Rakon : RAK FY24 Annual Report

RAKON    /    ANNUAL REPORT    /    2024

RAKON    /ANNUAL REPORT    /2024

Synchronising

the AI revolution.

Rakon's Niku™ TCXO platform.

Groundbreaking semiconductor design combined with cutting- edge XMEMS® oscillator technology. Delivering the precise timing and synchronisation required for next-generation data centres and AI Factories.

Niku™ TCXO platform not shown to scale.

01

About Rakon

Precision is power.

Our products help people to connect, explore and innovate.

They are the 'heartbeat' for electronic systems, delivering fast,

precise and stable connectivity in everything from mobile networks and autonomous vehicles to satellite constellations and AI data centres.

Whether connecting to a 5G tower or to a rover exploring Mars, our technology is relied on to deliver the highest performance in even the most extreme conditions.

Thanks to our constant drive to innovate, we continue to empower our customers to create the next-generation of life-transforming technologies. On Earth, and beyond.

RAKON    /ANNUAL REPORT    /2024

02	RAKON    /ANNUAL REPORT    /2024

Supplying the global

space industry

For over 40 years Rakon has worked alongside leading agencies including NASA, ESA and ISRO to develop ground-breaking products for their space programmes.

We've now leveraged that experience and expertise to capture growth opportunities within the fast-growing commercial space industry, and are a top-3 supplier for our subsystems products.

We're seeing unprecedented demand for our expanding product range and are proud to have been selected to supply our subsystems for two new Low-Earth Orbit satellite constellations (see page 28).

03

Emerging core market: AI

Rakon's technology and products are ideally suited for overcoming the synchronisation challenges that data centres face with AI workloads.

Our solutions help to unlock the major

performance gains demanded by AI workloads, and we are working with leading players in AI hardware to enable next-generation platforms and data centres (see page 26).

RAKON    /ANNUAL REPORT    /2024

04	RAKON    /ANNUAL REPORT    /2024

Welcome to our 2024 Annual Report

This document reports on Rakon's operational and financial performance for the year to 31 March 2024 (FY24). We have focused on what we believe matters most to our stakeholders and business.

This report provides a clear look at our company and shows how we are delivering against our strategic priorities of technology innovation, core market growth, customer partnerships, and flexible, scalable operations.

Our commitment to sustainability is demonstrated through our Environmental, Social and Governance (ESG) actions and this report includes an update on our progress across a number of material ESG related topics. In a change from last year's report, we will deliver our climate reporting as a standalone online document, to be published on or before 31 July 2024, that will be available on our website: rakon.com/investors/reports-presentations-events.

We have endeavoured to ensure all information is accurate, including performing internal verification. The information provided in this report has been compiled in line with NZX Listing Rules and recommendations for investor reporting.

The financial statements on pages 65-113 have been prepared in accordance with appropriate accounting standards and have been independently audited by PricewaterhouseCoopers.

We know many investors prefer to view this report online. Our company review and financial documents are included in this report, in an easy-to-read format.

We welcome your feedback on this report, including how we can improve. Please email your feedback to: [e-mail].

05

Contents

RAKON    /ANNUAL REPORT    /2024

THE YEAR	LONG-TERM	CORE MARKET	AI, SPACE, AND INDIA	SUSTAINABILITY	FINANCIALS AND
IN CONTEXT	GROWTH PLAN	OVERVIEW	MANUFACTURING	AND ESG	OTHER DISCLOSURES

Our global operations	06	Four paths to growth	14	Space and defence	20	Emerging core market: AI	26	Our People	32		Consolidated	66
																financial statements
Performance snapshot	08	How we create	15	Telecommunications	22	Synchronising AI	27	Board and	35
			long-term value									Management profiles		Notes to the consolidated
Highlights	08	Positioning	24	Subsystem success in space	28	72
					financial statements
3 year roadmap	16	Driving sustainability
Chair & CEO report	09					Four decades of			40
						29	through our business		Independent
									space exploration		110
												Auditor's Report
									Our ESG framework	42
									Framework for efficiency
									30		Remuneration Report	114
										and innovation	Improving our
										44
													environmental impact		Shareholder	119
																Information 2024
													Our supply chain, people
													49			122
													and practices		Indexing
													Contributing in	50		Directory	124
													our communities
													Corporate Governance	51
													Glossary	63

06	THE YEAR IN CONTEXT	RAKON    /ANNUAL REPORT    /2024

Our global operations

					KEY:
					• Manufacturing sites
					• R&D centres
					• Customer support locations
					• Quality assurance
					• Key manufacturing partners
~70	7	6	16	~850	45
countries with	company and partner	R&D centres	customer support	employees worldwide	nationalities in the
Rakon customers	manufacturing sites	of excellence	locations		Rakon global team

07	THE YEAR IN CONTEXT	RAKON    /ANNUAL REPORT    /2024

T H E Y E A R

I N C O N T E X T

08

Performance snapshot

REVENUE

$128.0m

• $52.3M OR 29%

NET PROFIT AFTER TAX (NPAT)

$4.5m

• $18.7MM OR 81%

OPERATING CASH FLOW

$17.8m

• $6.7MM OR 60%

THE YEAR IN CONTEXT

GROSS MARGIN

$57.9m

• $30.9M OR 35%

$UNDERLYING13EBITDA .5m

• $28.7M OR 68%

NET CASH

$17.8m

• $3.9M OR 18%

RAKON    /ANNUAL REPORT    /2024

Highlights

Highest ever space segment revenue

CYCLICAL SLOWDOWN IMPACTING

TELCO AND POSITIONING

Top 3 player in space subsystems

NEW SATELLITE SPACE CONTRACTS POSITION RAKON AS A TOP PLAYER IN SUBSYSTEMS

Consistent market share gains

NEAR 100% DESIGN WIN RATE

ON TARGETED PROJECTS

Emerging core market: AI computing hardware

EXPANDING PRODUCT RANGE FOR AI DATA CENTRES

Delivery of 3-year growth plan

ALL FY24 MILESTONES ACHIEVED OR IN PROGRESS

All figures are presented in New Zealand dollars unless otherwise indicated.

All comparisons are to the prior corresponding period (i.e. 12 months to 31 March 2023) unless otherwise stated.

1 Refer to the footnote on page 63 for the definition of Underlying EBITDA as a non-GAAP financial measure, referred to in this document.