Slide 1: 1H 2022 Half Year Report Statement
1H 2022 Half Year Report Statement Ray Smets Heine Thorsgaard CEO CFO 18 August 2022 COPYRIGHT © 2022 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 88 95 13 NO: +47 80 02 51 23 UK: +44 2039 362 999 US: +1 646 664 1960 Participant Access code: 076024 To ask a question, press ZERO ONE on your telephone keypad. To withdraw your question, press ZERO TWO. Texted question can be submitted using th
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: 1H 2022 Half Year Report Topics
1H 2022 Half Year Report Topics • Napatech at a Glance • Market Update • Key Growth Developments • Landmark Design Win Will Create Significant Revenue Growth • Increasing Design Win Pipeline via Strategic Partners • 1H 2022 Financial Results • Q&A 4 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 5: Napatech at a Glance
• Napatech at a Glance 5 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 6: We Are Napatech
We Are Napatech • Napatech is a leading developer of FPGA-based Software solutions on chips and SmartNICs/IPUs based in Copenhagen 7% 400+ • Napatech is the largest independent FPGA SmartNIC Vendor Customers over 2 years software provider for the SmartNIC market Market Share • Napatech has a market
Slide 7: Server Deployments are Pervasive and Growing
Server Deployments are Pervasive and Growing… With intensifying demand for capacity and performance, networks are being built at massive scale to accelerate CPU-hungry applications in data centers The server market is expected to grow at a 12% CAGR from $80B in 2020 to $138B by 2026 Telco Operators
Slide 8: Yet Server CPU's Cannot Keep Up
Yet Server CPU’s Cannot Keep Up… Applications Demand More CPU Power SmartNIC Acceleration Server CPU Performance Cannot Keep Up with Demand 8 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 9: IPU/DPU SmartNICs Are Needed to Solve the Application Performance Gap
IPU/DPU SmartNICs Are Needed to Solve the Application Performance Gap on Standard Server Platforms… The average server requires 2-8 NICs to increase the performance of applications and SmartNICs provide a range of additional benefits Performance Agility Efficiency 200 Gbps Line-Rate Processing Softw
Slide 10: Napatech is Perfectly Positioned as the Leader in High-Performance Programmable SmartNICs
Napatech is Perfectly Positioned as the Leader in High-Performance Programmable SmartNICs Napatech accelerates server-based applications using the most advanced programmable IPU/DPU SmartNIC technology which it has developed over 20+ years • Napatech designs high- Cybersecurity Monitoring Infrastruc
Slide 11: Expertise, Execution and Focus has Moved Napatech into a Pole Position
Expertise, Execution and Focus has Moved Napatech into a Pole Position in the Fast-Growing SmartNIC Market Napatech is intensively focused with its industry leadership delivering a complete FPGA-based software programmable SmartNIC solution 2022-2026 Unlocking Higher Growth • Expand to high-growth m
Slide 12: Market Update
• Market Update 12 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 13: Napatech is Well Positioned Amongst Market Players
Napatech is Well Positioned Amongst Market Players Highest Performance & Programmability Customers select Napatech because of our software: Production-grade, plug-and-play, high-performance, feature-rich, with feature velocity SOC FPGA Nvidia PROGRAMMABILITY Marvell Intel This market is ripe for con
Slide 14: The Market is Experiencing High Sustainable Growth and Napatech is Investing to Win
The Market is Experiencing High Sustainable Growth and Napatech is Investing to Win the Highest Growth Segment CY21—CY26 CAGR Basic NIC -19.0% 8,000 Offload NIC 8.1% Market Share EoY2021 Programmable NIC 37.4% Grand Total 21.1% $7.0B SmartNICs - Vendors Only* 7,000 All NICs Share Share $6.1B 6,000 N
Slide 15: Q2'22 Global Customer Wins
Q2’22 Global Customer Wins We saw solid customer retention in Q2’22, several new customer Design Wins delivering first orders, and good pipeline development for 2H’22. However, the OEM revenue forecasting has been less predictable due to the current market climate. 15 18 August 2022 COPYRIGHT © 2022
Slide 16: Key Growth Developments
• Key Growth Developments 16 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 17: Landmark Design-In Will Create Significant Revenue Growth
Landmark Design-In Will Create Significant Revenue Growth • Napatech has been awarded a significant new Design-In • Customer: a multi-billion dollar global leader in network and security solutions selling its solutions to the world’s largest enterprises, financial institutions, service providers and
Slide 18: Increasing Design Win Pipeline via Strategic Partners
Increasing Design Win Pipeline via Strategic Partners Aligning our technology roadmap Creating valuable partnerships to to ensure Napatech SmartNICs expand our market reach focused on support all FPGA architectures, increasing set of customers & markets including IPU and DPU • Developing partnership
Slide 19: 1H 2022 Financial Results
1H 2022 Financial Results 19 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 20: 1H 2022 Financial Results Impacted by Global Market Climate
1H 2022 Financial Results Impacted by Global Market Climate • Growth YTD 1H’22 -6% in DKK • Gross Margins in 2Q’22 of 70.3% • We are navigating a variety of different market conditions 20 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S
Slide 21: Confident That Our Strategic Direction WILL Deliver Growth
Confident That Our Strategic Direction WILL Deliver Growth Strong New Strong New Pipeline Adding Customer Design Wins Partnerships Development New Retention Customers New Expanding SmartNIC IPU Use Cases Needs Growing Expansion Exceptional Tier-2 Cloud Enterprise Data Center Market Growth Expansion
Slide 22: Consolidated Income Statement Q2 & H1 2022
Consolidated Income Statement Q2 & H1 2022 Q2 H1 Q2 H1 Key Highlights DKK'000 2022 2021 2022 2021 ∆ ∆ • Revenue in Q2 in USD down 33% compared Revenue 35,484 46,408 87,721 93,232 -24% -6% to Q2’21 (down 24% in DKK). Revenue in H1 in Cost of goods sold (10,528) (13,072) (36,128) (27,109) USD down 15%
Slide 23: Consolidated Cash Flow Statement Q2 & H1 2022
Consolidated Cash Flow Statement Q2 & H1 2022 Q2 H1 DKK'000 2022 2021 2022 2021 Key Highlights Earnings before tax (EBT) (11,363) 6,453 (17,952) 11,722 Adjustments to reconcile profit before tax to net cash flows 6,420 3,086 11,799 7,147 • Net Cash flow from operating activities in Q2 Working capita
Slide 24: Napatech Stays Focused On Long Term Opportunity
Napatech’s Stays Focused On Long Term Opportunity 2022 • Given the temporary market conditions, we will maximize revenue by continuing our efforts delivering key software and feature development • Outlook for 2022 • Pipeline development in the 2H’22 is promising with improved order volume expected i
Slide 25: Key Investor Highlights
Key Investor Highlights Growing Market. Robust IP Portfolio. The Programmable NIC market is rapidly 22 patents & patents-pending provides expanding driven by heightened compute high barrier-to-entry for competitors requirements needed for cloud, enterprise and telco datacenters. Superior Performance
Slide 26: Q&A Session at the end of the presentation
Q&A Session at the end of the presentation DK: +45 89 88 95 13 NO: +47 80 02 51 23 UK: +44 2039 362 999 US: +1 646 664 1960 Participant Access code: 076024 To ask a question, press ZERO ONE on your telephone keypad. To withdraw your question, press ZERO TWO. Texted question can be submitted using th
Slide 27: Thank You
Thank You 27 18 August 2022 COPYRIGHT © 2022 NAPATECH A/S