Fluence’s Revenue Rockets 73% as Smart Solutions Drive Growth
Fluence Corporation reported a robust 72.9% revenue increase in Q3 2025, driven by a strategic pivot towards higher-margin Smart Product Solutions and recurring revenue streams. The company maintains its full-year guidance despite expecting to finish near the lower end.
- 72.9% year-to-date revenue growth to $52.4M
- Strategic shift from Custom Engineered Solutions to Smart Product Solutions and Recurring Revenue
- Q3 backlog grows to $75.7M, supporting FY2025 revenue guidance
- Ivory Coast water treatment project progressing with potential O&M contract
- Maintains FY2025 revenue guidance of $80-95M and EBITDA of $3-5M
Strong Revenue Growth Amid Strategic Realignment
Fluence Corporation Limited (ASX, FLC) has delivered a striking 72.9% increase in year-to-date revenue for Q3 2025, reaching $52.4 million. This surge reflects the company’s deliberate shift away from lower-margin Custom Engineered Solutions towards its higher-margin Smart Product Solutions (SPS) and recurring revenue (RR) segments. The strategic realignment is already bearing fruit, with SPS revenue alone growing 26.6% compared to the previous year.
Backlog and New Orders Signal Robust Pipeline
Fluence’s backlog as of September 30, 2025, stands at $75.7 million, a 70.2% increase compared to the same period last year. This backlog, combined with new orders totaling $39.7 million year-to-date, underpins the company’s confidence in meeting its full-year revenue guidance of $80-95 million. Notably, new orders in Q3 alone rose 9.6% year-on-year, with expectations that Q4 will surpass this quarter’s record order intake.
Ivory Coast Project, A Keystone Asset
The flagship Ivory Coast water treatment plant project continues to progress steadily. Provisional acceptance of the main works was granted in December 2024, with partial commissioning completed and all payments received for this phase. The addendum works, including infrastructure such as access roads and bridges, are underway and expected to complete by September 2026. Fluence is also in negotiations for a potential operations and maintenance (O&M) contract, which could provide a significant recurring revenue stream and strengthen its foothold in the region.
Financial Performance and Outlook
While gross margins dipped slightly to 28.8% due to the increased contribution from the Ivory Coast addendum, Fluence improved EBITDA to $1.2 million in Q3 and year-to-date, surpassing the prior year by $2.6 million and $6.2 million respectively. The company has also reduced overhead costs, achieving $0.8 million in savings year-to-date. Despite a forecasted negative operating cash flow in Q4 due to milestone payment timing, full-year cash flow is expected to remain positive, supported by a healthy cash balance of $14.1 million plus $4.1 million in security deposits.
Expanding Global Footprint and Market Focus
Fluence is intensifying its presence in North America and other high-growth markets, leveraging its energy-efficient Membrane Aerated Biofilm Reactor technology and wastewater-to-energy solutions. Recent notable orders include a $12 million ultra-pure water treatment plant in Saudi Arabia and multiple wastewater treatment projects across Argentina, Italy, and China. The company’s focus on sustainable, decentralized water treatment aligns with global decarbonization trends and growing regulatory demands, positioning it well for future growth.
Bottom Line?
Fluence’s strategic pivot and strong project pipeline set the stage for sustained growth, but execution on key contracts and margin management will be critical in the coming quarters.
Questions in the middle?
- Will Fluence secure the anticipated O&M contract for the Ivory Coast project?
- How will the company manage margin pressures from large addendum projects going forward?
- Can Fluence sustain its accelerated order growth in Q4 and beyond amidst market uncertainties?
