Rakon (RAK) H1 2025 earnings summary

Executive summary

• Revenue for the first half of FY 2025 was NZD 41.7 million, down 32% year-over-year, with strong aerospace and defense growth offset by weak telecommunications and positioning demand.

• Strategic milestones included cost reductions, R&D investments in space and AI, and progress on product launches despite market headwinds.

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

• Net loss after tax was NZD 10.4 million, compared to a profit of NZD 0.5 million in the prior year.

• Underlying EBITDA was -NZD 7.3 million, a significant decline from positive NZD 5.3 million a year ago.

Financial highlights

• Total revenue for H1 FY 2025 was NZD 41.7 million, down 32% year-over-year from NZD 61.3 million.

• Gross profit was NZD 15.7 million (37.8% margin), impacted by lower sales, increased inventory provisions, and one-off adjustments.

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

• CapEx was NZD 6.9 million, down 5% year-over-year; R&D investment increased to NZD 10.7 million.

• Cash and cash equivalents at period end were NZD 15.8 million, with undrawn HSBC debt facilities.

Outlook and guidance

• Expect to remain within the lower half of FY 2025 underlying EBITDA guidance of NZD 5–15 million.

• Strong order pipeline in space, AI, and cloud infrastructure expected to drive growth in FY 2026 and beyond.

• Targeting a 25% compound annual growth rate from FY 2026 to FY 2029, driven by space, AI, and telecom recovery.

• 2H25 revenue anticipated to benefit from seasonal aerospace and defense deliveries and improving telecom orders.

• No material subsequent events or changes to contingent liabilities reported after 30 September 2024.