Fluence Corporation (ASX:FLC) specialises in the delivery of water and wastewater solutions in industrial, municipal and commercial industries across the globe. The company has delivered a strong Q2 FY2026 (December year-end), resulting in first-half (H1) revenue increasing 14.7% year-on-year (YoY) to US$37.6m and EBITDA increasing to US$3.4m, the strongest H1 EBITDA in more than five years. Gross margins expanded materially to 35.5% (+8.7% YoY) driven by recognition of previously executed O&M work being billed, higher contribution from Smart Product Solutions (SPS), other recurring revenue and lower warranty accruals. New order momentum rebounded strongly following a softer Q1, with Q2 orders of US$16.1m up 53.9% YoY and H1 FY26 orders of US$23.6m up 5.0% YoY. Order backlog remains healthy at US$59.8m, with the core business units collectively increasing backlog by 18.4%. Operating cash flow (OCF) was positive US$1.8m for the quarter, with cash increasing to US$10.9m, although the timing of IVC receipts and associated vendor payments is expected to result in negative OCF in Q3 before reversing in Q4. Management reiterated expectations of double-digit FY26 revenue growth and is “increasingly confident” in meeting its EBITDA growth targets, supported by improving order momentum, backlog conversion and continued margin expansion. We retain our existing forecasts and our DCF valuation remains unchanged at A$0.18 per share, representing potential upside of 140% from the current share price.