Energy One (ASX:EOL) executives used the company’s half-year results presentation to highlight continued growth in recurring revenue, progress on operating leverage, and a push to deepen customer relationships through its “one-stop-shop” strategy across software and trading services.
Half-year performance and key operating metrics
CFO Guy Steel said the company’s annual recurring revenue (ARR) grew by AUD 10.8 million, or 17.4%, landing “right in the middle” of the company’s targeted range. Management emphasized the growth has been organic, noting the company has not relied on acquisitions for at least three years.
On profitability, Steel pointed to continued improvement in gross margin and an “upward trajectory” in cash EBITDA. He said results were adjusted for certain one-offs, including CEO recruitment costs and a Europe-related item tied to France moving into a new go-live. He also reiterated the firm’s internal “20/10 objective” of growing revenue by 20% while holding expense growth to 10%, saying the period’s outcomes were consistent with that framework.
Steel noted statutory expenditure rose 16% year-over-year (15% excluding one-offs), with share-based payments up about AUD 1 million. He said stripping out the share-based payments implied cash expenses were up 11%.
On cash flow, Steel said first halves are typically seasonally weaker than second halves due to factors such as incentive payments and the cadence of project revenue. He added that stronger cash earnings in the second half of FY2025 and the first half of FY2026 allowed the company to pay a cash dividend, which he said was the first time it had done so “for some time.”
Sales pipeline, retention, and “land and expand” execution
CEO Shaun Ankers and CEO designate Ben Tranier described a focus on expanding sales and marketing capability and using an approach of winning an initial foothold and then cross-selling additional products and services. Ankers said the company recorded 53,000 website hits in the first half and held 290 meetings at the E-world trade show in Europe, describing that as an improvement on the prior year.
Management said investment in sales and marketing increased 13% over last year and that the ARR sales pipeline of “confirmed leads” rose 24% versus the prior period. They also highlighted net revenue retention (NRR) of 111%, which Ankers attributed to a mix of broad upselling and some deals becoming larger than initially expected.
On customer retention and churn, executives said attrition increased to 5% and was largely related to customers exiting the market rather than switching to competitors. Ankers cited an example of a manufacturer in Australia exiting the market amid gas price spikes and volatility. He characterized these market exits as “a feature, not a bug” in an industry where new entrants can come and go.
Customer wins and regional commentary
In Australia, management said ARR grew 15%. Ankers highlighted an upsell at an existing utility customer that had been using products including NemSight analytics and EOT deal capture and settlement, and has now upgraded to add a battery energy storage system (BESS) solution for automated battery trading, supported by 24/7 trading services. He said the company expects additional ARR from that upgrade in the second half.
In Europe, Tranier said the region continued to build momentum, citing revenue growth of 20% to EUR 19.6 million, driven mainly by recurring revenue. He said European ARR rose 28% (19% on a constant-currency basis). Tranier also described customers increasingly seeking “fully integrated solutions” rather than single modules, combining capabilities such as ETRM, workflow engines, nomination tools, and market access.
Management discussed a “very large industrial” customer win in Europe, describing it as a competitive process that validated the one-stop-shop positioning. Tranier said the deal includes $0.8 million in recurring revenue and more than $1 million in project revenue.
Tranier also said Europe has moved away from a country-based general manager model to “European-wide functional leadership” across operations, sales, delivery, and training, which he said is improving efficiency and consistency of execution.
On geographic expansion, Tranier said the company is seeing increased trading volumes and connectivity needs in Eastern Europe, and rising software demand related to LNG flows in Southern European markets such as Spain, Portugal, Italy, and Greece, tied to shifts in European gas supply dynamics.
AI adoption framed as productivity and customer value, with “human in the loop”
Ankers and Tranier devoted a portion of the presentation to artificial intelligence, positioning it as an “enabler” rather than a threat in a heavily regulated, mission-critical environment. Ankers argued that wholesale energy markets require deterministic, auditable systems due to grid stability requirements, regulatory oversight, and cybersecurity concerns, and said much of the industry’s data is proprietary rather than public.
Management said Energy One is already using AI internally. Ankers said AI tools are installed in developers’ environments and that the company is seeing productivity gains in some areas of “50 odd %.” He added that Energy One has generated 1.6 million lines of code using AI and is working toward what he called an “AI factory capability” over the next 12 months. Executives also emphasized that “human in the loop” remains essential, particularly when dispatch decisions can carry safety and compliance implications.
On customer behavior, Tranier said the company has not seen customers stalling procurement decisions due to AI. He said customers may use AI for forecasting or algorithms, but still require reliable systems for market access, compliance, and governance.
M&A stance and questions on projects and dividends
Ankers reiterated that M&A remains part of the company’s long-term strategy, but stressed Energy One is “not a roll-up.” He said the company has made five acquisitions over his nearly 16 years as CEO, with the last more than three years ago. He said the company, with advisers Lazard Australia, is actively reviewing opportunities with an emphasis on Europe and Australia, but added there is “no timeline or guarantee” and “no financial commitments” at this time.
During Q&A, management addressed questions about lower European project implementation revenue. Ankers said the company expects project revenue in the second half to approach the previous half, but cautioned that project timing can be customer-driven and may not be a reliable leading indicator. He said the company remains focused on ARR conversion, which requires customers to sign and go live.
When asked whether market conditions and M&A opportunities could affect dividends, Chairman Andrew Bonwick said the board would consider different funding avenues for acquisitions, citing a strong balance sheet, attractive banking conditions, and potential equity participation, noting past deals have often included cash plus equity. He said dividends are intended to reward shareholders but would be evaluated alongside other capital allocation options.
Ankers closed the presentation by highlighting the company’s ISO/IEC 27000 cybersecurity certification as a differentiator, saying it enables engagement with larger customers with strict governance requirements, and noted that at least in the past the company had lost work because it did not yet have the certification.
About Energy One (ASX:EOL)
Energy One Limited provides various software products and services to wholesale energy, environmental, and carbon trading markets in the Australasia, and Europe. The company offers enFlow, a tool for automating and managing business processes, and for integrating systems; EnergyOffer, a bidding, offering, dispatch, and logistics solution; EOT that offers front, middle, and backoffice solutions; NemSight, a real time presentation and historical analysis tool, which offers screens displaying live prices, demand, constraints, generation, bidstacks, and temperatures; and pypIT, a gas pipeline contracts management and scheduling platform.
