Slide 1: Growth and Profitability – Q1 2014 Presentation
napatech GROWTH AND PROFITABILITY Q1 2014 PRESENTATION May 2014 Henrik Brill Jensen, CEO
Slide 2: Financial Highlights Q1 2014
FINANCIAL HIGHLIGHTS Q1 2014 Invoiced USD sales increased 15% compared to Q1 2013 Revenue in Q1 2014 at 47.8 MDKK = 8% increase compared to Q1 201 » 9% increase compared to Q4 201 Gross margin in Q1 2014 was 73% = Compared to 68% for Q1 2013 EBITDA in Q1 2014 was 6.5 MDKK = 25% increase compared to
Slide 3: Financial Results Q1 2014
FINANCIAL RESULTS Q1 2014 Q1'14 Q4'13 Q1'13 Revenue (MDKk) 47.8 44.0 44.2 Growth YoY 8% (16)% 28% Gross Margin 73% 74% 68% EBITDA (MDKk) 6.5 10.5 5.2 EBIT bf exceptional items (MDKk) 1.1 5.1 0.1 IPO related cost (MDKk) O 6.8 O EBT (MDkk) 0.9 (1.5) 0.8 napatech*
Slide 4: Cash Flow Q1 2014
CASH FLOW Q1 2014 1,000 DKK Q1'14 Q1'18 Profit before tax 859 839 Net cash flow from operating activities (9,572) 6,476 Investments in Product development (10,663) (4,974) Net cash used in investments activities (13,371) (6,446) Issue of shares 110 ) Net cash flow from financing 110 O Net increase i
Slide 5: Q1 2014 Growth in Underlying Business
Q1 2014 GROWTH IN UNDERLYING BUSINESS Invoiced sales /Revenue Growth Influencing factors: 16% * Lower US Dollar to Danish say, | | Kroner exchange rate fo = Revenue recognition and 12% accounting adjustments 10% 8% 6% 4% 2% 0% Invoiced in USD FX headwind* Adjustments Reported revenue * Based on aver
Slide 6: Gross Margin - Continued Improvements
GROSS MARGIN - CONTINUED IMPROVEMENTS Gross Margin Margin development: 80% = Transition towards higher 78% speed products 76% = Operational excellence and 749% improvements = Development in APAC 72% ; business 70% 68% 66% 64% 62% 60% 2010 2011 2012 2013 Qi4 ; napatech*
Slide 7: Improved EBITDA Margin - YoY
IMPROVED EBITDA MARGIN - YoY EBITDA Margin Q1 2014 EBITDA margin: 30% = Gross margin effect = Spending in sales and 25% marketing 20% 15% 10% - i 0% Q1'3 Q2'13 Q3'13 Q413 Qi4 ; napatech*
Slide 8: Improvement YoY in Both NAM and EMEA
IMPROVEMENT YoY IN BOTH NAM AND EMEA Q1'14 Revenue Growth Geographical split: 50% = North America on recovery 40% trend 30% = EMEA recovery continues. 0% 20% inQiv14 10% = APAC shows solid growth 0% | * Large historical fluctuations NAM* EMEA APAC YoY Revenue Growth 80% 60% 40% 20% 0% -20% ——NAM gro
Slide 9: Recent Events and Shareholder Status
RECENT EVENTS AND SHAREHOLDER STATUS
Slide 10: Recent Recognitions and Events
RECENT RECOGNITIONS AND EVENTS » — Announced the release of new 4 port 10 GbE PCle Gens accelerator = New 4 port 10 and 100 Gigabit accelerators included on PCI-SIG compliance list* » Network Products Guide, selected Napatech as a finalist for the 9th Annual 2014 Hot Companies and Best Products Awar
Slide 11: New Quarterly Shipment Indicator
NEW QUARTERLY SHIPMENT INDICATOR «= — Napatech launched a new activity indicator in April named “Napatech Quarterly Shipment Indicator’ (QS) » — The intension is to provide the market with progress in our underlying business » The QSI shows development in product ports shipped to customers for the p
Slide 12: The QSI - Historical Perspective
THE QSI - HISTORICAL PERSPECTIVE Sequential port growth 40% 30% 20% 10% 0% -10% Qe Q2'13 Q3'13 Q4'13 ee —Low-end High-end =Total revenue DKK Measured as sequential growth in port shipment quarter over quarter High-end port (10 GbE and above) changes have more impact on revenue The correlation betwee
Slide 13: Top Shareholders April 30, 2014
TOP 20 SHAREHOLDERS APRIL 30, 2014 Shareholders 1 - 10 Shareholders 11 - 20 Investor Type Country (%) Inves' Type country Ferd AS Ordinary Norway 22,24 DTU Invest rep. ved Sympion Ordinary Denmark Northzone IV K/S Ordinary Denmark 21,99 Northzea Management Ordinary US. Skandinaviske Enskilda Nominee
Slide 14: 14
14
Slide 15: Napatech Strategic Direction
NAPATECH STRATEGIC DIRECTION Io be the recognized standard for accelerating applications that ensure the quality and security of the network services we all rely on napatech™
Slide 16: Recent Design Win Summary
RECENT DESIGN WIN SUMMARY «= 10 Gigabit design win with US based leading provider of network visibility and security intelligence to defend enterprises against today’s top security threats «= 10 Gigabit design win with South Korean based telecom equipment manufacturer * 1 Gigabit design win with Eur
Slide 17: Gigabit Breakthrough Performance
320 GIGABIT BREAKTHROUGH PERFORMANCE Ops throughput . apatech’s 320 ¢ ation of throught ~ napatech*
Slide 18: Gigabit - Flagship Accelerator
100 GIGABIT — FLAGSHIP ACCELERATOR 7 LJ u Vomeatl man AUECV ES 7 . ers are signed up for our Early Acc . eb 00 Gigabi napatech*
Slide 19: Enhance Brand Leadership
ENHANCE BRAND LEADERSHIP * Our ambition with the new Napatech positioning is to clearly articulate and enhance Napatech’s offering and value proposition to the market «= We believe that a clear positioning of what our customers can expect from Napatech will help guide their strategic decisions in st
Slide 20: Market Trends and Outlook
MARKET TRENDS AND OUTLOOK
Slide 21: Gigabit Market Trends
40 GIGABIT MARKET TRENDS «= At resent Ethernet Tech Summit industry leaders (e.g. Cisco and others) expressed expectation of significant up-take in 40 Gigabit Ethernet deployment «= — The broad Cisco portfolio of 40 Gigabit Ethernet products as well as their removal of barriers of adoption by delive
Slide 22: Gigabit Volume Deployment
40 GIGABIT VOLUME DEPLOYMENT Server ports = Crehan research expects 40 GbE port deployment to be meaningful in 2014 = 40 GbE port deployment growth expectations are higher than actual growth in 10 GbE = 10 GbE port deployment in 2008 seems above 40 GbE in 2014 al 2008A 2009A 2010A 2011A 2012A 2013E
Slide 23: Management Outlook
MANAGEMENT OUTLOOK » — The general climate for network infrastructure investments are expected to continue to improve during 2014 * Our new 10 and 100 Gigabit product lines and expansion of our Sales & Marketing activities are expected to fuel additional growth «= — The market predictions of up-take
Slide 24: Questions and Answers Session
3? QUESTIONS AND ANSWERS SESSION napatech
Slide 25: Important Notice
IMPORTANT NOTICE This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this presentation are based on current expectations, estimates and projectio