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Rakon is forecasting sales of its new range of AI componentry will compensate for slower activity in the global telecommunications space.
Auckland-based Rakon, a manufacturer of frequency control and timing technologies, released full-year 2025 guidance today, telling shareholders underlying EBITDA was expected to be in the range of $5M to 15M for the year to 31 March 2025 compared with $13.5 million in 2024.
“This reflects growth in the space and AI computing hardware segments, offset by a slow recovery in telecommunications and positioning, albeit with positive market indications in telecommunications now being seen,” the company said.
The first half of 2025 continued to be challenging for telecommunications and positioning segments as customers navigated the tougher macroeconomic conditions and drew down on stockpiled inventory.
While first half orders to date and revenue had reduced, improvement was expected, with the potential for the market to level out year-on-year during the second half.
Rakon said its new AI computing hardware products were already generating revenue and high customer interest from some of the largest global computer hardware companies.
It anticipated the segment could rival its revenues in its telecommunications segment in the next five years, providing increased protection through the business cycles.
Also positively, Rakon’s tier-1 telecom infrastructure customers, making up most of the market, were reporting a return to growth in North America as mobile network operator inventory levels normalised and they selectively increased capex investment.
While global mobile operator capex and 5G infrastructure investment levels remained low, Rakon said it expected orders in the telco segment would track up in the second half.
The space and defence segment was continuing to grow with a strong order book, however, Rakon’s traditional positioning segment was expected to remain flat.
The space segment included two new subsystems contracts previously announced which would have a $5 million revenue benefit in 2025.
“Rakon has continued to gain market share and has maintained a near 100% design win rate on targeted projects across all markets, which the company sees as a clear precursor that it is poised to capture larger market shares as conditions improve,” Rakon told shareholders.
Cost cutting and efficiency efforts had made good progress to improve resilience and competitiveness.
The company was transferring some product lines from its French and New Zealand manufacturing facilities to a new India facility which was expected deliver margin improvements later in the current financial year.
Yesterday, Rakon said it had received confirmation market regulator NZ RegCo would not be investigating a reported complaint about the timing of Rakon’s market disclosures over the conclusion of a six month takeover bid starting in December 2023.