Fluence Corporation (ASX: FLC) has secured a US$3.7 million industrial water treatment contract in Texas, bolstering its presence in US water-scarce markets.
Fluence will undertake the design and construction of an ultrafiltration (UF) and reverse osmosis (RO) industrial water treatment plant designed to treat up to 1.5 million gallons per day of groundwater from an on-site well.
This treated water will primarily be used for cooling tower makeup for a major US manufacturer, reducing their reliance on municipal water supplies.
A key sustainability feature of the plant is its stated capability for greater than 90% water recovery from the feedwater. Commissioning of the plant is expected by the end of 2026.
Strategic Market Focus
This contract reinforces Fluence's strategic focus on addressing industrial water scarcity, particularly in drought-prone regions such as Texas.
The state's industrial sector faces growing water stress, making efficient water treatment and reuse solutions critical.
The win aligns with Fluence's broader strategy to expand its Smart Product Solutions (SPS) and Recurring Revenue (RR) offerings.
These solutions are vital for improving operational resilience and reducing dependence on municipal water, especially for industrial clients.
Annual Performance Context
The Texas contract builds on Fluence's reported financial momentum.
For the full year 2025, the company reported revenue of $78.4 million, representing a significant 52.3% increase year-on-year.
Profitability also saw material improvement, with EBITDA reaching $4.0 million in FY2025, up from a negative $4.0 million in FY2024, with operating cash flow a robust $10.9 million.
At the close of FY2025, Fluence's backlog stood at $74.8 million, providing clear visibility into future revenue streams.
Management has indicated expectations for double-digit revenue growth in FY2026, even with an anticipated reduction in Ivory Coast Addendum revenue.
Recent Operational Updates
In its Q1 2026 business update, Fluence reported revenue of $17.2 million, a 3.6% increase compared to Q1 2025.
The company's gross margin continued to improve, reaching 29.2%, up 3.0 percentage points year-on-year, driven by enhanced execution.
While new orders in Q1 2026 were $7.5 million, a decrease of 38% year-on-year, management attributed this to project delays rather than lost opportunities, with a rebound anticipated in Q2 2026.
Total backlog as of 31 March 2026 was $64.4 million.
The company is actively negotiating an extension for its $20 million revolving credit facility, which was set to mature on 30 April 2026.
This negotiation is expected to be finalised well before the revised July 2026 maturity.
Outlook and Risks
The new Texas contract provides positive momentum and underscores Fluence's strategic market focus on industrial water solutions in water-stressed regions.
This aligns with the company's stated goal of growing its higher-margin SPS and RR segments.
However, the company continues to manage execution risks, particularly around project timing and the conversion of its backlog into revenue.
The ongoing negotiation for the $20 million revolving credit facility extension also remains a key funding watch item, alongside the broader management of working capital.
Fluence aims to leverage its growing order book and operational discipline to deliver sustained profitability, with FY2026 revenue growth expected to be double-digit.
