You could be forgiven for not having come across Fluence Corporation Ltd (ASX: FLC).
It's a modestly-sized company at a value of $56.1 million, and it's racked up at least four years on the trot without making a profit.
Add to that the fact that the company's shares are trading just above their 12-month low at 4.7 cents, well below highs of 14.8 cents over the period, and the picture starts out looking pretty grim.
But if you look at the company's recent quarterly, published on 29 October, it seems a turnaround story might be under way.
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Strong earnings from a historical perspective
For the first nine months of the company's financial year it has generated revenue of US$58 million, up 11.3% year on year, and EBITDA of US$4.7 million, already surpassing the US$4.1 million in earnings from 2025.
The water technology company's Managing Director Ben Fash said the third quarter was "solid", and recurring revenue growth was exceptional at more than 50%.
He added:
Management continues to expect strong double-digit revenue growth across its core business units in FY2026 and, given the Company has already exceeded FY2025 EBITDA, another year of significant profitable growth is expected in FY2026.
The company said in its quarterly report that it expected demand for water and wastewater infrastructure to remain strong and said the current disruptions in the Middle East, "are sowing the seeds of future demand, including requiring energy-efficient treatment solutions as well as the critical need to secure water resources to ensure the resilience of their business''.
Analyst says there's plenty of upside for this ASX small cap
RaaS Research Group on 9 November published a new research report on Fluence, commissioned by the company, which came up with a bullish share price target.
The report said Fluence's shift towards recurring revenue and higher-margin smart products solutions (SPS) was driving its improved financial performance.
The report said:
We have moderated our near-term forecasts to reflect project timing delays, while retaining a strong medium-term outlook. We forecast EBITDA growth of 27.8% compound annual growth rate from FY26 to FY28, supported by increasing SPS and recurring revenue contributions, improving operating leverage and potentially more predictable cash generation following the completion of Ivory Coast project construction.
The RaaS price target on Fluence shares was 17 cents per share, down 1 cent, which would be a 261.7% return if achieved.
Fluence had US$12.8 million in net debt at the end of September.
