Gentrack Group Ltd (ASX: GTK) delivered strong half-year growth, but expectations were sky high coming into this announcement.

The Gentrack share price is under pressure on Monday following the release of the company's half-year results to 31 March 2025.

At the time of writing, shares in the utility and airport software provider are down 5% to $10.58.

Let's unpack what's driving the latest move.

Solid growth from Veovo

Gentrack reported group revenue of NZ$112 million, up 9.8% on the prior period. The uplift was driven by strong revenue growth across both the Utilities and Veovo divisions.

Utilities revenue grew 7.2% to 92.8m, with recurring revenue up 17% thanks to customer wins and upsells. These were offset by lower non-recurring revenue from project work, which failed to meet the high bar set in the prior year.

Veovo, the airport technology arm, saw a 24% increase in revenue to $19.2m, reflecting upgrades and expansion projects across the UK, Middle East, and APAC.

While non-recurring revenue fell in Utilities (down 12%), the company expects project activity to rebound in the second half. Veovo's project-based revenue rose 34%, including steady hardware sales.

EBITDA and profit up, cash position strengthened

EBITDA was NZ$13 million, up 5.1%. This includes heavier investment in sales and product development, especially around the rollout of its g2.0 platform, which recently went live at Genesis Energy in New Zealand.

Net profit after tax (NPAT) jumped 34.7% to NZ$7.2 million, aided by a lower effective tax rate and $2.1 million in foreign exchange gains. The NPAT figure includes a $1.1 million loss from its 10% stake in Amber Electric.

Gentrack ended the half with $70.7 million in cash, giving it flexibility to invest and pursue M&A.

As expected, no interim dividend was declared, with management continuing to reinvest for growth.

Management outlook: Confident, focused on scale

Looking ahead, management reaffirmed FY25 guidance of:

• Revenue of at least NZ$230 million
• EBITDA margin above 12%

They also reiterated a medium-term ambition to grow revenue at 15%+ CAGR with margins in the 15–20% range, even after expensing all development costs.

CEO Gary Miles said the company has set a "target to announce new wins in the second half of this year" as the energy transition, regulatory change, and digital transformation drive demand for Gentrack's software.

He highlighted:

This is a year of transition as we expand into Asia, the Middle East, and Europe, building on early wins and a maturing pipeline.

So why is the share price down?

Expectations were sky high coming into this earnings announcement. Gentrack shares have risen an incredible 680% over the last five years, so a 5% drop should be taken in that context.

With sticky recurring revenues, strong customer wins, and a growing international footprint, Gentrack has real leverage to net-zero targets and digitisation trends.