policies, which introduced a 10% universal tariff on imports in April 2025. The company has largely mitigated potential margin erosion through alternative manufacturing strategies, including expanding US-based membrane production. Despite a positive operating cash flow of $4.9 million in H1, timing of milestone payments and vendor settlements means Q3 cash flow is expected to be negative, though year-to-date cash flow remains positive.
Ivory Coast Project Progress and Future Outlook
Significant progress has been made on the Ivory Coast Main Works and Addendum projects, with commissioning largely complete and milestone payments totaling €22.3 million received. The Addendum, critical for connecting the water treatment plant to the distribution system, is on schedule and budget, with further milestone payments expected soon. Fluence is actively negotiating a long-term operations and maintenance contract, which would provide recurring revenue and operational stability once the Addendum is completed.
Looking ahead, Fluence maintains its full-year 2025 revenue guidance of $80-95 million and EBITDA target of $3-5 million. While tariff-related delays and China market softness pose risks, the company’s diversified portfolio, cost discipline, and backlog growth position it well for continued progress.
Bottom Line?
Fluence’s strong H1 momentum and strategic adjustments set the stage for a pivotal second half, though tariff volatility and regional market risks warrant close watch.
Questions in the middle?
- How will ongoing US tariff policy shifts affect Fluence’s manufacturing and margins beyond 2025?
- What is the timeline and likelihood of securing the long-term O&M contract for the Ivory Coast project?
- Can Fluence sustain order growth in Southeast Asia amid China market uncertainties?