CALNEX ON THE RECOVERY ROAD - 16/02/26

Why It Matters

The shift to diversified channels and the VIAVI alliance positions Calnex to benefit from rapid Open RAN adoption, potentially unlocking significant upside for shareholders.

Key Takeaways

• Spirent exit forces diversified channel strategy.
• VIAVI partnership targets Open RAN, AI-driven 5G testing.
• Open RAN market projected $45bn by 2033.
• FY26 revenue forecast £20.3m, cash £12.6m.
• US defence and satellite sectors present new growth avenues.

Pulse Analysis

The global rollout of Open RAN and AI‑enhanced 5G networks is creating a surge in demand for sophisticated test‑and‑measurement solutions. Operators and equipment makers need to validate timing, synchronization and interoperability across multi‑vendor environments, a niche where high‑precision instruments are essential. As carriers accelerate deployments to meet latency and reliability targets, the market for network validation tools is set to expand dramatically, underpinning a broader shift toward software‑defined, cloud‑native telecom infrastructure.

Calnex is capitalising on this trend by abandoning its dependence on a single distributor and forging a diversified channel ecosystem. The recent partnership with VIAVI integrates Calnex’s timing platforms with VIAVI’s TM500 and XEdge test systems, delivering end‑to‑end pre‑certification testbeds for Open RAN and future 6G architectures. This collaboration not only shortens deployment cycles for customers but also embeds Calnex within a global sales network, enhancing recurring revenue potential while preserving its capital‑light operating model and strong operational gearing.

Financially, Calnex projects £20.3 million of revenue for FY26, down from its 2023 peak yet reflecting a clear return to growth after a period of disruption. With a net cash balance of £12.6 million and a cost base that remains largely fixed, incremental revenue translates directly into expanding margins. The valuation at roughly 53p already incorporates optimism, but the combination of a high‑growth Open RAN market, expanding US defence and satellite opportunities, and a resilient balance sheet provides a compelling upside narrative for investors seeking exposure to the next wave of telecom infrastructure testing.