Fluence Corporation Limited

Good morning. Welcome to the Fluent Corporation Q1 FY2026 results webcast. My name is Andrew Angus, and I look after investor relations for the company. With me today are Ben Fash, the Managing Director and Chief Executive Officer, and Ozzy Yarners, the Chief Financial Officer. Ben, over to you.

Thank you, Andrew. Good morning, everyone. My name, as Andrew said, is Ben Fash, CEO and Managing Director of Fluent. And I'd like to welcome everyone to our Q1 2026 business and financial update. As always, thank you for your time today and your interest and influence. With me is our CFO, Ozzy Giannis. By now, you've likely seen our Q1 business update and Appendix 4C that was recently released. I will provide a brief overview of the results and direction of the business and then turn it over to Ozzy to provide additional commentary on the financial results. There was a lot to be encouraged about regarding Fluence's Q1 results. In what is traditionally a relatively slow quarter, EBITDA performed quite well, hitting half a million against a prior period EBITDA, which was essentially breakeven. This was a result of continued strong execution of our backlog as gross margins increased 3% compared to Q1 2025, as well as the company maintaining strong cost discipline. And while delays resulted in a disappointing quarter in terms of orders with only 7.5 million in bookings. Backlog across our core businesses is almost 20% higher today than it was at the same time last year. More importantly, we did not lose many of the key orders we've been tracking. We did, however, experience several order delays. But the upside is we now have strong visibility on our near-term pipeline and could see as much as 18 to 20 million in new orders in Q2. which would result in strong growth in the first half of 2026 compared to the prior year. The combination of higher backlog across our core business units and near-term pipeline visibility gives us confidence in our ability to meet our revenue and order growth objectives for the year. The Q1 cash flow print was disappointing, there is no doubt, but this was also largely due to timing. As we noted in our Q4 update, We collected a large payment from the Ivory Coast addendum project milestone six at the end of the year, while we still had a number of payables that needed to be settled early in 2026. In fact, as of the 31st of December, 2025, we were more than 7 million ahead on addendum cashflow, which on its face is a very positive thing, but it did result in our cash balance at the end of the year being somewhat artificially high. Additionally, We had planned to collect milestone 7 at the end of March. This was forecasted and promised by the government, and had we done so, our operating cash burn in the quarter would have been approximately $1 million rather than the $8.2 million seen in our foresee. There were other cash flow impacts that I will let Ozzy discuss in his update, but it bears repeating that much of the cash performance can be explained by report timing. We are forecasting positive operating cash flow through the balance of the year, However, we may still see continued volatility quarter over quarter due to the large payments associated with the agri-coast development projects. The other topic that is top of mind for executives and investors alike at this moment in time is the conflict in the Middle East. Obviously, this conflict is having an impact on businesses around the world. While we have not experienced any direct negative impacts to our business as of yet, we have experienced some minor project delays and supply disruptions. It has no doubt led to uncertainty with a significant number of our customers. We believe indirectly led to some order delays as customers want to see where energy prices settle and how supply chains will be impacted in the short to medium term. As we look ahead, however, the company is not currently forecasting any significant impact to its fiscal 2026 financial year. However, if conflict escalates or persists for an extended period, our outlook could change. For now, we believe the mitigation strategies that we've put in place over the past 18 months to diversify our supply chains will allow us to manage through this period of uncertainty. Overall, management remains confident in the positive direction of the company and we continue to expect double-digit revenue growth driven by momentum in SPS and recurring revenue segments across our core markets. Combined with expansion of gross margins and disciplined cost controls, EBITDA is expected to show strong growth in fiscal 2026. At this point, I will turn it over to Ozzy to provide a bit more color on our financial results. Over to you, Ozzy.

Thanks, Ben. Good day, everyone. Revenue for Q1 2026 was $17.2 million, representing 3.6% growth over Q1 2025. Growth is driven primarily by industrial wastewater and biogas and sea in China, which increased revenue by $800,000 and a million dollars respectively, reflecting continued momentum across our market-focused business units. IDC remained a significant contributor at $5.6 million, consistent with prior year. As Ben mentioned, dividend improved to half a million dollars in Q1 2026 compared to $100,000 in Q1 2025. and increased a significant increase of 400,000 year-over-year. The improvement was driven by stronger operational execution across the business with industrial wastewater and biogas and Asia contributing the majority of the growth. Growth margins were 29.2% in Q1 2026, an increase of 3% compared to Q1 2025. This expansion was driven by improved project execution and margin performance across key business units, particularly MWW or the municipal business, the biogas, and Asia, highlighting the strength of our core operations despite some variability in revenue mix. Backlog increased across municipal, industrial water reuse, and industrial water biogas, and Asia as well, reflecting continued strength across the market-focused business units. Total backlog, however, declined to $64.4 million as of Q1 2026, primarily due to the continued execution and revenue conversion of the IVC addendum project. From a cash flow perspective, the company ended Q1 with $8 million in cash plus $4 million in restricted deposits. Cash performance during the quarter was impacted by the timing of several large collections, most notably in the IBC Addendum milestone, which shifted into Q2. While this timing impacted reported Q1 cash flow, the underlying business continues to demonstrate positive operating cash flow characteristics, and we expect improvement as these collections are realized. I turn it back to you, Ben.