Rakon (RAK) H1 2025 earnings summary

Executive summary

• Revenue for HY25 was NZD 41.7 million, down 32% year-over-year, driven by weak Telecommunications and Positioning demand, while Aerospace and defense delivered record revenue growth for the fourth consecutive half-year.

• Strategic milestones achieved despite market headwinds, with cost reductions and investments in high-growth areas like Space and AI & Cloud Infrastructure.

• Early signs of telecom market stabilization and strong AI/cloud infrastructure demand point to improved outlook for the second half and beyond.

• Operational transformation and cost efficiency initiatives advanced, positioning for future growth.

Financial highlights

• Gross profit was NZD 15.7 million (37.8% margin), down from NZD 26.1 million (42.6%) year-over-year, impacted by lower sales and increased inventory provisions.

• Underlying EBITDA was -NZD 7.3 million; net loss after tax was NZD 10.4 million, compared to a profit in the prior year.

• CapEx was NZD 6.9 million, down 6% year-over-year; R&D investment increased to NZD 10.7 million.

• Operating cash flow was +NZD 8.3 million, up 14% year-over-year, aided by NZD 8.5 million inventory reduction.

• Operating expenses remained flat at NZD 30 million.

Outlook and guidance

• Expect to remain within the lower half of FY25 underlying EBITDA guidance of NZD 5–15 million.

• Strong order pipeline in Space, AI, and Cloud Infrastructure expected to drive growth in FY26 and beyond.

• Targeting a 25% compound annual growth rate from FY26 to FY29, driven by Space, AI, and Telecommunications recovery.

• 2H25 revenue anticipated to benefit from seasonal Aerospace and defense deliveries and improving Telecommunications orders.