Gentrack’s Heavy Product Spend Tests Margins Despite Profit Surge

Solid Financial Performance in FY25

Gentrack has reported a robust set of full-year results for FY25, with total group revenue rising 8% to NZ$230.2 million, comfortably meeting management’s guidance. The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 18% to NZ$27.8 million, reflecting improved operational efficiency and higher-margin recurring revenues. Notably, net profit after tax (NPAT) more than doubled to NZ$20.9 million, boosted by favourable tax treatments and foreign exchange gains.

Growth Driven by Utilities and Veovo Segments

The Utilities division, which forms the core of Gentrack’s business, saw revenue increase 7% to NZ$193.4 million. Recurring revenues within this segment rose 12%, underpinned by prior period contract wins and upsells, although non-recurring project revenues declined slightly compared to the previous year’s elevated levels. Meanwhile, Veovo, Gentrack’s travel and transport software arm, delivered a 15% revenue increase to NZ$36.8 million, or 30% growth when excluding hardware sales. This was supported by strong contract wins and upgrades across APAC, Europe, and the Middle East.

Strategic Investments and Product Innovation

Gentrack has significantly ramped up investment in product development, particularly around the launch and initial deployment of its new g2.0 technology stack. These costs were expensed in FY25, reflecting the company’s commitment to modernising its platform and expanding its addressable market. The company also increased sales and marketing spend to support growth initiatives, especially in the EMEA and APAC regions where it sees substantial opportunity.

Strong Cash Position and Balance Sheet

Cash reserves strengthened to NZ$84.8 million, up NZ$18.1 million year-on-year, with no external debt on the balance sheet. This healthy cash flow generation underscores the quality of Gentrack’s earnings and provides flexibility for potential bolt-on acquisitions or further product investments. The company also maintained its strategic stake in Amber, a fast-growing partner, reflecting a broader ecosystem approach.

Confident Outlook for FY26 and Beyond

Looking ahead, management expressed confidence in accelerating revenue growth for FY26, supported by a mature and sizeable sales pipeline across utilities markets in EMEA and APAC. While specific guidance for FY26 is yet to be provided, the company targets a mid-term compound annual growth rate exceeding 15%, alongside EBITDA margins expanding to 15-20% after development costs. Key contract wins, including a major billing platform deal with NAV Canada, reinforce Gentrack’s position in new market segments and geographies.