Thank you for standing by, welcome to the Fluence Corporation Q4 FY 2022 business update. All participants are in listen only mode. If you wish to ask a question via the webcast, please submit your question via the Ask a Question box. I would now like to hand the conference over to Mr. Tom Pokorsky, CEO and Managing Director. Please go ahead.
Thank you, Rachel, and all of you, welcome to the Fluence January 2023 quarterly business update. Thank you all for taking the time to join us. As the moderator introduced, I am Tom Pokorsky, CEO and Managing Director. Joining me on the call is Richard Irving, our Chairman. In addition, I'd like to introduce you to our brand new CFO, Ben Fash. I'm very excited Ben has agreed to join Fluence. I had the opportunity to previously work with Ben at another very successful water company and know he's exactly what Fluence needs to help us profitably grow the business. Ben's addition is just one more addition into our increasingly improved executive management team. This year we've upgraded quite a bit, and I believe we have one of the best executive management teams in the water business right now. Well, we had a very active Q4.
Even with continued COVID challenges in China, as well as some global supply and shipping issues, we did finish strong from an EBITDA standpoint. As noted in our report, we finished the year with $2.3 million EBITDA, exceeding our adjusted guidance of $2 million. Ben will provide more details on this in just a minute. In the Q4, we also started our company restructuring and are well on our way to completing it. There are a few items left to finish. As of January 1, we are now reporting financials with our new structure. We changed from geographical business units to global product units. In addition to saving well over $3 million in fixed costs, we'll be much better suited to use our global talent for cross-selling, leading to faster and more profitable growth.
While doing this, we also took the time and effort to strengthen our sales and engineering capabilities in North America by adding a few key positions. This will allow us to take advantage of a very, very strong municipal water and wastewater market in North America, as well as a very fast-growing waste-to-energy market. These historically have not been strong areas for Fluence. In addition, we've increased our pipeline for BOO projects as well as operating contracts, which will lead to increased recurring revenues in the future. Finally, with the COVID restrictions in China, our team there spent quite a bit of time developing a robust pipeline in other areas of Southeast Asia. With the Ivory Coast project starting to wind down in 2023, our revenue will be lower, but we are replacing it with much higher margin products and services.
The increase in smart products and recurring revenue with increased margin will help us grow our EBITDA faster than we have before. I'll let Ben go through the details. Ben, I'd like to turn it over to you. We are really excited about the prospects for 2023. Ben?
Yes. Thank you, Tom. I appreciate the introduction and just to note, I'm very excited to join the Fluence team and continue the momentum that both you and the rest of our colleagues have been building throughout 2022. Please note that with all discussion regarding financial results are on an unaudited basis. For the fiscal year ending 2022, as Tom had mentioned, we finished the year with $2.3 million of underlying EBITDA ahead of our guidance of $2 million and a significant increase over 2021. The company recorded total revenue of $25.9 million in Q4 and $119.1 million for the full year 2022. This represents an increase of 7% over 2021, but slightly behind the guidance of $123 million.
SPS revenue for 2022 was $35.2 million, just behind adjusted guidance of $38 million, due primarily to COVID-related business slowdowns in China. Recurring revenue, however, was up $9.7 million for 2022, which represents an increase of 43% over the prior year, 2021. Fluence had strong cash generation in the quarter, with Q4 operating cash flow of $3.9 million, mainly due to the collection of milestone eight of the Ivory Coast project, which was EUR 13 million in the quarter. For the full year 2022, operating cash flow was -$20.5 million, as anticipated, driven by the first three quarters of the year.
That leaves the company with a cash balance of $30.9 million as at December 31, 2022, with an additional $13.6 million of short and long-term investments on the balance sheet. The weakening of the euro relative to the US dollar was a theme in 2022, and it resulted in a reduction in expected revenue, receipts and EBITDA. From the Ivory Coast project on a US dollar basis. Exchange rate fluctuations resulted in the recognition of an exchange rate gain in Q4 in the company's P&L, but an overall exchange rate loss for 2022.
Lastly, following on Tom's enthusiasm, our guidance reflects a strong outlook for 2023 with SPS and recurring revenue growth of over 65% to $75 to 80 million, and EBITDA of $4 million, which would represent growth of more than 70% over 2022 EBITDA. With that, I'd like to hand it back over to Tom.
Okay. Thank you, Ben. Thank you very much. Let me, let me start with some of the questions here. Let's see. There was a question about, with COVID in China, where do we stand with our backlog and bookings and so on? The COVID situation in China just stopped progress for everything. We did not lose a lot of work or any work that I'm aware of because of COVID. It just stopped progress. The backlog and bookings are what they were before the start. We didn't lose any of it, and we expect it to again start increasing once activity starts up again. It was, it's almost like it was just a stop of any progress until they're ready to go forward again. Next question.
There was also a question about our big project in Egypt, New Mansoura. New Mansoura is a large desal plant that we are currently finishing up phase one of. The question was, are there more phases? There are plans for more phases. In fact, there are strong plans currently for phase two, which is a similar size project to phase one. We are being told that's scheduled to proceed forward later on this year. As any project, the timing is still in question. There was a question also about the impact of bringing Italy back in the business.
I'm not gonna go into some of the details on the accounts, bringing Italy back into the business, we believe will be beneficial because of their products and services meet the waste-to-energy market growth, which they happen to be very good at. Okay, let's see. Yeah, there was a question about Nitro. What are we doing? As you may have heard recently, we sold our first Nitro in Asia to a plant in Korea. Nitro is a variation of the MABR for extremely high-strength side stream waste. The pilot plant we did turned out very good results. We are still continuing to obtain the results, but we sold one in Korea, we're working on several more throughout the rest of the world. There's a question about my comments about Xylem and Evoqua.
I'll leave that up to someone else to answer. That's not, that's not for me. Let's see. They ask how we're tracking on the target of 20% operating expenses versus revenue. We are making good headway, especially with the reorganization. We've reduced overhead by over $3 million, and we will continue to do so. We also added some overhead to grow North America. We aren't quite there yet, but we are getting closer and closer. Ben, can you answer the EBITDA question there for 2021? Do you have that data with you?
Yes. The EBITDA of $1 million, I believe, is referring to the 2021 EBITDA excluding Italy, which is correct. We are now presenting it, including Italy as we're continuing with that business, and that is $0.1. On a comparable basis, you should be looking at $0.1 million for EBITDA in 2021.
Yeah. In other words.
Hey, do you...
It probably would be fair to say, that the Italy business was actually losing money in 2021, but is now making money and has a very good backlog, which is one of many reasons why that's now being integrated in the story going forward.
Okay, Ben, there's a question on when we expect to be cash flow positive. Do you have that, a look at that information, or would you prefer to pass for that on at this point?
Well, what I will say is we're not guiding on cash flow. We are, we do intend to make a number of improvements to cash flow initiatives in 2022 and expect that will improve in the year. There are investments that we are looking at, as you know, to help support the growth of recurring revenue, so that's how I would answer that question.
Okay. There was a question about our wins in Argentina for Coca-Cola, Dow, Eramine. The question has to do with, because of the high inflation in Argentina, are we protecting our margins? Well, first of all of this work in Argentina is our cost basis is also tied in Argentina, and the team manages the cost very, very well there. We're not losing margin on the high inflation because we're protecting ourselves on the projects. There is a little bit of effort to get the money out of Argentina once we do it, and we work different ways to do that. We are actually increasing our margins in Argentina, even working through these issues. Don't see a difficulty there. Oh, a good question on China.
Do we see an increase in activity in new business and the desire to catch up on lost time on projects? I would say in October, November, we did. We saw a huge increase and an effort to try and catch up. The political nature of what was going on there slowed the flow of money, so that slowed it back. We see a desire to catch up, but then COVID hit again in China, so things are slow. Again, we see the intent to speed it up and make up for lost time, but it hasn't started yet. Have we found good traction in the U.S. market? Are there good leads, and are we optimistic? Absolutely, we are. We are now starting to get traction. We've added a few key sales positions. Our pipeline is growing rapidly.
We've already booked a few nice jobs this year. We expect that to continue. We have very high expectations for that market. Let's see. We don't comment on being EBITDA positive until the quarters. Leave that one.
Tom, I think just for clarity, in response to that question, we have been EBITDA positive since 2020. We've just announced our third year in a row of being EBITDA positive on an annual basis, and as you say, we don't break it down by quarter.
Yeah. Yeah. I guess I looked at that and expected to be, what month are we gonna be positive for the year, which we don't. Yes, we've been positive for 3 straight years and we expect to be obviously very positive this year. Oh, next question from, ask if the guidance for 2022, how much is assumed to come from China recovery? We expect basically China to recover to about half of what we had originally anticipated, we expect to make up for that and get stronger EBITDAs out of the rest of Southeast Asia. I don't think there's. Is there some questions we missed? Let me just check. There was a question about American Water. Thank you all for joining us. We appreciate it, and we are excited about the year.