Slide 1: Interim Management Statement 1Q-2025
Interim Management Statement 1Q-2025 Lars Boilesen, CEO Heine Thorsgaard, CFO May 26, 2025 NAPATECH A/S © COPYRIGHT 2025
Slide 2: Q&A Session
Q&A Session Following the presentation DK: +45 89 87 50 45 NO: +47 81 50 33 08 US: +1 646 787 9445 UK: +44 20 3936 2999 • Participant Access Code: 408079 To ask a question, press *1 on your telephone keypad. To withdraw your question, press *2 Texted questions can be submitted using the button on th
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation has been prepared by Napatech A/S 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 forward-looking st
Slide 4: Agenda
AGENDA • BUSINESS STATUS • MARKET UPDATE • PIPELINE SPOTLIGHT • FINANCIAL RESULTS 4
Slide 5: Business Status and Outlook
BUSINESS STATUS AND OUTLOOK 5
Slide 6: Business Status
BUSINESS STATUS Financial Results • 1Q-2025 Revenue $3.4M USD, +8% year over year • 1Q-2025 Gross Margins 70.3%, as expected, within guidance • 2Q-2025 Revenue Trending towards as +40-50% year over year Recent Highlights • Tier-1 Server OEM Ahead of plan on programs and projects Delivered hardware a
Slide 7: Market Update
MARKET UPDATE Limitless AI powered by networks that think 7
Slide 8: Situation: Server Requirements Are Transforming
SITUATION: SERVER REQUIREMENTS ARE TRANSFORMING BASIC ADVANCED 25-year evolution Daily-weekly revolution Best-effort Real-time 100s of users Billions of uses, devices Milliseconds Nanoseconds 1-10 Gigabits 100-800 Gigabits Static Evolving Basic Server Networking Card Advanced Networking Card Napatec
Slide 9: Problem: Standard Servers With Basic Network Cards Are Obsolete
PROBLEM: STANDARD SERVERS WITH BASIC NETWORK CARDS ARE OBSOLETE Research from Google and Facebook has shown infrastructure PROCESSING: Suffocating tasks amidst decreasing generational improvements workloads consume up to 80 percent of CPU cycles NETWORKING: AI/cloud drives complexity, data overload,
Slide 10: Solution: Advanced Network Interface Cards
SOLUTION: ADVANCED NETWORK INTERFACE CARDS ACCELERATED PROCESSING PROGRAMMABLE NETWORKING SUSTAINABLE COST Offload and accelerate Hardware performance Rearchitect servers to burdensome CPU network, at the speed of remove ROI constraints from security, storage processing Software innovation space, po
Slide 11: Market Validation: Early Adopters Prove Technology
MARKET VALIDATION: EARLY ADOPTERS PROVE TECHNOLOGY, VALUE, BENEFITS AND SCALE Hyperscale Equipment Next-Wave Cloud Operators Manufacturers Cloud Operators DEPLOYED NOW EMERGING NOW: 8 global companies 5000+ mass market Initially niche, bespoke Early cases emerging Component self-built DIY Merchant-b
Slide 12: Opportunity: Our Time to Shine Is Now
OPPORTUNITY: OUR TIME TO SHINE IS NOW NIC market development by category 21.3 CAGR USD billions 19.1 • Advanced Network Cards are the future 5.8 46% 15.8 4.9 • 92% of demand is from Hyperscale operators 3.5 • The mass market will become 37% of demand 12.5 2.2 • Creating a $6B mass market SAM in 2028
Slide 13: Opportunity: Applications That Benefit From Advanced NICs
OPPORTUNITY: APPLICATIONS THAT BENEFIT FROM ADVANCED NICS CLOUD AND ARTIFICIAL INTELLIGENCE BUSINESS CRITICAL APPLICATIONS NETWORK INFRASTRUCTURE AI Infrastructure Cybersecurity Application and Network Monitoring AI Coprocessing Fintech Financial Services 5G Mobile Infrastructure Storage Acceleratio
Slide 14: Product: Advanced NICs
PRODUCT: ADVANCED NICS [Programmable SmartNICs, IPUs, Coprocessors] A D A Infrastructure Processing Unit Link E B SmartNIC B D Think C GPU/ASIC, FPGA for AI D Memory chip C E E Central Processing Unit D F Server F Napatech’s Advanced NICs play a crucial role in … providing access to CPU and GPU reso
Slide 15: Business Model
BUSINESS MODEL: INNOVATE GO-TO-MARKET LOWERS OPEX AND INCREASES SCALABILITY 15
Slide 16: Pipeline Spotlights
PIPELINE SPOTLIGHTS 16
Slide 17: Case Study: Tier-1 Server OEM
CASE STUDY: TIER-1 SERVER OEM HARDWARE SOFTWARE USE CASES Standalone SmartNIC NETWORKING AI STORAGE (N3070X) STORAGE CLOUD STORAGE SECURITY AI CONTENT AND DATA REDUCTION INFRASTRUCTURE CLOUD TENNANT SERVICES MANAGEMENT 5G MOBILE INFRASTRUCTURE AND MORE…. PARALLEL FILE SYSTEM Butterfly 1RU IPU (F3070
Slide 18: Case Study: Artificial Intelligence Infrastructure
CASE STUDY: ARTIFICIAL INTELLIGENCE INFRASTRUCTURE • AI inferencing vendor • AI infrastructure back-end network • High-volume production • Replication: N3070X SW and HW • Commitments: units, NRE fee • 5-year supply agreement “Traditional Front-end Networks Remain Vital as AI Back-end Network Investm
Slide 19: Case Study: Cybersecurity
CASE STUDY: CYBERSECURITY • Data loss prevention • Software cybersecurity application • Run on standard server platform • Suffers on basic NIC • Run best on Napatech • >5x performance on advanced NIC https://www.napatech.com/solutions/partners/data-loss-prevention-with-broadcom-symantec/ “As network
Slide 20: Case Study: Critical Infrastructure
CASE STUDY: CRITICAL INFRASTRUCTURE • Improves cybersecurity • Improves storage and data for AI • Cryptographic acceleration • Transparent compression • Up to 99% lower CPU, at 36% power “The combination of Napatech’s programmable NICs and our NoLoad® acceleration solutions for cryptography and comp
Slide 21: Case Study: AI for Financial Services
CASE STUDY: AI FOR FINANCIAL SERVICES • Targeting financial services • High frequency trading • Ultra-low latency inferencing • FPGA-based software application • Runs best on Napatech https://www.napatech.com/solutions/partners/ai-inference-acceleration-for-trading-with-xelera/ “Our collaboration wi
Slide 22: Design Win Pipeline
DESIGN WIN PIPELINE: A FOUNDATION TO REALIZE OUR REVENUE ASPIRATIONS Growth impact of 2024 and 2025 design wins # unit projection in future peak year of production CURRENT PIPELINE: • 400+ base customers 10-20k • 250+ new opportunities 200-500 • >$375M in value ~60-80k units DESIGN WINS: in design w
Slide 23: Financial Outlook: Key Performance Indicators
FINANCIAL OUTLOOK: KEY PERFORMANCE INDICATORS Units shipped • Unit sales driven by 32 000 increasing demand among mass-market customers • High gross margins enabled by the strong software component in Napatech’s 10 700 products, which also promote customer stickiness 5 837 5 278 5 700 4 371 • Opex r
Slide 24: Financial Review and Outlook 1Q 2025
FINANCIAL REVIEW AND OUTLOOK 1Q 2025 24
Slide 25: Consolidated Income Statement Q1 2025
Consolidated Income Statement Q1 2025 Q1 Q1 DKK'000 2025 2024 ∆ Key Developments Revenue 23,849 21,542 11% Cost of goods sold (7,078) (6,112) • Revenue in Q1 up 11% compared to Gross profit 16,771 15,430 9% Q1’24 GM% 70.3% 71.6% Staff costs (35,059) (27,758) 26% • GM in Q1 70% Other external costs (
Slide 26: Consolidated Cash Flow Statement Q1 2025
Consolidated Cash Flow Statement Q1 2025 Q1 Key Developments DKK'000 2025 2024 • Net Cash flow from operating activities in Q1 Earnings before tax (EBT) (36,815) (32,183) negative DKK 25.7m Adjustments to reconcile profit before tax to net cash flows 10,530 9,882 • Net working capital end of Q1 down
Slide 27: NWC Improvement Initiatives
NWC Improvement Initiatives • Our Net Working Capital has had an unfortunate development for the past five quarters. • We have planned and implemented a number of different improvement initiatives that will bring our NWC down over the coming quarters, and as we implement new design wins in our suppl
Slide 28: Q&A Session
Q&A Session Following the presentation DK: +45 89 87 50 45 NO: +47 81 50 33 08 US: +1 646 787 9445 UK: +44 20 3936 2999 • Participant Access Code: 408079 To ask a question, press *1 on your telephone keypad. To withdraw your question, press *2 Texted questions can be submitted using the button on th
Slide 29: Stay Connected With Napatech
Stay Connected With Napatech On The Web: Social Media: Other News: www.google.com/alerts https://newsweb.oslobors.no/ www.napatech.com www.napatech.com/newsletter 29