Reckon Limited (RKN) AI Stock Analysis

• Market Cap: AU$58.90M
• Dividend Yield: 4.39%
• Average Volume (3M): 74.36K
• Price to Earnings (P/E): 5.6
• Beta (1Y): 0.25
• Revenue Growth: 9.30%
• EPS Growth: 11.68%
• Country: AU
• Employees: 180
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.02
• Shares Outstanding: 113,294,830
• 10 Day Avg. Volume: 87,029
• 30 Day Avg. Volume: 74,356
• PEG Ratio: 0.13
• Price to Book (P/B): 2.52
• Price to Sales (P/S): 1.03
• P/FCF Ratio: 2.73
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$1.05
• Price Target Upside: 84.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.07
• Revenue Forecast (FY): AU$64.57M

• Rating: 72 Outperform
• Price Target: AU$0.60 ▲(5.09% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is driven primarily by solid financial performance (improving growth and margins plus strong cash generation) and supportive valuation (low P/E and high dividend yield). These positives are partially offset by weak technical signals, with the stock trading below key moving averages and negative MACD.

Positive Factors

Cash generation / conversion

Operating cash flow consistently running about 1.5x reported net income and a 17.3% FCF surge in 2025 indicate high earnings quality and strong internal funding. That durable cash conversion supports reinvestment, shareholder returns and debt servicing, improving financial resilience across cycles.

High and improving margins

Very strong EBITDA margins and a material improvement in net margin to ~11.8% reflect scalable unit economics and operating leverage. Durable high margins provide cash flow buffer, capacity to fund product development and competitiveness versus peers, and resilience to pricing pressure.

Recurring SaaS revenue model

A subscription-focused business model drives recurring, predictable revenue and higher customer lifetime value. Serving SMEs and accounting practices with cloud accounting, payroll and practice management products creates sticky relationships and cross-sell opportunities, supporting steady long-term revenue.

Negative Factors

Rising leverage trend

Leverage has increased meaningfully in the past two years (debt-to-equity ~0.45 vs ~0.31), which reduces financial flexibility. If growth or margins weaken, higher debt servicing needs could constrain capital allocation, increase refinancing risk, and limit ability to pursue strategic investments.

Revenue and margin volatility

Historical swings—such as the sharp 2022 revenue drop and variable margins—signal inconsistent demand or sensitivity to business cycles. This volatility undermines forecastability and makes sustaining recent improvements less certain, complicating multi-period planning and investment prioritization.

Free cash flow variability

Significant FCF swings driven by working-capital or investment timing (very weak FCF in 2023) increase operational funding uncertainty. Such variability can force short-term financing, pressure dividends or buybacks, and reduce clarity on sustainable cash available for growth initiatives.

Reckon Limited Business Overview & Revenue Model

Company Description

Reckon Limited provides software solutions in Australia, the United States, and internationally. The company operates through three divisions: Business Group; Practice Management Group, Accountants; and Practice Management Group, Legal. It offers Reckon One, an online accounting software for small businesses; Single Touch Payroll software for managing pay runs, allowances, leave, and superannuation; Reckon Accounts Hosted, an online accounting software to manage finances, payroll, and inventory for large businesses; Reckon Cloud POS, a cloud-based point of sale software; and Better Clinics, an online practice management software for allied health professionals. The company also provides Reckon Loans, which offers business loans; Reckon Accounts Desktop, a desktop accounting software for businesses; Desktop Point of Sale software; personal finance software; Reckon APS, an accounting practice management software; and Reckon Elite, a small and medium firms practice management software. In addition, it delivers digitalization, practice management, and cost recovery and analytics solutions under the nQ Zebraworks brand primarily to the law firms, and government and corporate legal departments. The company was incorporated in 1987 and is based in North Sydney, Australia.

How the Company Makes Money

Reckon Limited generates revenue through multiple streams, primarily from software sales, subscription services, and support contracts. The company sells its software products both as one-time purchases and through recurring subscription models, allowing customers to access updates and support as long as they maintain their subscriptions. Additionally, Reckon monetizes its offerings through add-ons and integrations that enhance functionality for users. The company's partnerships with accounting firms and professional service providers also contribute to its earnings by facilitating referrals and expanding its customer base. Overall, Reckon's revenue model leverages a combination of direct sales, subscription fees, and strategic alliances to drive financial performance.

Reckon Limited Financial Statement Overview

Summary

Improving revenue growth in 2025 (+6.4%) and stronger profitability (net margin ~11.8%) are supported by very strong EBITDA margins and excellent recent cash conversion (operating cash flow ~1.5x net income). Offsets include some historical volatility in revenue/margins and free cash flow, plus a recent upward drift in debt.

Income Statement

Revenue growth has improved in the most recent year (2025: +6.4% vs. ~flat in 2024), and profitability strengthened meaningfully with higher operating and net margins (net margin rose to ~11.8% from ~8.2%). EBITDA margin remains very strong (high-30s to low-40s), supporting solid earnings power. Offsetting this, profitability has been somewhat volatile over the cycle (notably the sharp revenue decline in 2022 and unusually high gross margin in 2021 versus other years), which reduces confidence in consistency.

Balance Sheet

Leverage looks manageable with debt-to-equity around ~0.45 in 2025 (up from ~0.31 in 2024 but well below the 2020 peak), and equity has grown alongside assets. Returns to shareholders are strong (2025 return on equity ~28.7%), indicating efficient capital use. The main watch-out is the upward drift in debt in recent years (2023 to 2025), which, if paired with weaker earnings, could pressure flexibility.

Cash Flow

Cash generation is a clear strength: operating cash flow is robust and comfortably supports reported profits (operating cash flow runs ~1.5x net income in 2024–2025). Free cash flow surged in 2025 (+17.3%) and is essentially in line with net income in 2024–2025, signaling high earnings quality. The key weakness is variability—free cash flow was very weak in 2023 relative to profits, suggesting working-capital or investment timing can create meaningful swings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	62.42M	54.04M	53.41M	51.23M	71.06M
Gross Profit	17.85M	11.90M	13.50M	13.50M	63.05M
EBITDA	26.11M	20.19M	19.70M	17.77M	29.02M
Net Income	7.37M	4.42M	5.57M	7.31M	9.82M
Balance Sheet
Total Assets	56.26M	46.40M	41.21M	39.94M	71.87M
Cash, Cash Equivalents and Short-Term Investments	894.00K	986.00K	975.00K	1.23M	1.39M
Total Debt	11.65M	6.96M	5.20M	6.49M	21.14M
Total Liabilities	30.72M	23.78M	21.58M	22.03M	40.05M
Stockholders Equity	25.67M	22.25M	19.57M	17.14M	30.53M
Cash Flow
Free Cash Flow	23.62M	17.53M	4.61M	7.47M	10.05M
Operating Cash Flow	23.80M	17.89M	19.13M	7.69M	10.79M
Investing Cash Flow	-22.44M	-14.82M	-15.29M	78.17M	12.90M
Financing Cash Flow	-1.39M	-3.08M	-4.11M	-85.93M	-23.46M

Reckon Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:RKN, the sentiment is Negative. The current price of 0.57 is above the 20-day moving average (MA) of 0.52, above the 50-day MA of 0.55, and above the 200-day MA of 0.55, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 42.40 is Neutral, neither overbought nor oversold. The STOCH value of 26.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:RKN.

Reckon Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RKN	72 Outperform	AU$58.90M	5.58	21.98%	4.39%	9.30%	11.68%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AMX	48 Neutral	AU$28.50M	-3.90	-31.01%	―	-3.43%	-40.65%
PRO	43 Neutral	AU$7.38M	-0.46	-133.07%	―	-4.90%	-52.78%
XF1	43 Neutral	AU$22.01M	-13.76	―	―	7.32%	67.11%
FLX	41 Neutral	AU$38.81M	-3.17	―	―	21.82%	6.83%

Reckon Limited Corporate Events

Reckon Issues Summary Investor Presentation for FY2025

Reckon Limited has released an investor presentation for the year ended 31 December 2025, intended to be read alongside its formal financial reports and ASX announcements. The document provides only a summary of information that is current as of its stated date and is not designed to serve as standalone investment advice.

The company stresses that the presentation may include forward-looking statements about its operations, outlook and opportunities, which are subject to change and not guaranteed. Reckon also disclaims any obligation to update such statements and advises investors to consider their own objectives and financial situations when interpreting the information.

The most recent analyst rating on (AU:RKN) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Reckon Limited stock, see the AU:RKN Stock Forecast page.

Reckon lifts profit 94% as cloud and legal workflows power FY25 growth

Reckon reported a strong FY25, with group revenue up 15% to $62.4 million, EBITDA up 29% to $26.1 million and NPAT surging 94% to $7 million, supported by the acquisition of Cashflow Manager and robust organic growth. Cloud-based Reckon One revenue rose 27%, lifting Business Group cloud revenue by 8%, while the Legal Group increased subscription income 15%, more than doubling revenue from its Billing Workflows platform and expanding its installed base of attorneys as it invests heavily in product development to capture a larger share of the US and UK legal tech market.

The Business Group completed the integration of Cashflow Manager, maintained EBITDA margins of 52% and boosted operating cash flow to $8.7 million after $15.1 million in development spend, reinforcing the company’s capacity to fund further cloud innovation and migration of legacy users. Zebraworks grew annual recurring revenue to $13.7 million, launched its first client-facing AI tool within DataQ AI and continued to build scale in a serviceable market it estimates at 77,000 attorneys, underlining Reckon’s strategy to drive high-margin recurring revenues and deepen its position in legal workflow and billing solutions.

The most recent analyst rating on (AU:RKN) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Reckon Limited stock, see the AU:RKN Stock Forecast page.

Reckon posts profit surge but deeper negative net tangible assets

Reckon Limited reported strong growth for the year ended 31 December 2025, with revenue from continuing operations rising 15.4% to $62.4 million and EBITDA up 29.3% to $26.1 million. Net profit from continuing operations almost doubled to $7.0 million, while net profit attributable to members climbed 66.7% to $7.4 million, and the company paid a fully franked dividend of 2.5 cents per share in September 2025.

Despite the profit and revenue gains, Reckon’s net tangible assets position deteriorated, falling to negative 19.8 cents per share from negative 12.6 cents a year earlier, suggesting a balance sheet more heavily weighted to intangibles or liabilities. The preliminary results are still subject to audit, but the company expects an unmodified opinion, which should provide shareholders and creditors with added confidence in the reported performance and the sustainability of its current operating momentum.

The most recent analyst rating on (AU:RKN) stock is a Hold with a A$0.50 price target. To see the full list of analyst forecasts on Reckon Limited stock, see the AU:RKN Stock Forecast page.