Slide 1: Napatech Q3 2017 Presentation
Napatech Q3 2017 Presentation November 7, 2017 1 Napatech A/S © Copyright 2017
Slide 2: Highlights Q3 2017
Highlights Q3 2017 Sales performance ▪ 7% decrease in USD sales compared to Q3’16 ▪ 11% decrease in DKK Revenue compared to Q3’16 Progress in Pandion business ▪ 8% of our sales in Q3 coming from Pandion products Pandion integration with Palo Alto Networks Firewall ▪ Value Added Reseller has integrat
Slide 3: Napatech Q3 2017 Financials
Napatech Q3 2017 Financials 3 Napatech A/S © Copyright 2017
Slide 4: Q3 2017 Revenue
Q3 2017 Revenue Sales and Revenue Growth (YoY) 0% Comments: -2% • Revenue declined in Q3 is 11% -4% • Revenue growth YTD is 11% (FY 2017 guidance 10-20%) -6% • The decline is due to the quarterly fluctuations as well as a loss of a -8% Pandion project -10% • Currency has had a large effect as the US
Slide 5: Pandion Progression
Pandion Progression Pandion share of sales 14% Comments: 12% • Q3 below our expectations • Pandion is expected to be a 10% significant growth driver for the coming periods 8% • Pandion product mix sold: 6% • As a recorder solution for system integrators 4% • As recorder software and accelerators to
Slide 6: Regional Revenue Distribution
Regional Revenue Distribution Quarterly revenue in MDKK 50 Comments: • Small growth in North America 1% 40 • North America growth effected by fluctuations in order pattern 30 • EMEA decline due to timing of projects in the region 20 -36% • APAC decline due to timing of projects in the region 10 -30%
Slide 7: Last Twelve Months Rolling Revenue
Last Twelve Months Rolling Revenue Revenue (DKK) 270 Comments: • Last twelve months (LTM) rolling 250 18% revenue is 18% (FY 2017 guidance 10-20%) 230 • By comparison, EBITDA (LTM) for same period has shown an 210 increase of 54% 190 • Fluctuations in quarters offset by longer-term trend 170 150 Q3'
Slide 8: Gross Margin Development
Gross Margin Development Gross Margin 80% Comments: • Gross margin YTD is 72% (FY 2017 guidance around 68%) 75% • The gross margin in Q3’17 is at 72%, increase of 1 point compared to Q3 2016 70% • Larger volumes to strategic accounts and changes in product 65% mix are expected to drive the gross mar
Slide 9: EBITDA Margin
EBITDA Margin EBITDA Margin 35% Comments: • EBITDA margin YTD is 13% 30% (FY 2017 guidance around 20%) 25% • EBITDA margin is lower in Q3 compared to last year. This is due 20% to the lower revenue, as our cost are very stable, the EBITDA margin 15% is heavily dependent on the revenue level 10% 5% 0
Slide 10: Financial Results Q3 2017
Financial Results Q3 2017 (Figures in MDKK) Q3 2017 Q3 2016 YTD 2017 YTD* 2016 Revenue 44.1 49.6 158.1 142.4 Growth YoY** (11%) (18%) 11% (3%) Gross Margin 72% 71% 72% 72% EBITDA 2.1 6.1 21.0 15.4 EBIT (7.3) (3.6) (7.4) (11.2) Cash flow from operating activities 4.8 10.0 14.8 7.3 Cash and cash equiv
Slide 11: This is Napatech
This is Napatech 11 Napatech A/S © Copyright 2017
Slide 12: Napatech in Short
Napatech in Short ▪ Napatech provides reconfigurable SmartNIC solutions based on hardware What is a SmartNIC? and software that help IT organizations reimagine their business by harnessing the cost, performance and innovation benefits enjoyed • A SmartNIC is a product built by hyper-scale cloud serv
Slide 13: Market Trends In Networking and Communications
Market Trends In Networking and Communications Cloud 5G Internet of Computing Mobile things 4 25 25 50 50 By 2020 BILLION MILLION BILLION BILLION TRILLION Connected People Applications Embedded Systems Devices and Sensors Gbps of Data Source: IDC 13 Napatech A/S © Copyright 2017
Slide 14: Hyper-Scale Cloud Data Centers
Hyper-Scale Cloud Data Centers Common Platform Ensures Scalability to Meet Demand Billions of Mobile and IoT Devices Hyper-Scale Cloud Datacenter Thousands of interconnected servers running cloud services 5G Mobile Connectivity Smart Phones Smart Cars Hyper-Scale Cloud Service Providers Tablets Smar
Slide 15: Standard Computing Platform Basis for Hyper-Scale Today But Struggling To Keep Up
Standard Computing Platform Basis for Hyper-Scale Today But Struggling To Keep Up Central Processing Unit (CPU) Processes all the data for cloud services Needs to divide time and resources between many different tasks CPU Network Interface Card (NIC) Processing Only delivers data to and from the CPU
Slide 16: Reconfigurable Computing Platform
Reconfigurable Computing Platform FPGA’s Provide The Additional Processing Power Reconfigurable Computing Platform Combination of CPU and FPGA processes all the data for cloud services FPGAs can focus on specific tasks while CPU continues to support other tasks CPU Processing FPGA-based SmartNIC can
Slide 17: Reconfigurable Computing Solutions by FPGA
Reconfigurable Computing Solutions by FPGA Driven by Largest Cloud Service and Solution Providers Configurable cloud architecture based on FPGAs Intel acquires Altera FPGA for record $16.7B Amazon introduces FPGA-as-a-Service Alibaba introduces FPGA-as-a-Service 17 Napatech A/S © Copyright 2017
Slide 18: Napatech Reconfigurable Computing Solution
Napatech Reconfigurable Computing Solution It’s all about the software ▪ The power of FPGA technology is that it can be Napatech Reconfigurable Computing reconfigured by software on-the-fly to support a new Solutions task at any given point in time ▪ Reconfiguring the computing platform enables fast
Slide 19: Napatech Reconfigurable SmartNIC Solutions
Napatech Reconfigurable SmartNIC Solutions Today Focused on Cybersecurity and Network Management Typical datacenter Only some servers dedicated to Napatech Reconfigurable SmartNICs with thousands of servers network management and ensure reliable delivery of all the data supporting user services cybe
Slide 20: Napatech Growth Strategy
Napatech Growth Strategy Powering Any Reconfigurable Computing Need Artificial Intelligence Reconfigurable computing platforms Reconfigurable Computing Napatech Reconfigurable deployed to keep up with growth in Solutions are required for each Computing Solutions accelerate cloud services, mobile and
Slide 21: Key Take-Away
Key Take-Away FPGA’s are the Foundation for Tomorrows Computing ▪ The shift towards cloud networking, 5G mobile and IOT has created a Growth path towards 2020 pervasive need for reconfigurable computing solutions across a wide range • Robust portfolio of current of new users, in high-growth applicat
Slide 22: Business Highlights
Business Highlights 22 Napatech A/S © Copyright 2017
Slide 23: Progress in our SmartNIC Strategy
Progress in our SmartNIC Strategy ▪ Engagement with major telecom operators and equipment vendors discussing use cases related to our SmartNIC offerings for Network Function Virtualization ▪ On-going dialog about usage of Napatech technology for compute offload with the two largest FPGA technology v
Slide 24: Recent Design Wins to Drive Future Business
Recent Design Wins to Drive Future Business ▪ 100 Gigabit Accelerator solution design win for a North American Tier-1 customer delivering a Network Monitoring solution ▪ 10 Gigabit Accelerator solution design win for an APAC customer focused on delivering product to the Telecom industry ▪ 10 Gigabit
Slide 25: Design-win Effect on Q3 Revenue
Design-win Effect on Q3 Revenue ▪ Design wins during the last 7 quarters delivered 21% Pandion DWs of the overall Q3 2017 revenue Accelerator ▪ The Pandion business delivered: DWs ▪ 8% of the overall revenue in Q3 is based on design-wins secured in 2016 and 2017 ▪ The Accelerator business delivered:
Slide 26: Case study: IBM QRadar Boosts Network Forensics
Case study: IBM QRadar® Boosts Network Forensics ▪ As announced in Q3 2016, IBM partnered with Napatech to Challenge ensure that their QRadar® Security Intelligence Platform would • Ensure that the IBM QRadar ® SIEM platform would seize and retrieve provide complete network visibility 100% of networ
Slide 27: Case study: Pandion Plug-in for Palo Alto Networks Firewalls
Case study: Pandion Plug-in for Palo Alto Networks Firewalls From Circumstantial Evidence to Hard Facts ▪ Joint industry solution with the Danish company Credocom, Challenge combining the capture to disk capabilities of the Napatech • Palo Alto firewalls provide efficient logs for various security i
Slide 28: Organization Enhancement to Match Our Strategic Ambitions
Organization Enhancement to Match Our Strategic Ambitions In the North American Market (NAM), in particular, we see a pervasive need for Increased North America Market SmartNIC solutions across a wide range of new users, in high-growth focus as: applications and services • NAM is >75% of current sal
Slide 29: Outlook: The Roadmap to 100 MUSD by 2020
Outlook The Roadmap to 100 MUSD by 2020 29 Napatech A/S © Copyright 2017
Slide 30: 2020 Strategy Secured by Strong Technology, Portfolio and Organization
2020 Strategy Secured by Strong Technology, Portfolio and Organization Expanding the core LEADING TECHNOLOGY EXPANDING THE CORE FIRM STRATEGIC EXECUTION Repackage solutions and Focus on pursuing and technologies to fit diverse Napatech is the leader in FPGA- exploiting emerging market needs based so
Slide 31: Management's Outlook
Management’s Outlook ▪ The Cloud Computing, 5G and IoT combined form a significant Comments: growth driver, leading to exploding volumes of users, devices and data. Clear industry consensus around that providing the Guidance for 2017 as stated in the needed processing power to support the hyper-scal
Slide 32: Q&A Session
WANT TO LEARN MORE? …about Napatech, Smarter Data Delivery, SmartNICs, IoT, cloud computing, 5G Mobile, and other trends in the industry? Sign up for the Napatech News Q&A Session Sign up for OSE news Follow us on social media 32 Napatech A/S © Copyright 2017