Fluence Corporation delivered a 14.7% revenue increase in H1 2026, driven by a 34.7% rise in higher-margin Smart Product Solutions and Recurring Revenue, alongside record backlog growth and strategic leadership appointments.
- H1 2026 revenue up 14.7% to $37.6M
- EBITDA of $3.4M, best half-year in over five years
- Backlog climbs 18.4% year-on-year to $59.8M
- New COO appointed to boost execution
- Suspension of Egyptian joint venture amid receivables issues
Strong Financial Momentum in H1 2026
Fluence Corporation Limited (ASX:FLC) has posted its strongest first half-year EBITDA in more than five years, reaching $3.4 million in H1 2026. This performance accompanies a 14.7% increase in revenue to $37.6 million, fuelled by a 34.7% jump in higher-margin Smart Product Solutions (SPS) and Recurring Revenue (RR). Gross margins expanded by 8.7 percentage points to 35.5%, reflecting improved project execution, a more favourable sales mix, and lower warranty accruals.
Orders in Q2 and H1 2026 surged 53.9% and 5.0% respectively compared to the same periods last year, underpinning a backlog of $59.8 million; a rise of 18.4% from Q2 2025. The company forecasts significantly higher order intake in H2 2026, reinforcing confidence in meeting full-year revenue and EBITDA targets.
Segment Performance Highlights and Key Wins
The Industrial Wastewater & Biogas (IWB) segment led revenue growth with a $3.2 million increase and a $0.9 million EBITDA uplift, while Southeast Asia & China (SEA & China) returned to positive EBITDA driven by improved project execution and regional order activity. The Ivory Coast (IVC) project contributed $5.0 million EBITDA, boosted by $3.5 million in 2025 operations and maintenance fees, with ongoing negotiations for a long-term O&M contract.
Municipal Water & Wastewater (MWW) and Industrial Water & Reuse (IWR) segments faced timing-related project execution delays but are expected to rebound in the second half. Notable recent contracts include a $3.7 million water treatment plant for a confidential US steel manufacturer, multiple orders in Southeast Asia, and projects across the USA, Italy, and Dubai.
Strategic Leadership and Capital Management
Fluence bolstered its executive team with the appointment of Jeremy Dayment as Chief Operating Officer, effective July 27, 2026. Dayment brings nearly 30 years of water industry leadership, including a successful tenure scaling Newterra, a modular wastewater solutions firm. His remit includes enhancing global execution capabilities and leading the Municipal Water & Wastewater business unit.
In July 2026, Fluence extended its $20 million revolving credit facility for 12 months under substantially unchanged terms, maintaining financial flexibility. The facility is provided by long-term shareholders and board members Nikolaus Oldendorff and Doug Brown.
Challenges in Egypt Lead to Business Suspension
Fluence announced plans to suspend operations of its Egyptian joint venture, International Company for Water Services & Infrastructure (IWS), due to persistent collection issues on accounts receivable, notably the New Mansoura water treatment plant. Despite successful project delivery, outstanding payments have led Fluence to classify IWS as a discontinued operation pending liquidation. This move reflects a strategic focus on markets with stronger financial prospects.
Navigating Geopolitical Risks in the Middle East
The company acknowledged ongoing geopolitical tensions in the Middle East, which have introduced supply chain volatility and delayed some customer investment decisions. Fluence has implemented mitigation strategies including diversified sourcing and disciplined pricing. While no direct cancellations have occurred, the company remains vigilant about potential prolonged impacts on project execution and customer demand.
Fluence's diversified portfolio across municipal, industrial, and wastewater-to-energy markets, combined with its proprietary modular technologies, positions it well to capitalise on the growing global water scarcity challenge. The company continues to target double-digit revenue growth driven by expanding SPS and recurring revenue streams, supported by disciplined cost management and operational leverage.
Bottom Line?
Fluence's robust first-half results and expanding backlog set the stage for growth, but execution risks and geopolitical uncertainties warrant close monitoring.
Questions in the middle?
- How will the suspension of the Egyptian JV impact Fluence’s financials and regional strategy over the next year?
- Can Fluence sustain its momentum in higher-margin SPS and recurring revenue segments amid global supply chain pressures?
- What progress will be made on the Ivory Coast O&M contract negotiations, and how material will this be to future earnings?