Gentrack Profit Jumps 35% on Strong Recurring Revenue

About Gentrack Group Ltd

Gentrack Group Limited (Gentrack, ASX: GTK) is a New Zealand-based software provider, listed on the NZX and ASX, specialising in billing, customer management, and operational solutions for utilities and airports. Its platforms, including the innovative g2.0, support over 60 energy and water companies and numerous airports worldwide, driving efficiency and transformation.

Half-Year Results Showcase Financial Strength

On May 19, 2025, Gentrack reported a 9.8% revenue increase to $112 million for the half-year to 31 March 2025. Recurring revenues, a key indicator of stability, grew 16.7% to $76.4 million, reflecting strong contract renewals and upgrades. The utilities division, the company’s core segment, saw revenue rise 7.2% to $92.8 million, with recurring revenues up 17%. Non-recurring revenues fell 12% to $25.4 million due to a high base of project work in the prior year, but Gentrack expects a rebound in the second half.

Veovo Drives Impressive Revenue Growth

The Veovo airport technology division delivered a standout performance, with revenue up 24% to $19.2 million. This growth was fueled by new contracts in the UK and Middle East, alongside upgrades in Asia-Pacific. Recurring revenues rose 14% to $9 million, while non-recurring project work, including $3.6 million in hardware sales, surged 34%. Key milestones, such as operational launches in Edinburgh and Saudi Arabia, underscore Veovo’s growing global presence.

Profit and Cashflow Reflect Robust Operations

Gentrack’s EBITDA increased 5.1% to $13 million, despite higher investments in sales and the g2.0 platform, which achieved its first deployment with Genesis Energy. Net profit after tax soared 34.7% to $7.2 million, boosted by a lower effective tax rate of 21.3% (down from 35.5%) due to tax relief on share-based payments and $2.1 million in foreign exchange gains from currency appreciation, notably Sterling. Cash reserves grew to $70.7 million, up $4 million since January 2025, highlighting strong cash flow generation and a solid balance sheet.

Strategic Wins Bolster Market Position

Gentrack secured a major contract with Utility Warehouse in the UK, integrating its billing software to serve nearly two million meter points. Long-term renewals with clients like Wave, Castle Water, and Vector in New Zealand ensure stable revenue streams. Innovative solutions, such as battery automation with Amber Electric and grid stability with Mercury, align with the global energy transition. Veovo’s win of London Gatwick’s Integrated Airport Control project positions it as a leader in airport technology, with further upgrades planned for 2025.

Global Trends Support Long-Term Growth

The utilities and airport sectors are transforming rapidly, creating opportunities for Gentrack. The shift to cloud-based systems and renewable energy drives demand for g2.0, targeting a $17 billion addressable market across Europe, the Middle East, and Asia. Despite potential risks from global economic uncertainties, such as tariff impacts or slower airport transformations, Gentrack’s essential services provide resilience. The weakening New Zealand dollar has also benefited its global operations.

Expansion Plans Signal Bright Future

Gentrack forecasts full-year revenue of at least $230 million for FY25, with an EBITDA margin above 12%. The company targets over 15% annual revenue growth and a 15-20% EBITDA margin in the medium term. With a maturing pipeline and $70.7 million in cash, Gentrack is well-positioned to pursue organic growth and strategic opportunities, including potential acquisitions, as it expands into high-growth regions.