Okay. Three years ago, I sat in front of all of you as the newly minted CFO of Fluence, knowing that we had a challenge in front of us to turn this business around. I believe Tom compared it to turning around an aircraft carrier. Fluence was always a business that had tremendous potential, an undeniably strong portfolio of water and wastewater treatment products and technologies. It also had a unique geographic footprint and operated in some of the highest growth regions in the world. Yet the company was never able to turn that potential into results. I believe Q4 2025 shows that that aircraft carrier has finally been turned around, and the financial results reflect the progress that we have made as a company.
You may recall that in fiscal 2023, we decided to make a strategic shift and realign the Fluence business to focus on our SPS and recurring revenue products through four core business units, as shown here. In fiscal 2022, SPS and recurring revenue represented only 38% of our total revenue. In fiscal 2025, that number is now 65%. Further, our gross margins have grown from 23.9% in fiscal 2022 to 29.9% this year, and we expect that that will continue to expand. Our realignment also allowed us to rationalize and cut SG&A costs by approximately 25% since fiscal 2022. We also determined that Fluence needed to operate like the global company that it was, leveraging our existing enviable geographic footprint, as well as focus on growing its presence in North America.
Our One Fluence approach initially led to a significantly expanded sales pipeline, which is now converting into record SPS and recurring revenue orders. Our core business units started selling into new markets to them, but there were existing markets for Fluence overall. Today, our global teams are now regularly working together to secure and execute orders that cross borders and product lines, and that is leading to expanded growth opportunities. We built a strong, experienced global management team that is laser-focused on execution, improving cash flow, contract management, controls, and costs, all of which helped to lead to the strong results in Q4 and fiscal 2025 that we are delivering today. I will leave you with this before launching into the financial results.
While the job is not done, I truly believe that Q4 2025 represents an inflection point in the business and that Fluence has moved beyond many of the historical challenges it has faced to embrace the potential and take advantage of the growth opportunities that lie ahead. With that, I will turn to our results. Following a strong Q3, Q4 did not disappoint and delivered even stronger results consistent with our forecast. The combination of double-digit growth in SPS and recurring revenue, progress on the Ivory Coast addendum project that contributed meaningfully to revenue, continued expansion of gross margins, and strong cost controls resulted in Fluence delivering fiscal 2025 EBITDA of $4.0 million on revenue of $78.4 million, meeting the midpoint of its EBITDA guidance. As noted, fiscal 2025 revenue was $78.4 million, which was $26.9 million or 52% higher than fiscal 2024.
Q4 itself contributed $26.0 million in revenue, which was 22% higher than Q4 of 2024. SPS plus recurring revenue continued to show healthy growth of 15% compared to the prior year. However, contributions from the Ivory Coast addendum were the largest contributor to the increase, as revenue from that project was $20.4 million higher than fiscal 2024. The growth achieved in our SPS and recurring revenue products and services is having the intended effect of improving gross margins. Those margins finished fiscal 2025 at 29.9%, which was flat compared to 2024. That in spite of the fact that we had significantly more revenue contribution from the lower margin Ivory Coast addendum project. This was really a result of strong execution by our teams and outperformance of bid margins on projects across our core business units, with all but Southeast Asia and China delivering meaningful increases in gross margin.
More specifically, municipal, industrial water and reuse, and industrial wastewater and biogas all exceeded gross margins in fiscal 2025 by an average of more than 6% compared to the prior year. As a result of the revenue growth and margin expansion in our SPS and recurring revenue segments, EBITDA was $4 million, as we noted earlier, which was a dramatic increase of $8 million compared to the loss of $4 million in 2024. All business units saw EBITDA increases in fiscal 2025, which we were the most proud of. Just to run through a few, the Ivory Coast addendum contributed $3.4 million of EBITDA compared to $0.2 million in 2024. Industrial wastewater and biogas saw an EBITDA increase of $1.8 million based exclusively on revenue growth of $5.0 million, as well as gross margin improvements.
Municipal water and wastewater saw revenue and EBITDA growth of $1.4 million and $0.9 million, respectively. Southeast Asia and China revenue growth was $2.8 million in fiscal 2025, and it was able to reduce its EBITDA loss by almost $1 million compared to 2024. Industrial water and reuse saw an EBITDA increase of about $500,000, and that despite modestly lower revenue, but driven by significantly higher gross margins from positive project variances. Lastly, we were able to achieve corporate cost savings of about $500,000 that also contributed positively to EBITDA. On the cash flow side, the company had another strong quarter. Fluence ended the year with $16.6 million in cash and $4.1 million in security deposits. Operating cash flow in Q4 and fiscal 2025 was $3.8 million and $10.9 million, respectively.
This is certainly higher than forecasted, and it was due to a number of Ivory Coast payables not getting settled prior to year-end. As a result, the company anticipates negative operating cash flow in Q1 2026, but forecasts resuming the trend of positive cash flow in Q2 through Q4 of 2026. It's also notable that Fluence repaid $2.5 million in debt during fiscal 2025 as a result of that strong cash flow generated by the business. Here's another good story. New orders in Q4 2025 were $24.5 million, which was an increase of $15 million or almost 158% compared to Q4 of last year. More importantly, I checked back in the records, and we believe that this was Fluence's largest order quarter on record for SPS and recurring revenue. For fiscal 2025 overall, new orders were $64.2 million, which was an increase of $14.2 million or 28.5%.
Municipal North America and industrial wastewater and biogas certainly led the way with increases of 98% and 76%, respectively. Backlog closed the year at just under $75 million, of which approximately $53 million is forecasted to be recognized in fiscal 2026. The core business units of municipal water and wastewater, industrial water and reuse, industrial wastewater and biogas in Southeast Asia and China saw an increase in backlog of $14.8 million or well over 40%. Combined with our expectations for recurring revenue, this gives us a very strong foundation for growth in fiscal 2026. Given the strong performance and positive momentum of the company, Fluence will not be issuing discrete guidance for fiscal 2026. Nevertheless, the company expects double-digit revenue growth, even with a significant reduction in revenue from the Ivory Coast addendum project, driven by continued momentum in SPS and recurring revenue segments in our core markets.
Additionally, we expect continued expansion of gross margins, all of which will contribute to strong growth in EBITDA and EBITDA margins. I also want to give a brief update on the Ivory Coast project, given its contribution to the company in 2025 and beyond. Through Q4 of 2025, the company continued to make progress on the addendum works. A number of activities were advanced around road construction, earthworks, and drainage works. Pipeline installation has progressed to approximately 2.2 kilometers. Overall, the addendum works are progressing well through Q4, and revenue is in line with our forecast for the year. The project is expected to be completed in Q3 2026, with no significant deviations at this time from budget. As noted in prior updates, the addendum works are critical for connecting the main works water treatment plant to the broader distribution system, enabling treated water to reach the population of Abidjan.
Fluence continues to pursue a long-term O&M contract for the plant, and preliminary steps have been taken. Negotiations are expected to begin soon after the technical proposal and business plan, which we have provided, are reviewed by the government. Fluence is currently maintaining the plant on an interim basis, which positions us very well to be awarded the long-term O&M contract. And on the cash flow side, as of December 31, 2025, the company has collected six milestone payments under the addendum contract, totaling EUR 35.4 million, or approximately 73% of the total payments. All right. Scroll here. I also wanted to provide several additional updates on the business, including developments in our Egypt business and enhancements made to our executive management team. Just a little bit of background on Egypt itself.
IWS was established in 2018 as a joint venture with several Egyptian partners, whereby Fluence was and remains the 75% majority owner and leads the business operationally. Minority partners were set up to support project acquisition, government relations, and operational support where required. Since 2018, IWS has successfully executed a number of municipal and industrial water treatment projects, including the $20 million New Mansoura water treatment plant that was commissioned in 2023. IWS continues to support the New Mansoura project through an ongoing O&M contract. Unfortunately, despite efforts of local and executive management, IWS has not been fully successful in collecting outstanding amounts owing on accounts receivable across a number of accounts, most notably that New Mansoura water treatment plant. The accounts receivable remain substantially in arrears, despite the plant being operational for more than two years.
Fluence's minority partners have provided limited support with local and national government support to support collections. As a result, Fluence has determined at this time that it is necessary to take a reserve of $4.5 million of accounts receivable at IWS. This reserve will be taken as an extraordinary item in other losses and is not expected to impact cash flow, as management has not been forecasting collections from these accounts for some time. However, we will continue to take all actions available to us to collect those amounts owing. Fluence management continues to review the future of the IWS operations, including the attractiveness of the market opportunity relative to other markets where Fluence operates. Fluence is considering all available alternatives for the IWS business. Now, a few updates on enhancements made to our executive management team.
Earlier, you met our new CFO, Ozzie Llanes, who started with Fluence in December. We're very fortunate to have been able to attract such an experienced finance executive that brings very relevant industry experience with him from his time at Xylem. Ozzie will work directly with me to drive capital efficiency, investor relations, and the integration of global financial processes to support Fluence's long-term growth and profitability objectives. Additionally, we bolstered our business unit leadership group when Anda Cao joined us in December. Anda brings significant water industry leadership experience from his time at De Nora, Xylem, and Anaergia, with a focus on delivering sustainable double-digit growth through operational excellence and driving a performance-driven culture, which fits perfectly with Fluence's strategy. Rick Cisterna and Spencer Smith are also taking on refined and expanded roles within the business as Chief Growth Officer and Chief Talent and Legal Officer, respectively.
Rick's key areas of focus will be global key account management, rep and agent management, marketing, and ensuring consistent reporting and incentives for our global sales team. He will also be responsible for establishing a global water services business unit, which will be focused on driving growth of operations and maintenance, parts and consumables, build-on-operate, and rental service models across all Fluence's product lines and geographies. He will also take ownership of the Ivory Coast project as we look to transition it from a CES project to a long-term O&M project. Spencer will now be responsible for defining and driving Fluence's global people and culture strategy, in addition to responsibility for legal affairs, compliance, and risk management.
This role will be a strategic enabler of growth through leadership development, organizational design, talent acquisition, training, and total rewards to ensure that Fluence attracts, develops, and retains the best global talent in the water industry while fostering a One Fluence approach across all our regions. Lastly, I'd be remiss if I didn't express my sincere gratitude to Tom Pokorsky, Fluence's recently retired CEO. Tom's extraordinary leadership was on full display during his time with Fluence, and he helped set the foundation from which we can now grow responsibly and profitably. He will remain on as a trusted advisor to the company and to the board, and we will lean on his tremendous experience on a regular basis. However, we will try to allow him to enjoy his well-earned retirement after a pretty remarkable 50-year career in the water industry.
To conclude, the strength of Fluence's Q4 and fiscal 2025 results demonstrate the progress that the company has made over the past few years. More importantly, while delivering a strong year was a critical step in demonstrating the revised strategy has gained traction, record orders in Q4 and a strong backlog have positioned us for an even stronger fiscal 2026. Combined with expanding gross margins, a lower cost base, and better cash management practices, management is optimistic about the ability to build sustained profitability and positive cash flow into 2026 and beyond. At this time, I think we can open it up for questions from webcast participants. Thank you again for your time and your continued interest in Fluence. Okay. So I will read out some of these questions and try to answer them as best I can.
A question came in, "Is Applegreen the only USA project mentioned in the recent wins? Could you elaborate more on Applegreen and if there is further significance to this win?" Nothing really further to elaborate on the Applegreen win. We continue to make progress, as we've discussed in our organic growth strategy in municipal USA. It was one of the stronger growth areas in terms of orders in fiscal 2025, as mentioned, with order growth of almost 100%. We continue to make progress, and this is just another example of that. Congratulations on the Q4 results. This is just a comment on the result with Q4 EBITDA at $2.6 million and a contribution from IVC at $800,000. Does this show that we are now positive EBITDA even without the contribution from Ivory Coast? I think that's a really good question, and the answer is yes.
If you look at the entirety of the year, as well as in Q4, what we demonstrated was profitability even without the contribution of the Ivory Coast addendum project. That has really come from the growth in our SPS and recurring revenue from our core business units and expanded gross margins combined with a lower cost base, all of which has really contributed to a business that can and is profitable, can and will be profitable even in the absence of the Ivory Coast addendum project, as we demonstrated in 2025. Okay. There's a question on Fluence's operating the Ivory Coast plant on an interim basis. What is the ongoing revenue from this on an interim basis? At this moment in time, there has not been any revenue recognized on the interim maintenance work that has been done. We have been incurring costs through this period.
We have a commitment from the client, from the government, to be reimbursed at standard market rates for the maintenance work that's been done during that period. But during fiscal 2025, we did not recognize revenue as we did not have a contract in place. Question, to clarify, the company expects double-digit growth on total revenue of $78 million. The answer is yes. Are we expecting more legacy write-downs in addition to IWS? Will PDVSA be any issues? So those are two very different questions. We do believe that IWS likely represents, I'll say, the last of the major legacy write-downs. We don't expect any additional ones from existing operations at this moment in time. PDVSA is a different issue altogether and obviously has become brought back into the limelight with the current geopolitical situation with Venezuela.
At this moment in time, there has been nothing that has changed with regard to the sanctions environment and OFAC and their position on our ability to negotiate with PDVSA. So at this moment in time, there are no changes to that situation and none envisioned at this moment in time until there's more clarity provided. Do you have target EBITDA margin for 2026? Noting your medium-term targets are noted at 10%. We are not providing specific EBITDA margin guidance at this time. Any update on the rental division? This is a good question. We are working diligently on building out our rental strategy. There'll be more updates that we can provide through the course of 2026, but there are no specific or material updates that we need to share at this moment in time. Any traction on Dow City MABR pilot with regards to approval from the Iowa DNR?
No specific updates on that other than we are leveraging that pilot and have been able to generate some opportunities around that in the Iowa area. So Iowa has sort of become one of the states that we have now put on our approved list to be able to market and develop new business. There's a question around, there's a lot of discussion around the water usage by data centers under construction. Is this an area of interest or opportunity for Fluence? This is an excellent question, and obviously, there is a lot of buzz around AI and the water needs for data centers. And I would say both directly and indirectly, we are interested in this market and are tracking it very closely.
However, what I would say is in the early days right now, the biggest opportunity that we see available to us is actually in the power generation market. You've seen that through several recent orders over the past 12-18 months in areas like Saudi Arabia, South America, where power generation is becoming, I would say, the leading edge of that AI boom. The demand for power is actually going to be what leads the way, I think, in the AI build-out. And those power plants require significant amounts of water. In fact, significantly more water treatment required in those power plants than in the AI data centers themselves. There are some questions around what the water need truly is in these AI data centers. There's some good research that's come out recently on the true water requirements, which we are evaluating and have numerous commercial discussions ongoing.
But I'd say where we're having some early success right now, where we're seeing the most growth, is actually in the power generation market, which is kind of following on the AI growth boom that we are seeing. Okay. There were a couple of questions on that around data centers. So I believe I've answered that. And there were a few other questions on guidance for fiscal 2026, which I believe I've answered. So I think at this time, I don't see any additional questions coming in. So I think at this time, we will move to conclude the Q&A and the presentation at this time. I truly appreciate your interest and tuning in, as always. If you do have any additional questions, please feel free to send them along to Andrew Angus, and we will do our best to address them. Thank you and have a great day.