Gentrack H1 FY25 results: Recurring revenue surges 16.7%, EBITDA up 5.1%

Gentrack Group Limited (ASX/NZX: GTK), the New Zealand-based enterprise software provider for utilities and airports, reported a solid performance for the half-year ended 31 March 2025, underpinned by rising recurring revenues, global customer wins, and deeper strategic investment into its flagship g2.0 platform. The company reported a 34.7% year-on-year increase in net profit after tax (NPAT) to NZD 7.2 million, with total revenue climbing 9.8% to NZD 112 million.

The results reflect strong operating leverage despite heavier spending on sales and technology development. A particularly bright spot was the 16.7% year-over-year rise in recurring revenue, signaling the durability of its software-as-a-service business model even amid fluctuating project income.

What Drove Gentrack’s Revenue and Profit Growth in H1 FY25?

Gentrack’s business model hinges on the development, integration, and long-term support of software solutions tailored to energy, water utilities, and airport management. During the first half of FY25, revenue growth was led by its core Utilities segment, which saw a 7.2% year-on-year increase to NZD 92.8 million. A majority of this gain was attributed to the continuation of upgrades and contract wins translating into recurring income.

Project-based non-recurring revenues in the Utilities segment declined 12%, reflecting a high base from the previous year. However, this drop was more than offset by the 17% surge in recurring revenue, which now constitutes the lion’s share of utility segment income.

Meanwhile, Gentrack’s airport-focused subsidiary Veovo delivered an impressive 24% jump in revenue to NZD 19.2 million. This was supported by new client wins in the UK and Middle East, as well as upgrades in the Asia-Pacific region. Non-recurring revenue from Veovo rose by 34%, driven by higher project work and hardware deliveries worth NZD 3.6 million.

Overall EBITDA for the group came in at NZD 13 million, representing a 5.1% rise compared to H1 FY24. The margin was partially constrained by increased investment into R&D and sales capacity, including the successful deployment of its g2.0 software at Genesis Energy.

How Did Gentrack Improve Cash Flow and Net Income in H1 FY25?

Cash generation remained strong across the business. Gentrack exited the half-year with NZD 70.7 million in cash, up NZD 4 million from the start of the calendar year and nearly double the NZD 39.3 million held at the end of H1 FY24. Despite scaling up operational investments, the group managed to strengthen its balance sheet and improve liquidity.

Net income received a lift not only from core operations but also from a favourable NZD 2.1 million foreign exchange gain due to the appreciation of subsidiary currencies—primarily the British pound. Even after absorbing a NZD 1.1 million equity loss related to Gentrack’s 10% stake in Amber Energy, the company reported NPAT of NZD 7.2 million, a sharp increase from NZD 5.3 million a year earlier.

The effective income tax rate dropped to 21.3% from 35.5% in H1 FY24, aided by tax relief from share-based payment vesting.

What Are Gentrack’s Strategic Wins in Utilities and Airports?

Strategic contract wins were a central theme of Gentrack’s H1 FY25 narrative. In the UK utility sector, the company secured a high-profile contract with Utility Warehouse, which serves nearly 2 million meter points. This engagement merges Gentrack’s billing capabilities with a multi-service delivery platform—reinforcing its positioning in customer-centric digital utility operations.

The company also locked in long-term renewal agreements with a suite of energy retailers, including Wave, Castle Water, So Energy, and Marble Power in the UK, Vector in New Zealand, and Pacific Light in Singapore. In addition, Gentrack partnered with Ecotricity and Amber Electric for battery solutions and collaborated with Mercury on grid-stabilisation tools.

On the aviation front, Veovo is delivering its Gen8 software upgrades across Australasian airports, while marking major “go-lives” at Edinburgh and its first operational rollout in Saudi Arabia. The company also celebrated a key contract win at London Gatwick for an integrated airport control project, positioning itself as a driver of AI- and ML-enabled airport transformation.

What Is Gentrack’s FY25 Outlook and Long-Term Growth Plan?

Looking forward, Gentrack has guided for FY25 revenue to reach or exceed NZD 230 million, nearly doubling its H1 performance. The company expects EBITDA margins to exceed 12% for the full year, even as it continues to expense all development costs upfront—an approach aligned with its long-term growth strategy.

In the medium term, Gentrack is targeting compound annual revenue growth of over 15% with a sustained EBITDA margin in the range of 15–20%. This is predicated on increased adoption of its g2.0 cloud-based platform, particularly in new geographies including the Middle East and Asia, where early project wins are already being monetised.

Gentrack’s leadership sees ample opportunity in a utility sector undergoing rapid digitisation and in airports increasingly reliant on real-time operational data. With its Salesforce and AWS partnerships acting as strategic enablers, the company aims to support utilities in reducing cost-to-serve, launching new propositions faster, and improving customer experience.

How Is Gentrack Positioned Amid Global Economic Trends?

In a macroeconomic environment marked by currency volatility and shifting net-zero goals, Gentrack remains largely insulated from major downside risks. The weakening of the Australian and New Zealand dollars has actually provided a tailwind to earnings, given the company’s global revenue base.

The company’s exposure to utilities—a sector expected to accelerate its digital and cloud transition regardless of short-term global economic dips—acts as a defensive pillar. Even in the face of potential slowdowns in airport transformation due to declining travel activity, management anticipates stable demand in its core verticals.

As climate regulations and energy decentralisation trends intensify, Gentrack appears well-positioned to support utilities in their transformation. Meanwhile, its foothold in key airport hubs and expansion into AI-driven control systems enhances its competitive edge in the evolving air transport sector.

What Is the Stock Market Sentiment Around GTK in May 2025?

Gentrack Group Ltd (ASX: GTK) closed on May 19 at AUD 10.85, down 2.78% for the day amid broader weakness in the technology sector. However, the stock has posted an impressive 50.49% return over the past 12 months, underscoring strong investor confidence in its transformation roadmap.

The company is currently trading at a price-to-earnings ratio of 83.46, indicating premium valuation expectations from the market based on future growth. Volume was relatively high at over 1.5 million shares traded, suggesting active institutional participation and continued visibility.

Despite the day’s pullback, long-term sentiment remains bullish. Institutional investors appear to be factoring in the firm’s expanding total addressable market in utility digitisation and airport analytics. GTK has become a notable name in ASX-listed tech plays with recurring revenue predictability and global project pipelines.

Will GTK Maintain Momentum Into FY26?

With an expanding portfolio, deepening client relationships, and increasing recurring revenue share, Gentrack enters the second half of FY25 with strong forward visibility. The company’s international project wins and airport upgrades could catalyse further revenue expansion, especially as global demand for utility transformation and smart airport systems remains resilient.

The decision to forgo dividends in favour of reinvestment signals confidence in long-term returns, despite near-term margin moderation due to higher R&D spend. Analysts may continue to revise revenue targets upward if Veovo’s contracts convert smoothly and g2.0 achieves broader adoption.

For investors, GTK presents a growth-oriented technology play in defensive verticals. With solid fundamentals, strong cash flow, and rising operating leverage, the stock is likely to remain on institutional radars well into FY26.