Slide 1: Q4 2018 Interim Management Statement Presentation
Q4 2018 Interim Management Statement Presentation February 28, 2019 1 Napatech A/S © Copyright 2018
Slide 2: Q4'18 Interim Management Statement Topics
Q4’18 Interim Management Statement Topics • Corporate Update • Update about Cash Raise • Business Highlights • Q4-2018 Results • 2019 Guidance • Q&A 2 Napatech A/S © Copyright 2018
Slide 3: Corporate Overview: NAPA.OL
Corporate Overview: NAPA.OL • +15 year history delivering FPGA-based technology to customers globally • Unparalleled expertise accelerating compute-intensive applications on standard open servers • High-tech solution with 22 patents provides high barrier-to-entry for competitors • Solid gross margin
Slide 4: Napatech Sits at the Crossroads of Two Major Market Forces
Napatech Sits at the Crossroads of Two Major Market Forces Artificial More sophisticated and compute-intensive applications Intelligence consuming and generating more data Machine Learning require more processing speed and power Cloud Infrastructure SDN/NFV Cybersecurity The SmartNIC is becoming the
Slide 5: Market Opportunity for SmartNICs is Growing Rapidly
Market Opportunity for SmartNICs is Growing Rapidly Market growing from $1.5B in 2018 to $3.7B in 2022 Need for higher speeds and more capacity with SmartNICs the fastest growing category (80% CAGR) driven by demanding data-hungry applications FPGA Impact Source: IHS Markit Ethernet Network Adapter
Slide 6: Napatech Product Areas for Growth
Napatech Product Areas for Growth Compute-Hungry Applications Application Driven FPGA Software Software-Centric Network Cybersecurity Virtual Switching Management Hardware Independent Napatech designed portfolio of FPGA SmartNICs Intel designed FPGA SmartNICs 6 Napatech A/S © Copyright 2019
Slide 7: Successfully Completed Cash Raise to Fund Growth
Successfully Completed Cash Raise to Fund Growth Cash Raise Completed: 76.7 MNOK (58.6 MDKK, $8.9M USD) • 50 MNOK in a private placement lead by Verdane Capital • 25 MNOK in fully-underwritten repair round to benefit of existing investors • 1.7 MNOK management and board investment Planned Use of Cas
Slide 8: What's Different Now About Napatech?
What’s Different Now About Napatech? • Solely focused on our unique core competency: • We embrace our unique expertise in FPGA • FPGA Configuration Software is at the center of our new product strategy: • We will access new growing markets in Cybersecurity and Virtualization, but we are doing it wit
Slide 9: Business Highlights
Business Highlights Napatech A/S © Copyright 2018
Slide 10: Napatech's Progress Towards Stability and Return to Growth
Napatech’s Progress Towards Stability and Return to Growth • Revenue • Q4 Sales Revenue of $7.4M, 2H18 Sales Revenue of $12.2M ahead of $12M target • Revenue in Q4 reflects more normalized patterns • Cash • Q4 was cash-flow positive reflecting a better cash position at the end of Q4 over Q3 • Succes
Slide 11: Significant End-User Wins
Significant End-User Wins Global Social Networking Leader • High performance leader in • Global leader and innovator in social media and business flow tracking and real- social networking time, in-stream performance • Existing 10 gigabit customer who chose analytics Napatech’s new 2x40GB FPGA-based
Slide 12: Significant OEM Wins
Significant OEM Wins EMEA-based Security Tech • Leading innovator in Hyper-Converged • Leader Market leader in mobility and threat- Infrastructure and Edge Computing systems appropriate security technology based in designed to run tier 1 storage-intensive EMEA workloads. • Selected Napatech’s FPGA-b
Slide 13: Napatech Q4 2018 Financials
Napatech Q4 2018 Financials Napatech A/S © Copyright 2018
Slide 14: Q4 2018 Financial Highlights
Q4 2018 Financial Highlights • Sales of $7.4M, +54% over Q3 2018 • Sales in 2H’18 were $12.2M vs Sales in 1H18 of 7.9M , a 54% increase • Gross margin was 67% adjusted for special items • Cash flow from operating activities in Q4 was +18 MDKK, up from 8.2 MDKK in Q4 2017 • Total cash and unused cred
Slide 15: Q4 2018 Financial Highlights (cont'd)
Q4 2018 Financial Highlights (cont’d) • EBITDA: 4.1 MDKK adjusted for the special items • Reported EBITDA -10.0 MDKK, compared to -7.2 MDKK in Q4 2017 • Depreciation, amortization and impairment for Q4 2018 was 52.0 MDKK, compared to 9.4 MDKK in Q4 2017 • Q4 is impacted by the impairment of capitali
Slide 16: Summary of Financial Results for Q4-2018
Summary of Financial Results for Q4-2018 *Reported cost of goods sold in Q4 is impacted by an extraordinary write down of inventories 11.1 MDKK aligned with the decision to end of life certain products, and by 2.9 MDKK related to the divestiture of the Pandion product line. 16 Napatech A/S © Copyrig
Slide 17: Interim Consolidated Income Statement
Interim Consolidated Income Statement 4th quarter YTD December DKK'000 2018 2017 2018 2017 Revenue 53.997 47.898 106.153 206.046 Cost of goods sold (31.793) (22.025) (57.060) (66.611) Gross profit 22.204 25.873 49.093 139.435 Other operating income 599 - 599 - Research and development costs (6.603)
Slide 18: Interim Consolidated Cash Flow Statement
Interim Consolidated Cash Flow Statement 4th quarter YTD December DKK'000 2018 2017 2018 2017 Operating activities Loss before tax (64.836) (10.616) (192.106) (29.826) Adjustments to reconcile profit before tax to net cash flows 65.735 4.130 138.959 45.117 Working capital adjustments 17.120 14.676 8
Slide 19: Outlook
Outlook Napatech A/S © Copyright 2018
Slide 20: 2019 Annual Guidance
2019 Annual Guidance ▪ Revenue in the range of 150-180 MDKK ($23-$27.6M) ▪ Gross margin around 68% ▪ Operating expenses in the range of 115-125 MDKK ▪ Investments in development projects in the range of 20-25 MDKK ▪ Depreciation and amortization in the range of 20-25 MDKK ▪ Management focus in 2019
Slide 21: Q&A Session
Q&A Session WANT TO LEARN MORE? Sign up for the Napatech News Sign up for OSE news Follow us on social media 21 Napatech A/S © Copyright 2018