Gentrack Revises FY26 Revenue to $229m-$238m, Signals Share Buyback

Revenue Guidance Revised Lower Amid Growth Investments

Gentrack Group Limited (ASX:NZX:GTK) has adjusted its FY26 revenue guidance downward to a range of $229 million to $238 million, a modest step back from prior expectations. While total revenue is tempered, the company projects recurring revenue to climb by over 10% to approximately $174 million, underscoring the growing importance of its subscription-style income streams. The first half is expected to deliver around $110 million in revenue, with $85 million recurring.

This recalibration comes as Gentrack continues to invest heavily in international expansion and product development, particularly around its g2.0 platform, a cloud-based, low code/no code solution aimed at utilities and the Veovo airports division. The firm remains confident in its medium-term revenue target of more than 15% compound annual growth, reflecting a strategic pivot towards global leadership rather than short-term profitability.

The FY26 EBITDA guidance spans a wide range from $13.5 million to $20 million, reflecting ongoing investments and the transition to a business model that prioritises higher recurring revenue with lower onboarding costs. Management anticipates H1 EBITDA of approximately $7.8 million, excluding acquisition expenses, with margins improving toward a medium-term target of 15% to 20% after development costs.

Board Signals On-Market Share Buyback Up to $20 Million

In a notable capital management move, Gentrack’s board has indicated an intention to launch an on-market share buyback following the release of its half-year results on 18 May 2026. The buyback program could see the company repurchase up to $20 million worth of shares, capped at 5% of the total shares on issue, over a 12-month period subject to market conditions.

Chairman Andy Green described the buyback as "appropriate and accretive to shareholders," emphasising that it is supported by a robust balance sheet and will not impede the company’s ability to fund organic and inorganic growth initiatives. This approach reflects a disciplined capital allocation strategy balancing shareholder returns with ongoing investment in growth areas.

Strategic Shift Towards Recurring Revenue and Global Expansion

Gentrack’s shift to a subscription-heavy revenue model is exemplified by the rollout of g2.0, which aims to reduce cost-to-serve and accelerate new product launches for utilities worldwide. This transformation aligns with the company’s broader ambition to lead the global utilities software market, partnering with tech giants like Salesforce and AWS to enhance its product suite.

The company’s confidence in this strategy is backed by a strong pipeline and market opportunities in both the utilities and Veovo segments. The transition to g2.0 also involves new customer wins and upgrades that will drive higher recurring revenue streams while lowering onboarding costs, a dynamic that should improve margins over time.

These developments build on Gentrack’s solid FY25 performance, where the company achieved an 8% revenue increase and a doubling of net profit, driven by strong recurring revenues and strategic investments. The momentum from last year’s results, including the first full deployment of g2.0 with Genesis Energy, sets a foundation for the medium-term growth targets. This context is highlighted in recent coverage of the company’s strong recurring revenue growth and g2.0 platform deployments.