After a tough year marked by delays and market softness, Fluence Corporation (ASX: FLC) has ended 2024 on a high note, setting the stage for a strong recovery in 2025. The company’s fourth-quarter revenue surged to US$21.2 million, more than doubling any other quarter during the year and delivering a positive EBITDA of US$1.0 million. While the full-year result was impacted by setbacks in its key Ivory Coast project and weaker demand in China, management is confident that the company is now back on track.
Fluence has issued FY 2025 revenue guidance of US$80–95 million, a significant jump from 2024’s US$51.5 million, with EBITDA forecast to turn positive at US$3–5 million. The turnaround comes as the company shifts away from lower-margin, capital-intensive projects and refocuses on its Smart Product Solutions (SPS) and recurring revenue streams—a move that is already paying dividends with improved profitability and a growing order book.
The Q4 Turnaround: A Glimpse of What’s to Come?
Fluence’s final quarter of 2024 offered a much-needed boost after what had been a challenging year. The company’s US$21.2 million in revenue for the quarter was a clear sign of momentum building, particularly in its core segments. Gross margins also expanded to 30.1%, reflecting the benefits of its strategic shift towards high-margin business lines.
New order wins have been steady, with US$9.5 million secured in Q4 alone, bringing total new orders for 2024 to US$50 million, an increase of 5.8% year-on-year (excluding the Ivory Coast Addendum project). The company’s backlog now stands at US$88 million, with US$58.1 million expected to be recognised in FY 2025, covering around two-thirds of its revenue target.
CEO Tom Pokorsky, who has been leading Fluence’s turnaround strategy, believes the company is now well-positioned for sustainable growth.
“We have realigned our focus to higher-margin products and services, and we’re seeing the benefits of that shift. With the Ivory Coast project now moving forward and a strong order book in place, we expect 2025 to be a year of significant growth and improved profitability.”
Fluence CEO Tom Pokorsky
2024: A Year of Setbacks, but Core Business Holds Strong
Despite the positive end to the year, Fluence’s full-year results reflect the struggles it faced in 2024. Revenue of US$51.5 million was down 26.5% from 2023, largely due to continued delays in the Ivory Coast Addendum project and weaker demand in China, which saw its revenue plummet by 72% to just US$3.8 million.
The Ivory Coast project, which was expected to contribute US$25–30 million in 2024, only delivered US$7.0 million, leading to a major revenue shortfall. However, with the first milestone payment of US$8.5 million received in January 2025, work is now progressing, and the project is forecast to generate US$38 million over the next 18 months.
While these setbacks weighed on the bottom line, Fluence’s core business segments—Industrial Wastewater & Biogas (IWB) and Industrial Water & Reuse (IWR)—performed strongly. The IWR division saw revenue climb 21.3% to US$18.0 million, while the IWB segment grew 27.4% to US$8.9 million. These results highlight the effectiveness of Fluence’s renewed focus on high-margin, scalable water treatment solutions.
Fluence’s Business: From Water Treatment to Recurring Revenue
Fluence is a global provider of decentralised water and wastewater treatment solutions. The company operates across municipal, industrial, and commercial sectors, providing everything from plug-and-play modular water treatment systems to custom-built industrial wastewater solutions.
Its Smart Product Solutions (SPS)—which include its flagship Membrane Aerated Biofilm Reactor (MABR) technology—are designed to provide cost-effective, energy-efficient water treatment. MABR, which is Fluence’s proprietary technology, reduces aeration energy consumption by up to 90%, making it an attractive option for both municipalities and industrial clients seeking sustainable water treatment solutions.
Fluence has also been building out its Build-Own-Operate (BOO) business model, where it finances, builds, and operates water treatment facilities for clients, generating long-term recurring revenue. The company is targeting growth in North America, Latin America, and Southeast Asia, where demand for water reuse and sustainable wastewater treatment is rising.
The shift towards SPS and BOO has already led to higher gross margins, with the company expecting further improvements as it reduces exposure to large, capital-intensive projects like Ivory Coast.
Market Outlook: Stronger Balance Sheet, Improved Funding Position
A recent RaaS Research update highlighted that Fluence is now fully funded for 2025, thanks to its recent debt refinancing and an expanded US$20 million facility provided by its two largest shareholders. The firm noted that Fluence’s recurring revenue and SPS business is gaining momentum, with revenue up 29% in Q4 versus the prior year, and group recurring revenue growing 31%.
The research group maintained its DCF valuation at A$0.18 per share, which represents potential upside of 164% from Fluence’s current share price of A$0.068.
Looking Ahead: What to Expect in 2025
With the Ivory Coast project now progressing, a solid order backlog, and a growing footprint in high-margin segments, Fluence is poised for a much stronger 2025. The company expects:
- Revenue of US$80–95 million, a 55–84% increase from 2024.
- EBITDA of US$3–5 million, a turnaround from the US$4.0 million loss in 2024.
- Stronger recurring revenue, with over US$58 million in backlog revenue already secured.
The water treatment sector remains a high-growth industry, with increasing global demand for decentralised, energy-efficient solutions. If Fluence can execute its strategy effectively and sustain its recent momentum, 2025 could mark the beginning of a new phase of profitability and expansion.
For now, the market will be watching closely to see if Fluence can turn promise into performance.
