Rakon Limited Analysis

Overview

Rakon is a global high technology company which was founded in 1967 by Warren Robinson. Rakon designs and manufactures advanced frequency control and timing solutions. The company has four manufacturing plants, including two joint ventures plants, located in New Zealand, France, India and China and five research and development (R&D) centres. Customer support centres are located in ten offices worldwide.

The company's focus is on enabling next generation technologies in the telecommunications, global positioning and space & defence markets.

Rakon designs and manufactures advanced frequency control and timing solutions for telecommunications, global positioning and space and defence applications. Rakon products are found at the forefront of communications where speed and/or reliability are paramount. The company's products provide extremely accurate clocking signals, which are then used to generate precise electrical, radio or optical signals in networks and systems around the globe. Additionally Rakon offers a broad product portfolio to meet its customers timing and frequency control requirements.

Whether it be within wired, wireless and fibre telecommunications networks, navigation devices, or satellites in space. Rakon products enable connectivity.

In May 2006, the company listed on the NZX, raising $66m in a 41.25m offering at $1.60 per share. Since listing, Rakon has achieved a number of key merger and acquisition milestones:

• In 2007 Rakon acquired the frequency control products division of Britain's C-MAC MicroTechnology.
• In 2008 Rakon entered into a joint venture relationship with Indian owned and based Centum Electronics, together establishing Centum Rakon India.
• In 2008 Rakon entered into a joint venture agreement with China based Timemaker Crystal Technology.
• In 2010 Rakon acquired the assets of French based competitor Temex.
• In 2013 Rakon sold its majority stake in Rakon Crystal Chengdu (RCC) to ECEC, as a result of a strategic exit from smart wireless device (SWD) business.
• In December 2015 Rakon announced its investment in Thinxtra, an Internet of Things (IoT) company. Thinxtra became the exclusive Sigfox network operator for Australia and New Zealand and began deploying the network in Australasia in the second quarter of 2016 and announced its expansion into Hong Kong in December 2016.
• In December 2016, Rakon announced that Taiwanese company Siward Crystal Technology Company Limited would invest in Rakon, taking a 16.6 percent share in the company. The investment completed on 15 February 2017.

Performance

The following information was extracted from Rakon Limited's Half Year Results, released 28 November 2025

Rakon Limited (NZX: RAK), a global leader in frequency control and timing solutions, today released its financial results for the six months ended 30 September 2025 (1H26), delivering a strong return to growth with double-digit increases across revenue, margins and earnings.

The company reported 30% year-on-year revenue growth, a sharp lift in gross margin to 48.8%, and a 149% increase in Underlying EBITDA1, reflecting strengthening demand across all of its markets. FY26 Underlying EBITDA1 guidance remains unchanged at $15m to $24m.

Highlights:

• Double-digit increases in revenue, gross margin percentage and Underlying EBITDA1:

o Revenue $54.2m, +30.2% YoY – broad-based growth across all major markets

o Gross Margin 48.8%, +11 percentage points from 37.8% in 1H25 – driven by scale, mix and India cost efficiencies

o Underlying EBITDA1 $3.6m, +149% YoY – strong operating leverage and disciplined cost base.

• Market momentum across the portfolio:

o Aerospace & Defence (Revenue: $20.1m, +20% YoY): Fifth consecutive period of record growth; demand accelerating with a $75m+ global contracted Aerospace and Defence (A&D) order book – the highest in Rakon’s history – and a rapidly expanding multi-year pipeline

o Telecommunications (Revenue: $25.0m; +49% YoY): Rebounded strongly as orders recovered and customer inventory normalised

o AI & Data Centre (currently reported as a part of Telecommunications): Delivered 50% YoY revenue growth; meaningful FY26 revenue expected as Tier-1 programmes scale

o Positioning (Revenue: $6.3m, +14% YoY): Stable, profitable niche with growth opportunities.

• Cost discipline delivering margin expansion: Efficiency programmes and global manufacturing optimisation have reduced the cost base while enabling increased strategic investment capacity across New Zealand, India and France.

1H26 Financial Performance

Revenue grew +30% YoY to $54.2m, reflecting strong contributions across all major markets.

Gross margin rose by +11 percentage points to 48.8%, reflecting higher volumes, richer product mix and early benefits from Rakon’s global manufacturing optimisation.

Operating expenses remained tightly controlled, with FY25 restructuring delivering ~$1.5m in annualised savings that have been redeployed into the A&D capacity expansion in France. Revenue growth materially outpaced cost increases in 1H26, driving operating leverage and bringing opex as a percentage of revenue down for the half by -17.6ppt YoY.

Underlying EBITDA1 rose +149% to $3.6m, reflecting strong operating leverage across the business. Net loss after tax improved by $7.4m YoY to $(3.0)m. This momentum is expected to continue into 2H26, supported by higher volumes, improved margins and increased manufacturing efficiency.

Rakon maintains a robust balance sheet, supporting disciplined investment in expanded manufacturing capacity for high-demand A&D, Telecom and AI & Data Centre products. Working capital efficiency improved in the half, while preserving the ability to meet rising customer demand. In November, Rakon completed the renewal of its debt facility with global banking and financial services group, HSBC.