Slide 1: 2023 Half-Year Report Presentation
2023 Half-Year Report Presentation Henrik Brill Jensen, CEO Heine Thorsgaard, CFO August 24, 2023 1 2023-08-24 COPYRIGHT © 2023 NAPATECH A/S
Slide 2: Q&A Session at the end of the presentation
Q&A Session at the end of the presentation DK: +45 89 87 50 45 NO: +47 81 50 33 08 UK: +44 20 3936 2999 US: +1 646 664 1960 Participant Access Code: 251435 To ask a question, press * 1 on your telephone keypad. To withdraw your question, press * 2. Texted question can be submitted using the button o
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation has been prepared by Napatech A/S (the “Company”) solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Certain statements included in this presentation contain various fo
Slide 4: Agenda
Agenda • Business Status and Outlook • Datacenter Market Update • Strategy Mileposts Results • Financial Review and Outlook • Q&A Session 4 2023-08-24 COPYRIGHT © 2023 NAPATECH A/S
Slide 5: Progress in Business, Market and Strategy
Progress in Business, Market and Strategy 5 2023-08-24 COPYRIGHT © 2023 NAPATECH A/S
Slide 6: Business Status and Outlook
Business Status and Outlook • Results that position Napatech for new high-growth segments Napatech continues to execute its strategic plan, anchored in: • Strategic initiatives with Intel, delivering new IPU in 2023, contributing to 2024 and forward • Servicing our valuable installed base of custome
Slide 7: Mega-Trends Drive New Network Architectures and Opportunities for Napatech
Mega-Trends Drive New Network Architectures and Opportunities for Napatech • Communications Mega-Trends that drive new network New Napatech Programmable NIC architectures relevant to Napatech • Napatech product NT400D • Next-wave Cloud Service providers • Powered by Intel Agilex FPGA • Telco 5G Core
Slide 8: Market Update: Datacenter Servers and NICs
Market Update: Datacenter Servers and NICs Quarterly Server Demand Annual Annual NIC NIC Demand Forecast Programmable NIC Market 8,000 Source: Omdia 2023 Source: Omdia 2023 Vendor Share Napatech 7,000 Microsoft (1) 31% 6,000 Amazon 26% 5,000 Marvell 17% Revenues ($ millions) Intel (1) 10% 4,000 Sili
Slide 9: Strategy Milepost: Our Intel Journey
Strategy Milepost: Our Intel Journey • Launch, orderability and delivery in 2023 Napatech + Intel Solution Overview • Development for Napatech’s first Intel IPU on track • FPGA-based SmartNICs & IPUs • Complete solutions versus components • Napatech software packages for innovative use cases • Produ
Slide 10: Strategy Milepost: Our F5 Journey
Strategy Milepost: Our F5 Journey • Initial orders received About the solution • First Napatech SmartNIC • Napatech has delivered first units for product development Powered by Intel Agilex FPGA • Tier-1 OEM provider of networking and security appliances • Designed for volume servers • Latest techno
Slide 11: Strategy Milepost: Expanded Customer Reach Through Partnerships
Strategy Milepost: Expanded Customer Reach Through Partnerships Server Manufacturers: • Customer sales and marketing • Pipeline development Partnerships lower the barriers to • System Integration customer adoption and validates • Fulfillment the Napatech solution by the • 3 more in progress partner
Slide 12: Strategy Milepost: 5G Networking Solution (UPF)
Strategy Milepost: 5G Networking Solution (UPF) Stunning Performance Create Market Traction Targeted Use Cases: • Telco 5G infrastructure • Enterprise private 5G networks Compared to ASIC-basic DPU NIC: • 4.7x increase in number of users per server • 63% reduction in CAPEX • 78% reduction in OPEX. C
Slide 13: Strategy Milepost: Napatech Solutions Fulfilling ESG Aspirations
Strategy Milepost: Napatech Solutions Fulfilling ESG Aspirations • Challenges facing network operators Example: Napatech enables compelling reduction in data center power consumption • Increasing and fluctuating energy costs • 75% reduction vs. ASIC-basic DPU NIC • Limited availability of power for
Slide 14: Financial Review and Outlook
Financial Review and Outlook 14 2023-08-24 COPYRIGHT © 2023 NAPATECH A/S
Slide 15: Consolidated Income Statement Q2 & H1 2023
Consolidated Income Statement Q2 & H1 2023 Q2 H1 Q2 H1 DK K '000 2023 2022 2023 2022 ∆ ∆ Key Developments Revenue 37,846 35,484 74,942 87,721 7% -15% • Revenue in Q2 in USD up 10% compared to Cost of goods sold (9,191) (10,528) (25,757) (36,128) Q2’22 (up 7% in DKK). Revenue in H1 in USD Gro ss pro
Slide 16: Consolidated Cash Flow Statement Q2 & H1 2023
Consolidated Cash Flow Statement Q2 & H1 2023 Q2 H1 DK K '000 2023 2022 2023 2022 Key Developments Earnings before tax (EBT) (12,505) (11,363) (34,069) (17,952) Adjustments to reconcile profit before tax to net cash flows 9,448 6,420 19,061 11,799 • Net Cash flow from operating activities in Q2 Work
Slide 17: 2023 Guidance unchanged
2023 Guidance unchanged Summary Guidance • Our 2023 focus is to accelerate our engineering activities in software and hardware, extending our Programmable Revenue DKK 180-200m SmartNICs into new projected high-growth segments Gross margin 68-71% • With performance in the middle of the guided ranges:
Slide 18: Q&A Session
Q&A Session DK: +45 89 87 50 45 NO: +47 81 50 33 08 UK: +44 20 3936 2999 US: +1 646 664 1960 Participant Access Code: 251435 To ask a question, press * 1 on your telephone keypad. To withdraw your question, press * 2. Texted question can be submitted using the button on the website. 18 2023-08-24 CO