Auckland utilities and airport software developer Gentrack has reported a sharp drop in first-half profit and watched its share price plunge almost 30 percent in a single session, after two key new client deals slipped past the 31 March balance date and forced the company to trim its full-year revenue outlook.
The dual-listed NZX and ASX company posted a statutory net profit after tax of 5.1 million dollars for the six months to 31 March 2026, down 29 percent on the same half last year, on revenue of 110.1 million dollars, which was 1.7 percent lower than the corresponding period. Earnings before interest, tax, depreciation and amortisation, before acquisition costs, halved to 7.9 million dollars from 13 million dollars, according to the RNZ business team.
Chief executive Gary Miles attributed the slide to long sales cycles in the utilities arm and two unexpected new client delays in the half. He told an investor webcast with chief financial officer John Priggen that the underlying customer pipeline remained healthy and that the company was still targeting compound annual revenue growth above 15 percent in the medium term.
The picture was not all bleak. Recurring revenue, the part of the business that comes from subscriptions and ongoing service contracts and is most valued by tech investors, climbed 17 percent to 85.3 million dollars, lifting from 76.4 million dollars a year earlier. That now accounts for more than three quarters of the half’s reported revenue and points to the slow shift in the company’s mix from one-off project work toward predictable annuity income.
Investors did not wait for the medium-term story to play out. Gentrack shares fell 1.79 dollars on the announcement to close at 4.24 dollars on Monday, a one-day drop of 29.7 percent. The NZ Herald reports the stock has now lost more than half its value over the past twelve months, ranking it among the worst performers on the local exchange this calendar year.
The reaction owed as much to the new full-year guidance as to the half-year numbers. The company now expects revenue for the financial year ending 30 September 2026 of between 229 million dollars and 238 million dollars. The midpoint sits at or just below the 230.19 million dollars Gentrack delivered in the prior year, effectively flagging a flat top line at a company that has been telling the market to expect double-digit growth. Full-year EBITDA before acquisition costs is forecast in a wide band of 13.5 million dollars to 20 million dollars.
In a frank line that summed up the day, Gentrack management told shareholders the board had taken the strategic decision to prioritise growth and global leadership over short-term EBITDA. Margins, they said, should rebuild toward the 15 to 20 percent target range over the medium term as the new product platform scales.
To soften the blow the directors approved an on-market buyback of up to 20 million dollars, or five percent of shares outstanding, over the next twelve months, subject to market conditions. They did not declare an interim dividend.
Gentrack also used the result to confirm two acquisitions that significantly expand the company’s footprint on either side of its business. In utilities it has bought Auckland-based Prospero Energy, which trades as Factor and offers AI-driven pricing software to electricity and gas retailers. The Factor deal was signed and settled on 15 May 2026 and slots into Gentrack’s g2 retail energy platform at a time when New Zealand and Australian power retailers are scrambling to manage distributed generation, battery storage and rapidly changing wholesale prices.
In its airport business the company has agreed to acquire Dubai-based Dubai Technology Partners for 10 million United States dollars, or about 17 million New Zealand dollars. The deal is expected to add about 3.5 million dollars of revenue to Gentrack’s Veovo airport software division over the four months remaining in the financial year, and slots into a Veovo unit Miles described as performing exceptionally in the half. Gentrack’s airport software now runs passenger flow, queue management and resource planning at terminals across Europe, North America and the Middle East.
Brokers covering the stock had warned for several months that the company’s mix of long enterprise sales cycles and lumpy implementation revenue made any one-half result vulnerable to slippage, particularly with global utilities customers re-pricing their own businesses in the wake of the Middle East energy shock and the European Union’s tighter consumer protection rules. BusinessDesk reported the delays specifically hit revenue recognition on new utilities projects, the higher-margin part of the book.
For New Zealand investors the result is a useful reminder that even the local tech success stories do not move in straight lines. Gentrack has quietly built itself into a global supplier serving more than 60 utilities customers and 80 airports, and its software sits as a critical layer between many of those companies and the people who pay them. A flat year for revenue while the team integrates two acquisitions and rebuilds margin is plausible, but only if the deferred deals do actually close in the second half.
What do you think of Gentrack’s strategy of buying its way into AI pricing and Middle East airport tech while profits slide. Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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